10-Q

UNITED STATES

SECURITIES 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 September 27, 2014

or

[   ]      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:   001-35930

PLY GEM HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	3089	20-0645710
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)
	5020 Weston Parkway, Suite 400 Cary, North Carolina 27513

Registrant's telephone number, including area code: 919-677-3900

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

Yes [X]                 No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes [X]   No [  ]

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer   [   ]                                                                       Accelerated filer                    [   ]   

Non-accelerated filer     [X]                                                                       Smaller reporting company   [   ]

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [  ]   No [X]

As of November 7, 2014, there were 67,845,371 shares of common stock, $0.01 par value, outstanding.

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES

FORM 10-Q

QUARTERLY PERIOD ENDED September 27, 2014

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)-
	Three months ended September 27, 2014 and September 28, 2013	2
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)-
	Nine months ended September 27, 2014 and September 28, 2013	3
	Condensed Consolidated Balance Sheets -
	September 27, 2014 and December 31, 2013	4
	Condensed Consolidated Statements of Cash Flows -
	Nine months ended September 27, 2014 and September 28, 2013	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition
	and Results of Operations	46
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	69
Item 4.	Controls and Procedures	71

PART II – OTHER INFORMATION

Item 5.	Other information	72
Item 6.	Exhibits	72
Signatures		73

PART I

Item 1.      FINANCIAL STATEMENTS

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(Amounts in thousands, except shares and per share data)	For the three months ended
	September 27, 2014			September 28, 2013
Net sales	$	437,848		$	407,426
Cost of products sold	339,259			323,258
Gross profit	98,589			84,168
Operating expenses:
Selling, general and administrative expenses	51,355			47,597
Amortization of intangible assets	5,307			5,651
Total operating expenses	56,662			53,248
Operating earnings	41,927			30,920
Foreign currency loss	(766		)	(376		)
Interest expense	(16,300		)	(22,045		)
Interest income	18			285
Tax receivable agreement liability adjustment	(13,988		)	6,669
Income before benefit for income taxes	10,891			15,453
Benefit for income taxes	(10,514		)	(1,442		)
Net income	$	21,405		$	16,895
Comprehensive income	$	17,282		$	20,969
Net income attributable to common shareholders per share:
Basic	$	0.32		$	0.25
Diluted	$	0.32		$	0.25
Weighted average shares outstanding:
Basic	67,844,546			67,120,389
Diluted	67,944,470			68,244,727

See accompanying notes to condensed consolidated financial statements.

2

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(Amounts in thousands, except shares and per share data)	For the nine months ended
	September 27, 2014			September 28, 2013
Net sales	$	1,116,524		$	1,032,663
Cost of products sold	890,717			832,389
Gross profit	225,807			200,274
Operating expenses:
Selling, general and administrative expenses	156,391			131,162
Amortization of intangible assets	15,841			14,575
Initial public offering costs	—			23,527
Total operating expenses	172,232			169,264
Operating earnings	53,575			31,010
Foreign currency loss	(517		)	(755		)
Interest expense	(52,065		)	(70,605		)
Interest income	64			359
Tax receivable agreement liability adjustment	(14,419		)	(1,474		)
Loss on modification or extinguishment of debt	(21,364		)	(18,948		)
Loss before provision (benefit) for income taxes	(34,726		)	(60,413		)
Provision (benefit) for income taxes	(15,933		)	1,676
Net loss	$	(18,793	)	$	(62,089	)
Comprehensive loss	$	(24,206	)	$	(60,998	)
Basic and diluted net loss per share attributable to common shareholders	$	(0.28	)	$	(1.08	)
Basic and diluted weighted average shares outstanding	67,807,801			57,538,917

See accompanying notes to condensed consolidated financial statements.

3

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(Amounts in thousands, except share amounts)	September 27, 2014			December 31, 2013
ASSETS
Current Assets:
Cash and cash equivalents	$	26,782		$	69,801
Accounts receivable, less allowances of $4,518 and $4,453, respectively	278,138			140,062
Inventories:
Raw materials	75,858			51,313
Work in process	28,359			23,817
Finished goods	71,490			60,340
Total inventory	175,707			135,470
Prepaid expenses and other current assets	20,502			23,214
Deferred income taxes	6,554			3,178
Total current assets	507,683			371,725
Property and Equipment, at cost:
Land	8,017			4,528
Buildings and improvements	65,670			43,691
Machinery and equipment	360,775			321,614
Total property and equipment	434,462			369,833
Less accumulated depreciation	(273,893		)	(258,186		)
Total property and equipment, net	160,569			111,647
Other Assets:
Intangible assets, net	155,006			110,012
Goodwill	450,618			420,228
Deferred income taxes	—			5,406
Other	30,986			23,233
Total other assets	636,610			558,879
	$	1,304,862		$	1,042,251
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable	$	116,976		$	82,981
Accrued expenses	147,557			112,940
Current portion of long-term debt	4,300			—
Total current liabilities	268,833			195,921
Deferred income taxes	22,520			17,115
Payable to related parties pursuant to tax receivable agreement	26,042			11,623
Other long-term liabilities	52,398			52,560
Long-term debt, less current portion	1,008,525			817,028
Commitments and contingencies
Stockholders' Deficit:
Preferred stock $0.01 par, 50,000,000 shares authorized, none issued and outstanding	—			—
Common stock $0.01 par, 250,000,000 shares authorized, 67,845,371 and 67,223,233 issued and outstanding, respectively	678			672
Additional paid-in-capital	744,529			741,789
Accumulated deficit	(810,036		)	(791,243		)
Accumulated other comprehensive loss	(8,627		)	(3,214		)
Total stockholders' deficit	(73,456		)	(51,996		)
	$	1,304,862		$	1,042,251

See accompanying notes to condensed consolidated financial statements.

4

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(Amounts in thousands)	For the nine months ended
	September 27, 2014			September 28, 2013
Cash flows from operating activities:
Net loss	$	(18,793	)	$	(62,089	)
Adjustments to reconcile net loss to cash
used in operating activities:
Depreciation and amortization expense	33,916			32,983
Fair-value premium on purchased inventory	38			2,015
Fair-value decrease of contingent acquisition liability	(264		)	(358		)
Non-cash restructuring costs	3,012			—
Non-cash interest expense, net	11,606			9,457
Loss on foreign currency transactions	517			755
Non-cash litigation expense	4,593			—
Loss on modification or extinguishment of debt	21,364			18,948
Prepaid management fee write off	—			2,682
Stock based compensation	1,672			1,631
Deferred income taxes	(17,195		)	1,765
Tax receivable agreement liability adjustment	14,419			1,474
Increase (reduction) in tax uncertainty, net of valuation allowance	254			(1,279		)
Other	(224		)	(5		)
Changes in operating assets and liabilities:
Accounts receivable, net	(102,728		)	(75,403		)
Inventories	(24,074		)	(11,730		)
Prepaid expenses and other assets	2,607			(5,181		)
Accounts payable	15,180			(4,192		)
Accrued expenses	(1,468		)	26,552
Payment of advisory termination fee to affiliate	—			(18,852		)
Cash payments on restructuring liabilities	(4,412		)	(2,893		)
Other	4,571			(912		)
Net cash used in operating activities	(55,409		)	(84,632		)
Cash flows from investing activities:
Acquisitions, net of cash acquired and outstanding checks assumed	(130,856		)	(99,282		)
Capital expenditures	(14,524		)	(16,314		)
Proceeds from sale of assets	744			24
Net cash used in investing activities	(144,636		)	(115,572		)
Cash flows from financing activities:
Proceeds from long-term debt	1,067,725			—
Net revolver borrowings (payments)	20,000			(1,000		)
Payments on long-term debt	(853,075		)	(148,000		)
Payment of tender and early call premiums	(61,142		)	(8,520		)
Net proceeds from issuance of common stock	—			353,407
Proceeds from exercises of employee stock options	1,073			—
Debt issuance costs paid	(16,721		)	(62		)
Net cash provided by financing activities	157,860			195,825
Impact of exchange rate movements on cash	(834		)	301
Net decrease in cash and cash equivalents	(43,019		)	(4,078		)
Cash and cash equivalents at the beginning of the period	69,801			27,194
Cash and cash equivalents at the end of the period	$	26,782		$	23,116

See accompanying notes to condensed consolidated financial statements.

5

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Ply Gem Holdings, Inc. and its subsidiaries (referred to herein as “Ply Gem Holdings”, “Ply Gem”, the “Company”, “we”, “us”, or “our”) have been prepared in accordance with U.S. generally accepted accounting principles as described in the consolidated financial statements and related notes included in our 2013 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2014.  These statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles and should be read in conjunction with our 2013 Annual Report on Form 10-K.  In management’s opinion, all normal and recurring adjustments considered necessary for a fair presentation have been included.  Operating results for the period from January 1, 2014 through September 27, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014.

On May 23, 2013, the Company issued 18,157,895 shares of common stock at an initial public offering price of $21.00 per share and received net proceeds of approximately $353.4 million in an initial public offering ("IPO") of its common stock after deducting underwriting discounts and commissions of approximately $25.4 million and offering expenses of approximately $2.5 million. Prior to the IPO, the Company also issued a total of 48,962,494 shares of common stock in connection with the merger of Ply Gem Prime Holdings, Inc. (“Ply Gem Prime”) into Ply Gem Holdings, with Ply Gem Holdings being the surviving entity.

The condensed consolidated balance sheet at December 31, 2013 has been derived from the audited consolidated financial statements of Ply Gem Holdings at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

The Company’s fiscal quarters are based on periods ending on the Saturday of the last week in the quarter.  Therefore, the financial results of certain fiscal quarters will not be comparable to the prior and subsequent fiscal quarters.  The accompanying financial statements include the Company’s condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 27, 2014 and September 28, 2013, the condensed consolidated statements of cash flows for the nine months ended September 27, 2014 and September 28, 2013, and the condensed consolidated balance sheets as of September 27, 2014 and December 31, 2013.

Ply Gem is a diversified manufacturer of residential and commercial building products, which are sold primarily in the United States and Canada, and include a wide variety of products for the residential and commercial construction, the do-it-yourself and the professional remodeling and renovation markets.  The demand for the Company’s products is seasonal, particularly in the Northeast and Midwest regions of the United States and Canada where inclement weather during the winter months usually reduces the level of building and remodeling activity in both the home repair and remodeling and new home construction sectors.  The Company’s sales are usually lower during the first and fourth quarters.

To a significant extent our performance is dependent upon the levels of home repair and remodeling and new home construction spending, all of which are affected by such factors as interest rates, inflation, consumer confidence, unemployment, and availability of consumer credit.

6

Initial Public Offering and Related Transactions

As a result of the IPO, the Company expensed within operations approximately $23.5 million in costs associated with the offering that were not directly attributable to the securities offered. The following table summarizes these costs for the nine months ended September 28, 2013. No such costs were incurred during the nine months ended September 27, 2014.

(Amounts in thousands)
Advisory termination fee to affiliate	$	18,852
2013 management fee as of date of termination	2,682
Other transaction expenses for the IPO	1,993
	$	23,527

Further, the Company incurred approximately $27.9 million in costs associated with the IPO that have been recorded within additional paid-in-capital. These costs include underwriter fees along with legal, accounting, printing and other general expenses directly associated with the public offering.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Ply Gem Holdings and its subsidiaries, all of which are wholly owned.  All intercompany accounts and transactions have been eliminated.

Accounting Policies and Use of Estimates

The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles involves estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of income and expense during the reporting periods.  Certain of the Company’s accounting policies require the application of judgment in selecting the appropriate assumptions for calculating financial estimates.  By their nature, these judgments are subject to an inherent degree of uncertainty.  The Company periodically evaluates the judgments and estimates used in their critical accounting policies to ensure that such judgments and estimates are reasonable.  Such estimates include the allowance for doubtful accounts receivable, rebates, pensions, valuation reserve for inventories, warranty reserves, insurance reserves, legal contingencies, assumptions used in the calculation of income taxes and the tax receivable agreement liability, projected cash flows used in the goodwill and intangible asset impairment tests, and environmental accruals and other contingencies.  These judgments are based on the Company’s historical experience, current trends and information available from other sources, and are based on management’s best estimates and judgments.  The Company adjusts such estimates and assumptions when facts and circumstances dictate.  Illiquid credit markets, volatile equity markets, foreign currency, litigation risk, and the depressed housing and remodeling markets have combined to increase the uncertainty inherent in such estimates and assumptions.  If different conditions result from those assumptions used in the Company’s judgments, actual results could be materially different from the Company’s estimates.

Cash and Cash Equivalents

Cash equivalents consist of short-term highly liquid investments with original maturities of three months or less and which are readily convertible into cash.

Accounts Receivable

Accounts receivable-trade are recorded at their net realizable value.  The allowance for doubtful accounts was $4.5 million at September 27, 2014 and December 31, 2013.  The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company estimates the allowance for doubtful accounts based on a variety of factors including the length of time receivables are past due, the financial health of its customers, unusual macroeconomic conditions and historical experience. If the financial condition of its customers deteriorates or other circumstances occur that result in an impairment of customers’ ability to make payments, the Company records additional allowances as needed. The Company writes off uncollectible trade accounts receivable against the allowance for doubtful accounts when collection efforts have been exhausted and/or any legal action taken by the Company has concluded.

7

Inventories

Inventories in the accompanying condensed consolidated balance sheets are valued at the lower of cost or market and are determined primarily by the first-in, first-out (FIFO) method.  The Company records provisions, as appropriate, to write-down obsolete and excess inventory to estimated net realizable value.  The process for evaluating obsolete and excess inventory often requires the Company to make subjective judgments and estimates concerning future sales levels, quantities and prices at which such inventory will be able to be sold in the normal course of business.  Accelerating the disposal process or incorrect estimates of future sales potential may cause actual results to differ from the estimates at the time such inventory is disposed or sold. As of September 27, 2014, the Company had inventory purchase commitments of approximately $27.2 million.

Inventory reserves were approximately $10.4 million at September 27, 2014, increasing during the nine months ended September 27, 2014 by $1.5 million compared to the December 31, 2013 reserve balance of approximately $8.9 million.

Property and Equipment

Property and equipment are presented at cost.  Depreciation of property and equipment are provided on a straight-line basis over estimated useful lives, which are generally as follows: 

Buildings and improvements	10-37 years
Machinery and equipment, including leases	3-15 years
Leasehold improvements	Term of lease or useful life, whichever is shorter

Expenditures for maintenance and repairs are expensed when incurred. Expenditures for renewals and betterments are capitalized.  When assets are sold, or otherwise disposed, the cost and related accumulated depreciation are eliminated and the resulting gain or loss is recognized in operations.  

Intangible Assets, Goodwill and Other Long-lived Assets

Long-lived assets

The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.  The Company performs an undiscounted operating cash flow analysis to determine if impairment exists.  If an impairment is determined to exist, any related impairment loss is calculated based on the asset’s fair value and the discounted cash flow.

The Company tests for long-lived asset impairment at the following asset group levels: (i) the combined U.S. Siding, Fencing and Stone companies in the Siding, Fencing and Stone segment (“Siding”), (ii) the combined U.S. Windows companies in the Windows and Doors segment (“US Windows”), (iii) the combined Simonton windows companies in the Windows and Doors segment, (iv) Gienow Canada Inc. ("Gienow Canada") (a combined Western Canadian company created by the January 2014 amalgamation of the Company's legacy Western Canadian business and the Gienow entity acquired in April 2013) in the Windows and Doors segment, and (v) Mitten (formerly known as Mitten, Inc.) in the Siding, Fencing and Stone segment. For purposes of recognition and measurement of an impairment loss, a long-lived asset or asset group should represent the lowest level for which an entity can separately identify cash flows that are largely independent of the cash flows of other assets and liabilities.  There were no indicators of impairment during the three and nine months ended September 27, 2014.

Goodwill and other intangible assets

The Company evaluates goodwill for impairment on an annual basis and whenever events or business conditions warrant.  All other intangible assets are amortized over their estimated useful lives and are assessed for impairment as necessary.  The Company assesses goodwill for impairment at the November month end each year and also at any other date when events or changes in circumstances indicate that the carrying value of these assets may exceed their fair value.  To evaluate goodwill for impairment, the Company estimates the fair value of reporting units considering such factors as discounted cash flows and valuation multiples for comparable publicly traded companies.  A significant reduction in projected sales and earnings, which would lead to a reduction in future cash flows, could indicate potential impairment.  There were no indicators of impairment during the three and nine months ended September 27, 2014 that would trigger an interim impairment test.  The Company will continue to evaluate goodwill during future periods and future declines in the residential housing and repair and remodeling markets could result in goodwill impairments.

8

Debt Issuance Costs

Debt issuance costs, composed of facility, agency, and certain legal fees associated with issuing new debt financing, are amortized over the contractual term of the related agreement using the effective interest method.  Net debt issuance costs totaled approximately $25.1 million and $17.7 million as of September 27, 2014 and December 31, 2013, respectively, and have been recorded in other long term assets in the accompanying condensed consolidated balance sheets. Amortization of debt issuance costs for the three months ended September 27, 2014 and September 28, 2013 was approximately $0.8 million and $1.2 million, respectively.  Amortization of debt issuance costs for the nine months ended September 27, 2014 and September 28, 2013 was approximately $2.8 million and $3.2 million, respectively. Amortization of debt issuance costs is recorded in interest expense in the accompanying condensed consolidated statements of operations and comprehensive income (loss).

Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes which requires that deferred tax assets and liabilities be recorded to reflect the future tax consequences of temporary differences between the book and tax basis of various assets and liabilities.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect of changes in tax rates on deferred tax assets and liabilities is recognized as income or expense in the period in which the rate change occurs.  A valuation allowance is established to offset any deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Estimates are required with respect to, among other things, the appropriate state income tax rates used in the various states that the Company and its subsidiaries are required to file, the potential utilization of operating and capital loss carry-forwards for both federal and state income tax purposes and valuation allowances required, if any, for tax assets that may not be realized in the future.  The Company establishes reserves when, despite our belief that our tax return positions are fully supportable, certain positions could be challenged, and the positions may not be fully sustained.  As a result of the 2013 Ply Gem Prime and Ply Gem Holdings merger, U.S. federal income tax returns will be prepared and filed by Ply Gem Holdings on behalf of itself, Ply Gem Industries, Inc. (“Ply Gem Industries”), and its U.S. subsidiaries.  The Company has executed a tax sharing agreement with Ply Gem Industries and Ply Gem Holdings pursuant to which tax liabilities for each respective party are computed on a stand-alone basis.  The Company along with its U.S. subsidiaries file a consolidated federal income tax return, separate state income tax returns, combined state returns, and unitary state returns. Gienow Canada and Mitten both file separate Canadian federal income tax returns and separate provincial returns. Simonton will join the filing of the consolidated U.S. federal returns. Simonton will also join the filings of certain combined and unitary state income tax returns as well as continue to file certain state returns on a separate company basis.

Environmental

The Company accrues for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable. Environmental remediation obligation accruals are adjusted as further information develops or circumstances change.  Costs of future expenditures for environmental remediation obligations are not discounted to their present value.  Recoveries of environmental remediation costs from other parties are recorded as assets when their receipt is deemed probable.

Commitments and Contingencies

The Company accrues for all direct costs associated with the estimated resolution of contingencies at the earliest date at which it is deemed probable that a liability has been incurred and the amount of such liability can be reasonably estimated.  Costs accrued have been estimated based upon an analysis of potential results, assuming a combination of litigation and settlement strategies and outcomes. Insurance recoveries are recorded as assets when their receipt is deemed probable.

Foreign Currency

Gienow Canada and Mitten, the Company’s Canadian subsidiaries, utilize the Canadian dollar as their functional currency.  For reporting purposes, the Company translates the assets and liabilities of its foreign entities at the exchange rates in effect at period-end.  Net sales and expenses are translated using average exchange rates in effect during the period.  Gains and losses from foreign currency translation are credited or charged to accumulated other comprehensive income or loss in the accompanying condensed consolidated balance sheets.

9

The Company recorded a loss from foreign currency transactions of approximately $(0.8) million for the three months ended September 27, 2014 and a loss of approximately $(0.4) million for the three months ended September 28, 2013. The Company recorded a loss from foreign currency transactions of approximately $(0.5) million for the nine months ended September 27, 2014 and a loss of approximately $(0.8) million for the nine months ended September 28, 2013. As of September 27, 2014 and December 31, 2013, accumulated other comprehensive loss included a currency translation adjustment of approximately $(5.4) million and $(2.9) million, respectively.

Derivative Financial Instruments

During the nine months ended September 27, 2014, the Company entered into a foreign currency zero-cost collar agreement to hedge approximately $43.0 million of its 2014 non-functional currency inventory purchases to protect the Company from variability in cash flows attributable to changes in the U.S. dollar relative to the Canadian dollar.

The Company has designated this zero-cost collar agreement as a cash flow hedge. As a cash flow hedge, unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. The zero-cost collar agreement is highly correlated to the changes in foreign currency rates to which the Company is exposed. Unrealized gains and losses on this agreement are designated as effective or ineffective. The effective portion of such gains or losses is recorded as a component of accumulated other comprehensive income or loss, while the ineffective portion of such gains or losses is recorded as a component of cost of goods sold. Future realized gains and losses in connection with each inventory purchase will be reclassified from accumulated other comprehensive income or loss to cost of goods sold.

The changes in fair values of derivatives that have been designated and qualify as cash flow hedges are recorded in accumulated other comprehensive income or loss and are reclassified into cost of goods sold in the same period the hedged item affects earnings. Due to the high degree of effectiveness between the hedging instrument and the underlying exposures being hedged, fluctuations in the value of the derivative instrument are generally offset by changes in the fair value or cash flows of the underlying exposures being hedged. The changes in the fair value of derivatives that do not qualify as effective are immediately recognized in earnings.

The gains and losses on the derivative contract that are reclassified from accumulated other comprehensive income or loss to current period earnings are included in the line item in which the hedged item is recorded in the same period the forecasted transaction affects earnings. As of September 27, 2014, approximately $47,000 of the deferred net loss on derivative instruments included in accumulated other comprehensive loss is expected to be reclassified as cost of goods sold during the next twelve months. This expectation is based on the expected timing of the occurrence of the hedged forecasted transactions.

The fair value of the foreign currency zero-cost collar agreement is estimated using industry standard valuation models using market-based observable inputs, including spot rates, forward points, interest rates and volatility inputs (Level 2). A summary of the recorded liability included in the accompanying condensed consolidated balance sheets is as follows:

(Amounts in thousands)
	September 27, 2014			December 31, 2013
Foreign currency hedge (included in accrued expenses)	$	(47	)	$	—

Fair Value Measurement

The accounting standard for fair value discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flows), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The standard utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

• Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

• Level 3: Inputs that reflect the reporting entity’s own assumptions.

10

The hierarchy requires the use of observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.  The Company’s population of recurring financial assets and liabilities subject to fair value measurements and the necessary disclosures are as follows:

					Quoted Prices in Active Markets		Significant Other		Significant
(Amounts in thousands)			Fair		for Identical		Observable		Unobservable
	Carrying		Value		Assets		Inputs		Inputs
Description	Value		Total		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Senior Notes-6.50%	$	650,000	$	625,625	$	625,625	$	—	$	—
Term Loan Facility	428,925		422,491		422,491		—		—
As of September 27, 2014	$	1,078,925	$	1,048,116	$	1,048,116	$	—	$	—
Liabilities:
Senior Notes-9.375%	$	96,000	$	103,440	$	103,440	$	—	$	—
Senior Secured Notes-8.25%	756,000		805,140		805,140		—		—
As of December 31, 2013	$	852,000	$	908,580	$	908,580	$	—	$	—

The fair value of the long-term debt instruments was determined by utilizing available market information.  The carrying value of the Company’s other assets and liabilities approximates their fair value.  

Earnings (Loss) Per Common Share

Basic earnings (loss) per share ("EPS") is computed based upon weighted-average shares outstanding during the period. Dilutive earnings per share is computed consistently with the basic computation while giving effect to all dilutive potential common shares and common share equivalents that were outstanding during the period. Ply Gem Holdings uses the treasury stock method to reflect the potential dilutive effect of unvested stock awards and unexercised options.

The Company was in a net loss position for the nine months ended September 27, 2014 and for the nine months ended September 28, 2013 and therefore the impact of stock options and unvested restricted stock were excluded from the computation of diluted earnings (loss) per share for those specific periods, as the inclusion of such amounts would be anti-dilutive.

The computation of the dilutive effect of other potential common shares included options and unvested restricted stock representing approximately 0.1 million shares of common stock for the three months ended September 27, 2014 and excluded approximately 0.1 million shares of common stock for the nine months ended September 27, 2014. The computation of the dilutive effect of other potential common shares included options and unvested restricted stock representing approximately 0.2 million shares of common stock for the three months ended September 28, 2013 and excluded approximately 0.2 million shares of common stock for the nine months ended September 28, 2013. Under the treasury stock method, the inclusion of these stock awards would have been anti-dilutive.

Prior to the IPO, the Company issued a total of 48,962,494 shares of common stock in connection with the merger of Ply Gem Prime into Ply Gem Holdings. Therefore, for purposes of EPS, the Company had 48,962,494 shares of common stock outstanding for the 2013 period through May 23, 2013. The Company calculated the amounts as net loss divided by the 48,962,494 shares of common stock outstanding for the 2013 period through May 23, 2013 plus the weighted-average shares outstanding subsequent to the IPO on May 23, 2013 through September 28, 2013. Prior to the IPO, all options and unvested restricted shares were instruments that were exercisable into Ply Gem Prime stock. Subsequently, those options and unvested restricted share grants were converted into Ply Gem Holdings instruments and as such will be treated prospectively from the date of the IPO for the calculation of dilutive income per share.

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New Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update ("ASU") No. 2014-08, Presentation of Financial Statements and Property, Plant, and Equipment, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. Under the new guidance, a discontinued operation is defined as a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results. The change is effective for fiscal years, and interim reporting periods within those years, beginning on or after December 15, 2014, which means the first quarter of Ply Gem's fiscal year 2016, with early adoption permitted. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. This new guidance is not expected to affect the Company's consolidated financial position, results of operations or cash flows.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which completes the joint effort by the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and improve financial reporting by creating common revenue recognition guidance for GAAP and International Financial Reporting Standards ("IFRS"). ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using IFRS and GAAP. The core principle of this update is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The changes are effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, which means the first quarter of Ply Gem's fiscal year 2017. This update will be effective for the Company beginning in the first quarter of fiscal year 2017, and allows for full retrospective adoption applied to all periods presented or retrospective adoption with the cumulative effect of initially applying this update recognized at the date of initial application. The method of adoption has not been determined yet by the Company. The Company is currently reviewing the revised guidance and assessing the potential impact on the consolidated financial statements.

2.   ACQUISITIONS

Simonton

On September 19, 2014, Ply Gem completed an acquisition for cash consideration of approximately $130.0 million to acquire the capital stock of Fortune Brands Windows Inc., and its direct and indirect wholly owned subsidiaries Simonton Building Products LLC, Simonton Industries, Inc., Simonton Windows, Inc., and SimEx, Inc. Fortune Brand Windows’ name has subsequently been changed to Simonton Windows & Doors, Inc. (“Simonton”). Simonton is a premier repair and remodeling window company with leading brand recognition within this market which will provide the Company with long-term value. Simonton manufactures top quality vinyl windows and doors and provides industry-leading customization options, delivery times, and customer service. Simonton has manufacturing plant locations in California, Illinois, and West Virginia with administrative offices in Ohio. The Simonton acquisition will balance our end window market mix by moving our market exposure to approximately 60% and 40% for the new construction and repair and remodeling markets, respectively, as compared to the approximate 80% and 20% legacy split for the Company’s window business. By incorporating the Company’s siding net sales, the Company’s market exposure is expected to be approximately 50% and 50% for the new construction and repair and remodeling markets, respectively. Simonton will strategically fit into the Company’s existing footprint and broaden our service offering to existing and new customers within the building product industry. The Company accounted for the transaction as an acquisition in accordance with the provisions of Accounting Standards Codification 805, Business Combinations, which results in a new valuation for the assets and liabilities of Simonton based upon fair values as of the acquisition date.

Since the acquisition was recently completed on September 19, 2014, the final acquisition accounting allocation remains subject to further adjustments. The specific accounts subject to ongoing purchase accounting adjustments include various income tax assets and liabilities, accounts receivable, inventories, prepaid expenses and other current assets, property and equipment, goodwill, intangibles, accounts payable, accrued expenses, and other liabilities. Therefore, the measurement date remains open as of September 27, 2014, and the preliminary acquisition accounting allocation detailed below is subject to adjustment. The Company anticipates completing these acquisition accounting adjustments during 2015.

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The Company determined the fair value of the tangible and intangible assets and the liabilities acquired, and recorded goodwill based on the excess of fair value of the acquisition consideration over such fair value, as follows:

(Amounts in thousands)
Cash	$	(856	)
Accounts receivable	37,269
Inventories	17,673
Prepaid expenses and other current assets	2,233
Property and equipment	53,655
Intangible assets	62,170
Goodwill	32,344
Other assets	426
Accounts payable and accrued expenses	(45,555		)
Deferred income taxes	(24,979		)
Other liabilities	(4,380		)
	$	130,000

The $32.3 million of goodwill was allocated to the Windows and Doors segment and none of the goodwill is expected to be deductible for tax purposes. The goodwill is attributable to the workforce of the acquired business and the synergies expected to be realized after the Company’s acquisition of Simonton. As of the acquisition date and as of September 27, 2014, Simonton was in a net deferred tax liability position, which was evaluated with the Company’s existing net deferred tax asset position as of September 27, 2014 considering the Company’s full valuation allowance position. This resulted in a reversal of approximately $25.0 million in the Company's valuation allowance during the three and nine months ended September 27, 2014. The reversal was recorded in the Company's condensed consolidated statement of operations and comprehensive income (loss) in the provision (benefit) for income taxes.

For the three and nine months ended September 27, 2014, Simonton contributed net sales of approximately $7.2 million from the acquisition date (September 19, 2014), which has been included within the Company’s condensed consolidated statement of operations and comprehensive income (loss). If the Simonton acquisition would have occurred at the beginning of 2013, the Company’s consolidated net sales would have been $1,344.4 million and $1,251.7 million for the nine months ended September 27, 2014 and September 28, 2013, respectively, with a net loss of $18.8 million and $66.2 million for the nine months ended September 27, 2014 and September 28, 2013, respectively.

During the three and nine months ended September 27, 2014, the Company incurred $0.6 million of acquisition-related costs for Simonton. These expenses are included in selling, general, and administrative expense in the Company’s condensed consolidated statement of operations and comprehensive income (loss) within the Windows and Doors segment.

Gienow

On April 9, 2013, the Company, through its wholly-owned Canadian subsidiary Gienow Canada Inc., acquired Gienow WinDoor Ltd. for $20.4 million, through the purchase of all of the capital stock of Gienow WinDoor Ltd. Immediately subsequent to the acquisition, Gienow WinDoor Ltd. was amalgamated into Gienow Canada Inc. (the surviving entity, "Gienow"). In January 2014, Gienow was amalgamated with the Company's legacy Western Canadian business. Gienow is in the business of manufacturing, distributing, and selling windows, doors, and related products and services to industrial and residential customers in Canada and the United States. Gienow has a manufacturing facility located in Calgary, Alberta, Canada. The Company accounted for the transaction as a purchase in accordance with the provisions of Accounting Standards Codification 805, Business Combinations, which results in a new valuation for the assets and liabilities of Gienow based upon fair values as of the acquisition date.

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The Company determined the fair value of the tangible and intangible assets and the liabilities acquired, and recorded goodwill based on the excess of fair value of the acquisition consideration over such fair values, as follows:

(Amounts in thousands)
Accounts receivable	$	11,714
Inventories	6,814
Other current assets	1,118
Property and equipment	4,746
Deferred taxes	2,657
Intangible assets	1,083
Goodwill	3,717
Accounts payable and accrued expenses	(10,041		)
Other liabilities	(1,428		)
	$	20,380

The $3.7 million of goodwill was allocated to the Windows and Doors segment and none of the goodwill is expected to be deductible for tax purposes.

Mitten

On May 31, 2013, Ply Gem completed an acquisition for cash consideration of approximately $76.8 million to acquire the capital stock of Mitten Inc. (now known as Mitten), a leading manufacturer and distributor of vinyl siding and accessories in Canada. Mitten is located in Ontario, Canada, and therefore the acquisition expanded the Company's presence in Eastern Canada and enabled the Company to expand its current distribution of its portfolio of exterior building products to this market for its siding and windows businesses. The Company accounted for the transaction as an acquisition in accordance with the provisions of Accounting Standards Codification 805, Business Combinations, which results in a new valuation for the assets and liabilities of Mitten based upon fair values as of the acquisition date.

The Company determined the fair value of the tangible and intangible assets and the liabilities acquired, and recorded goodwill based on the excess of fair value of the acquisition consideration over such fair values, as follows:

(Amounts in thousands)
Accounts receivable	$	18,393
Inventories	22,592
Other current assets	904
Property and equipment	9,279
Other assets	1,439
Intangible assets	35,400
Goodwill	26,098
Accounts payable and accrued expenses	(27,499		)
Deferred taxes	(9,786		)
	$	76,820

The allocation reflects a $2.1 million working capital adjustment that was recognized during the fourth quarter of 2013. The $26.1 million of goodwill was allocated to the Siding, Fencing and Stone segment and none of the goodwill is expected to be deductible for tax purposes.     

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3.   GOODWILL

The Company records the excess of the fair value of the acquisition consideration over the net tangible and intangible assets of acquired companies as goodwill.  The Company performs an annual test for goodwill impairment at the November month end each year and also at any other date when events or changes in circumstances indicate that the carrying value of these assets may exceed their fair value.  The Company has defined its reporting units and performs the impairment testing of goodwill at the operating segment level.  The Company has two reporting units: (1) Siding, Fencing and Stone and (2) Windows and Doors.  Separate valuations are performed for each of these reporting units in order to test for impairment.      

The Company uses the two-step method to determine goodwill impairment.  If the carrying amount of a reporting unit exceeds its fair value (“Step One”), the Company measures the possible goodwill impairment based upon a hypothetical allocation of the fair value estimate of the reporting unit to all of the underlying assets and liabilities of the reporting unit, including previously unrecognized intangible assets (“Step Two”).  The excess of the reporting unit’s fair value over the amounts assigned to its assets and liabilities is the implied fair value of goodwill.  An impairment loss is recognized to the extent that a reporting unit’s recorded goodwill exceeds the implied fair value of goodwill. The Company has elected not to utilize the qualitative Step Zero impairment assessment. There was no goodwill impairment for the year ended December 31, 2013 and no impairment indicators which would trigger an interim impairment test during the three and nine months ended September 27, 2014. However, the Company will continue to evaluate goodwill during future periods and future declines in the residential housing and repair and remodeling markets or the Company's market capitalization could result in goodwill impairments.  

To determine the fair value of its reporting units, the Company equally considers both the income and market valuation methodologies.  The income valuation methodology uses the fair value of the cash flows that the reporting unit can be expected to generate in the future. This method requires management to project revenues, operating expenses, working capital investment, capital spending and cash flows for the reporting unit over a multi-year period as well as determine the weighted average cost of capital to be used as the discount rate.  The Company also utilizes the market valuation method to estimate the fair value of the reporting units by utilizing comparable public company multiples.  These comparable public company multiples are then applied to the reporting unit’s financial performance.  The market approach is more volatile as an indicator of fair value as compared to the income approach as internal forecasts and projections have historically been more stable.  Since each approach has its merits, the Company equally weights the approaches to balance the internal and external factors affecting the Company’s fair value.

The Company’s fair value estimates of its reporting units and goodwill are sensitive to a number of assumptions including discount rates, cash flow projections, operating margins, and comparable market multiples.  In order to accurately forecast future cash flows, the Company estimates single family housing starts and the repair and remodeling market's growth rates.  However, there is no assurance that: (1) valuation multiples will not decline, (2) discount rates will not increase, or (3) the earnings, book values or projected earnings and cash flows of the Company's reporting units will not decline. 

The reporting unit goodwill balances were as follows as of September 27, 2014 and December 31, 2013:

(Amounts in thousands)
	September 27, 2014		December 31, 2013
Siding, Fencing and Stone	$	344,970	$	346,140
Windows and Doors	105,648		74,088
	$	450,618	$	420,228

The changes in the goodwill balances from December 31, 2013 to September 27, 2014 relate to currency translation adjustments and the additional $32.3 million of goodwill established in the Simonton acquisition as described in Note 2. A goodwill rollforward for 2014 is included in the table below:

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	Windows and			Siding, Fencing
(Amounts in thousands)	Doors			and Stone
Balance as of December 31, 2013
Goodwill	$	401,861		$	468,367
Accumulated impairment losses	(327,773		)	(122,227		)
	$	74,088		$	346,140
Currency translation adjustments	(784		)	(1,170		)
Simonton acquisition	32,344			—
Balance as of September 27, 2014
Goodwill	433,421			467,197
Accumulated impairment losses	(327,773		)	(122,227		)
	$	105,648		$	344,970

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4.   INTANGIBLE ASSETS

The table that follows presents the major components of intangible assets as of September 27, 2014 and December 31, 2013:

(Amounts in thousands)	Average Amortization Period			Accumulated			Net Carrying
	(in Years)	Cost		Amortization			Value
As of September 27, 2014
Patents	14	$	12,770	$	(9,958	)	$	2,812
Trademarks/Tradenames	11	117,660		(69,304		)	48,356
Customer relationships	13	221,155		(118,962		)	102,193
Other	5	4,390		(2,745		)	1,645
Total intangible assets	12	$	355,975	$	(200,969	)	$	155,006
As of December 31, 2013:
Patents	14	$	12,770	$	(9,250	)	$	3,520
Trademarks/Tradenames	10	91,884		(65,801		)	26,083
Customer relationships	12	187,055		(107,721		)	79,334
Other	5	3,427		(2,352		)	1,075
Total intangible assets	12	$	295,136	$	(185,124	)	$	110,012

Estimated amortization expense for the fiscal years 2014 through 2018 is shown in the following table:

	Amortization
(Amounts in thousands)	expense
2014 (remainder of year)	$	5,723
2015	25,051
2016	24,374
2017	20,511
2018	19,731

5.  COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss), net of tax is comprised of the following:

(Amounts in thousands)	For the three months ended					For the nine months ended
	September 27, 2014			September 28, 2013		September 27, 2014			September 28, 2013
Net income (loss)	$	21,405		$	16,895	$	(18,793	)	$	(62,089	)
Foreign currency translation adjustment	(5,009		)	4,074		(5,366		)	1,091
Unrealized gain (loss) on derivative instrument	886			—		(47		)	—
Comprehensive income (loss)	$	17,282		$	20,969	$	(24,206	)	$	(60,998	)

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6.   LONG-TERM DEBT

Long-term debt in the accompanying condensed consolidated balance sheets at September 27, 2014 and December 31, 2013 consists of the following:

(Amounts in thousands)
	September 27, 2014			December 31, 2013
Senior secured asset based revolving credit facility	$	20,000		$	—
Term Loan due 2021, net of unamortized early tender premium
and discount of $33,658 and $0, respectively	395,267			—
6.50% Senior notes due 2022, net of unamortized early tender premium
and discount of $52,442 and $0, respectively	597,558			—
8.25% Senior secured notes due 2018, net of unamortized early
tender premium and discount of $0 and $30,426, respectively	—			725,574
9.375% Senior notes due 2017, net of unamortized
discount of $0 and $4,546, respectively	—			91,454
	$	1,012,825		$	817,028
Less current portion of long-term debt	(4,300		)	—
	$	1,008,525		$	817,028

Recent developments

As described in the following paragraph, Ply Gem Industries modified its debt structure during the nine months ended September 27, 2014. On January 30, 2014, Ply Gem Industries completed an offering of $500.0 million aggregate principal amount of 6.50% Senior Notes due 2022 (the “6.50% Senior Notes”) and also entered into a $430.0 million senior secured term loan facility due 2021 (the “Term Loan Facility”). The approximate $927.9 million of net proceeds from the issuance of the 6.50% Senior Notes and the borrowings under the Term Loan Facility were used by Ply Gem Industries to purchase all of its 8.25% Senior Secured Notes due 2018 (the "8.25% Senior Secured Notes") and 9.375% Senior Notes due 2017 (the "9.375% Senior Notes") tendered in the tender offers described below, to satisfy and discharge the remaining obligations under the indentures governing the 8.25% Senior Secured Notes and 9.375% Senior Notes and to pay related fees and expenses.

On January 30, 2014, Ply Gem Industries purchased approximately $705.9 million of the outstanding 8.25% Senior Secured Notes in a tender offer at a price of $1,067.50 per $1,000 principal amount, which included an early tender payment of $30.00 per $1,000 principal amount, plus accrued and unpaid interest. On January 30, 2014, Ply Gem Industries also purchased approximately $94.7 million of the outstanding 9.375% Senior Notes in a tender offer at a price of $1,108.36 per $1,000 principal amount, which included an early tender payment of $30.00 per $1,000 principal amount, plus accrued and unpaid interest. As a result, Ply Gem Industries paid aggregate consideration of approximately $780.2 million for the tendered 8.25% Senior Secured Notes, including a tender premium of approximately $47.6 million, and paid aggregate consideration of approximately $107.6 million for the tendered 9.375% Senior Notes, including a tender premium of approximately $10.3 million. On March 1, 2014, pursuant to the terms of the indenture governing the 8.25% Senior Secured Notes, Ply Gem Industries redeemed the remaining approximate $50.1 million principal amount of the outstanding 8.25% Senior Secured Notes at a redemption price equal to 106.188% of the principal amount thereof, plus accrued and unpaid interest. On February 16, 2014, pursuant to the terms of the indenture governing the 9.375% Senior Notes, Ply Gem Industries redeemed the remaining approximate $1.3 million principal amount of the outstanding 9.375% Senior Notes at a redemption price equal to 100% of the principal amount plus the “make-whole” premium required under the indenture governing the 9.375% Senior Notes (which equated to 110.179% of the principal amount thereof), plus accrued and unpaid interest. As of March 1, 2014, there were no longer outstanding any 8.25% Senior Secured Notes. As of February 16, 2014, there were no longer outstanding any 9.375% Senior Notes.

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On September 19, 2014, Ply Gem Industries issued an additional $150.0 million aggregate principal amount of its 6.50% Senior Notes (“Senior Tack-on Notes”).  The net proceeds from the transaction were approximately $138.0 million after deducting $10.1 million for the debt discount and $1.9 million in transaction costs. The proceeds from the issuance of the Senior Tack-on Notes and approximately $3.1 million of cash on hand were used by Ply Gem Industries to fund Ply Gem Industries’ purchase of all the issued and outstanding shares of common stock of Simonton, to pay fees and expenses related to the offering of the Senior Tack-on Notes and the Simonton acquisition and for general corporate purposes, including the repayment of approximately $10.0 million of indebtedness under the Company’s senior secured asset-backed revolving credit facility (the "ABL Facility"). The additional $150.0 million of 6.50% Senior Tack-on Notes have the same terms and covenants as the original $500.0 million of 6.50% Senior Notes due 2022. The 6.50% Senior Notes originally issued in January 2014 and the Senior Tack-on Notes issued in September 2014 (collectively, the "6.50% Senior Notes") will mature on February 1, 2022 and bear interest at the rate of 6.50%.

6.50% Senior Notes due 2022

On January 30, 2014, Ply Gem Industries issued $500.0 million of 6.50% Senior Notes at par. On September 19, 2014, Ply Gem Industries issued an additional $150.0 million of 6.50% Senior Notes at a discount of approximately $10.1 million. Interest accrues at 6.50% per annum and is paid semi-annually on February 1 and August 1 of each year. The 6.50% Senior Notes will mature on February 1, 2022.

Prior to February 1, 2017, Ply Gem Industries may redeem up to 40% of aggregate principal amount of the 6.50% Senior Notes with the net cash proceeds from certain equity offerings at a redemption price equal to 106.50% of the aggregate principal amount of the 6.50% Senior Notes to be redeemed, plus accrued and unpaid interest, if any, provided that at least 50% of the aggregate principal amount of the 6.50% Senior Notes remains outstanding after the redemption. Prior to February 1, 2017, Ply Gem Industries may redeem the 6.50% Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus a “make-whole” premium plus accrued and unpaid interest, if any. At any time on or after February 1, 2017, Ply Gem Industries may redeem the 6.50% Senior Notes, in whole or in part, at declining redemption prices set forth in the indenture governing the 6.50% Senior Notes plus, in each case, accrued and unpaid interest, if any, to the redemption date. The effective interest rate for the 6.50% Senior Notes is 4.24% after considering each of the different interest expense components of this instrument, including the coupon payment and the deferred debt issuance costs.

The 6.50% Senior Notes are fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by Ply Gem Holdings and all of the wholly-owned domestic subsidiaries of Ply Gem Industries (the “Guarantors”).  The indenture governing the 6.50% Senior Notes contains certain covenants that limit the ability of Ply Gem Industries and its restricted subsidiaries to incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem their stock, make loans and investments, sell assets, incur certain liens, enter into agreements restricting their ability to pay dividends, enter into transactions with affiliates, and consolidate, merge or sell assets.  In particular, Ply Gem Industries and its restricted subsidiaries may not incur additional debt (other than permitted debt (as defined in the indenture) in limited circumstances) unless, after giving effect to such incurrence, the consolidated interest coverage ratio of Ply Gem Industries would be at least 2.00 to 1.00.  In the absence of satisfying the consolidated interest coverage ratio test, Ply Gem Industries and its restricted subsidiaries may only incur additional debt under certain circumstances, including, but not limited to, debt under credit facilities (as defined in the indenture) (x) in an amount not to exceed the greater of (a) $350.0 million and (b) the borrowing base (as defined in the indenture) and (y) in an amount not to exceed the greater of (A) $575.0 million and (B) the aggregate amount of indebtedness (as defined in the indenture) that that would cause the consolidated secured debt ratio (as defined in the indenture) to be equal to 4.00 to 1.00; purchase money indebtedness in an aggregate amount not to exceed the greater of (x) $35.0 million and (y) 10% of consolidated net tangible assets (as defined in the indenture) at any one time outstanding; debt of foreign subsidiaries in an aggregate amount not to exceed the greater of (x) $60.0 million and (y) 15% of consolidated net tangible assets (as defined in the indenture) at any one time outstanding; debt pursuant to a general basket in an aggregate amount at any one time outstanding not to exceed the greater of (x) $75.0 million and (y) 20% of consolidated net tangible assets; and the refinancing of debt under certain circumstances. On January 30, 2014, Ply Gem Industries and the Guarantors entered into a registration rights agreement relating to the 6.50% Senior Notes. Ply Gem Industries will be required to pay additional interest on the 6.50% Senior Notes if it fails to comply with certain of its obligations under the registration rights agreement within specified time periods.

On September 5, 2014, Ply Gem Industries completed an exchange offer with respect to the 6.50% Senior Notes issued in January 2014 to exchange $500.0 million 6.50% Senior Notes registered under the Securities Act for $500.0 million of the issued and outstanding 6.50% Senior Notes. Upon completion of the exchange offer, all $500.0 million of issued and outstanding 6.50% Senior Notes were registered under the Securities Act.  However, the $150.0 million of Senior Tack-on Notes issued in September 2014 have not yet been registered under the Securities Act.

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Term Loan Facility due 2021

On January 30, 2014, Ply Gem Industries entered into a credit agreement governing the terms of its new $430.0 million Term Loan Facility. Ply Gem Industries borrowed $430.0 million under the Term Loan Facility on January 30, 2014, with an original discount of approximately $2.2 million, yielding proceeds of approximately $427.9 million. The Term Loan Facility will mature on January 30, 2021. The Term Loan Facility requires scheduled quarterly payments in an aggregate annual amount equal to 1.00% of the original aggregate principal amount of the Term Loan Facility with the balance due at maturity. Interest on outstanding borrowings under the Term Loan Facility will be paid quarterly.

Borrowings under the Term Loan Facility bear interest at a rate equal to, at Ply Gem Industries’ option, either (a) a base rate determined by reference to the highest of (i) the prime rate of the administrative agent under the credit agreement, (ii) the federal funds rate plus 0.50% and (iii) the adjusted LIBO rate for a one-month interest period plus 1.00% or (b) a LIBO rate determined by reference to the cost of funds for eurocurrency deposits in dollars for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a 1.00% floor, plus, in each case, an applicable margin of 3.00% for any eurocurrency loan and 2.00% for any alternate base rate loan. As of September 27, 2014, the Company's interest rate on the Term Loan Facility was 4.00%. The effective interest rate for the Term Loan is 1.76% after considering each of the different interest expense components of this instrument, including the coupon payment, the deferred debt issuance costs and the original issue discount.

The Term Loan Facility allows Ply Gem Industries to request one or more incremental term loan facilities in an aggregate amount not to exceed the greater of (x) $140.0 million and (y) an amount such that Ply Gem Industries’ consolidated senior secured debt ratio (as defined in the credit agreement), on a pro forma basis, does not exceed 3.75 to 1.00, in each case, subject to certain conditions and receipt of commitments by existing or additional financial institutions or institutional lenders. Ply Gem Industries may voluntarily repay outstanding loans under the Term Loan Facility at any time without premium or penalty, other than customary “breakage” costs with respect to LIBOR loans and with respect to certain repricing transactions occurring within six months of January 30, 2014, which shall be subject to a prepayment premium of 1.00%.

The Term Loan Facility requires Ply Gem Industries to prepay outstanding term loans, subject to certain exceptions, with: (i) 50% (which percentage will be reduced to 25% if our consolidated senior secured debt ratio is equal or less than 2.50 to 1.00 but greater than 2.00 to 1.00 and to 0% if our consolidated senior secured debt ratio is equal to or less than 2.00 to 1.00) of our annual excess cash flow (as defined in the credit agreement), to the extent such excess cash flow exceeds $15.0 million, commencing with the fiscal year ending December 31, 2015; (ii) 100% of the net cash proceeds of certain non-ordinary course asset sales or certain insurance and condemnation proceeds, in each case subject to certain exceptions and reinvestment rights; and (iii) 100% of the net cash proceeds of certain issuances of debt, other than proceeds from debt permitted under the Term Loan Facility.

The Term Loan Facility is secured on a first-priority lien basis by the stock of Ply Gem Industries and by substantially all of the assets (other than the assets securing the obligations under the ABL Facility, which primarily consist of accounts receivable, inventory, cash, deposit accounts, securities accounts, chattel paper, contract rights, instruments, documents related thereto and proceeds of the foregoing) of Ply Gem Industries and the Guarantors that are subsidiaries of Ply Gem Industries and on a second-priority lien basis by the assets that secure the ABL Facility.

The Term Loan Facility includes negative covenants, subject to certain exceptions, that are substantially the same as the negative covenants in the 6.50% Senior Notes and also does not contain any restrictive financial covenants. The Term Loan Facility also restricts the ability of Ply Gem Industries’ subsidiaries to enter into agreements restricting their ability to grant liens to secure the Term Loan Facility and contains a restriction on changes in fiscal year.

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8.25% Senior Secured Notes due 2018

On February 11, 2011, Ply Gem Industries issued $800.0 million of 8.25% Senior Secured Notes at par.  Ply Gem Industries used the proceeds to purchase approximately $724.6 million principal amount of its outstanding 11.75% Senior Secured Notes in a tender offer, to redeem the remaining approximate $0.4 million principal amount of outstanding 11.75% Senior Secured Notes, and to pay related fees and expenses.  A portion of the early tender premiums and the original unamortized discount on the 11.75% Senior Secured Notes was recorded as a discount on the $800.0 million of 8.25% Senior Secured Notes given that the 2011 transaction was predominately accounted for as a loan modification.  On February 15, 2012, Ply Gem Industries issued an additional $40.0 million principal amount of its 8.25% Senior Secured Notes. The 8.25% Senior Secured Notes would have matured on February 15, 2018 and bore interest at the rate of 8.25% per annum.   Interest was paid semi-annually on February 15 and August 15 of each year. The 8.25% Senior Secured Notes were fully and unconditionally and jointly and severally guaranteed on a senior secured basis by the Guarantors. The 8.25% Senior Secured Notes and the related guarantees were secured on a first-priority lien basis by substantially all of the assets (other than the assets securing our obligations under the ABL Facility, which consist of accounts receivable, inventory, cash, deposit accounts, securities accounts, chattel paper and proceeds of the foregoing and certain assets such as contract rights, instruments and documents related thereto) of Ply Gem Industries and the Guarantors and on a second-priority lien basis by the assets that secure the ABL Facility.

As a result of the 2013 initial public offering, on June 28, 2013, Ply Gem Industries redeemed $84.0 million aggregate principal amount of its 8.25% Senior Secured Notes at a redemption price equal to 103%, plus accrued and unpaid interest thereon of approximately $2.6 million. The call premium for this redemption was approximately $2.5 million. Additionally, the Company expensed approximately $3.8 million of unamortized discount and $1.8 million of unamortized debt issuance costs in connection with this redemption and the related loss on debt extinguishment.

On January 30, 2014, Ply Gem Industries purchased approximately $705.9 million of its outstanding 8.25% Senior Secured Notes in a tender offer at a price of $1,067.50 per $1,000 principal amount, which included an early tender payment of $30.00 per $1,000 principal amount, plus accrued and unpaid interest. On January 30, 2014, Ply Gem Industries irrevocably deposited with the trustee for the 8.25% Senior Secured Notes an amount sufficient to satisfy and discharge its obligations under the 8.25% Senior Secured Notes and the indenture. On March 1, 2014, Ply Gem Industries redeemed the remaining outstanding principal amount of the 8.25% Senior Secured Notes at a redemption price equal to 106.188% of the principal amount thereof, plus accrued and unpaid interest to the redemption date. Following the redemption, there were no longer any 8.25% Senior Secured Notes outstanding.

Senior Secured Asset Based Revolving Credit Facility due 2018

On November 1, 2013, Ply Gem Holdings, Inc., Ply Gem Industries, Inc., Ply Gem Canada, Gienow Canada Inc., and Mitten Inc. (together with Ply Gem Canada and Gienow, the “Canadian Borrowers”) entered into an amended and restated credit agreement governing the ABL Facility. Among other things, the amendment and restatement of the credit agreement governing the ABL Facility: (i) increased the overall facility to $250.0 million from $212.5 million, (ii) increased the accordion feature to $100.0 million, (iii) reduced the applicable margin for borrowings under the ABL Facility to a range from 1.50% to 2.00% for Eurodollar rate loans, depending on availability, and (iv) increased the amount available under the ABL Facility to Ply Gem Industries' Canadian subsidiaries to $50.0 million. In November 2014, the Company exercised a portion of the accordion feature under the ABL Facility for $50.0 million, or 50% of the eligible accordion, increasing the ABL Facility from $250.0 million to $300.0 million to primarily account for the additional borrowing base acquired from Simonton. Under the terms of the ABL Facility, the Company has the ability to further increase the revolving commitments up to another $50.0 million to $350.0 million, subject to certain terms and conditions. All outstanding loans under the ABL Facility are due and payable in full on November 1, 2018. Under the ABL Facility, $250.0 million is available to Ply Gem Industries and $50.0 million is available to the Canadian Borrowers. The following summary describes the ABL Facility after giving effect to the amendment and restatement. As a result of the ABL Facility amendment in which the loan syndication consisted of previous members who either maintained or increased their position as well as new syndication members, the Company capitalized new debt issuance costs of $1.3 million and will amortize these costs through 2018.

The ABL Facility provides for revolving credit financing of up to $300.0 million subject to borrowing base availability, including sub-facilities for letters of credit, swingline loans and borrowings in Canadian dollars and United States dollars, $250.0 million of the ABL Facility is available to Ply Gem Industries and $50.0 million is available to the Canadian Borrowers.

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Borrowings under the ABL Facility bear interest at a rate per annum equal to, at Ply Gem Industries’ option, either (a) a base rate determined by reference to the higher of (1) the corporate base rate of the administrative agent under the ABL Facility and (2) the federal funds rate plus 0.5% or (b) a Eurodollar rate determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, in each case plus an applicable margin.  The initial applicable margin for borrowings under the ABL Facility was 0.75% for base rate loans and 1.75% for Eurodollar rate loans.  The applicable margin for borrowings under the ABL Facility is subject to step ups and step downs based on average excess availability under the ABL Facility.  Swingline loans bear interest at a rate per annum equal to the base rate plus the applicable margin.

In addition to paying interest on outstanding principal under the ABL Facility, Ply Gem Industries is required to pay a commitment fee in respect of the unutilized commitments thereunder, which fee will be determined based on utilization of the ABL Facility (increasing when utilization is low and decreasing when utilization is high) multiplied by a commitment fee rate determined by reference to average excess availability under the ABL Facility. The commitment fee rate during any fiscal quarter is 0.375% when average excess availability is greater than $100.0 million for the preceding fiscal quarter and 0.25% when average availability is less than or equal to $100.0 million for the preceding fiscal quarter.  Ply Gem Industries must also pay customary letter of credit fees equal to the applicable margin on Eurodollar loans and agency fees.   As of September 27, 2014, the Company’s interest rate on the ABL Facility was approximately 1.72%.  The ABL Facility requires that if (a) excess availability is less than the greater of (x) 10.0% of the lower of the borrowing base and the aggregate commitments and (y) $17.5 million or (b) any event of default has occurred and is continuing, Ply Gem Industries must comply with a minimum fixed charge coverage ratio test of 1.0 to 1.0.  If the excess availability under the ABL Facility is less than the greater of (a) 12.5% of the lesser of the borrowing base and the aggregate commitments and (b) $22.5 million ($20.0 million for the months of January, February, March and April) for a period of 5 consecutive days or an event of default has occurred and is continuing, all cash from Ply Gem Industries material deposit accounts (including all concentration accounts) will be swept daily into a collection account controlled by the administrative agent under the ABL Facility and used to repay outstanding loans and cash collateralize letters of credit.

All obligations under the ABL Facility are unconditionally guaranteed by Ply Gem Holdings and substantially all of Ply Gem Industries’ existing and future, direct and indirect, wholly owned domestic subsidiaries.  All obligations under the ABL Facility, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of the assets of Ply Gem Industries and the guarantors, including a first-priority security interest in personal property consisting of accounts receivable, inventory, cash, deposit accounts, and certain related assets and proceeds of the foregoing and a second-priority security interest in, and mortgages on, substantially all of Ply Gem Industries’ and the Guarantors’ material owned real property and equipment and all assets that secure the Term Loan Facility on a first-priority basis.  In addition to being secured by the collateral securing the obligations of Ply Gem Industries under the domestic collateral package, the obligations of the Canadian Borrowers, which are borrowers under the Canadian sub-facility under the ABL Facility, are also secured by a first-priority security interest in substantially all of the assets of such Canadian subsidiaries, plus additional mortgages in Canada, and a pledge by Ply Gem Industries of the remaining 35% of the equity interests of the Canadian Borrowers pledged only to secure the Canadian sub-facility.

The ABL Facility contains certain covenants that limit Ply Gem Industries’ ability and the ability of Ply Gem Industries’ subsidiaries to incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem their stock, make loans and investments, sell assets, incur certain liens, enter into transactions with affiliates, and consolidate, merge or sell assets.  In particular, Ply Gem Industries is permitted to incur additional debt in limited circumstances, including, but not limited to, permitted subordinated indebtedness in an aggregate principal amount not to exceed $112.5 million at any time outstanding (subject to the ability to incur additional permitted subordinated debt provided that immediately after giving effect to such incurrence excess availability is more than 25% of the lesser of the total borrowing base and the aggregate commitments and Ply Gem Industries is in pro forma compliance with the fixed charge coverage ratio), purchase money indebtedness in an aggregate amount not to exceed $25.0 million at any one time outstanding, debt of foreign subsidiaries (other than Canadian subsidiaries) in an aggregate amount not to exceed $10.0 million at any one time outstanding, indebtedness in connection with the tax receivable agreement in an aggregate principal amount not to exceed $100.0 million, and the refinancing of debt under certain circumstances.  

As of September 27, 2014, Ply Gem Industries had approximately $224.3 million of contractual availability and approximately $221.4 million of borrowing base availability under the ABL Facility, reflecting $20.0 million of borrowings outstanding and approximately $5.7 million of letters of credit and priority payables reserves.

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9.375% Senior Notes due 2017

On September 27, 2012, Ply Gem Industries issued $160.0 million of 9.375% Senior Notes at par. Ply Gem Industries used the proceeds of the offering, together with cash on hand, to satisfy and discharge its obligations under the 13.125% Senior Subordinated Notes and the indenture governing the 13.125% Senior Subordinated Notes. The 9.375% Senior Notes would have matured on April 15, 2017 and bore interest at the rate of 9.375% per annum. Interest was paid semi-annually on April 15 and October 15 of each year. The 9.375% Senior Notes were unsecured and fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by the Guarantors.

A portion of the early call premium and the original unamortized discount on the 13.125% Senior Subordinated Notes was recorded as a discount on the $160.0 million of 9.375% Senior Notes, given that the transaction was predominately accounted for as a loan modification.

As a result of the 2013 initial public offering, on June 22, 2013, Ply Gem Industries redeemed $64.0 million aggregate principal amount of the 9.375% Senior Notes at a redemption price equal to 109.375%, plus accrued and unpaid interest thereon of approximately $1.1 million. The call premium for this redemption was approximately $6.0 million. Additionally, the Company expensed approximately $3.7 million of unamortized discount and $1.2 million of unamortized debt issuance costs in connection with this redemption and the related loss on debt extinguishment.

On January 30, 2014, Ply Gem Industries purchased approximately $94.7 million of the outstanding 9.375% Senior Notes at a tender price of $1,108.36 per $1,000 principal amount, which included an early tender payment of $30.00 per $1,000 principal amount, plus accrued and unpaid interest. On January 30, 2014, Ply Gem Industries irrevocably deposited with the trustee for the 9.375% Senior Notes an amount sufficient to satisfy and discharge its obligations under the 9.375% Senior Notes and the indenture. On February 16, 2014, Ply Gem Industries redeemed the remaining outstanding principal amount of the 9.375% Senior Notes at a redemption price equal to 100% of the principal amount plus the “make-whole” premium required under the indenture (which equated to 110.179% of the principal amount thereof), plus accrued and unpaid interest. Following the redemption, there were no longer any 9.375% Senior Notes outstanding.

Loss on debt modification or extinguishment

As a result of the January 2014 6.50% Senior Notes and Term Loan Facility issuance and the tender, redemption, and repurchase of the 8.25% Senior Secured Notes and the 9.375% Senior Notes (the "January 2014 Refinancing") during the nine months ended September 27, 2014, the Company performed an analysis to determine the proper accounting treatment for the January 2014 Refinancing. Specifically, the Company evaluated each creditor with ownership in both the new 6.50% Senior Notes and/or Term Loan Facility debt instruments and the old 8.25% Senior Secured Notes and/or 9.375% Senior Notes to determine whether the transaction should be accounted for as a modification or an extinguishment of debt as it relates to each individual creditor. The Company had approximately $34.4 million of unamortized debt discount and $14.9 million of unamortized debt issuance costs associated with the 8.25% Senior Secured Notes and 9.375% Senior Notes, of which approximately $4.8 million and $2.1 million, respectively, were expensed as a loss on extinguishment of debt in the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended September 27, 2014 as a result of the January 2014 Refinancing.

The Company also incurred an early tender premium of approximately $61.1 million in conjunction with this transaction, of which approximately $52.6 million was recorded as a discount on the 6.50% Senior Notes and the Term Loan Facility and approximately $8.5 million was expensed as a loss on extinguishment of debt in the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended September 27, 2014. The Company also expensed approximately $0.3 million for the third party fees for the 8.25% Senior Secured Notes and 9.375% Senior Notes as a result of the January 2014 Refinancing for the nine months ended September 27, 2014. The Company also incurred approximately $14.7 million of costs associated with the 6.50% Senior Notes and Term Loan Facility, of which approximately $9.2 million was recorded as debt issuance costs and approximately $5.5 million was expensed as a loss on modification of debt in the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended September 27, 2014. Additionally, the Company incurred an original issue discount of approximately $2.2 million for the Term Loan Facility, of which approximately $1.9 million was recorded as a discount and approximately $0.3 million was expensed as a loss on extinguishment of debt in the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended September 27, 2014.

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As a result of the June 28, 2013 redemption of approximately $84.0 million aggregate principal amount of the 8.25% Senior Secured Notes, the Company recorded a loss on debt extinguishment of approximately $8.1 million in the condensed consolidated statement of operations for the nine months ended September 28, 2013.

As a result of the June 22, 2013 redemption of approximately $64.0 million aggregate principal amount of the 9.375% Senior Notes, the Company recorded a loss on debt extinguishment of approximately $10.8 million in the condensed consolidated statement of operations for the nine months ended September 28, 2013.

Based on the January 2014 Refinancing, the Company recognized a loss on debt modification or extinguishment of approximately $21.4 million for the nine months ended September 27, 2014 and approximately $18.9 million for the nine months ended September 28, 2013 related to the 2013 redemptions, as summarized in the table below.

(Amounts in thousands)	For the nine months ended
	September 27, 2014			September 28, 2013
Loss on extinguishment of debt:
Tender premium	$	(8,493	)	$	—
8.25% Senior Secured Notes and 9.375% Senior Notes unamortized discount	(4,773		)	—
8.25% Senior Secured Notes and 9.375% Senior Notes unamortized debt issuance costs	(2,067		)	—
Term Loan Facility unamortized discount	(255		)	—
Call premium for 8.25% Senior Secured Notes	—			(2,520		)
8.25% Senior Secured Notes unamortized discount	—			(3,831		)
8.25% Senior Secured Notes unamortized debt issuance costs	—			(1,766		)
Call premium for 9.375% Senior Notes	—			(6,000		)
9.375% Senior Notes unamortized discount	—			(3,666		)
9.375% Senior Notes unamortized debt issuance costs	—			(1,165		)
	(15,588		)	(18,948		)
Loss on modification of debt:
Third party fees for 8.25% Senior Secured Notes and 9.375% Senior Notes	(302		)	—
Third party fees for 6.50% Senior Notes and Term Loan Facility	(5,474		)	—
	(5,776		)	—
Total loss on modification or extinguishment of debt	$	(21,364	)	$	(18,948	)

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7.   PENSION PLANS

The Company has two pension plans, the Ply Gem Group Pension Plan and the MW Manufacturers, Inc. Retirement Plan. The Company’s net periodic benefit expense for the combined plans for the periods indicated consists of the following components:

(Amounts in thousands)	For the three months ended						For the nine months ended
	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
Service cost	$	—		$	29		$	—		$	87
Interest cost	476			440			1,427			1,320
Expected return on plan assets	(567		)	(513		)	(1,702		)	(1,539		)
Amortization of loss	116			234			347			702
Net periodic benefit expense	$	25		$	190		$	72		$	570

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8.   COMMITMENTS AND CONTINGENCIES

Indemnifications

In connection with the Ply Gem acquisition, in which Ply Gem Industries was acquired from Nortek, Inc. (“Nortek”) in February 2004, Nortek has agreed to indemnify the Company for certain liabilities as set forth in the stock purchase agreement governing the Ply Gem acquisition.  In the event Nortek is unable to satisfy amounts due under these indemnifications, the Company would be liable.  The Company believes that Nortek has the financial capacity to honor its indemnification obligations and therefore does not anticipate incurring any losses related to liabilities indemnified by Nortek under the stock purchase agreement.  A receivable related to this indemnification has been recorded in other long-term assets of approximately $3.0 million and $3.1 million at September 27, 2014 and December 31, 2013, respectively.  As of September 27, 2014 and December 31, 2013, the Company has recorded liabilities related to these indemnifications of approximately $0.5 million and $0.4 million, respectively, in current liabilities and $2.5 million and $2.7 million, respectively, in long-term liabilities, consisting of the following:

(Amounts in thousands)	September 27, 2014		December 31, 2013
Product claim liabilities	$	140	$	140
Multi-employer pension plan withdrawal liability	2,251		2,362
Other	647		576
	$	3,038	$	3,078

Warranty claims

The Company sells a number of products and offers a number of warranties.  The specific terms and conditions of these warranties vary depending on the product sold.  The Company estimates the costs that may be incurred under their warranties and records a liability for such costs at the time of sale.  Factors that affect the Company’s warranty liabilities include the number of units sold, historical and anticipated rates of warranty claims, cost per claim and new product introduction.  The Company assesses the adequacy of the recorded warranty claims and adjusts the amounts as necessary.  As of September 27, 2014 and December 31, 2013, warranty liabilities of approximately $11.4 million and $10.9 million, respectively, have been recorded in current liabilities and approximately $32.1 million and $31.6 million, respectively, have been recorded in long term liabilities.

Changes in the Company’s short-term and long-term warranty liabilities are as follows:

	For the three months ended						For the nine months ended
(Amounts in thousands)	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
Balance, beginning of period	$	40,397		$	40,554		$	42,466		$	37,870
Acquisitions - Simonton, Gienow, and Mitten	5,370			—			5,370			4,675
Warranty expense during period	2,897			3,827			8,209			8,197
Settlements made during period	(5,148		)	(4,012		)	(12,529		)	(10,373		)
Balance, end of period	$	43,516		$	40,369		$	43,516		$	40,369

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Environmental

The Company is subject to United States and Canadian federal, state, provincial and local laws and regulations relating to pollution and the protection of the environment, including those governing emissions to air, discharges to water, use, storage and transport of hazardous materials, storage, treatment and disposal of waste, remediation of contaminated sites, and protection of worker health and safety. From time to time, the Company's facilities are subject to investigation by governmental regulators. In addition, the Company has been identified as one of many potentially responsible parties for contamination present at certain offsite locations to which it or its predecessors are alleged to have sent hazardous materials for recycling or disposal. The Company may be held liable, or incur fines or penalties, in connection with such requirements or liabilities for, among other things, releases of hazardous substances occurring on or emanating from current or formerly owned or operated properties or any associated offsite disposal location, or for known or newly-discovered contamination at any of the Company's properties from activities conducted by previous occupants. The amount of any liability, fine or penalty may be material, and certain environmental laws impose strict, and under certain circumstances joint and several, liability for the cost of addressing releases of hazardous substances upon certain classes of persons, including site owners or operators and persons that disposed or arranged for the disposal of hazardous substances at contaminated sites.

MW Manufacturers Inc. (“MW”), a subsidiary of MWM Holding, entered into an Administrative Order on Consent, effective September 12, 2011, with the United States Environmental Protection Agency (“EPA”), Region III, under Section 3008(h) of the Resource Conservation and Recovery Act (RCRA), with respect to its Rocky Mount, Virginia property.  During 2011, as part of the Administrative Order on Consent, MW provided the EPA, among other things, a RCRA Facility Investigation Workplan as well as a preliminary cost estimate of approximately $1.8 million for the predicted assessment, remediation and monitoring activities to be conducted pursuant to the Consent Order over the remediation period, which is currently estimated through 2023. During 2012, the EPA approved the RCRA Facility Investigation Workplan (the "Workplan"), and MW is currently implementing the Workplan. The Company has recorded approximately $0.3 million of this environmental liability within current liabilities and approximately $1.2 million within other long-term liabilities in the Company’s condensed consolidated balance sheet at September 27, 2014 and December 31, 2013.  The Company will adjust this environmental remediation liability in future periods, if necessary, as further information develops or circumstances change.

Certain liabilities with respect to this contamination relate to the previous closure of an underground storage tank and were assumed by U.S. Industries, Inc., pursuant to its indemnity obligation under the stock purchase agreement dated August 11, 1995, whereby U.S. Industries, Inc. sold the stock of MW to FPI Acquisition Corp. (“Fenway Partners”). As the successor-in-interest of Fenway Partners, the Company is similarly indemnified by U.S. Industries, Inc.  The Company’s ability to seek indemnification from U.S. Industries, Inc. is, however, limited by the terms and limits of the indemnity as well as the strength of U.S. Industries, Inc.’s financial condition, which could change in the future.  As of September 27, 2014, no recovery has been recognized on the Company’s condensed consolidated balance sheet, but the Company will actively pursue the validity of this indemnity in future periods and will recognize future recoveries in the period in which they become probable.

The State of Nebraska is investigating certain groundwater contamination in northern York, Nebraska, comprised primarily of volatile organic compounds (“VOC”) (predominantly trichloroethene (“TCE”)). In December 2013, the EPA announced its proposal to add this groundwater contamination site to the Superfund National Priorities List (“NPL”) after it was referred to the EPA by the State of Nebraska. Sampling was conducted at the Kroy Building Products, Inc. (“Kroy”) facility in York, Nebraska during the first quarter of 2010, however the facility has not received any official communications concerning this sampling event or the addition of the groundwater contamination site to the NPL. Alcan Aluminum Corporation (“Alcan”) has assumed the obligation to indemnify the Company with respect to certain liabilities for environmental contamination of the Kroy facility occurring prior to 1994. Notwithstanding this indemnity, however, under applicable Federal and State laws, Kroy, and Ply Gem as its parent, could be held liable for all or part of the costs associated with the matter under certain circumstances. Moreover, the ability of Kroy and Ply Gem to seek indemnification may be limited by the strength of Alcan’s financial condition as well as the terms and limits of the indemnity.

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The Company is currently involved in environmental proceedings involving Gienow Canada Inc. (f/k/a Ply Gem Canada, Inc.) and Alberta Environment (arising from subsurface contamination discovered at our Calgary, Alberta property), and the Company may in the future be subject to environmental proceedings involving Thermal-Gard, Inc. (arising from groundwater contamination in Punxsutawney, Pennsylvania), Mastic Home Exteriors, Inc. (“MHE”) (relating to a closed landfill site in Sidney, Ohio as well as participating as a potentially responsible party in nine contaminated sites in Indiana, Ohio and South Carolina), and Simonton (relating to closed lagoons and certain contamination in Paris, Illinois as well as certain contamination associated with certain 7-Eleven convenience food stores). Under the stock purchase agreement governing the MHE acquisition, Alcoa Securities Corporation and Alcoa, Inc. are to indemnify the Company for certain environmental liabilities in excess of $2.5 million, including liabilities relating to the landfill site in Sidney, Ohio and the nine contaminated sites in Indiana, Ohio and South Carolina. Under the stock purchase agreement governing the Simonton acquisition, Fortune Brands Windows & Doors, Inc., is to indemnify the Company for any environmental claims associated with the 7-Eleven convenience food stores.  Our former subsidiary, Hoover Treated Wood Products, Inc., is involved in an environmental proceeding with the Georgia Department of Natural Resources in connection with a contaminated landfill site in Thomson, Georgia.  While the Company had assumed an obligation to indemnify the purchaser of our former subsidiary when the Company sold Hoover Treated Wood Products, Inc., the Company's obligation has been novated and assumed by Nortek. The Company's ability to seek indemnification or enforce these and other obligations is, however, limited by the strength of the financial condition of the indemnitor or responsible party, which could change in the future, as well as the terms and limits of any such indemnities or obligations.

Based on current information, the Company is not aware of any compliance obligations, claims, releases or investigations that will have a material adverse effect on our results of operations, cash flows or financial position except as otherwise disclosed in the Company's condensed consolidated financial statements. However, there can be no guarantee that previously known or newly-discovered matters or any inability to enforce our available indemnification rights against previous owners of the Company's subsidiaries will not result in material costs or liabilities. While the stock purchase agreements governing certain of our acquisitions provide that the sellers will indemnify us, subject to certain limitations, for certain environmental liabilities, our ability to seek indemnification from the respective sellers is limited by various factors, including the financial condition of the indemnitor or responsible party as well as by the terms and limits of such indemnities or obligations. As a result, there can be no assurance that we could receive any indemnification from the sellers, and any related environmental liabilities, costs or penalties could have a material adverse effect on our financial condition and results of operations.

Self-insured risks

The Company maintains a broad range of insurance policies which include general liability insurance coverage and workers compensation. These insurance policies protect the Company against a portion of the risk of loss from claims. However, the Company retains a portion of the overall risk for such claims through its self-insured per occurrence and aggregate retentions, deductibles, and claims in excess of available insurance policy limits. The Company's general liability insurance includes coverage for certain damages arising out of product design and manufacturing defects. The Company's insurance coverage is generally subject to a per occurrence retention.

The Company reserves for costs associated with claims, as well as incurred but not reported losses (“IBNR”), based on an outside actuarial analysis of its historical claims. These estimates make up a significant portion of the Company's liability and are subject to a high degree of uncertainty due to a variety of factors, including changes in type of claims, claims reporting and resolution patterns, frequency and timing of claims, third party recoveries, estimates of claim values, claims management expenses (including legal fees and expert fees), insurance industry practices, the regulatory environment, and legal precedent. Adjustments to estimated reserves are recorded in the period in which the change in estimate occurs.

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Litigation

During the past several years, the Company incurred increased litigation expense primarily related to the claims discussed below. The Company believes it has valid defenses to the claims discussed below and will vigorously defend all such claims; however, litigation is subject to many uncertainties and there cannot be any assurance that the Company will ultimately prevail or, in the event of an unfavorable outcome or settlement of litigation, that the ultimate liability would not be material and would not have a material adverse effect on the business, results of operations, cash flows or financial position of the Company.

In John Gulbankian and Robert D. Callahan v. MW Manufacturers, Inc. (“Gulbankian”), a purported class action filed in March 2010 in the United States District Court for the District of Massachusetts (the “Court”), plaintiffs, on behalf of themselves and all others similarly situated, allege damages as a result of the defective design and manufacture of MW's V-Wood windows. In Eric Hartshorn and Bethany Perry v. MW Manufacturers, Inc. (“Hartshorn”), a purported class action filed in July 2012 in the Court, plaintiffs, on behalf of themselves and all others similarly situated, allege damages as a result of the defective design and manufacture of MW's Freedom and Freedom 800 windows. On April 22, 2014, plaintiffs in both the Gulbankian and Hartshorn cases filed a Consolidated Amended Class Action Complaint, making similar claims against all MW vinyl clad windows, including MW’s V-Wood, Freedom, Freedom 600 and Freedom 800 windows. The plaintiffs seek a variety of relief, including (i) economic and compensatory damages, (ii) treble damages, (iii) punitive damages, and (iv) attorneys' fees and costs of litigation.

During 2014, MW engaged in mediation sessions with plaintiffs’ counsel for both the Gulbankian and Hartshorn cases. MW signed a settlement agreement with plaintiffs as of April 18, 2014 that would settle both the Gulbankian and Hartshorn cases on a nationwide basis (the “Vinyl Clad Settlement Agreement”). The Court granted preliminary approval of this settlement on May 23, 2014. If the Court grants final approval, the Vinyl Clad Settlement Agreement provides for a cash payment for eligible consumers submitting qualified claims showing, among other requirements, certain damage to the frames of their MW vinyl clad windows. Under the Vinyl Clad Settlement Agreement, MW has also agreed to pay attorneys' fees and costs to plaintiffs' counsel in an amount not to exceed $2.5 million. The Court will make a determination regarding counsel’s fees and costs upon final approval of the settlement. The Vinyl Clad Settlement Agreement provides that this settlement would apply to any and all MW vinyl clad windows manufactured from January 1, 1987 through May 23, 2014. While a final approval hearing occurred on October 29, 2014, the Court has not issued a ruling. It is expected that, if the settlement receives final approval, it will result in the dismissal of Karl Memari v. Ply Gem Prime Holdings, Inc. et al., another pending lawsuit discussed below that is seeking class certification with respect to vinyl clad windows manufactured by MW. The settlement is not final until the Court grants final approval of the settlement, and the Court may, in its sole discretion, determine not to grant final approval of the settlement. If the Court does not grant final approval of the settlement, the Vinyl Clad Settlement Agreement will not be binding on the parties. The Company and MW deny all liability in the settlement and with respect to the facts and claims alleged. The Company, however, is aware of the substantial burden, expense, inconvenience and distraction of continued litigation, and agreed to settle the litigation to avoid these.

As a result of this settlement, the Company recognized a $5.0 million expense during the nine months ended September 27, 2014 within selling, general, and administrative expenses in the Company’s condensed consolidated statement of operations and comprehensive income (loss) in the Company's Windows and Doors segment. It is possible that the Company may incur costs in excess of the recorded amounts; however, the Company currently expects that the total net cost to resolve the lawsuits will not exceed approximately $5.0 million. Approximately $4.6 million of this liability is currently outstanding, with $2.6 million as a current liability within accrued expenses and $2.0 million as a noncurrent liability within other long-term liabilities in the Company’s condensed consolidated balance sheet as of September 27, 2014.

In Karl Memari v. Ply Gem Prime Holdings, Inc. et al., a purported class action filed in March 2013 in the United States District Court for the District of South Carolina, Charleston Division, plaintiff, on behalf of himself and all others similarly situated, alleges damages as a result of the illegality and/or defects of MW's vinyl clad windows. The plaintiff seeks a variety of relief, including (i) actual and compensatory damages, (ii) punitive damages, and (iii) attorneys' fees and costs of litigation. Discovery regarding class certification has closed, however, the hearing regarding class certification has not yet been scheduled as this case is currently stayed pending the final approval hearing in the Gulbankian and Hartshorn matters. While the damages sought in this action have not yet been quantified, it is expected that, if the settlement of the Gulbankian and Hartshorn cases receives final approval, it will result in the dismissal of this action.

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In Anthony Pagliaroni v. Mastic Home Exteriors, Inc. and Deceuninck North America, LLC, a purported class action filed in January 2012 in the United States District Court for the District of Massachusetts, plaintiff, on behalf of himself and all others similarly situated, alleges damages as a result of the defective design and manufacture of Oasis composite deck and railing, which was manufactured by Deceuninck North America, LLC (“Deceuninck”) and sold by Mastic Home Exteriors, Inc. (“MHE”). The plaintiff seeks a variety of relief, including (i) economic and compensatory damages, (ii) treble damages, (iii) punitive damages, and (iv) attorneys' fees and costs of litigation. The damages sought in this action have not yet been quantified. Discovery regarding class certification has closed, however, the hearing regarding class certification has not yet been scheduled. Deceuninck, as the manufacturer of Oasis deck and railing, has agreed to indemnify MHE for certain liabilities related to this claim pursuant to the sales and distribution agreement, as amended, between Deceuninck and MHE. MHE's ability to seek indemnification from Deceuninck is, however, limited by the terms of the indemnity as well as the strength of Deceuninck's financial condition, which could change in the future.

In The Muhler Company, Inc. v. Ply Gem Prime Holdings, Inc. et al., a lawsuit filed in April 2011 in the United States District Court for the District of South Carolina, Charleston Division, plaintiff alleges unfair competition and trade practices. The plaintiff seeks a variety of relief, including (i) consequential damages, (ii) treble damages, (iii) punitive damages, and (iv) attorneys' fees and costs of litigation. In April 2013, the Court granted the Company's motion for summary judgment with respect to the federal Lanham Act claims. As such, only state unfair competition and trade practices claims currently remain. In May 2013, the plaintiff filed a notice of appeal to the U.S. Court of Appeals for the Fourth Circuit with respect to the summary judgment granted on the federal Lanham Act claims, and the Fourth Circuit denied interlocutory appeal. The damages sought in this action have not yet been quantified.

In J-Channel Industries Corporation v. Lowe’s Companies, Inc., and Ply Gem Industries, Inc., a purported patent infringement case filed in August 2013 in the United States District Court for the Eastern Division of Tennessee, Northern Division, plaintiff, a wholly owned subsidiary of CopyTele, Inc., a company specializing in patent monetization and patent assertion, alleged damages as a result of patent infringement by certain windows having an integrated “j-channel” feature. The plaintiff sought a variety of relief, including (i) economic and compensatory damages and (ii) attorneys' fees and costs of litigation. This action was settled and paid during the three and nine months ended September 27, 2014.

In rePly Gem Holdings, Inc., Securities Litigation isa purported federal securities class action filed on May 19, 2014 in the United States District Court for the Southern District of New York against Ply Gem Holdings, Inc., several of its directors and officers, and the underwriters associated with the Company’s IPO. It is filed on behalf of all persons or entities, other than the defendants, who purchased the common shares of the Company pursuant and/or traceable to the Company’s IPO and seeks remedies under Sections 11 and 15 of the Securities Act of 1933, alleging that the Company’s Form S-1 registration statement was negligently prepared and materially inaccurate, containing untrue statements of material fact and omitting material information which was required to be disclosed. The plaintiffs seek a variety of relief, including (i) damages together with interest thereon and (ii) attorneys’ fees and costs of litigation. On October 14, 2014, Strathclyde Pension Fund was certified as lead plaintiff, and class counsel was appointed. The damages sought in this action have not yet been quantified. Pursuant to the Underwriting Agreement, dated May 22, 2013, entered into in connection with the IPO, the Company has agreed to reimburse the underwriters for the legal fees and other expenses reasonably incurred by the underwriters’ law firm in its representation of the underwriters in connection with this matter. Pursuant to Indemnification Agreements, dated as of May 22, 2013, between the Company and each of the directors and officers named in this action, the Company has agreed to assume the defense of such directors and officers. The Company believes the purported federal securities class action is without merit and will vigorously defend against the lawsuit.

Other contingencies

The Company is subject to other contingencies, including legal proceedings and claims arising out of its businesses that cover a wide range of matters, including, among others, environmental matters, contract and employment claims, personal injury, product liability, warranty and modification, adjustment or replacement of component parts of units sold, which may include product recalls.  Product liability, environmental and other legal proceedings also include matters with respect to businesses previously owned.  The Company has used various substances in their products and manufacturing operations, which have been or may be deemed to be hazardous or dangerous, and the extent of its potential liability, if any, under environmental, product liability and workers’ compensation statutes, rules, regulations and case law is unclear.  Further, due to the lack of adequate information and the potential impact of present regulations and any future regulations, there are certain circumstances in which no range of potential exposure may be reasonably estimated.  Also, it is not possible to ascertain the ultimate legal and financial liability with respect to certain contingent liabilities, including lawsuits, and therefore no such estimate has been made.

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9.   ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES

Accrued expenses consist of the following at September 27, 2014 and December 31, 2013:

(Amounts in thousands)	September 27, 2014		December 31, 2013
Insurance	$	9,292	$	3,926
Employee compensation and benefits	17,445		8,916
Sales and marketing	42,989		34,215
Product warranty	11,387		10,861
Accrued freight	2,701		1,350
Accrued interest	9,813		25,477
Accrued environmental liability	456		463
Accrued pension	2,258		2,258
Accrued sales returns and discounts	4,063		3,263
Accrued taxes	4,418		3,433
Litigation accrual	2,594		—
Other	40,141		18,778
	$	147,557	$	112,940

Other long-term liabilities consist of the following at September 27, 2014 and December 31, 2013:

(Amounts in thousands)	September 27, 2014		December 31, 2013
Insurance	$	2,043	$	2,213
Pension liabilities	5,176		6,622
Multi-employer pension withdrawal liability	2,251		2,362
Product warranty	32,129		31,605
Long-term product claim liability	140		140
Long-term environmental liability	1,227		1,247
Liabilities for tax uncertainties	3,188		2,934
Litigation accrual	2,000		—
Other	4,244		5,437
	$	52,398	$	52,560

Long-term incentive plan

The Company has a long-term incentive plan (“LTIP”) for certain employees. The long-term incentive plan was implemented to retain and incentivize key employees. During the three months ended September 27, 2014 and September 28, 2013, the Company recognized a LTIP expense of $0.5 million and $0.2 million, respectively, which has been recorded within selling, general, and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss). During the nine months ended September 27, 2014 and September 28, 2013, the Company recognized a LTIP expense of $1.5 million and $1.1 million, respectively, which has been recorded within selling, general, and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss). The LTIP liability is $3.3 million and $4.6 million as of September 27, 2014 and December 31, 2013, respectively, of which $2.3 million and $2.9 million has been recorded within accrued expenses and $1.0 million and $1.7 million in other long-term liabilities in the condensed consolidated balance sheets as of September 27, 2014 and December 31, 2013, respectively.

Other liabilities

During the three months ended September 27, 2014 and September 28, 2013, the Company made approximately $1.1 million and $1.0 million, in cash payments on restructuring liabilities, respectively. During the nine months ended September 27, 2014 and September 28, 2013, the Company made approximately $4.4 million and $2.9 million, in cash payments on restructuring liabilities, respectively. These payments were for a restructuring and integration program implemented in Western Canada and general back office centralization efforts incurred as well as product simplification costs incurred for the entire Windows and Doors segment.

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10.   INCOME TAXES

Effective tax rate

Under FASB Accounting Standards Codification 740-270, Income Taxes - Interim Reporting, each interim period is considered an integral part of the annual period and tax expense is measured using an estimated annual effective rate. Estimates of the annual effective tax rate at the end of interim periods are, of necessity, based on evaluation of possible future events and transactions and may be subject to subsequent refinement or revision. The Company calculates its quarterly tax provision consistent with the guidance provided by ASC 740-270, whereby the Company forecasts its estimated annual effective tax rate then applies that rate to its year-to-date pre-tax book (loss) income. In addition, we exclude jurisdictions with a projected loss for the year or the year-to-date loss where we cannot recognize a tax benefit from our estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections. In addition to the tax resulting from applying the estimated annual effective tax rate to pre-tax income (loss), the Company includes certain items treated as discrete events to arrive at an estimated effective tax rate. Future changes in the forecasted annual income (loss) projections, tax rate changes, or discrete tax items could result in significant adjustments to quarterly income tax expense (benefit) in future periods in accordance with ASC 740-270.

For the nine months ended September 27, 2014, the Company's estimated effective income tax rate was approximately 9.3%, which varied from the statutory rate primarily due to state income tax expense, valuation allowance, tax contingencies, and foreign income taxes. The effective tax rate including discrete items was 45.9%. The tax benefit for the three and nine months ended September 27, 2014 is approximately $10.5 million and $15.9 million, respectively.

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Valuation allowance

As of September 27, 2014, a full valuation allowance has been provided against certain deferred tax assets as it is presently deemed more likely than not that the benefit of such net tax assets will not be utilized. During the nine months ended September 27, 2014, the Company established a full valuation allowance on its deferred tax assets for Gienow Canada of approximately $7.9 million as a result of its operating performance and challenges associated with combining two separate manufacturing facilities into a single facility.

As a result of the Simonton acquisition on September 19, 2014, the Company evaluated Simonton's net deferred tax liability position with Ply Gem's full valuation allowance position, which resulted in a $25.0 million reversal of valuation allowance during the three and nine months ended September 27, 2014. All of the Company's subsidiaries, excluding Mitten, are in a full valuation allowance position as of September 27, 2014. Due to recent cumulative losses incurred by the Company, management did not rely upon projections of future taxable income in assessing the recoverability of deferred tax assets. The Company currently has book goodwill of approximately $20.2 million that is not amortized, which results in a deferred tax liability of approximately $6.2 million at September 27, 2014. Therefore, the reversal of deferred tax liabilities related to this goodwill is not considered a source of future taxable income in assessing the realization of its deferred tax assets. The Company continues to evaluate its ability to realize the net deferred tax assets and its estimates are subject to change.

Tax uncertainties

Despite the Company’s belief that its tax return positions are consistent with applicable tax laws, the Company believes that certain positions could be challenged by taxing authorities. The Company’s tax reserves reflect the difference between the tax benefit claimed on tax returns and the amount recognized in the condensed consolidated financial statements. These reserves have been established based on management’s assessment as to potential exposure attributable to permanent differences and interest applicable to both permanent and temporary differences. The tax reserves are reviewed periodically and adjusted in light of changing facts and circumstances, such as progress of tax audits, lapse of applicable statutes of limitations and changes in tax law. Certain income tax returns are currently under examination by various taxing authorities. During the nine months ended September 27, 2014, the Company increased its tax contingency reserve by approximately $0.3 million as a result of interest accrued on existing uncertain tax positions.

Tax Receivable Agreement

On May 22, 2013, the Company entered into a Tax Receivable Agreement (the “Tax Receivable Agreement”) with PG ITR Holdco, L.P. (the “Tax Receivable Entity”). The Tax Receivable Agreement generally provides for the payment by the Company to the Tax Receivable Entity of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that the Company actually realizes in periods ending after the IPO as a result of (i) net operating loss ("NOL") carryovers from periods (or portions thereof) ending before January 1, 2013, (ii) deductible expenses attributable to the transactions related to the IPO and (iii) deductions related to imputed interest deemed to be paid by the Company as a result of or attributable to payments under the Tax Receivable Agreement. The term of the Tax Receivable Agreement will continue until all such benefits have been utilized or expired. The Company will retain the benefit of the remaining 15% of these tax savings. The Tax Receivable Agreement will obligate the Company to make payments to the Tax Receivable Entity generally equal to 85% of the applicable cash savings that is actually realized as a result of utilizing NOL carryovers once the tax returns are filed for that respective tax year.

The Company estimates that the total anticipated amount of future payments under the Tax Receivable Agreement will be approximately $100.0 million assuming no material changes in the relevant tax law, that the Company earns sufficient taxable income to utilize the net operating loss carrying forwards, and that utilization of such tax attributes is not subject to limitation under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code") as the result of an “ownership change”. It is possible that future transactions or events or changes in estimates could increase or decrease the actual tax benefits realized from these tax attributes and the corresponding Tax Receivable Agreement payments and liability.

As of September 27, 2014, the Company had a non-current liability of approximately $26.0 million for the amount due pursuant to the Tax Receivable Agreement related to NOL carryovers. The Company recognized a $14.0 million and $14.4 million expense for the change in this liability during the three and nine months ended September 27, 2014, respectively, mostly as a result of Simonton's net deferred tax liabilities acquired which will create future taxable income to utilize net operating loss carryforwards.

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Other

As of September 27, 2014, the Company has not established U.S. deferred taxes on unremitted earnings of the Company’s foreign subsidiaries. Notwithstanding the provisions within the American Jobs Creation Act of 2004, the Company continues to consider these amounts to be permanently invested.

On December 23, 2011, the U.S. Treasury Department issued comprehensive temporary and proposed regulations addressing the treatment of expenditures related to tangible property for tax purposes. The final regulations were issued on September 13, 2013 and are effective for tax years beginning January 1, 2014. The Company is evaluating the changes necessary to comply with the regulations and the related administrative procedures and is not currently aware of any adjustments that would be material to the Company’s condensed consolidated financial statements.

11.   STOCK-BASED COMPENSATION

A rollforward of stock options outstanding during the nine months ended September 27, 2014 is presented below: 

	Stock Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Balance at January 1, 2014	3,285,750		$	11.04	5.24
Granted	151,147		15.11		—
Exercised	(618,615	)	1.76		—
Forfeited or expired	(105,494	)	10.85		—
Balance at September 27, 2014	2,712,788		$	13.39	5.71

In connection with the merger in conjunction with the IPO, options to purchase shares of common stock of Ply Gem Prime were converted into 3,386,008 options to purchase shares of Ply Gem Holdings common stock with adjustments to the per share exercise prices.

As of September 27, 2014, 2,091,234 options were 100% vested.  At September 27, 2014, the Company had approximately $2.4 million of total unrecognized compensation expense that will be recognized over the weighted average period of 1.80 years.  The Company recorded compensation expense of $0.6 million and $0.6 million for the three months ended September 27, 2014 and September 28, 2013, respectively, and $1.5 million and $1.5 million for the nine months ended September 27, 2014 and September 28, 2013, respectively, related to the vesting of these options.

Restricted stock

During December 2012, the Company issued 3,886 restricted shares of common stock to each of three independent members of the Board of Directors.  These shares will vest over the 2012 through 2013 twelve month period and the Company is expensing these items ratably over the twelve month period up to the vesting date. During the three and nine months ended September 28, 2013, the Company expensed $45,000 and $90,000, respectively, related to these grants in selling, general, and administrative expenses within the condensed consolidated statement of operations and comprehensive income (loss).

During March 2014, the Company issued 3,523 restricted shares of common stock to each of three independent members of the Board of Directors.  These shares will vest over the approximate ten-month period to December 31, 2014 and the Company is expensing these items ratably over the ten-month period up to the vesting date. One issuance of these shares, or 3,523 shares, became immediately fully vested during May 2014. Additionally during May 2014, the Company issued 5,240 restricted shares of common stock to each of the two new independent members of the Board of Directors.  These shares will vest over the approximate eight-month period to December 31, 2014 and the Company is expensing these items ratably over the eight-month period up to the vesting date. During the three and nine months ended September 27, 2014, the Company expensed approximately $76,000 and $182,000, respectively, related to all of these grants in selling, general, and administrative expenses within the condensed consolidated statement of operations and comprehensive income (loss).

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12.   SEGMENT INFORMATION

The Company defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by management in deciding how to allocate resources and in assessing performance.  The Company has two reportable segments:  (1) Siding, Fencing and Stone and (2) Windows and Doors.

The income before income taxes of each segment includes the revenue generated on transactions involving products within that segment less identifiable expenses.  Unallocated income and expenses include items which are not directly attributed to or allocated to either of the Company’s reporting segments.  Such items include interest, legal costs, corporate payroll, and unallocated finance, and accounting expenses. Unallocated corporate assets include cash and certain receivables.  Interest expense is presented net of interest income.

Following is a summary of the Company’s segment information:

	For the three months ended						For the nine months ended
(Amounts in thousands)	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
Net sales
Siding, Fencing and Stone	$	244,416		$	228,214		$	609,419		$	565,010
Windows and Doors	193,432			179,212			507,105			467,653
	$	437,848		$	407,426		$	1,116,524		$	1,032,663
Operating earnings (loss)
Siding, Fencing and Stone	$	44,756		$	39,476		$	89,484		$	92,998
Windows and Doors	3,773			(4,489		)	(17,793		)	(22,549		)
Unallocated	(6,602		)	(4,067		)	(18,116		)	(39,439		)
	$	41,927		$	30,920		$	53,575		$	31,010
	Total assets as of
	September 27, 2014			December 31, 2013
Total assets
Siding, Fencing and Stone	$	722,440		$	655,252
Windows and Doors	540,793			305,789
Unallocated	41,629			81,210
	$	1,304,862		$	1,042,251

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13.  RELATED PARTY TRANSACTIONS

Under the General Advisory Agreement (the “General Advisory Agreement”) the Company entered into with CI Capital Partners LLC (“CI Capital Partners”), formerly Caxton-Iseman Capital LLC, CI Capital Partners provided the Company with acquisition and financial advisory services as the Board of Directors reasonably requested.  Under the General Advisory Agreement the Company paid and expensed, as a component of selling, general, and administrative expenses, a management fee of approximately $0.0 million and $0.4 million for the three and nine months ended September 28, 2013, respectively. The General Advisory Agreement was terminated in May 2013 and as a result, no management fee was paid during the three and nine months ended September 27, 2014.

During 2012, the Company and CI Capital Partners amended the General Advisory Agreement to, among other things, extend the term for a period of ten years to November 6, 2022. In connection with the IPO in May 2013, the General Advisory Agreement was terminated prior to the end of the initial term, as such, Ply Gem Industries paid to CI Capital Partners an amount equal to the present value of the annual advisory fees that would have been payable for three years, based on the Company’s cost of funds to borrow amounts under the Company’s senior credit facilities. This payment of approximately $18.9 million was made in May 2013 and was expensed within initial public offering costs in the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended September 28, 2013. The Company also expensed approximately $2.7 million of the 2013 capitalized advisory fees paid to CI Capital Partners as a result of the termination within initial public offering costs in the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended September 28, 2013. The Company also paid CI Capital Partners approximately $0.4 million for advisory services in connection with the Gienow acquisition during the nine months ended September 28, 2013 and this amount was expensed within selling, general, and administrative expenses in the condensed consolidated statement of operations and comprehensive income (loss) during the nine months ended September 28, 2013.

In May 2013, the Company finalized an agreement with the Company's President and Chief Executive officer providing a one-time cash bonus of $1.5 million upon the successful completion of an IPO prior to December 31, 2013, subject to his continued employment with the Company through this date. This bonus agreement was made in lieu of any benefits that the President and Chief Executive Officer may have received under the Tax Receivable Agreement and was paid during May 2013 and expensed within initial public offering costs in the condensed consolidated statement of operations and comprehensive income (loss) during the nine months ended September 28, 2013.

14.   RESTRUCTURING

On September 30, 2013, the Company announced that it will realign production across two manufacturing facilities in Calgary, Alberta, Canada, in an effort to improve the Company’s overall operating efficiency. The two manufacturing facilities resulted from the Company’s acquisition of Gienow, completed in April 2013, combined with the pre-existing manufacturing facility of Ply Gem Canada. These realignment plans include shifting the majority of the vinyl window and door production into Gienow’s manufacturing facility in Calgary, Alberta, Canada, while maintaining wood window and door production in Ply Gem Canada’s manufacturing facility also located in Calgary, Alberta, Canada. In connection with this realignment, distribution was realigned across Gienow and Ply Gem Canada distribution centers in Western Canada.

Production began to be realigned during 2013, with the majority completed by March 2014. In connection with these plans, the Company originally expected to incur pre-tax exit and restructuring cash and non-cash costs totaling approximately $2.9 million, which includes approximately $0.2 million for contract termination costs, approximately $1.1 million of personnel-related costs and approximately $1.6 million of other facilities-related costs.

The following table summarizes the Company's restructuring activity for the nine months ended September 27, 2014:

(Amounts in thousands)	Accrued as of		Adjustments			Expensed		Cash payments			Accrued as of
	December 31, 2013		during 2014			during 2014		during 2014			September 27, 2014
Western Canada
Severance costs	$	603	$	(80	)	$	49	$	(485	)	$	87
Contract terminations	157		(24		)	—		—			133
Equipment removal and other	533		(69		)	2,963		(3,350		)	77
	$	1,293	$	(173	)	$	3,012	$	(3,835	)	$	297

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The adjustments incurred in the nine months ended September 27, 2014 related to the foreign currency translation impact of the related balances during the period.

The Company recorded restructuring costs in selling, general and administrative expenses in the condensed consolidated statements of operations in the periods and segments shown in the following table:

	For the three months ended				For the nine months ended
(Amounts in thousands)	September 27, 2014		September 28, 2013		September 27, 2014		September 28, 2013
Siding, Fencing and Stone	$	—	$	—	$	—	$	—
Windows and Doors	819		—		3,012		—
	$	819	$	—	$	3,012	$	—

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15.   GUARANTOR/NON-GUARANTOR

The 6.50% Senior Notes were issued by our direct 100% owned subsidiary, Ply Gem Industries, and are fully and unconditionally guaranteed on a joint and several basis by the Company and certain of Ply Gem Industries’ 100% owned subsidiaries.  Ply Gem Industries is a 100% owned subsidiary of Ply Gem Holdings. Accordingly, the following guarantor and non-guarantor information is presented as of September 27, 2014 and December 31, 2013, and for the three and nine months ended September 27, 2014 and September 28, 2013.  The non-guarantor information presented represents our Canadian subsidiaries: Gienow and Mitten.

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the three months ended September 27, 2014
	Guarantor		Issuer						Non-
	Ply Gem		Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.		Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Net sales	$	—	$	—		$	352,856		$	84,992		$	—		$	437,848
Cost of products sold	—		—			275,938			63,321			—			339,259
Gross profit	—		—			76,918			21,671			—			98,589
Operating expenses:
Selling, general and
administrative expenses	—		6,602			28,502			16,251			—			51,355
Intercompany administrative
charges	—		—			4,528			1,047			(5,575		)	—
Amortization of intangible assets	—		—			4,008			1,299			—			5,307
Total operating expenses	—		6,602			37,038			18,597			(5,575		)	56,662
Operating earnings (loss)	—		(6,602		)	39,880			3,074			5,575			41,927
Foreign currency loss	—		—			—			(766		)	—			(766		)
Intercompany interest	—		13,328			(11,723		)	(1,605		)	—			—
Interest expense	—		(16,296		)	(4		)	—			—			(16,300		)
Interest income	—		1			4			13			—			18
Tax receivable agreement liability adjustment	—		(13,988		)	—			—			—			(13,988		)
Intercompany administrative income	—		5,575			—			—			(5,575		)	—
Income (loss) before equity in
subsidiaries' income	—		(17,982		)	28,157			716			—			10,891
Equity in subsidiaries' income	21,405		39,387			—			—			(60,792		)	—
Income before provision
(benefit) for income taxes	21,405		21,405			28,157			716			(60,792		)	10,891
Provision (benefit) for income taxes	—		—			(11,159		)	645			—			(10,514		)
Net income	$	21,405	$	21,405		$	39,316		$	71		$	(60,792	)	$	21,405
Other comprehensive income (loss):
Foreign currency translation adjustments	—		—			—			(5,009		)	—			(5,009		)
Unrealized gain on derivative instrument	—		—			—			886			—			886
Total comprehensive income (loss)	$	21,405	$	21,405		$	39,316		$	(4,052	)	$	(60,792	)	$	17,282

38

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the three months ended September 28, 2013
	Guarantor		Issuer						Non-
	Ply Gem		Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.		Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
Net sales	$	—	$	—		$	316,548		$	90,878		$	—		$	407,426
Cost of products sold	—		—			256,912			66,346			—			323,258
Gross profit	—		—			59,636			24,532			—			84,168
Operating expenses:
Selling, general and
administrative expenses	—		4,067			26,780			16,750			—			47,597
Intercompany administrative
charges	—		—			4,235			1,941			(6,176		)	—
Amortization of intangible assets	—		—			4,221			1,430			—			5,651
Total operating expenses	—		4,067			35,236			20,121			(6,176		)	53,248
Operating earnings (loss)	—		(4,067		)	24,400			4,411			6,176			30,920
Foreign currency loss	—		—			—			(376		)	—			(376		)
Intercompany interest	—		17,842			(17,509		)	(333		)	—			—
Interest expense	—		(22,070		)	(9		)	34			—			(22,045		)
Interest income	—		1			165			119			—			285
Tax receivable agreement liability adjustment	—		6,669			—			—			—			6,669
Intercompany administrative income	—		6,176			—			—			(6,176		)	—
Income before equity in
subsidiaries' income	—		4,551			7,047			3,855			—			15,453
Equity in subsidiaries' income	16,895		12,344			—			—			(29,239		)	—
Income before provision (benefit)
for income taxes	16,895		16,895			7,047			3,855			(29,239		)	15,453
Provision (benefit) for income taxes	—		—			(2,124		)	682			—			(1,442		)
Net income	$	16,895	$	16,895		$	9,171		$	3,173		$	(29,239	)	$	16,895
Other comprehensive income:
Foreign currency translation adjustments	—		—			—			4,074			—			4,074
Total comprehensive income	$	16,895	$	16,895		$	9,171		$	7,247		$	(29,239	)	$	20,969

39

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the nine months ended September 27, 2014
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Net sales	$	—		$	—		$	905,393		$	211,131		$	—		$	1,116,524
Cost of products sold	—			—			728,675			162,042			—			890,717
Gross profit	—			—			176,718			49,089			—			225,807
Operating expenses:
Selling, general and
administrative expenses	—			18,116			90,553			47,722			—			156,391
Intercompany administrative
charges	—			—			12,774			4,567			(17,341		)	—
Amortization of intangible assets	—			—			11,793			4,048			—			15,841
Total operating expenses	—			18,116			115,120			56,337			(17,341		)	172,232
Operating earnings (loss)	—			(18,116		)	61,598			(7,248		)	17,341			53,575
Foreign currency loss	—			—			—			(517		)	—			(517		)
Intercompany interest	—			45,352			(42,753		)	(2,599		)	—			—
Interest expense	—			(52,033		)	(30		)	(2		)	—			(52,065		)
Interest income	—			4			24			36			—			64
Tax receivable agreement liability adjustment	—			(14,419		)	—			—			—			(14,419		)
Loss on modification or
extinguishment of debt	—			(21,364		)	—			—			—			(21,364		)
Intercompany administrative income	—			17,341			—			—			(17,341		)	—
Income (loss) before equity in
subsidiaries' loss	—			(43,235		)	18,839			(10,330		)	—			(34,726		)
Equity in subsidiaries' income (loss)	(18,793		)	24,442			—			—			(5,649		)	—
Income (loss) before provision
(benefit) for income taxes	(18,793		)	(18,793		)	18,839			(10,330		)	(5,649		)	(34,726		)
Provision (benefit) for income taxes	—			—			(21,134		)	5,201			—			(15,933		)
Net income (loss)	$	(18,793	)	$	(18,793	)	$	39,973		$	(15,531	)	$	(5,649	)	$	(18,793	)
Other comprehensive loss:
Foreign currency translation adjustments	—			—			—			(5,366		)	—			(5,366		)
Unrealized loss on derivative instrument	—			—			—			(47		)	—			(47		)
Total comprehensive income (loss)	$	(18,793	)	$	(18,793	)	$	39,973		$	(20,944	)	$	(5,649	)	$	(24,206	)

40

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the nine months ended September 28, 2013
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
Net sales	$	—		$	—		$	872,528		$	160,135		$	—		$	1,032,663
Cost of products sold	—			—			713,064			119,325			—			832,389
Gross profit	—			—			159,464			40,810			—			200,274
Operating expenses:
Selling, general and
administrative expenses	—			15,912			83,032			32,218			—			131,162
Intercompany administrative
charges	—			—			15,134			5,047			(20,181		)	—
Amortization of intangible assets	—			—			12,629			1,946			—			14,575
Initial public offering costs	—			23,527			—			—			—			23,527
Total operating expenses	—			39,439			110,795			39,211			(20,181		)	169,264
Operating earnings (loss)	—			(39,439		)	48,669			1,599			20,181			31,010
Foreign currency loss	—			—			—			(755		)	—			(755		)
Intercompany interest	—			59,992			(59,238		)	(754		)	—			—
Interest expense	—			(70,583		)	(28		)	6			—			(70,605		)
Interest income	—			6			181			172			—			359
Tax receivable agreement liability adjustment	—			(1,474		)	—			—			—			(1,474		)
Loss on modification or
extinguishment of debt	—			(18,948		)	—			—			—			(18,948		)
Intercompany administrative income	—			20,181			—			—			(20,181		)	—
Income (loss) before equity in
subsidiaries' loss	—			(50,265		)	(10,416		)	268			—			(60,413		)
Equity in subsidiaries' income (loss)	(62,089		)	(11,824		)	—			—			73,913			—
Income (loss) before provision (benefit)
for income taxes	(62,089		)	(62,089		)	(10,416		)	268			73,913			(60,413		)
Provision (benefit) for income taxes	—			—			1,866			(190		)	—			1,676
Net income (loss)	$	(62,089	)	$	(62,089	)	$	(12,282	)	$	458		$	73,913		$	(62,089	)
Other comprehensive loss:
Foreign currency translation adjustments	—			—			—			1,091			—			1,091
Total comprehensive income (loss)	$	(62,089	)	$	(62,089	)	$	(12,282	)	$	1,549		$	73,913		$	(60,998	)

41

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
As of September 27, 2014
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
ASSETS	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Current Assets:
Cash and cash equivalents	$	—		$	12,151		$	(3,427	)	$	18,058		$	—		$	26,782
Accounts receivable, net	—			—			229,183			48,955			—			278,138
Inventories:
Raw materials	—			—			62,437			13,421			—			75,858
Work in process	—			—			27,018			1,341			—			28,359
Finished goods	—			—			52,699			18,791			—			71,490
Total inventory	—			—			142,154			33,553			—			175,707
Prepaid expenses and other
current assets	—			461			15,494			4,547			—			20,502
Deferred income taxes	—			—			6,554			—			—			6,554
Total current assets	—			12,612			389,958			105,113			—			507,683
Investments in subsidiaries	(73,456		)	(8,108		)	—			—			81,564			—
Property and Equipment, at cost:
Land	—			—			7,100			917			—			8,017
Buildings and improvements	—			—			60,030			5,640			—			65,670
Machinery and equipment	—			2,701			341,481			16,593			—			360,775
	—			2,701			408,611			23,150			—			434,462
Less accumulated depreciation	—			(1,967		)	(264,168		)	(7,758		)	—			(273,893		)
Total property and equipment, net	—			734			144,443			15,392			—			160,569
Other Assets:
Intangible assets, net	—			—			128,345			26,661			—			155,006
Goodwill	—			—			415,386			35,232			—			450,618
Intercompany note receivable	—			953,510			—			—			(953,510		)	—
Other	—			28,283			2,703			—			—			30,986
Total other assets	—			981,793			546,434			61,893			(953,510		)	636,610
	$	(73,456	)	$	987,031		$	1,080,835		$	182,398		$	(871,946	)	$	1,304,862
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	—		$	541		$	91,518		$	24,917		$	—		$	116,976
Accrued expenses	—			15,756			106,557			25,244			—			147,557
Current portion of long-term debt	—			4,300			—			—			—			4,300
Total current liabilities	—			20,597			198,075			50,161			—			268,833
Deferred income taxes	—			—			14,784			7,736			—			22,520
Intercompany note payable	—			—			842,051			111,459			(953,510		)	—
Payable to related parties pursuant to
tax receivable agreement	—			26,042			—			—			—			26,042
Other long-term liabilities	—			5,323			42,880			4,195			—			52,398
Long-term debt, less current portion	—			1,008,525			—			—			—			1,008,525
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	—			—			—			—			—			—
Common stock	678			678			—			—			(678		)	678
Additional paid-in-capital	744,529			744,529			622,281			13,581			(1,380,391		)	744,529
(Accumulated deficit) retained earnings	(810,036		)	(810,036		)	(639,236		)	636			1,448,636			(810,036		)
Accumulated other
comprehensive loss	(8,627		)	(8,627		)	—			(5,370		)	13,997			(8,627		)
Total stockholders' (deficit) equity	(73,456		)	(73,456		)	(16,955		)	8,847			81,564			(73,456		)
	$	(73,456	)	$	987,031		$	1,080,835		$	182,398		$	(871,946	)	$	1,304,862

42

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2013
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	—		$	57,800		$	(4,970	)	$	16,971		$	—		$	69,801
Accounts receivable, net	—			—			110,475			29,587			—			140,062
Inventories:
Raw materials	—			—			41,593			9,720			—			51,313
Work in process	—			—			22,781			1,036			—			23,817
Finished goods	—			—			42,751			17,589			—			60,340
Total inventory	—			—			107,125			28,345			—			135,470
Prepaid expenses and other
current assets	—			613			17,270			5,331			—			23,214
Deferred income taxes	—			—			2,825			353			—			3,178
Total current assets	—			58,413			232,725			80,587			—			371,725
Investments in subsidiaries	(51,996		)	(229,668		)	—			—			281,664			—
Property and Equipment, at cost:
Land	—			—			3,565			963			—			4,528
Buildings and improvements	—			—			38,059			5,632			—			43,691
Machinery and equipment	—			3,275			300,089			18,250			—			321,614
	—			3,275			341,713			24,845			—			369,833
Less accumulated depreciation	—			(1,385		)	(249,344		)	(7,457		)	—			(258,186		)
Total property and equipment, net	—			1,890			92,369			17,388			—			111,647
Other Assets:
Intangible assets, net	—			—			77,968			32,044			—			110,012
Goodwill	—			—			383,042			37,186			—			420,228
Deferred income taxes	—			—			—			5,406			—			5,406
Intercompany note receivable	—			958,631			—			—			(958,631		)	—
Other	—			20,907			2,326			—			—			23,233
Total other assets	—			979,538			463,336			74,636			(958,631		)	558,879
	$	(51,996	)	$	810,173		$	788,430		$	172,611		$	(676,967	)	$	1,042,251
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	—		$	601		$	66,847		$	15,533		$	—		$	82,981
Accrued expenses	—			31,056			62,120			19,764			—			112,940
Total current liabilities	—			31,657			128,967			35,297			—			195,921
Deferred income taxes	—			—			9,005			8,110			—			17,115
Intercompany note payable	—			—			859,768			98,863			(958,631		)	—
Payable to related parties pursuant to
tax receivable agreement	—			11,623			—			—			—			11,623
Other long-term liabilities	—			1,861			46,315			4,384			—			52,560
Long-term debt	—			817,028			—			—			—			817,028
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	—			—			—			—			—			—
Common stock	672			672			—			—			(672		)	672
Additional paid-in-capital	741,789			741,789			423,584			12,727			(1,178,100		)	741,789
(Accumulated deficit) retained earnings	(791,243		)	(791,243		)	(679,209		)	16,167			1,454,285			(791,243		)
Accumulated other
comprehensive income (loss)	(3,214		)	(3,214		)	—			(2,937		)	6,151			(3,214		)
Total stockholders' (deficit) equity	(51,996		)	(51,996		)	(255,625		)	25,957			281,664			(51,996		)
	$	(51,996	)	$	810,173		$	788,430		$	172,611		$	(676,967	)	$	1,042,251

43

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the nine months ended September 27, 2014
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(18,793	)	$	(18,793	)	$	39,973		$	(15,531	)	$	(5,649	)	$	(18,793	)
Adjustments to reconcile net income (loss)
to cash used in operating activities:
Depreciation and amortization expense	—			486			27,239			6,191			—			33,916
Fair-value premium on purchased inventory	—			—			38			—			—			38
Fair-value decrease of contingent acquisition liability	—			—			(264		)	—			—			(264		)
Non-cash restructuring costs	—			—			—			3,012			—			3,012
Non-cash interest expense, net	—			11,606			—			—			—			11,606
Loss on foreign currency transactions	—			—			—			517			—			517
Non-cash litigation expense	—			—			4,593			—			—			4,593
Loss on modification or extinguishment of debt	—			21,364			—			—			—			21,364
Stock based compensation	—			1,672			—			—			—			1,672
Deferred income taxes	—			—			(22,227		)	5,032			—			(17,195		)
Tax receivable agreement liability adjustment	—			14,419			—			—			—			14,419
Increase in tax uncertainty,
net of valuation allowance	—			—			254			—			—			254
Equity in subsidiaries' net loss	18,793			(24,442		)	—			—			5,649			—
Other	—			—			(50		)	(174		)	—			(224		)
Changes in operating assets and liabilities:
Accounts receivable, net	—			—			(81,439		)	(21,289		)	—			(102,728		)
Inventories	—			—			(17,394		)	(6,680		)	—			(24,074		)
Prepaid expenses and other assets	—			189			2,673			(255		)	—			2,607
Accounts payable	—			(60		)	5,873			9,367			—			15,180
Accrued expenses	—			(18,259		)	11,865			4,926			—			(1,468		)
Cash payments on restructuring liabilities	—			—			(577		)	(3,835		)	—			(4,412		)
Other	—			2			(1,997		)	6,566			—			4,571
Net cash used in
operating activities	—			(11,816		)	(31,440		)	(12,153		)	—			(55,409		)
Cash flows from investing activities:
Acquisitions, net of cash acquired and
outstanding checks assumed	—			(130,856		)	—			—			—			(130,856		)
Capital expenditures	—			(1,075		)	(11,907		)	(1,542		)	—			(14,524		)
Proceeds from sale of assets	—			—			109			635			—			744
Net cash used in
investing activities	—			(131,931		)	(11,798		)	(907		)	—			(144,636		)
Cash flows from financing activities:
Proceeds from long-term debt	—			1,067,725			—			—			—			1,067,725
Net revolver borrowings	—			20,000			—			—			—			20,000
Payments on long-term debt	—			(853,075		)	—			—			—			(853,075		)
Payment of tender and early call premiums	—			(61,142		)	—			—			—			(61,142		)
Proceeds from exercises of employee stock options	—			1,073			—			—			—			1,073
Proceeds from intercompany
investment	—			(59,762		)	44,781			14,981			—			—
Debt issuance costs paid	—			(16,721		)	—			—			—			(16,721		)
Net cash provided by (used in)
financing activities	—			98,098			44,781			14,981			—			157,860
Impact of exchange rate movements on cash	—			—			—			(834		)	—			(834		)
Net increase (decrease) in cash
and cash equivalents	—			(45,649		)	1,543			1,087			—			(43,019		)
Cash and cash equivalents at the
beginning of the period	—			57,800			(4,970		)	16,971			—			69,801
Cash and cash equivalents at the end
of the period	$	—		$	12,151		$	(3,427	)	$	18,058		$	—		$	26,782

44

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the nine months ended September 28, 2013
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(62,089	)	$	(62,089	)	$	(12,282	)	$	458		$	73,913		$	(62,089	)
Adjustments to reconcile net income (loss)
to cash provided by (used in) operating activities:
Depreciation and amortization expense	—			315			28,744			3,924			—			32,983
Fair-value premium on purchased inventory	—			—			—			2,015			—			2,015
Fair-value decrease of contingent acquisition liability	—			—			(358		)	—			—			(358		)
Non-cash interest expense, net	—			9,457			—			—			—			9,457
Loss on foreign currency transactions	—			—			—			755			—			755
Loss on modification or extinguishment of debt	—			18,948			—			—			—			18,948
Prepaid management fee write off	—			2,682			—			—			—			2,682
Stock based compensation	—			1,631			—			—			—			1,631
Deferred income taxes	—			—			1,937			(172		)	—			1,765
Tax receivable agreement liability adjustment	—			1,474			—			—			—			1,474
Reduction in tax uncertainty,
net of valuation allowance	—			—			(1,279		)	—			—			(1,279		)
Equity in subsidiaries' net loss	62,089			11,824			—			—			(73,913		)	—
Other	—			—			(5		)	—			—			(5		)
Changes in operating assets and liabilities:
Accounts receivable, net	—			—			(67,244		)	(8,159		)	—			(75,403		)
Inventories	—			—			(13,605		)	1,875			—			(11,730		)
Prepaid expenses and other
current assets	—			(5,322		)	(294		)	435			—			(5,181		)
Accounts payable	—			107			3,142			(7,441		)	—			(4,192		)
Accrued expenses	—			(2,713		)	17,428			11,837			—			26,552
Payment of advisory termination fee to affiliate	—			(18,852		)	—			—			—			(18,852		)
Cash payments on restructuring liabilities	—			—			(2,535		)	(358		)	—			(2,893		)
Other	—			—			87			(999		)	—			(912		)
Net cash provided by (used in)
operating activities	—			(42,538		)	(46,264		)	4,170			—			(84,632		)
Cash flows from investing activities:
Acquisitions, net of cash acquired	—			(99,282		)	—			—			—			(99,282		)
Capital expenditures	—			(542		)	(15,014		)	(758		)	—			(16,314		)
Proceeds from sale of assets	—			—			24			—			—			24
Net cash used in
investing activities	—			(99,824		)	(14,990		)	(758		)	—			(115,572		)
Cash flows from financing activities:
Net revolver payments	—			(1,000		)	—			—			—			(1,000		)
Payments on long-term debt	—			(148,000		)	—			—			—			(148,000		)
Payment of early call premium	—			(8,520		)	—			—			—			(8,520		)
Net proceeds from issuance of common stock	—			353,407			—			—			—			353,407
Proceeds from intercompany
investment	—			(60,152		)	57,582			2,570			—			—
Debt issuance costs paid	—			(62		)	—			—			—			(62		)
Net cash provided by
financing activities	—			135,673			57,582			2,570			—			195,825
Impact of exchange rate movement
on cash	—			—			—			301			—			301
Net increase (decrease) in cash
and cash equivalents	—			(6,689		)	(3,672		)	6,283			—			(4,078		)
Cash and cash equivalents at the
beginning of the period	—			23,332			(4,307		)	8,169			—			27,194
Cash and cash equivalents at the end
of the period	$	—		$	16,643		$	(7,979	)	$	14,452		$	—		$	23,116

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Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information contained in this discussion and in the unaudited condensed consolidated financial statements and accompanying notes presented in this Quarterly Report on Form 10-Q should be read in conjunction with information set forth in Ply Gem Holdings’ Annual Report on Form 10-K for the year ended December 31, 2013.  Certain statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are “forward-looking statements”.  See “Special Note Regarding Forward-Looking Statements.”  As used in this Quarterly Report on Form 10-Q, the “Company”, “we”, “us”, and “our” refer to Ply Gem Holdings and its subsidiaries, except where the context otherwise requires or as otherwise indicated.

Overview

We are a leading manufacturer of exterior building products in North America, operating in two reportable segments: (i) Siding, Fencing and Stone and (ii) Windows and Doors, which comprised approximately 55% and 45% of our net sales, respectively, for the nine months ended September 27, 2014.  These two segments produce a comprehensive product line of vinyl siding, designer accents, cellular PVC trim, vinyl fencing, vinyl and composite railing, stone veneer and vinyl windows and doors used in both the new construction market and the home repair and remodeling market in the United States and Canada.  Vinyl building products have the leading share of sales volume in siding and windows in the United States.  We also manufacture vinyl and aluminum soffit and siding accessories, aluminum trim coil, wood windows, aluminum windows, vinyl and aluminum-clad windows and steel and fiberglass doors, enabling us to bundle complementary and color-matched products and accessories with our core products.  We believe that our comprehensive product portfolio and geographically diverse, low cost manufacturing platform allow us to better serve our customers and provide us with a competitive advantage over other exterior building products suppliers.  

Since Ply Gem incorporated in 2004, we have acquired nine additional businesses to complement and expand our product portfolio and geographic diversity, including two acquisitions during 2013 and one during 2014.  On April 9, 2013, we acquired the capital stock of Gienow WinDoor Ltd. (which was amalgamated into Gienow Canada Inc.) ("Gienow"), a manufacturer of windows and doors in Western Canada for a purchase price of $20.4 million.  On May 31, 2013, we acquired the capital stock of Mitten Inc. (now known as Mitten, "Mitten"), a manufacturer of vinyl siding and distributor of various other exterior building products in Canada for a purchase price, net of cash acquired, of $76.8 million.  Gienow is part of our Western Canadian windows business and is part of the Windows and Doors segment, and the majority of Mitten's operations are part of the Siding, Fencing and Stone segment. On September 19, 2014, we acquired all of the issued and outstanding shares of common stock of Fortune Brands Windows, Inc. ("Simonton"), a manufacturer of windows, for a purchase price of $130.0 million.

Prior to January 11, 2010, Ply Gem Holdings was a wholly owned subsidiary of Ply Gem Investment Holdings, which was a wholly owned subsidiary of Ply Gem Prime.  On January 11, 2010, Ply Gem Investment Holdings was merged with and into Ply Gem Prime, with Ply Gem Prime being the surviving corporation.  In May 2013, the Company issued 18,157,895 shares of common stock at an initial public offering price of $21.00 per share and received gross proceeds of approximately $381.3 million in an IPO of its common stock. The shares began trading on The New York Stock Exchange on May 23, 2013 under the symbol "PGEM". Immediately prior to the closing of the IPO, Ply Gem Prime merged with and into Ply Gem Holdings, with Ply Gem Holdings being the surviving entity. In the merger, all of the preferred stock of Ply Gem Prime (including the subordinated debt of Ply Gem Prime that was converted into preferred stock in connection with the IPO) was converted into a number of shares of the Company's common stock based on the IPO price of the common stock and the liquidation value of and the maximum dividend amount in respect of the preferred stock.

We are a holding company with no operations or assets of our own other than the capital stock of our subsidiaries. The terms of Ply Gem Industries' $250.0 million ABL Facility and the credit agreement governing the terms of its $430.0 million Term Loan Facility place restrictions on the ability of Ply Gem Industries and our other subsidiaries to pay dividends and otherwise transfer assets to us.  Further, the terms of the indenture governing Ply Gem Industries' $650.0 million 6.50% Senior Notes place restrictions on the ability of Ply Gem Industries and our other subsidiaries to pay dividends and otherwise transfer assets to us.

46

Financial statement presentation

Net Sales.  Net sales represent the fixed selling price of our products plus certain shipping charges less applicable provisions for discounts and allowances.  Allowances include cash discounts, volume rebates and returns.

Cost of products sold.  Cost of products sold includes direct material and manufacturing costs, manufacturing depreciation, third-party and in-house delivery costs and product warranty expense.

Selling, general and administrative expenses.  Selling, general and administrative expenses (“SG&A expense”) includes all non-product related operating expenses, including selling, marketing, research and development costs, information technology, and other general and administrative expenses.

Operating earnings (loss).  Operating earnings (loss) represents net sales less cost of products sold, SG&A expense and amortization of intangible assets.

Impact of commodity pricing

PVC resin and aluminum are major components in the production of our products and changes in PVC resin and aluminum prices have a direct impact on our cost of products sold.  Historically, we have been able to pass on a substantial portion of significant price increases to our customers.  The results of operations for individual quarters can be negatively impacted by a delay between the time of raw material cost increases and price increases that we implement in our products, or conversely can be positively impacted by a delay between the time of a raw material price decrease and competitive pricing moves that we implement accordingly.

Impact of weather

Since our building products are intended for exterior use, our sales and operating earnings tend to be lower during periods of inclement weather.  Weather conditions in the first and fourth quarters of each calendar year historically result in these quarters producing significantly less sales revenue than in any other period of the year.  As a result, we have historically had lower profits or higher losses in the first quarter, and reduced profits in the fourth quarter of each calendar year due to the weather.  Our results of operations for individual quarters in the future may be impacted by adverse weather conditions. In addition, favorable or unfavorable weather conditions may influence the comparability of our results from year to year or from quarter to quarter.

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Critical Accounting Policies

Our discussion and analysis of financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP.  The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities.  We base these estimates on our historical experience and on various other assumptions that we believe to be reasonable under the circumstances, and these estimates form the basis for our judgments concerning the carrying values of assets and liabilities that are not readily apparent from other sources.  By their nature, these estimates and judgments are subject to an inherent degree of uncertainty.  We periodically evaluate these estimates and judgments based on available information and experience.  Actual results could differ from our estimates under different assumptions and conditions.  If actual results significantly differ from our estimates, our financial condition and results of operations could be materially impacted.  For more information regarding our critical accounting policies and estimates please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies contained in our Annual Report on Form 10-K for the year ended December 31, 2013 and Note 1 to our condensed consolidated financial statements. There have been no material changes to the critical accounting policies previously disclosed in that report.

Results of Operations

The following table summarizes net sales and operating earnings (loss) by segment and is derived from the accompanying condensed consolidated statements of operations and comprehensive income (loss) included in this report.

	For the three months ended						For the nine months ended
(Amounts in thousands)	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Net sales
Siding, Fencing and Stone	$	244,416		$	228,214		$	609,419		$	565,010
Windows and Doors	193,432			179,212			507,105			467,653
Operating earnings (loss)
Siding, Fencing and Stone	44,756			39,476			89,484			92,998
Windows and Doors	3,773			(4,489		)	(17,793		)	(22,549		)
Unallocated	(6,602		)	(4,067		)	(18,116		)	(39,439		)
Foreign currency gain (loss)
Siding, Fencing and Stone	(352		)	100			(278		)	33
Windows and Doors	(414		)	(476		)	(239		)	(788		)
Interest income (expense), net
Siding, Fencing and Stone	7			153			13			148
Windows and Doors	6			156			15			183
Unallocated	(16,295		)	(22,069		)	(52,029		)	(70,577		)
Income tax benefit (provision)
Unallocated	10,514			1,442			15,933			(1,676		)
Tax Receivable Agreement liability adjustment
Unallocated	(13,988		)	6,669			(14,419		)	(1,474		)
Loss on modification or
extinguishment of debt
Unallocated	—			—			(21,364		)	(18,948		)
Net income (loss)	$	21,405		$	16,895		$	(18,793	)	$	(62,089	)

Our business is seasonal and the results of operations for the periods presented are not necessarily indicative of the results for a full fiscal year or any future period.

48

This review of performance is organized by business segment, reflecting the way we manage our business.  Each business group leader is responsible for operating results down to operating earnings.  We use operating earnings as a performance measure as it captures the income and expenses within the management control of our business leaders.  Corporate management is responsible for making all financing decisions.  Therefore, each segment discussion focuses on the factors affecting operating earnings, while interest expense and income taxes and certain other unallocated expenses are separately discussed at the corporate level.

The following tables set forth our results of operations based on the amounts and the percentage relationship of the items listed to net sales for the periods indicated.  However, our results of operations set forth in the tables below may not necessarily be representative of our future operating results.

Siding, Fencing and Stone Segment

	For the three months ended
(Amounts in thousands)	September 27, 2014					September 28, 2013
	(unaudited)					(unaudited)
Statement of operations data:
Net sales	$	244,416		100.0	%	$	228,214	100.0	%
Gross profit	68,587			28.1	%	63,255		27.7	%
SG&A expense	20,543			8.4	%	20,235		8.9	%
Amortization of intangible assets	3,288			1.3	%	3,544		1.6	%
Operating earnings	44,756			18.3	%	39,476		17.3	%
Currency transaction gain (loss)	(352		)	(0.1	)%	100		—	%

Net Sales

Net sales for the three months ended September 27, 2014 increased $16.2 million or 7.1% as compared to the three months ended September 28, 2013. The net sales increase was caused by favorable demand which drove higher unit sales relative to the comparable period in 2013. This demand improvement can be attributed to improved weather conditions in recent months relative to the harsh winter weather conditions that existed during the early part of 2014 which negatively impacted demand during the first six months of 2014. These improved industry conditions are reflected in industry metrics. According to the U.S. Census Bureau single family housing starts increased 7.2% during the three months ended September 27, 2014 compared to the three months ended September 28, 2013. According to the Leading Indicator of Remodeling Activity Index (“LIRA”), the 2014 third quarter trailing twelve months increased 6.1% compared to the prior year period. These favorable industry conditions contributed to the 7.1% net sales increase for the three months ended September 27, 2014. In addition to the more favorable industry conditions, the net sales increase can be attributed to higher selling prices for our products which were raised in response to increases in raw material costs resulting in increased net sales of approximately $3.0 million for the three months ended September 27, 2014.

Including Mitten, our U.S. market position in vinyl siding for the three months ended September 27, 2014 was 37.9%, while our combined share of the Canadian vinyl siding market was 29.2%. For the three months ended September 27, 2014, the percentage of sales within our Siding, Fencing and Stone segment derived from vinyl siding and metal accessories represented approximately 58.7% and 28.7%, respectively, with sales of other products comprising the remaining 12.6%. These net sales percentages were consistent with the three months ended September 28, 2013, for which the percentage of sales in vinyl siding and metal accessories represented approximately 61.2% and 26.9%, respectively, of our net sales with sales of other products comprising the remaining 11.9%.

49

Gross Profit

Gross profit for the three months ended September 27, 2014 increased $5.3 million or 8.4% as compared to the three months ended September 28, 2013. Our gross profit increased consistent with our 7.1% net sales increase. As a percentage of sales, gross profit increased from 27.7% for the three months ended September 28, 2013 to 28.1% for the three months ended September 27, 2014. The 40 basis increase for the three months ended September 27, 2014 was caused by improved operating leverage as volume and demand increased during the three months ended September 27, 2014 relative to the prior year period. In addition to improved operating leverage and lower product warranty expense, as previously noted, we increased our selling prices of our products in response to higher freight costs to deliver our products and increased material costs, specifically PVC resin and aluminum. The Midwest Ingot price of aluminum increased 20.7%, while the average market price for PVC resin was estimated to have increased approximately 10.3% for the three months ended September 27, 2014 relative to the three months ended September 28, 2013. Excluding the impact of any selling price changes, commodity cost fluctuations, predominantly for aluminum and PVC, and freight costs negatively impacted gross profit as a percentage of sales by approximately 2.1% for the three months ended September 27, 2014.

Selling, general and administrative expenses

SG&A expense for the three months ended September 27, 2014 was consistent with the three months ended September 28, 2013 increasing only $0.3 million or 1.5% as compared to the three months ended September 28, 2013. As a percentage of sales, SG&A expense decreased from 8.9% for the three months ended September 28, 2013 to 8.4% for the three months ended September 27, 2014. The decrease in SG&A expense as a percentage of net sales can be attributed to the net sales increase of 7.1% as we leveraged the fixed component of our SG&A expense as our total SG&A expense remained consistent for the three months ended September 27, 2014 as compared to the three months ended September 28, 2013.

Amortization of intangible assets

Amortization expense for the three months ended September 27, 2014 decreased by $0.3 million or 7.2% consistent with the prior year period. As a percentage of net sales, amortization expense was consistent at 1.3% for the three months ended September 27, 2014 as compared to 1.6% for the three months ended September 28, 2013.

Currency transaction loss

A currency transaction impact was established in May 2013 with the Mitten acquisition within the Siding, Fencing, and Stone segment. The currency transaction loss for the three months ended September 27, 2014 was a nominal $0.4 million resulting from the devaluation in the Canadian dollar during the three months ended September 27, 2014.

	For the nine months ended
(Amounts in thousands)	September 27, 2014					September 28, 2013
	(unaudited)					(unaudited)
Statement of operations data:
Net sales	$	609,419		100.0	%	$	565,010	100.0	%
Gross profit	160,894			26.4	%	152,471		27.0	%
SG&A expense	61,487			10.1	%	51,163		9.1	%
Amortization of intangible assets	9,923			1.6	%	8,310		1.5	%
Operating earnings	89,484			14.7	%	92,998		16.5	%
Currency transaction gain (loss)	(278		)	—	%	33		—	%

50

Net Sales

Net sales for the nine months ended September 27, 2014 increased $44.4 million or 7.9% as compared to the nine months ended September 28, 2013. Our net sales were favorably impacted by the Mitten acquisition, which was completed on May 31, 2013, and accounted for increased net sales of approximately $39.5 million. Excluding Mitten, our Siding, Fencing, and Stone net sales increased $4.9 million or 0.9% for the nine months ended September 27, 2014 reflecting the challenging weather conditions that existed early in 2014 offset by increased sales of our metal accessory products that resulted from new business wins, improved industry conditions in the third quarter of 2014, and higher selling prices to offset higher material costs. All of these factors contributed on a net basis to the 0.9% net sales growth experienced during the nine months ended September 27, 2014. The Vinyl Siding Institute reported that U.S. vinyl siding industry shipments decreased 1.0% during the nine months ended September 27, 2014.

Including Mitten, our U.S. market position in vinyl siding for the nine months ended September 27, 2014 was 38.7%, while our combined share of the Canadian vinyl siding market was 27.1%. For the nine months ended September 27, 2014, the percentage of sales within our Siding, Fencing, and Stone segment derived from vinyl siding and metal accessories represented approximately 60.3% and 27.2%, respectively, with sales of other products comprising the remaining 12.5%. These net sales percentages were consistent with the nine months ended September 28, 2013, for which the percentage of sales in vinyl siding and metal accessories represented approximately 63.1% and 25.2%, respectively, of our net sales with sales of other products comprising the remaining 11.7%.

Gross Profit

Gross profit for the nine months ended September 27, 2014 increased $8.4 million or 5.5% as compared to the nine months ended September 28, 2013. Our gross profit was favorably impacted by the Mitten acquisition, which was completed on May 31, 2013, and contributed increased gross profit of approximately $11.0 million. Adjusting for the Mitten acquisition, our gross profit for the nine months ended September 27, 2014 decreased by approximately $2.6 million or 1.7%. This gross profit decrease for the nine month period was driven primarily by the first quarter net sales decrease which was negatively impacted by the adverse winter weather, which resulted in lower unit volume sales and gross profit. This lower sales volume created less operating leverage to cover fixed manufacturing costs contributing to the decrease in gross profit. In addition, we experienced higher raw material and freight expenses that were not fully offset by our selling price increases within the nine month period ended September 27, 2014. The average market price for PVC resin was estimated to have increased 9.3% during the nine months ended September 27, 2014 while freight expenses increased approximately $3.4 million on a volume adjusted basis during the nine months ended September 27, 2014.

As a percentage of net sales, gross profit decreased to 26.4% for the nine months ended September 27, 2014 as compared to 27.0% for the nine months ended September 28, 2013. The 60 basis point decrease for the nine months ended September 27, 2014 can be attributed to the negative sales volume impact experienced during the first quarter of 2014 which negatively impacted our manufacturing operating leverage and higher commodity costs, predominantly PVC and freight expense that were not fully offset by our selling price increases within the nine months ended September 27, 2014.

Selling, general and administrative expenses

SG&A expense for the nine months ended September 27, 2014 increased $10.3 million or 20.2% as compared to the nine months ended September 28, 2013. Our SG&A expense increased as a result of our Mitten acquisition, which was completed on May 31, 2013, causing increased SG&A expense of approximately $10.6 million adjusting the comparable SG&A expense decrease to a nominal decrease of $0.3 million or 0.6% consistent with the prior year period. As a percentage of net sales, excluding the increased SG&A expense attributable to Mitten, our SG&A expense percentage remained consistent at 8.9% for the nine months ended September 27, 2014 compared to 9.1% for the nine months ended September 28, 2013.

Amortization of intangible assets

Amortization expense for the nine months ended September 27, 2014 increased by $1.6 million or 19.4% as compared to the nine months ended September 28, 2013 due to the addition of approximately $35.4 million of intangible assets for the Mitten acquisition on May 31, 2013. The Mitten intangible assets resulted in approximately $2.1 million of increased amortization expense during the nine months ended September 27, 2014. Excluding Mitten, amortization expense decreased nominally by $0.5 million or 6.3% consistent with the prior year period. Excluding Mitten, amortization of intangible assets as a percentage of net sales was consistent at 1.4% for the nine months ended September 27, 2014 as compared to 1.5% for the nine months ended September 28, 2013.

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Currency transaction (loss)

A currency transaction impact was established in May 2013 with the Mitten acquisition within the Siding, Fencing, and Stone segment. The currency transaction loss for the nine months ended September 27, 2014 was $0.3 million increasing from a currency transaction gain of $33,000 for the nine months ended September 28, 2013 from the devaluation in the Canadian dollar during the nine months ended September 27, 2014.

Windows and Doors Segment

	For the three months ended
(Amounts in thousands)	September 27, 2014					September 28, 2013
	(unaudited)					(unaudited)
Statement of operations data:
Net sales	$	193,432		100.0	%	$	179,212		100.0	%
Gross profit	30,002			15.5	%	20,913			11.7	%
SG&A expense	24,210			12.5	%	23,295			13.0	%
Amortization of intangible assets	2,019			1.0	%	2,107			1.2	%
Operating earnings (loss)	3,773			2.0	%	(4,489		)	(2.5	)%
Currency transaction loss	(414		)	(0.2	)%	(476		)	(0.3	)%

Net Sales

Net sales for the three months ended September 27, 2014 increased $14.2 million or 7.9% as compared to the three months ended September 28, 2013. Our net sales were modestly impacted by the Simonton acquisition, which was completed on September 19, 2014, and accounted for increased net sales of $7.2 million. Excluding Simonton, our Windows and Doors’ net sales increased $7.0 million or 3.9% for the three months ended September 27, 2014. The 3.9% net sales increase was primarily due to higher selling prices for our window products derived from price increases that we have implemented and favorable product mix that resulted from a higher proportion of our window sales being derived from our vinyl windows which typically carry a higher selling price than our aluminum windows. The impact of higher selling prices that resulted from our price increases and favorable product mix is estimated to have increased our average selling price for our U.S. window products by 4.5%, which contributed higher net sales of approximately $5.7 million for the three months ended September 27, 2014. Improving industry conditions have also contributed to our 3.9% net sales increase with the U.S. Census Bureau estimating that single family housing starts increased 7.2% for the three months ended September 27, 2014 relative to the three months ended September 28, 2013.

The net sales increases for the three months ended September 27, 2014 were partially offset by a net sales decrease of approximately $4.6 million for Western Canada attributed to integration challenges with our dealer customers and a negative foreign currency impact from a weakening Canadian dollar during the three months ended September 27, 2014 relative to the three months ended September 28, 2013.

52

Gross Profit

Gross profit for the three months ended September 27, 2014 increased $9.1 million or 43.5% as compared to the three months ended September 28, 2013. Our gross profit was modestly impacted by the Simonton acquisition, which was completed on September 19, 2014, and contributed gross profit of approximately $1.8 million. Adjusting for the Simonton acquisition, our gross profit for the three months ended September 27, 2014 increased by approximately $7.3 million or 34.7%. This gross profit increase for the three months ended September 27, 2014 can be attributed to the improvement in our U.S. windows business. Our U.S. windows business’s gross profit increased by approximately $10.7 million or 145.4% during the three months ended September 27, 2014. This gross profit increase was driven by improved net pricing and product mix that resulted in a 4.5% increase in average selling price during the three months ended September 27, 2014. In addition to the average sales price improvement, we have improved our operational efficiencies as a result of our “enterprise lean” initiative which will continue to streamline our window product offering by providing additional manufacturing flexibility in the future and our improved sales and operations planning process that is intended to provide better resource planning which will help to minimize ramp up costs that result from significant spikes in demand within a geographical area. In addition to these improvement initiatives, we did not incur approximately $0.3 million of expense associated with the start-up and consolidation of our production facility in Dallas, Texas and higher than normal “enterprise lean” expenditures which occurred during the three months ended September 28, 2013. These positive gross profit increases were partially offset by the performance of our combined Western Canadian businesses. On a combined basis, our Western Canadian businesses experienced a decrease in gross profit of approximately $3.3 million during the three months ended September 27, 2014. This gross profit decrease can be primarily attributed to expenses and inefficiencies associated with the consolidation of two operations (Gienow and Ply Gem Canada) into a single manufacturing facility including manufacturing inefficiencies and certain customer losses which decreased operating leverage and profitability for our Western Canadian businesses during the three months ended September 27, 2014.

As a percentage of sales, gross profit, excluding the Simonton gross profit, increased from 11.7% to 15.1% for the Windows and Doors segment during the three months ended September 27, 2014 as compared to the three months ended September 28, 2013. This increase was driven by the improvement in our U.S. windows gross profit performance that resulted in an improvement of approximately 570 basis points in gross profit performance in our Windows and Doors segment that resulting from improved net pricing and operational efficiencies during the three months ended September 27, 2014 relative to the three months ended September 28, 2013. This improvement was partially offset by the negative near-term integration costs incurred in our Western Canadian operations that resulted in the deterioration of approximately 180 basis points in gross profit performance during the three months ended September 27, 2014.

Selling, general and administrative expenses

SG&A expense for the three months ended September 27, 2014 increased $0.9 million or 3.9% compared to the three months ended September 28, 2013. Our SG&A expense increased as a result of our Simonton acquisition, which was completed on September 19, 2014, causing increased SG&A expense of approximately $1.2 million. In addition, SG&A expense increased as a result of $0.9 million of one-time restructuring and integration costs related to the integration of our Western Canadian businesses. After adjusting for Simonton and the Western Canadian integration costs, our SG&A expense decreased $1.2 million or 5.3%. This SG&A expense decrease related to the relocation of our U.S. window group’s corporate office from Roanoke, Virginia to Cary, North Carolina that occurred during the three months ended September 28, 2013 and the elimination of certain consulting costs related to the “enterprise lean” initiative. As a percentage of net sales, excluding the increased SG&A expense attributable to Simonton and the Western Canada integration expenses, our SG&A expense percentage decreased to 11.8% for the three months ended September 27, 2014 compared to 13.0% for the three months ended September 28, 2013. The percentage decrease related to the elimination of certain relocation and consulting costs for the U.S. windows group as well as increased leverage on the fixed component of SG&A expense as net sales increased during the three months ended September 27, 2014.

Gienow and Mitten’s SG&A expenses are higher as a percentage of sales at approximately 19.1% and 16.8%, respectively, compared to the remainder of the Company at approximately 10.2% for the three months ended September 27, 2014. Gienow and Mitten own their distribution centers across their respective regions in Eastern and Western Canada, which increases their respective SG&A expense, while allowing them to service their Canadian customer base across a broad geographical area. Also included in Gienow and Mitten’s SG&A expense are one-time costs related to restructuring and integration that are not expected to recur in future periods. These costs amounted to approximately $0.9 million for the three months ended September 27, 2014.

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Amortization of intangible assets

Amortization expense for the three months ended September 27, 2014 was comparable to the three months ended September 28, 2013 decreasing 4.2%. Amortization expense as a percentage of sales at 1.0% for the three months ended September 27, 2014 was consistent with the three months ended September 28, 2013 at 1.2%.

Currency transaction loss

The currency transaction loss of approximately $0.4 million for the three months ended September 27, 2014 was consistent to the transaction loss of $0.5 million for the three months ended September 28, 2013.

	For the nine months ended
(Amounts in thousands)	September 27, 2014					September 28, 2013
	(unaudited)					(unaudited)
Statement of operations data:
Net sales	$	507,105		100.0	%	$	467,653		100.0	%
Gross profit	64,913			12.8	%	47,803			10.2	%
SG&A expense	76,788			15.1	%	64,087			13.7	%
Amortization of intangible assets	5,918			1.2	%	6,265			1.3	%
Operating loss	(17,793		)	(3.5	)%	(22,549		)	(4.8	)%
Currency transaction loss	(239		)	—	%	(788		)	(0.2	)%

Net Sales

Net sales for the nine months ended September 27, 2014 increased $39.4 million or 8.4% as compared to the nine months ended September 28, 2013. Our net sales were favorably impacted by acquisitions during the nine months ended September 27, 2014. The Simonton acquisition, which was completed on September 19, 2014, contributed net sales of approximately $7.2 million during the nine months ended September 27, 2014. The Gienow acquisition, which was completed on April 9, 2013 and legally amalgamated with our legacy Ply Gem Canada business effective January 2014, resulted in our net sales increasing by approximately $12.9 million during the nine months ended September 27, 2014. The Mitten acquisition, which was completed on May 31, 2013, contributed increased net sales of approximately $2.2 million during the nine months ended September 27, 2014. After excluding the impact of these acquisitions, our net sales increased $17.1 million or 3.7% for the nine months ended September 27, 2014. The 3.7% net sales increase was primarily due to higher selling prices for our window products derived from price increases that we have implemented and favorable product mix that resulted from a higher proportion of our window sales being derived from our vinyl windows which typically carry a higher selling price than our aluminum windows. The impact of higher selling prices that resulted from our price increases and favorable product mix is estimated to have increased our average selling price for our U.S. window products by 4.5%, which contributed higher net sales of approximately $15.7 million for the nine months ended September 27, 2014. While the U.S. Census Bureau estimates that single family housing starts increased 7.2% relative to the third quarter of 2013, the industry and our net sales for the first nine months of 2014 were negatively impacted by severe winter weather during the first half of 2014 that adversely impacted our customers with higher levels of snow accumulation and extreme cold temperatures with the polar vortex phenomenon. The winter weather had a negative impact on the new construction market to which our Windows and Doors market is highly aligned.

The net sales increases for the nine months ended September 27, 2014 were partially offset by a net sales decrease of approximately $8.3 million for Western Canada attributed to difficult weather conditions in the early spring, integration challenges with our dealer customers, and a negative foreign currency impact from a weakening Canadian dollar during the nine months ended September 27, 2014 relative to the nine months ended September 28, 2013.

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Gross Profit

Gross profit for the nine months ended September 27, 2014 increased $17.1 million or 35.8% as compared to the nine months ended September 28, 2013. Our gross profit was favorably impacted by the Simonton, Gienow, and Mitten acquisitions which on a combined basis contributed increased gross profit by approximately $3.0 million. Excluding the impact of these acquisitions, our gross profit increased $14.1 million or 29.4% during the nine months ended September 27, 2014 compared to the nine months ended September 28, 2013. This gross profit increase for the nine months ended September 27, 2014 can be attributed to the improvement in our U.S. windows business. Our U.S. windows business’s gross profit increased by approximately $19.9 million or 94.2% during the nine months ended September 27, 2014. This gross profit increase was driven by improved net pricing and product mix that resulted in a 4.5% increase in average selling price during the nine months ended September 27, 2014. In addition to the average sales price improvement, we have improved our operational efficiencies as a result of our “enterprise lean” initiative which will continue to streamline our window product offering by providing additional manufacturing flexibility in the future and our improved sales and operations planning process that is intended to provide better resource planning which will help to minimize ramp up costs that result from significant spikes in demand within a geographical area. In addition to these improvement initiatives, we did not incur approximately $1.4 million of expense associated with the start-up and consolidation of our production facility in Dallas, Texas and $0.7 million of higher than normal “enterprise lean” expenditures which occurred during the nine months ended September 28, 2013. These positive gross profit increases were partially offset by the performance of our combined Western Canadian businesses. On a combined basis, our Western Canadian businesses experienced a decrease in gross profit of approximately $4.8 million during the nine months ended September 27, 2014. This gross profit decrease can be primarily attributed to expenses and inefficiencies associated with the consolidation of two operations (Gienow and Ply Gem Canada) into a single manufacturing facility including manufacturing inefficiencies and certain customer losses which decreased operating leverage and profitability for our Western Canadian businesses during the nine months ended September 27, 2014.

As a percentage of sales, gross profit, excluding the Simonton, Gienow, and Mitten acquisitions, increased from 10.2% to 12.8% for the Windows and Doors segment during the nine months ended September 27, 2014 as compared to the nine months ended September 28, 2013. This increase was driven by the improvement in our U.S. windows gross profit performance that resulted in an improvement of approximately 400 basis points in gross profit performance resulting from improved net pricing and operational efficiencies during the nine months ended September 27, 2014 relative to the nine months ended September 28, 2013. This improvement was partially offset by the negative near-term integration costs incurred in our Western Canadian operations that resulted in the deterioration of approximately 100 basis points in gross profit performance during the nine months ended September 27, 2014.

Selling, general and administrative expenses

SG&A expense for the nine months ended September 27, 2014 increased $12.7 million or 19.8% compared to the nine months ended September 28, 2013. The SG&A expense increase was caused by several factors with the first relating to the impact of the Gienow and Simonton acquisitions, which on a combined basis increased SG&A expense by approximately $7.7 million including restructuring and integration costs related to Gienow of approximately $3.8 million. These restructuring and integration expenses arose due to the consolidation of two manufacturing facilities into a single facility during the nine months ended September 27, 2014. Excluding the impact of these acquisitions, SG&A expense increased approximately $5.0 million or 7.9% for the nine months ended September 27, 2014 as compared to the nine months ended September 28, 2013. This increase was due to the preliminary legal settlement of class action lawsuits on May 1, 2014 for our Windows and Doors segment which resulted in a $5.0 million expense during the nine months ended September 27, 2014.

As a percentage of sales, SG&A expense increased to 15.1% of net sales from 13.7% during the nine months ended September 27, 2014 compared to the nine months ended September 28, 2013. Excluding the expense associated with the class action settlement as well as the acquisition and integration costs, SG&A expense decreased as a percentage of sales at 13.2% for the nine months ended September 27, 2014 compared to the nine months ended September 28, 2013. The percentage decrease related to the elimination of certain relocation and consulting costs for the U.S. windows business as well as increased leverage on the fixed component of SG&A expense as net sales increased during the nine months ended September 27, 2014.

Gienow and Mitten’s SG&A expenses are higher as a percentage of sales at approximately 21.4% and 20.2%, respectively, compared to the remainder of the Company at approximately 12.4% for the three months ended September 27, 2014. Gienow and Mitten own their distribution centers across their respective regions in Eastern and Western Canada, which increases their respective SG&A expense, while allowing them to service their Canadian customer base across a broad geographical area. Also included in Gienow and Mitten’s SG&A expense are one-time costs related to restructuring and integration that are not expected to recur in future periods. These costs amounted to approximately $3.8 million for the nine months ended September 27, 2014.

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Amortization of intangible assets

Amortization expense for the nine months ended September 27, 2014 was comparable to the nine months ended September 28, 2013 decreasing 5.5%. Amortization expense as a percentage of sales at 1.2% for the nine months ended September 27, 2014 was consistent with the nine months ended September 28, 2013 at 1.3%.

Currency transaction (loss)

The currency transaction loss for the nine months ended September 27, 2014 decreased $0.5 million as compared to the nine months ended September 28, 2013 based on the fluctuation of the U.S. dollar to the Canadian dollar as compared to the nine months ended September 28, 2013.

Quarterly profitability and seasonality trend

During the three months ended September 27, 2014, the Company’s gross profit margin increased to 22.5% of net sales compared to 20.7% for the three months ended September 28, 2013. This increase was primarily attributed to the improved operating performance of our US Windows businesses partially offset by the integration and restructuring challenges associated with combining our Western Canadian businesses. SG&A expense as a percentage of net sales remained consistent at 11.7% for the three months ended September 27, 2014 as compared to 11.7% for the three months ended September 28, 2013 as SG&A expense increases related to the acquisitions and integration expenses were offset by the Company gaining leverage on the fixed component of SG&A expense. Our key performance metrics and trends have improved relative to the prior year comparable period and to our first quarter which is consistent with previous years based on the seasonality of our business. The negative performance during the first three months of 2014 was caused by adverse weather and the inclusion of the Canadian business acquisitions, Gienow and Mitten, which were acquired in April and May of 2013, respectively. The first quarter of 2014 included the results of Gienow and Mitten, whereas the first quarter of 2013 excluded the results of these Canadian acquisitions. These acquisitions’ first quarter performance is typically the lowest of the year and was further impacted by the harsh winter in Canada and therefore their inclusion in the first quarter of 2014 had a negative impact on the trends in both gross profit margins and SG&A expense as a percentage of sales. Furthermore, we incurred increased integration costs related to the consolidation of its two Western Canadian manufacturing plants into a single facility which decreased gross margins and increased SG&A expense for the nine months ended September 27, 2014.

Unallocated Operating Earnings, Interest, and Provision (Benefit) for Income Taxes

	For the three months ended
(Amounts in thousands)	September 27, 2014			September 28, 2013
	(unaudited)			(unaudited)
Statement of operations data:
SG&A expense	$	(6,602	)	$	(4,067	)
Operating loss	(6,602		)	(4,067		)
Interest expense	(16,296		)	(22,070		)
Interest income	1			1
Tax receivable agreement liability adjustment	(13,988		)	6,669
Income tax benefit for income taxes	$	10,514		$	1,442

Operating loss

Unallocated losses include items which are not directly attributed to or allocated to either of our reporting segments.  Such items include legal costs, corporate payroll, and unallocated finance and accounting expenses.  The unallocated operating loss for the three months ended September 27, 2014 increased by $2.5 million or 62.3% compared to the same period in 2013 due primarily to various personnel costs, increasing professional fees, and costs associated with the Simonton acquisition which was completed on September 19, 2014.

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Interest expense

Interest expense for the three months ended September 27, 2014 decreased by approximately $5.8 million or 26.2% compared to the same period in 2013.  The decrease was due to the reduction in interest expense with holding the 9.375% Senior Notes due 2017 (the "9.375% Senior Notes") and the 8.25% Senior Secured Notes due 2018 (the "8.25% Senior Secured Notes") outstanding during the three months ended September 28, 2013 compared to the new notes issued in January 2014. The 6.50% Senior Notes due 2022 (the "6.50% Senior Notes") and the Term Loan Facility due 2021 (the "Term Loan Facility") which were issued on January 30, 2014 to replace the 8.25% Senior Secured Notes and 9.375% Senior Notes, carry lower interest rates on a weighted average basis of approximately 300 basis points and consequently reduced interest expense during the three months ended September 27, 2014 compared to the same period in 2013.

Tax receivable agreement liability adjustment

The $14.0 million tax receivable agreement liability adjustment for the three months ended September 27, 2014 resulted from the Simonton acquisition and the assumption of their approximate $25.0 million deferred tax liability position creating future taxable income that accelerated the timing of anticipated NOL utilization.

Income taxes

The income tax benefit for the three months ended September 27, 2014 increased by approximately $9.1 million compared to the same period in 2013.  Our pre-tax income for the three months ended September 27, 2014 was approximately $10.9 million including the $14.0 million tax receivable agreement liability adjustment compared to pre-tax income of $15.5 million for the three months ended September 28, 2013.  For the three months ended September 27, 2014, the increase in income tax benefit resulted from the Simonton acquisition and the assumption of their deferred tax liabilities which resulted in a $25.0 million reversal of the Company's valuation allowance partially offset by changes in the Company's estimated effective tax rate. Our estimated effective income tax rate varied from the statutory rate primarily due to state income tax expense, changes in the valuation allowance, changes in tax contingencies and foreign income tax expense (benefit).

	For the nine months ended
(Amounts in thousands)	September 27, 2014			September 28, 2013
	(unaudited)			(unaudited)
Statement of operations data:
SG&A expense	$	(18,116	)	$	(15,912	)
Initial public offering costs	—			(23,527		)
Operating loss	(18,116		)	(39,439		)
Interest expense	(52,033		)	(70,583		)
Interest income	4			6
Loss on modification or extinguishment of debt	(21,364		)	(18,948		)
Tax receivable agreement liability adjustment	(14,419		)	(1,474		)
Income tax benefit (provision) for income taxes	$	15,933		$	(1,676	)

Operating loss

Unallocated losses include items which are not directly attributed to or allocated to either of our reporting segments.  Such items include legal costs, corporate payroll, and unallocated finance and accounting expenses.  The unallocated operating loss for the nine months ended September 27, 2014 decreased by $21.3 million or 54.1% compared to the same period in 2013 due primarily to the $23.5 million in initial public offering costs incurred during the nine months ended September 28, 2013 highlighted in the table below, partially offset by various personnel costs, increasing professional fees, and costs associated with the Simonton acquisition which was completed on September 19, 2014.

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(Amounts in thousands)
Advisory termination fee to affiliate	$	18,852
2013 management fee as of date of termination	2,682
Other transaction expenses for the IPO	1,993
	$	23,527

Interest expense

Interest expense for the nine months ended September 27, 2014 decreased by approximately $18.6 million or 26.3% compared to the same period in 2013.  The decrease was primarily due to the reduction in interest expense with holding the 9.375% Senior Notes and the 8.25% Senior Secured Notes outstanding during the nine months ended September 28, 2013 compared to the new debt incurred in 2014. The 6.50% Senior Notes which were issued and the Term Loan Facility which was entered into on January 30, 2014 to replace the 8.25% Senior Secured Notes and 9.375% Senior Notes, carry lower interest rates on a weighted average basis of approximately 300 basis points and consequently reduced interest expense during the nine months ended September 27, 2014 compared to the same period in 2013. Additionally, the average balance on the ABL Facility has been slightly lower during the nine months ended September 27, 2014 compared to the same period in 2013.

Tax receivable agreement liability adjustment

The $14.4 million tax receivable agreement liability adjustment for the nine months ended September 27, 2014 resulted from the Simonton acquisition and the assumption of their approximate $25.0 million deferred tax liability position creating future taxable income that accelerated the timing of anticipated NOL utilization.

Loss on modification or extinguishment of debt

As a result of the 6.50% Senior Notes and Term Loan Facility and the tender, redemption, and repurchase of the 8.25% Senior Notes and the 9.375% Senior Secured Notes as further described in the Liquidity and Capital Resources section below, we recognized a loss on modification or extinguishment of debt of approximately $21.4 million during the nine months ended September 27, 2014.

As a result of the long-term debt redemptions during June 2013, as further described in the Liquidity and Capital Resources section below, we recognized a loss on extinguishment of debt of approximately $18.9 million for the nine months ended September 28, 2013. When considering the partial redemption of both the 8.25% Senior Secured Notes and the 9.375% Senior Notes, the loss consisted of the call premiums paid of $8.5 million, the write off of a portion of the capitalized bond discounts of approximately $7.5 million, and the write off of a portion of the capitalized financing costs of approximately $2.9 million.

Income taxes

The income tax benefit for the nine months ended September 27, 2014 increased by approximately $17.6 million compared to the same period in 2013.  Our pre-tax loss for the nine months ended September 27, 2014 was approximately $34.7 million including the $14.4 million tax receivable agreement liability adjustment compared to a pre-tax loss of $60.4 million for the nine months ended September 28, 2013.  For the nine months ended September 27, 2014, our estimated effective income tax rate varied from the statutory rate primarily due to state income tax expense, changes in the valuation allowance, changes in tax contingencies and foreign income tax expense (benefit).  Our tax benefit for the nine months ended September 27, 2014 was primarily due to the Simonton acquisition and the assumption of their deferred tax liabilities which resulted in a $25.0 million reversal of the Company's valuation allowance partially offset by the establishment of a $7.9 million full valuation allowance for our combined Western Canadian businesses that resulted from the integration and restructuring expenses associated with combining separate manufacturing facilities into a single facility and by changes in the Company's effective tax rate during the nine months ended September 27, 2014.

Liquidity and Capital Resources

In connection with the IPO in 2013, we entered into a Tax Receivable Agreement which provides for us to pay the Tax Receivable Entity 85% of the amount of cash savings if any, in U.S. federal, state and local income tax that we actually realize in periods ending after the IPO as a result of (i) net operating loss ("NOL") carryovers from periods (or portions thereof) ending before January 1, 2013, (ii) deductible expenses attributable to the transactions related to the IPO and (iii) deductions related to imputed interest deemed to be paid by us as a result of or attributable to payments under the Tax Receivable Agreement. Future payments on the Tax Receivable Agreement could be substantial. Management estimates that the total amount of payments under the Tax Receivable Agreement will be approximately $100.0 million assuming no material changes in the relevant tax law, that we earn sufficient taxable income to utilize the net operating loss carrying forwards, and that utilization of such tax attributes is not subject to limitation under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code") as the result of an “ownership change”. It is possible that future transactions or events or changes in estimates could increase or decrease the actual tax benefits realized from these tax attributes and the corresponding Tax Receivable Agreement payments and liability.

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During the nine months ended September 27, 2014, cash decreased by approximately $43.0 million compared to a decrease of approximately $4.1 million during the nine months ended September 28, 2013.  The decrease in cash generated during the comparative nine month period was primarily due to increases in trade receivables and inventory during the nine months ended September 27, 2014. The Simonton acquisition of $130.0 million was offset by additional financing instruments during the nine months ended September 27, 2014. The significant investing and financing activities in 2013 included approximately $99.3 million in acquisitions and a net inflow of approximately $196.9 million inflow from the IPO and subsequent debt repayment financing transactions.

One of the largest changes in operating cash flows during the nine months ended September 27, 2014 is the movement in the accounts receivable balance. The approximate $138.1 million increase in accounts receivable from December 31, 2013 to September 27, 2014 can be attributed to the seasonality of our business and the Simonton acquisition in the final week of September 2014. Net sales in the final two months of each respective quarter drove this increase as aging profiles were relatively consistent. Net sales for August and September 2014 were approximately $135.1 million and $174.9 million, respectively, versus approximately $98.0 million and $113.3 million in December and November 2013, respectively, for an increase of $98.7 million. The significant improvement in August and September 2014’s net sales reflects the Company’s normal seasonal business as the weather in August and September is generally improved compared to November and December, which allows for further construction activity, increasing the Company’s sales with a corresponding increase in accounts receivable. The Simonton acquisition also contributed an additional $37.3 million in accounts receivable from the September 19, 2014 acquisition.

Our business is seasonal because inclement weather during the winter months typically reduces the level of building and remodeling activity in both the home repair and remodeling and new home construction sectors, especially in the Northeast and Midwest regions of the United States and Canada.  As a result, our liquidity typically increases during the second and third quarters as our ABL Facility borrowing base increases, reaching a peak early in the fourth quarter, and decreases late in the fourth quarter and throughout the first quarter.

Our primary cash needs are for working capital, capital expenditures, and debt service.  As of September 27, 2014, our annual interest charges for debt service for the years ending December 31, 2014 and 2015, including the ABL Facility, are estimated to be approximately $54.7 million and $60.5 million, respectively.  We do not have any scheduled debt maturities until 2018.  The specific debt instruments and their corresponding terms and due dates are described in the following sections.  Our capital expenditures have historically been approximately 1.5% to 2.0% of net sales on an annual basis.  Historically, we have been able to manage our capital expenditures based on market conditions for the new construction and repair and remodeling markets during any given fiscal year. As of September 27, 2014, our purchase commitments for inventory are approximately $27.2 million.  We finance these cash requirements, including payments under the Tax Receivable Agreement through internally generated cash flow and funds borrowed under the ABL Facility.

Our outstanding indebtedness will mature in 2018 (ABL Facility), 2021 (Term Loan Facility), and 2022 (6.50% Senior Notes).  Although we expect to refinance or pay off such indebtedness, we may not be successful in refinancing, extending the maturity or otherwise amending the terms of such indebtedness because of market conditions, disruptions in the debt markets, our financial performance or other reasons. Furthermore, the terms of any refinancing, extension or amendment may not be as favorable as the current terms of our indebtedness. If we are not successful in refinancing our indebtedness or extending its maturity, we and our subsidiaries could face substantial liquidity problems and may be forced to reduce or delay capital expenditures, sell assets, seek additional capital or restructure our indebtedness.

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Our specific cash flow movement for the nine months ended September 27, 2014 and September 28, 2013 is summarized below:

Cash used in operating activities

Net cash used in operating activities for the nine months ended September 27, 2014 was approximately $55.4 million as compared to approximately $84.6 million used in operations for the nine months ended September 28, 2013. After considering the $18.9 million payment made to CI Capital Partners during the nine months ended September 28, 2013 for the termination of an advisory agreement, the net cash used in operating activities was consistent between the two periods reflecting increased operating earnings of approximately $22.6 million primarily attributable to improved operating performance for our U.S. windows business during the nine months ended September 27, 2014. This $22.6 million was offset by negative movement for the increase in accounts receivable of approximately $27.3 million related to the 8.1% increase in net sales for the nine months ended September 27, 2014 compared to the nine months ended September 28, 2013. The receivable increase was offset by lower interest expense and related accruals of approximately $17.3 million resulting from the January 2014 refinancing activities which lowered our weighted average interest rate by approximately 300 basis points reducing cash interest by approximately $24.8 million for the nine months ended September 27, 2014.

Cash used in investing activities

Net cash used in investing activities for the nine months ended September 27, 2014 and September 28, 2013 was approximately $144.6 million and $115.6 million, respectively, primarily used for capital expenditures on various ongoing capital projects and the $130.0 million acquisition of Simonton in 2014 and for the acquisitions of Mitten and Gienow in 2013. The 2013 acquisitions consisted of $78.9 million paid for Mitten and $20.4 million paid for Gienow. Capital expenditures for 2014 were lower than 2013, at approximately 1.3% of net sales which is comparably to our historical average of 1.5%.

Cash provided by financing activities

Net cash provided by financing activities for the nine months ended September 27, 2014 was approximately $157.9 million, primarily from net revolver borrowings of $20.0 million and the issuance of an additional $150.0 million in 6.50% Senior Notes. The long term debt refinancing in the nine months ended September 27, 2014 that occurred in January 2014 was essentially cash neutral after considering the final debt structure and related premiums/discounts with proceeds of $927.9 million offset by debt payments on the 8.25% Senior Secured Notes and 9.375% Senior Notes of $852.0 million, $61.1 million of tender/call premiums, and $14.6 million of debt issuance costs. The issuance of an additional $150.0 million in 6.50% Senior Notes in the nine months ended September 27, 2014 resulted in net proceeds of approximately $138.0 million after deducting $10.1 million for the debt discount and approximately $1.9 million in transaction costs incurred. Net cash provided by financing activities for the nine months ended September 28, 2013 was approximately $195.8 million, primarily from net proceeds from the issuance of common stock of $353.4 million offset by the redemption of long-term debt of $148.0 million combined with the $8.5 million of call premiums associated with that redemption.

Our specific debt instruments and terms are described below:

Recent developments

As described in the following paragraph, Ply Gem Industries modified its debt structure during the nine months ended September 27, 2014. On January 30, 2014, Ply Gem Industries completed an offering of $500.0 million aggregate principal amount of 6.50% Senior Notes due 2022 (the “6.50% Senior Notes”) and also entered into a $430.0 million senior secured term loan facility due 2021 (the “Term Loan Facility”). The approximate $927.9 million of net proceeds from the issuance of the 6.50% Senior Notes and the borrowings under the Term Loan Facility were used by Ply Gem Industries to purchase all of its 8.25% Senior Secured Notes due 2018 (the "8.25% Senior Secured Notes") and 9.375% Senior Notes due 2017 (the "9.375% Senior Notes") tendered in the tender offers described below, to satisfy and discharge the remaining obligations under the indentures governing the 8.25% Senior Secured Notes and 9.375% Senior Notes and to pay related fees and expenses.

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On January 30, 2014, Ply Gem Industries purchased approximately $705.9 million of the outstanding 8.25% Senior Secured Notes in a tender offer at a price of $1,067.50 per $1,000 principal amount, which included an early tender payment of $30.00 per $1,000 principal amount, plus accrued and unpaid interest. On January 30, 2014, Ply Gem Industries also purchased approximately $94.7 million of the outstanding 9.375% Senior Notes in a tender offer at a price of $1,108.36 per $1,000 principal amount, which included an early tender payment of $30.00 per $1,000 principal amount, plus accrued and unpaid interest. As a result, Ply Gem Industries paid aggregate consideration of approximately $780.2 million for the tendered 8.25% Senior Secured Notes, including a tender premium of approximately $47.6 million, and paid aggregate consideration of approximately $107.6 million for the tendered 9.375% Senior Notes, including a tender premium of approximately $10.3 million. On March 1, 2014, pursuant to the terms of the indenture governing the 8.25% Senior Secured Notes, Ply Gem Industries redeemed the remaining approximate $50.1 million principal amount of the outstanding 8.25% Senior Secured Notes at a redemption price equal to 106.188% of the principal amount thereof, plus accrued and unpaid interest. On February 16, 2014, pursuant to the terms of the indenture governing the 9.375% Senior Notes, Ply Gem Industries redeemed the remaining approximate $1.3 million principal amount of the outstanding 9.375% Senior Notes at a redemption price equal to 100% of the principal amount plus the “make-whole” premium required under the indenture governing the 9.375% Senior Notes (which equated to 110.179% of the principal amount thereof), plus accrued and unpaid interest. As of March 1, 2014, there were no longer outstanding any 8.25% Senior Secured Notes. As of February 16, 2014, there were no longer outstanding any 9.375% Senior Notes.

On September 19, 2014, Ply Gem Industries issued an additional $150.0 million aggregate principal amount of its 6.50% Senior Notes (“Senior Tack-on Notes”).  The net proceeds from the transaction were approximately $138.0 million after deducting $10.1 million for the debt discount and $1.9 million in transaction costs. The proceeds from the issuance of the Senior Tack-on Notes and approximately $3.1 million of cash on hand were used by Ply Gem Industries to fund Ply Gem Industries’ purchase of all the issued and outstanding shares of common stock of Simonton, to pay fees and expenses related to the offering of the Senior Tack-on Notes and the Simonton acquisition and for general corporate purposes, including the repayment of approximately $10.0 million of indebtedness under the Company’s senior secured asset-backed revolving credit facility (the "ABL Facility"). The additional $150.0 million of 6.50% Senior Notes have the same terms and covenants as the original $500.0 million of 6.50% Senior Notes due 2022. The 6.50% Senior Notes originally issued in January 2014 and the Senior Tack-on Notes issued in September 2014 (collectively, the "6.50% Senior Notes") will mature on February 1, 2022 and bear interest at the rate of 6.50%.

6.50% Senior Notes due 2022

On January 30, 2014, Ply Gem Industries issued $500.0 million of 6.50% Senior Notes at par. On September 19, 2014, Ply Gem Industries issued an additional $150.0 million of 6.50% Senior Notes at a discount of approximately $10.1 million. Interest accrues at 6.50% per annum and is paid semi-annually on February 1 and August 1 of each year. The 6.50% Senior Notes will mature on February 1, 2022.

Prior to February 1, 2017, Ply Gem Industries may redeem up to 40% of aggregate principal amount of the 6.50% Senior Notes with the net cash proceeds from certain equity offerings at a redemption price equal to 106.50% of the aggregate principal amount of the 6.50% Senior Notes to be redeemed, plus accrued and unpaid interest, if any, provided that at least 50% of the aggregate principal amount of the 6.50% Senior Notes remains outstanding after the redemption. Prior to February 1, 2017, Ply Gem Industries may redeem the 6.50% Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus a “make-whole” premium plus accrued and unpaid interest, if any. At any time on or after February 1, 2017, Ply Gem Industries may redeem the 6.50% Senior Notes, in whole or in part, at declining redemption prices set forth in the indenture governing the 6.50% Senior Notes plus, in each case, accrued and unpaid interest, if any, to the redemption date. The effective interest rate for the 6.50% Senior Notes is 4.24% after considering each of the different interest expense components of this instrument, including the coupon payment and the deferred debt issuance costs.

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The 6.50% Senior Notes are fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by Ply Gem Holdings and all of the wholly-owned domestic subsidiaries of Ply Gem Industries (the “Guarantors”).  The indenture governing the 6.50% Senior Notes contains certain covenants that limit the ability of Ply Gem Industries and its restricted subsidiaries to incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem their stock, make loans and investments, sell assets, incur certain liens, enter into agreements restricting their ability to pay dividends, enter into transactions with affiliates, and consolidate, merge or sell assets.  In particular, Ply Gem Industries and its restricted subsidiaries may not incur additional debt (other than permitted debt (as defined in the indenture) in limited circumstances) unless, after giving effect to such incurrence, the consolidated interest coverage ratio of Ply Gem Industries would be at least 2.00 to 1.00.  In the absence of satisfying the consolidated interest coverage ratio test, Ply Gem Industries and its restricted subsidiaries may only incur additional debt under certain circumstances, including, but not limited to, debt under credit facilities (as defined in the indenture) (x) in an amount not to exceed the greater of (a) $350.0 million and (b) the borrowing base (as defined in the indenture) and (y) in an amount not to exceed the greater of (A) $575.0 million and (B) the aggregate amount of indebtedness (as defined in the indenture) that that would cause the consolidated secured debt ratio (as defined in the indenture) to be equal to 4.00 to 1.00; purchase money indebtedness in an aggregate amount not to exceed the greater of (x) $35.0 million and (y) 10% of consolidated net tangible assets (as defined in the indenture) at any one time outstanding; debt of foreign subsidiaries in an aggregate amount not to exceed the greater of (x) $60.0 million and (y) 15% of consolidated net tangible assets (as defined in the indenture) at any one time outstanding; debt pursuant to a general basket in an aggregate amount at any one time outstanding not to exceed the greater of (x) $75.0 million and (y) 20% of consolidated net tangible assets; and the refinancing of debt under certain circumstances. On January 30, 2014, Ply Gem Industries and the Guarantors entered into a registration rights agreement relating to the 6.50% Senior Notes. Ply Gem Industries will be required to pay additional interest on the 6.50% Senior Notes if it fails to comply with certain of its obligations under the registration rights agreement within specified time periods.

On September 5, 2014, Ply Gem Industries completed an exchange offer with respect to the 6.50% Senior Notes issued in January 2014 to exchange $500.0 million 6.50% Senior Notes registered under the Securities Act for $500.0 million of the issued and outstanding 6.50% Senior Notes. Upon completion of the exchange offer, all $500.0 million of issued and outstanding 6.50% Senior Notes were registered under the Securities Act.  However, the $150.0 million of Senior Tack-on Notes issued in September 2014 have not yet been registered under the Securities Act.

Term Loan Facility due 2021

On January 30, 2014, Ply Gem Industries entered into a credit agreement governing the terms of its new $430.0 million Term Loan Facility. Ply Gem Industries borrowed $430.0 million under the Term Loan Facility on January 30, 2014, with an original discount of approximately $2.2 million, yielding proceeds of approximately $427.9 million. The Term Loan Facility will mature on January 30, 2021. The Term Loan Facility requires scheduled quarterly payments in an aggregate annual amount equal to 1.00% of the original aggregate principal amount of the Term Loan Facility with the balance due at maturity. Interest on outstanding borrowings under the Term Loan Facility will be paid quarterly.

Borrowings under the Term Loan Facility bear interest at a rate equal to, at Ply Gem Industries’ option, either (a) a base rate determined by reference to the highest of (i) the prime rate of the administrative agent under the credit agreement, (ii) the federal funds rate plus 0.50% and (iii) the adjusted LIBO rate for a one-month interest period plus 1.00% or (b) a LIBO rate determined by reference to the cost of funds for eurocurrency deposits in dollars for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a 1.00% floor, plus, in each case, an applicable margin of 3.00% for any eurocurrency loan and 2.00% for any alternate base rate loan. As of September 27, 2014, the Company's interest rate on the Term Loan Facility was 4.00%. The effective interest rate for the Term Loan is 1.76% after considering each of the different interest expense components of this instrument, including the coupon payment, the deferred debt issuance costs and the original issue discount.

The Term Loan Facility allows Ply Gem Industries to request one or more incremental term loan facilities in an aggregate amount not to exceed the greater of (x) $140.0 million and (y) an amount such that Ply Gem Industries’ consolidated senior secured debt ratio (as defined in the credit agreement), on a pro forma basis, does not exceed 3.75 to 1.00, in each case, subject to certain conditions and receipt of commitments by existing or additional financial institutions or institutional lenders. Ply Gem Industries may voluntarily repay outstanding loans under the Term Loan Facility at any time without premium or penalty, other than customary “breakage” costs with respect to LIBOR loans and with respect to certain repricing transactions occurring within six months of January 30, 2014, which shall be subject to a prepayment premium of 1.00%.

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The Term Loan Facility requires Ply Gem Industries to prepay outstanding term loans, subject to certain exceptions, with: (i) 50% (which percentage will be reduced to 25% if our consolidated senior secured debt ratio is equal or less than 2.50 to 1.00 but greater than 2.00 to 1.00 and to 0% if our consolidated senior secured debt ratio is equal to or less than 2.00 to 1.00) of our annual excess cash flow (as defined in the credit agreement), to the extent such excess cash flow exceeds $15.0 million, commencing with the fiscal year ending December 31, 2015; (ii) 100% of the net cash proceeds of certain non-ordinary course asset sales or certain insurance and condemnation proceeds, in each case subject to certain exceptions and reinvestment rights; and (iii) 100% of the net cash proceeds of certain issuances of debt, other than proceeds from debt permitted under the Term Loan Facility.

The Term Loan Facility is secured on a first-priority lien basis by the stock of Ply Gem Industries and by substantially all of the assets (other than the assets securing the obligations under the ABL Facility, which primarily consist of accounts receivable, inventory, cash, deposit accounts, securities accounts, chattel paper, contract rights, instruments, documents related thereto and proceeds of the foregoing) of Ply Gem Industries and the Guarantors that are subsidiaries of Ply Gem Industries and on a second-priority lien basis by the assets that secure the ABL Facility.

The Term Loan Facility includes negative covenants, subject to certain exceptions, that are substantially the same as the negative covenants in the 6.50% Senior Notes and also does not contain any restrictive financial covenants. The Term Loan Facility also restricts the ability of Ply Gem Industries’ subsidiaries to enter into agreements restricting their ability to grant liens to secure the Term Loan Facility and contains a restriction on changes in fiscal year.

8.25% Senior Secured Notes due 2018

On February 11, 2011, Ply Gem Industries issued $800.0 million of 8.25% Senior Secured Notes at par.  Ply Gem Industries used the proceeds to purchase approximately $724.6 million principal amount of its outstanding 11.75% Senior Secured Notes in a tender offer, to redeem the remaining approximate $0.4 million principal amount of outstanding 11.75% Senior Secured Notes, and to pay related fees and expenses.  A portion of the early tender premiums and the original unamortized discount on the 11.75% Senior Secured Notes was recorded as a discount on the $800.0 million of 8.25% Senior Secured Notes given that the 2011 transaction was predominately accounted for as a loan modification.  On February 15, 2012, Ply Gem Industries issued an additional $40.0 million principal amount of its 8.25% Senior Secured Notes. The 8.25% Senior Secured Notes would have matured on February 15, 2018 and bore interest at the rate of 8.25% per annum.   Interest was paid semi-annually on February 15 and August 15 of each year. The 8.25% Senior Secured Notes were fully and unconditionally and jointly and severally guaranteed on a senior secured basis by the Guarantors. The 8.25% Senior Secured Notes and the related guarantees were secured on a first-priority lien basis by substantially all of the assets (other than the assets securing our obligations under the ABL Facility, which consist of accounts receivable, inventory, cash, deposit accounts, securities accounts, chattel paper and proceeds of the foregoing and certain assets such as contract rights, instruments and documents related thereto) of Ply Gem Industries and the Guarantors and on a second-priority lien basis by the assets that secure the ABL Facility.

As a result of the 2013 initial public offering, on June 28, 2013, Ply Gem Industries redeemed $84.0 million aggregate principal amount of its 8.25% Senior Secured Notes at a redemption price equal to 103%, plus accrued and unpaid interest thereon of approximately $2.6 million. The call premium for this redemption was approximately $2.5 million. Additionally, the Company expensed approximately $3.8 million of unamortized discount and $1.8 million of unamortized debt issuance costs in connection with this redemption and the related loss on debt extinguishment.

On January 30, 2014, Ply Gem Industries purchased approximately $705.9 million of its outstanding 8.25% Senior Secured Notes in a tender offer at a price of $1,067.50 per $1,000 principal amount, which included an early tender payment of $30.00 per $1,000 principal amount, plus accrued and unpaid interest. On January 30, 2014, Ply Gem Industries irrevocably deposited with the trustee for the 8.25% Senior Secured Notes an amount sufficient to satisfy and discharge its obligations under the 8.25% Senior Secured Notes and the indenture. On March 1, 2014, Ply Gem Industries redeemed the remaining outstanding principal amount of the 8.25% Senior Secured Notes at a redemption price equal to 106.188% of the principal amount thereof, plus accrued and unpaid interest to the redemption date. Following the redemption, there were no longer any 8.25% Senior Secured Notes outstanding.

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Senior Secured Asset Based Revolving Credit Facility due 2018

On November 1, 2013, Ply Gem Holdings, Inc., Ply Gem Industries, Inc., Ply Gem Canada, Gienow Canada Inc., and Mitten Inc. (together with Ply Gem Canada and Gienow, the “Canadian Borrowers”) entered into an amended and restated credit agreement governing the ABL Facility. Among other things, the amendment and restatement of the credit agreement governing the ABL Facility: (i) increased the overall facility to $250.0 million from $212.5 million, (ii) increased the accordion feature to $100.0 million, (iii) reduced the applicable margin for borrowings under the ABL Facility to a range from 1.50% to 2.00% for Eurodollar rate loans, depending on availability, and (iv) increased the amount available under the ABL Facility to Ply Gem Industries' Canadian subsidiaries to $50.0 million. In November 2014, the Company exercised a portion of the accordion feature under the ABL Facility for $50.0 million, or 50% of the eligible accordion, increasing the ABL Facility from $250.0 million to $300.0 million to primarily account for the additional borrowing base acquired from Simonton. Under the terms of the ABL Facility, the Company has the ability to further increase the revolving commitments up to another $50.0 million to $350.0 million, subject to certain terms and conditions. All outstanding loans under the ABL Facility are due and payable in full on November 1, 2018. Under the ABL Facility, $250.0 million is available to Ply Gem Industries and $50.0 million is available to the Canadian Borrowers. The following summary describes the ABL Facility after giving effect to the amendment and restatement. As a result of the ABL Facility amendment in which the loan syndication consisted of previous members who either maintained or increased their position as well as new syndication members, the Company capitalized new debt issuance costs of $1.3 million and will amortize these costs through 2018.

The ABL Facility provides for revolving credit financing of up to $300.0 million subject to borrowing base availability, including sub-facilities for letters of credit, swingline loans and borrowings in Canadian dollars and United States dollars, $250.0 million of the ABL Facility is available to Ply Gem Industries and $50.0 million is available to the Canadian Borrowers.

Borrowings under the ABL Facility bear interest at a rate per annum equal to, at Ply Gem Industries’ option, either (a) a base rate determined by reference to the higher of (1) the corporate base rate of the administrative agent under the ABL Facility and (2) the federal funds rate plus 0.5% or (b) a Eurodollar rate determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, in each case plus an applicable margin.  The initial applicable margin for borrowings under the ABL Facility was 0.75% for base rate loans and 1.75% for Eurodollar rate loans.  The applicable margin for borrowings under the ABL Facility is subject to step ups and step downs based on average excess availability under the ABL Facility.  Swingline loans bear interest at a rate per annum equal to the base rate plus the applicable margin.

In addition to paying interest on outstanding principal under the ABL Facility, Ply Gem Industries is required to pay a commitment fee in respect of the unutilized commitments thereunder, which fee will be determined based on utilization of the ABL Facility (increasing when utilization is low and decreasing when utilization is high) multiplied by a commitment fee rate determined by reference to average excess availability under the ABL Facility. The commitment fee rate during any fiscal quarter is 0.375% when average excess availability is greater than $100.0 million for the preceding fiscal quarter and 0.25% when average availability is less than or equal to $100.0 million for the preceding fiscal quarter.  Ply Gem Industries must also pay customary letter of credit fees equal to the applicable margin on Eurodollar loans and agency fees.   As of September 27, 2014, the Company’s interest rate on the ABL Facility was approximately 1.72%.  The ABL Facility requires that if (a) excess availability is less than the greater of (x) 10.0% of the lower of the borrowing base and the aggregate commitments and (y) $17.5 million or (b) any event of default has occurred and is continuing, Ply Gem Industries must comply with a minimum fixed charge coverage ratio test of 1.0 to 1.0.  If the excess availability under the ABL Facility is less than the greater of (a) 12.5% of the lesser of the borrowing base and the aggregate commitments and (b) $22.5 million ($20.0 million for the months of January, February, March and April) for a period of 5 consecutive days or an event of default has occurred and is continuing, all cash from Ply Gem Industries material deposit accounts (including all concentration accounts) will be swept daily into a collection account controlled by the administrative agent under the ABL Facility and used to repay outstanding loans and cash collateralize letters of credit.

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All obligations under the ABL Facility are unconditionally guaranteed by Ply Gem Holdings and substantially all of Ply Gem Industries’ existing and future, direct and indirect, wholly owned domestic subsidiaries.  All obligations under the ABL Facility, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of the assets of Ply Gem Industries and the guarantors, including a first-priority security interest in personal property consisting of accounts receivable, inventory, cash, deposit accounts, and certain related assets and proceeds of the foregoing and a second-priority security interest in, and mortgages on, substantially all of Ply Gem Industries’ and the Guarantors’ material owned real property and equipment and all assets that secure the Term Loan Facility on a first-priority basis.  In addition to being secured by the collateral securing the obligations of Ply Gem Industries under the domestic collateral package, the obligations of the Canadian Borrowers, which are borrowers under the Canadian sub-facility under the ABL Facility, are also secured by a first-priority security interest in substantially all of the assets of such Canadian subsidiaries, plus additional mortgages in Canada, and a pledge by Ply Gem Industries of the remaining 35% of the equity interests of the Canadian Borrowers pledged only to secure the Canadian sub-facility.

The ABL Facility contains certain covenants that limit Ply Gem Industries’ ability and the ability of Ply Gem Industries’ subsidiaries to incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem their stock, make loans and investments, sell assets, incur certain liens, enter into transactions with affiliates, and consolidate, merge or sell assets.  In particular, Ply Gem Industries is permitted to incur additional debt in limited circumstances, including, but not limited to, permitted subordinated indebtedness in an aggregate principal amount not to exceed $112.5 million at any time outstanding (subject to the ability to incur additional permitted subordinated debt provided that immediately after giving effect to such incurrence excess availability is more than 25% of the lesser of the total borrowing base and the aggregate commitments and Ply Gem Industries is in pro forma compliance with the fixed charge coverage ratio), purchase money indebtedness in an aggregate amount not to exceed $25.0 million at any one time outstanding, debt of foreign subsidiaries (other than Canadian subsidiaries) in an aggregate amount not to exceed $10.0 million at any one time outstanding, indebtedness in connection with the tax receivable agreement in an aggregate principal amount not to exceed $100.0 million, and the refinancing of debt under certain circumstances.  

As of September 27, 2014, Ply Gem Industries had approximately $224.3 million of contractual availability and approximately $221.4 million of borrowing base availability under the ABL Facility, reflecting $20.0 million of borrowings outstanding and approximately $5.7 million of letters of credit and priority payables reserves.

9.375% Senior Notes due 2017

On September 27, 2012, Ply Gem Industries issued $160.0 million of 9.375% Senior Notes at par. Ply Gem Industries used the proceeds of the offering, together with cash on hand, to satisfy and discharge its obligations under the 13.125% Senior Subordinated Notes and the indenture governing the 13.125% Senior Subordinated Notes. The 9.375% Senior Notes would have matured on April 15, 2017 and bore interest at the rate of 9.375% per annum. Interest was paid semi-annually on April 15 and October 15 of each year. The 9.375% Senior Notes were unsecured and fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by the Guarantors.

A portion of the early call premium and the original unamortized discount on the 13.125% Senior Subordinated Notes was recorded as a discount on the $160.0 million of 9.375% Senior Notes, given that the transaction was predominately accounted for as a loan modification.

As a result of the 2013 initial public offering, on June 22, 2013, Ply Gem Industries redeemed $64.0 million aggregate principal amount of the 9.375% Senior Notes at a redemption price equal to 109.375%, plus accrued and unpaid interest thereon of approximately $1.1 million. The call premium for this redemption was approximately $6.0 million. Additionally, the Company expensed approximately $3.7 million of unamortized discount and $1.2 million of unamortized debt issuance costs in connection with this redemption and the related loss on debt extinguishment.

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On January 30, 2014, Ply Gem Industries purchased approximately $94.7 million of the outstanding 9.375% Senior Notes at a tender price of $1,108.36 per $1,000 principal amount, which included an early tender payment of $30.00 per $1,000 principal amount, plus accrued and unpaid interest. On January 30, 2014, Ply Gem Industries irrevocably deposited with the trustee for the 9.375% Senior Notes an amount sufficient to satisfy and discharge its obligations under the 9.375% Senior Notes and the indenture. On February 16, 2014, Ply Gem Industries redeemed the remaining outstanding principal amount of the 9.375% Senior Notes at a redemption price equal to 100% of the principal amount plus the “make-whole” premium required under the indenture (which equated to 110.179% of the principal amount thereof), plus accrued and unpaid interest. Following the redemption, there were no longer any 9.375% Senior Notes outstanding.

Loss on debt modification or extinguishment

As a result of the January 2014 6.50% Senior Notes and Term Loan Facility issuance and the tender, redemption, and repurchase of the 8.25% Senior Secured Notes and the 9.375% Senior Notes (the "January 2014 Refinancing") during the nine months ended September 27, 2014, the Company performed an analysis to determine the proper accounting treatment for the January 2014 Refinancing. Specifically, the Company evaluated each creditor with ownership in both the new 6.50% Senior Notes and/or Term Loan Facility debt instruments and the old 8.25% Senior Secured Notes and/or 9.375% Senior Notes to determine whether the transaction should be accounted for as a modification or an extinguishment of debt as it relates to each individual creditor. The Company had approximately $34.4 million of unamortized debt discount and $14.9 million of unamortized debt issuance costs associated with the 8.25% Senior Secured Notes and 9.375% Senior Notes, of which approximately $4.8 million and $2.1 million, respectively, were expensed as a loss on extinguishment of debt in the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended September 27, 2014 as a result of the January 2014 Refinancing.

The Company also incurred an early tender premium of approximately $61.1 million in conjunction with this transaction, of which approximately $52.6 million was recorded as a discount on the 6.50% Senior Notes and the Term Loan Facility and approximately $8.5 million was expensed as a loss on extinguishment of debt in the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended September 27, 2014. The Company also expensed approximately $0.3 million for the third party fees for the 8.25% Senior Secured Notes and 9.375% Senior Notes as a result of the January 2014 Refinancing for the nine months ended September 27, 2014. The Company also incurred approximately $14.7 million of costs associated with the 6.50% Senior Notes and Term Loan Facility, of which approximately $9.2 million was recorded as debt issuance costs and approximately $5.5 million was expensed as a loss on modification of debt in the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended September 27, 2014. Additionally, the Company incurred an original issue discount of approximately $2.2 million for the Term Loan Facility, of which approximately $1.9 million was recorded as a discount and approximately $0.3 million was expensed as a loss on extinguishment of debt in the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended September 27, 2014.

As a result of the June 28, 2013 redemption of approximately $84.0 million aggregate principal amount of the 8.25% Senior Secured Notes, the Company recorded a loss on debt extinguishment of approximately $8.1 million in the condensed consolidated statement of operations for the nine months ended September 28, 2013.

As a result of the June 22, 2013 redemption of approximately $64.0 million aggregate principal amount of the 9.375% Senior Notes, the Company recorded a loss on debt extinguishment of approximately $10.8 million in the condensed consolidated statement of operations for the nine months ended September 28, 2013.

Based on the January 2014 Refinancing, the Company recognized a loss on debt modification or extinguishment of approximately $21.4 million for the nine months ended September 27, 2014 and approximately $18.9 million for the nine months ended September 28, 2013 related to the 2013 redemptions, as summarized in the table below.

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(Amounts in thousands)	For the nine months ended
	September 27, 2014			September 28, 2013
Loss on extinguishment of debt:
Tender premium	$	(8,493	)	$	—
8.25% Senior Secured Notes and 9.375% Senior Notes unamortized discount	(4,773		)	—
8.25% Senior Secured Notes and 9.375% Senior Notes unamortized debt issuance costs	(2,067		)	—
Term Loan Facility unamortized discount	(255		)	—
Call premium for 8.25% Senior Secured Notes	—			(2,520		)
8.25% Senior Secured Notes unamortized discount	—			(3,831		)
8.25% Senior Secured Notes unamortized debt issuance costs	—			(1,766		)
Call premium for 9.375% Senior Notes	—			(6,000		)
9.375% Senior Notes unamortized discount	—			(3,666		)
9.375% Senior Notes unamortized debt issuance costs	—			(1,165		)
	(15,588		)	(18,948		)
Loss on modification of debt:
Third party fees for 8.25% Senior Secured Notes and 9.375% Senior Notes	(302		)	—
Third party fees for 6.50% Senior Notes and Term Loan Facility	(5,474		)	—
	(5,776		)	—
Total loss on modification or extinguishment of debt	$	(21,364	)	$	(18,948	)

Liquidity requirements

We intend to fund our ongoing capital and working capital requirements, including our internal growth, through a combination of cash flows from operations and, if necessary, from borrowings under our ABL Facility.  We believe that we will continue to meet our liquidity requirements over the next 12 months.  We believe that our operating units are positive cash flow generating units and will continue to sustain their operations without any significant liquidity concerns.  The performance of these operating units is significantly impacted by the performance of the housing industry, specifically single family housing starts and the repair and remodeling activity.  Any unforeseen or unanticipated downturn in the housing industry could have a negative impact on our liquidity position.

Management anticipates that our current liquidity position, as well as expected cash flows from our operations, should be sufficient to meet ongoing operational cash flow needs, capital expenditures, debt service obligations, and other fees payable under other contractual obligations for the foreseeable future.  As of September 27, 2014, we had cash and cash equivalents of approximately $26.8 million, approximately $224.3 million of contractual availability under the ABL Facility and approximately $221.4 million of borrowing base availability.  

In order to further supplement our operating cash flow, we have from time to time opportunistically accessed capital markets based on prevailing economic and financial conditions.  Based on market conditions, we may elect to pursue additional financing alternatives in the future. 

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Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Contractual Obligations

In addition to the items listed in the Contractual Obligations table presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, we have a potential obligation related to certain tax matters of approximately $3.2 million, including interest of approximately $1.2 million.  The timing of the potential tax payments is unknown.

Inflation; Seasonality

Our performance is dependent to a significant extent upon the levels of home repair and remodeling and new home construction spending, all of which are affected by such factors as interest rates, inflation, consumer confidence and unemployment.  We do not believe that inflation has had a material impact on our business, financial condition or results of operations during the past three fiscal years.

The demand for our products is seasonal, particularly in the Northeast and Midwest regions of the United States and Canada where inclement weather conditions during the winter months usually reduces the level of building and remodeling activity in both the home repair and remodeling and the new home construction sectors.  Our sales in both segments are usually lower during the first and fourth quarters.  Since a portion of our manufacturing overhead and operating expenses are relatively fixed throughout the year, operating income and net earnings tend to be lower in quarters with lower sales levels.  In addition, the demand for cash to fund our working capital is greater from late in the fourth quarter through the first quarter.

Recent Accounting Pronouncements

See Note 1 – Summary of Significant Accounting Policies to the condensed consolidated financial statements, regarding the impact of certain recent accounting pronouncements on our condensed consolidated financial statements.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements relate to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology.  These statements are only predictions.  Actual events or results may differ materially.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements.  All written and oral forward-looking statements made in connection with this Quarterly Report on Form 10-Q that are attributable to us or persons acting on our behalf are expressly qualified in their entirety by the Risk Factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and other cautionary statements included therein and herein.

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There can be no assurance that other factors will not affect the accuracy of these forward-looking statements or that our actual results will not differ materially from the results anticipated in such forward-looking statements. While it is impossible to identify all such factors, factors which could cause actual results to differ materially from those estimated by us include, but are not limited to, those factors or conditions described under Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, and the following:

• our high degree of leverage and significant debt service obligations;

• restrictions under the indenture governing the 6.50% Senior Notes and the restrictions under our Term Loan Facility and ABL Facility;

• the competitive nature of our industry;

• changes in interest rates, and general economic, home repair and remodeling and new home construction market conditions;

• changes in the price and availability of raw materials; and

• changes in our relationships with our significant customers.

Other factors that could cause actual results to differ from those implied by the forward-looking statements contained in this Quarterly Report on Form 10-Q include those set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013.  We undertake no obligation to update the forward-looking statements in this report.

Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our principal interest rate exposure relates to the loans outstanding under our Term Loan Facility and our ABL Facility, which provides for borrowings of $430.0 million on the Term Loan and up to $250.0 million on the ABL, bearing interest at a variable rate, based on an adjusted LIBOR rate plus an applicable interest margin or the base rate plus an applicable interest margin.  Each quarter point increase or decrease in the interest rate would change our interest expense by approximately $1.1 million per year for the Term Loan Facility.  Assuming the ABL Facility is fully drawn, each quarter point increase or decrease in the interest rate would change our interest expense by approximately $0.6 million per year. At September 27, 2014, we were not party to any interest rate swaps or caps to manage our interest rate risk. In the future, we may enter into interest rate swaps or interest rate caps, involving exchange of floating for fixed rate interest payments, to reduce our exposure to interest rate volatility.

Foreign Currency Risk

Our results of operations are affected by fluctuations in the value of the U.S. dollar as compared to the value of the Canadian dollar.  For the three and nine months ended September 27, 2014, the net impact of foreign currency changes to our results of operations was a loss of approximately $0.8 million and $0.5 million, respectively. The impact of foreign currency changes related to translation resulted in a decrease in stockholders' deficit of approximately $5.4 million for the nine months ended September 27, 2014. The revenue or expense reported by us as a result of currency fluctuations will be greater in times of U.S. dollar devaluation and less in times of U.S. dollar appreciation. During the nine months ended September 27, 2014, we entered into a hedging contract in order to mitigate the exposure risk of currency fluctuation against the Canadian dollar.  At September 27, 2014, our foreign currency hedging contract had a market value of $47,000 and is recorded as an increase in stockholders' deficit for the nine months ended September 27, 2014.

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Commodity pricing risk

We are subject to significant market risk with respect to the pricing of our principal raw materials, which include PVC resin, aluminum, and wood.  If prices of these raw materials were to increase dramatically, we may not be able to pass such increases on to our customers and, as a result, gross margins could decline significantly.  We manage the exposure to commodity pricing risk by increasing our selling prices for corresponding material cost increases, continuing to diversify our product mix, strategic buying programs and vendor partnering. According to the London Metal Exchange, the price of aluminum decreased approximately 8.8% for the nine months ended September 27, 2014 compared to the nine months ended September 28, 2013. Conversely, the average market price for PVC resin was estimated to have increased approximately 10.3% for the nine months ended September 27, 2014 compared to the nine months ended September 28, 2013.

Inflation

We do not believe that inflation, net of our corresponding price increases for material cost, has had a material effect on our business, financial condition or results of operations.  Our lease payments related to our sale/leaseback agreement include an annual increase based on the Consumer Price Index, which could expose us to potential higher costs in years with high inflation. The CPI increase for the twelve months ended September 2014 was approximately 1.7%.

Labor force risk

Our manufacturing process is highly engineered but involves manual assembly, fabrication, and manufacturing processes. We believe that our success depends upon our ability to employ, train, and retain qualified personnel with the ability to design, utilize and enhance these services and products. In addition, our ability to expand our operations depends in part on our ability to increase our labor force as the U.S. housing market recovers and minimize labor inefficiencies. A significant increase in the wages paid by competing employers could result in a reduction of our labor force, increases in the wage rates that we must pay, or both. If either of these events were to occur, our cost structure could increase, our margins could decrease and any growth potential could be impaired. Historically, the Company has believed that the lag period between breaking ground on a new housing start and the utilization of our products on the exterior of a home was 90 days. The Company believes that the labor force risk has expanded the historical 90 day lag period to 120 days or more.

During the nine months ended September 27, 2014, a union vote was held at the newly combined Western Canadian entity and the union received a favorable vote. It is expected that the manufacturing operations at that facility will be unionized through ratification of that vote.

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Item 4.     CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding the required disclosure.

Our management is responsible for establishing and maintaining our disclosure controls and procedures. Our Chief Executive Officer and Chief Financial Officer participated with our management in evaluating the effectiveness of our disclosure controls and procedures as of September 27, 2014.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of September 27, 2014 were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding the required disclosure.

There have been no changes in our internal control over financial reporting during the three months ended September 27, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

On May 14, 2013, the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") issued an updated version of its Internal Control – Integrated Framework ("2013 Framework"). Originally issued in 1992 ("1992 Framework"), the framework helps organizations design, implement and evaluate the effectiveness of internal control concepts and simplify their use and application. The 1992 Framework remains available during the transition period, which extends to December 15, 2014, after which time COSO will consider it as superseded by the 2013 Framework. As of September 27, 2014, the Company continues to utilize the 1992 Framework during the transition to the 2013 Framework by the end of 2014. The Company does not expect significant changes to its overall internal control structure over financial reporting to result from the transition to the 2013 Framework.

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PART II – OTHER INFORMATION

Item 5.                                                 OTHER INFORMATION

On November 6, 2014, the Company, Ply Gem Industries, a wholly-owned subsidiary of the Company, Gienow Canada Inc. (“Gienow”), and Mitten Inc. (“Mitten”, and together with Gienow, the “Canadian Borrowers”) and certain subsidiaries of Ply Gem Industries, as loan parties, entered into Amendment No. 2 and Incremental Assumption Agreement to Amended and Restated Credit Agreement with certain financial institutions and institutional lenders providing incremental revolving credit commitments and UBS AG, Stamford Branch, as U.S. administrative agent (the “ U.S. Administrative Agent”), exercising a portion of the accordion feature under the ABL Facility for $50.0 million.

This accordion exercise for $50.0 million increases the aggregate amount of the commitments under the ABL Facility from $250.0 million to $300.0 million to account for the additional borrowing base acquired from Simonton. Under the terms of the ABL Facility, the Company has the ability to further increase the revolving commitments up to another $50.0 million to $350.0 million, subject to certain terms and conditions. All other terms and conditions under the ABL Facility remain unchanged. Please refer to “Note 6-Long-Term Debt” to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information on the ABL Facility, which information is incorporated by reference into this Item 5.

In the ordinary course of their businesses, certain of the agents and lenders under the ABL Facility and certain of their affiliates have, from time to time, provided, and may in the future provide, financial services to or engage in investment and commercial banking or other transactions of a financial nature with the Company, Ply Gem Industries or their respective affiliates, including the provision of certain advisory services and the making of loans to the Company and its affiliates, for which they received or will receive customary fees and expenses.

Item 6.                                                 EXHIBITS

(a)   Exhibits

Exhibit No.Description of Exhibits

2.1*	Stock Purchase Agreement, dated as of August 19, 2014, by and among Ply Gem Industries, Inc., Fortune Brands Home & Security, Inc. and Fortune Brands Windows & Doors, Inc.
4.1	Registration Rights Agreement, September 19, 2014, among Ply Gem Industries, inc., the Guarantors party thereto and Credit Suisse Securities (USA) LLC, as representative of the initial purchasers (incorporated by reference from Exhibit 4.1 to the Company's Form 8-K, dated September 19, 2014 (File No. 001-359302).
31.1 *	Certification by President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 *	Certification by Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 *	Certification by President and Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 *	Certification by Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*	The following financial statements from Ply Gem Holdings, Inc. Quarterly Report on Form 10-Q for the quarter ended September 27, 2014, filed on November 7, 2014, were formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss); (iii) Condensed Consolidated Statements of Cash Flows; (iv) the Notes to Condensed Consolidated Financial Statements.

*  Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PLY GEM HOLDINGS, INC.

(Registrant)

Date:  November 7, 2014

By:	/s/ Gary E. Robinette
	Gary E. Robinette
	President, Chief Executive Officer, and Vice Chairman of the Board

Date:  November 7, 2014

By:	/s/ Shawn K. Poe
	Shawn K. Poe
	Vice President, Chief Financial Officer, Treasurer and Secretary

73

EX-2.1

Execution Copy

STOCK PURCHASE AGREEMENT

by and among

FORTUNE BRANDS HOME & SECURITY, INC.,

FORTUNE BRANDS WINDOWS & DOORS, INC.

and

PLY GEM INDUSTRIES, INC.

Dated as of August 19, 2014

TABLE OF CONTENTS

1. Definitions; Interpretive Provisions1

1.1 Definitions1

1.2 Interpretive Provisions10

2. Sale of the Shares; Closing; Purchase Price Adjustment Payment10

2.1 Sale of Shares10

2.2 Purchase Price10

2.3 Closing11

2.4 Closing Deliveries11

2.5 Treatment of Payments12

3. Representations and Warranties of the Shareholder12

3.1 Organization and Good Standing12

3.2 Authority and Due Execution12

3.3 No Conflict12

3.4 Capitalization13

3.5 Financial Statements14

3.6 Title to Properties; Encumbrances14

3.7 No Undisclosed Liabilities15

3.8 Indebtedness16

3.9 Taxes16

3.10 No Material Adverse Change17

3.11 Employee Benefits17

3.12 Compliance with Legal Requirements; Governmental Authorizations19

3.13 Legal Proceedings; Orders20

3.14 Absence of Certain Changes and Events20

3.15 Contracts22

3.16 Environmental Matters23

3.17 Employees24

3.18 Labor Relations; Compliance24

3.19 Intellectual Property25

3.20 Brokers or Finders26

3.21 Suppliers and Distributors26

3.22 Product Liability26

3.23 Permits27

3.24 Affiliate Transactions27

3.25 Representations on Closing Date27

4. Representations and Warranties of Buyer27

4.1 Organization and Good Standing27

4.2 Authority; No Conflict27

4.3 Sufficient Funds28

4.4 Certain Proceedings28

4.5 Brokers or Finders28

5. Covenants of the Shareholder and the Companies28

5.1 Access and Investigation28

5.2 Operation of the Businesses of the Companies29

5.3 Required Approvals30

5.4 Reasonable Best Efforts30

5.5 Tax Matters30

5.6 Consents30

5.7 Closing Indebtedness and Intercompany Payables and Receivables30

5.8 Terminations of Transactions with Related Parties30

5.9 Confidentiality31

5.10 Non-Competition; Non-Solicitation31

5.11 Cooperation33

5.12 Insurance Matters34

5.13 PVC Extrusion Lines34

5.14 401(K) Plan Rollovers35

6. Covenants of Buyer35

6.1 Required Approvals35

6.2 Reasonable Best Efforts35

6.3 Employment35

6.4 Release36

7. Conditions Precedent to Buyer’s Obligation to Close36

7.1 Accuracy of Representations36

7.2 Shareholder Performance36

7.3 Simex Supply Agreement36

7.4 No Injunction36

7.5 Regulatory Consents36

7.6 Material Adverse Effect37

7.7 Transition Services Agreement37

7.8 Notice of Termination of Severance Plans37

8. Conditions Precedent to the Shareholder’s Obligation to Close37

8.1 Accuracy of Representations37

8.2 Buyer’s Performance37

8.3 Simex Supply Agreement37

8.4 No Injunction38

8.5 Regulatory Consents38

9. Termination38

9.1 Termination Events38

9.2 Effect of Termination39

10. Indemnification; Remedies39

10.1 Survival39

10.2 Indemnification and Payment of Damages by the Shareholder or Buyer39

10.3 Survival Period40

10.4 Limitations on Amount40

10.5 Procedure for Indemnification -- Third Party Claims40

10.6 Procedure for Indemnification - Other Claims41

10.7 No Right of Contributions41

10.8 Limitations on Indemnification41

10.9 Calculation of Damages41

11. Tax Indemnification; Tax Matters42

11.1 Tax Indemnification42

11.2 Tax Indemnification Procedures42

11.3 Tax Audits and Contests; Cooperation43

11.4 Preparation of Tax Returns and Payment of Taxes44

11.5 Straddle Periods46

11.6 Refunds47

11.7 Transfer Taxes47

11.8 Tax Sharing Agreements47

12. Guarantee47

12.1 Guarantee by FBHS47

13. General Provisions47

13.1 Expenses47

13.2 Public Announcements48

13.3 Confidentiality48

13.4 Notices48

13.5 Jurisdiction49

13.6 Waiver49

13.7 Entire Agreement and Modification49

13.8 Assignments and Successors49

13.9 Severability50

13.10 Use of Fortune Brands Name50

13.11 Governing Law50

13.12 No Third Party Beneficiaries50

13.13 Counterparts50

13.14 Waiver of Jury Trial50

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “Agreement”) dated as of August 19, 2014 among Fortune Brands Home & Security, Inc., a Delaware corporation (“FBHS”), Fortune Brands Windows & Doors, Inc., a Delaware corporation (the “Shareholder”) and Ply Gem Industries, Inc., a Delaware corporation (“Buyer”).

RECITALS

WHEREAS, Fortune Brands Windows, Inc., a Delaware corporation (“Simonton”), and its direct and indirect wholly owned subsidiaries, Simex, Inc., a West Virginia corporation (“Simex”), Simonton Building Products, Inc., a West Virginia corporation, Simonton Industries, Inc., a California corporation, and Simonton Windows, Inc., a West Virginia corporation (Simonton and such subsidiaries and their successors being collectively referred to herein as the “Companies”), are engaged in the production, sale and distribution of vinyl-framed windows and vinyl-framed patio doors and PVC trim in the United States (the "Business");

WHEREAS, the Shareholder is the record and beneficial owner of all of the issued and outstanding shares (the “Shares”) of the capital stock of Simonton; and

WHEREAS, the Shareholder desires to sell, and Buyer desires to purchase, the Shares owned by the Shareholder, upon the terms and conditions set forth herein.

NOW, THEREFORE, the parties hereto agree as follows:

1. Definitions; Interpretive Provisions

1.1 Definitions

For purposes of this Agreement, the following terms have the meanings specified in this Section 1:

“Affiliate”- with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person, provided that neither FBHS nor the Shareholder shall be considered to be Affiliates of any of the Companies for purposes hereof.

“Balance Sheet” - as defined in Section 3.5.

“Balance Sheet Rules” - the accounting methods historically applied by the Companies in producing the Balance Sheet, applied on a consistent basis and in accordance with GAAP.

“Business” - as defined in the Recitals of this Agreement.

“Business Employee” - any individual who, as of the date hereof, is employed (full-time or part-time) by the Companies, including any individual absent due to short-term disability, vacation, holiday, or approved leave of absence, including military leave and leave under the Family and Medical Leave Act, but excluding any individual absent due to long-term disability.

“Business Licenses” - as defined in Section 3.23.

“Buyer” - as defined in the Preamble of this Agreement.

“Buyer Indemnitees” - as defined in Section 10.2(a).

“Cap” - as defined in Section 10.4.

“Closing” - as defined in Section 2.3.

“Closing Date” - the date and time as of which the Closing actually takes place.

“Closing Indebtedness” - the amount of consolidated Indebtedness of the Companies outstanding immediately before the Closing, determined in accordance with the Balance Sheet Rules.

“Code” - the U.S. Internal Revenue Code of 1986, as amended from time to time.

“Companies” - as defined in the Recitals of this Agreement.

“Companies Assets”- all the assets of the Companies, wherever located, and the goodwill associated therewith, real and personal, tangible and intangible, as the same shall exist as of the Closing Date, including, without limitation, cash and cash equivalents, accounts receivable, prepaid expenses, personal property, plant, machinery and equipment, together with all associated parts and supplies, motor vehicles, furniture and other office equipment, all Contracts, all Intellectual Property Assets, all computer programs and software owned or used by the Companies, and all licenses, patents and copyrights and applications therefor; inventories, including, without limitation, raw materials, finished goods, work-in-process and goods in transit, all marketing and technical data and documents of the Companies, including, without limitation, files, marketing literature, blueprints, plans, specifications and drawings, and all business records of the Companies including, without limitation, standard forms, customer lists, vendor lists, documents relating to any Tax pertaining to the Companies Assets and financial books and records of the Companies.

“Company Intellectual Property” - as defined in Section 3.19(b).

“Company Plans” - as defined in Section 3.11(a).

“Company Securities” - shares of capital stock or voting securities of the Companies, securities of the Companies convertible into or exchangeable for shares of capital stock or voting securities of the Companies or options, warrants, calls or other rights or agreements to acquire from the Companies, or other obligation of the Companies to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Companies.

“Competition Laws” - the antitrust laws of the United States.

“Consent” - any approval, consent, ratification, waiver or other authorization (including any Governmental Authorization).

“Contest” - as defined in Section 11.3(a).

“Contract” - all agreements, contracts, leases of real property, licenses, and other contractual arrangements written or otherwise.

“Copyrights” - as defined in Section 3.19(a).

“Damages” - as defined in Section 10.2.

“Deductible” - as defined in Section 10.4.

“Encumbrance” - any charge, claim, community property interest, condition, equitable interest, lien, mortgage, deed of trust, easement, title default, encroachment, option, pledge, security interest, right of first offer, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

“Environment” - soil, land surface or subsurface strata, surface waters (including streams, ponds, drainage basins, and wetlands), groundwaters, drinking water supply, stream sediments, ambient air, plant and animal life, and any other environmental medium or natural resource.

“Environmental Claims” - any complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter or other communication, oral or written, from any Governmental Body arising pursuant to Environmental Law or concerning Releases of or exposures to Hazardous Materials.

“Environmental Law” - any Legal Requirement that relates to pollution, protection of the Environment, or the Release, generation, handling, treatment, storage, disposal, recycling or presence of or exposure to Hazardous Materials.

“Environmental Liabilities” - any cost, damages, expense, Liability, obligation or other responsibility arising from or under any Environmental Law.

“Environmental Permits” - any Permits required pursuant to Environmental Laws.

“ERISA” - the Employee Retirement Income Security Act of 1974, as amended from time to time.

“Exchange Act” - the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Expenses” - as defined in Section 13.1.

“Facilities” - as defined in Section 3.6(c).

“FBHS” - as defined in the Preamble of this Agreement.

“FBHS Group” - as defined in Section 3.9(i).

“Financial Statements” - as defined in Section 3.5.

“Fundamental Representations” - the representations and warranties of the Shareholder set forth in Sections 3.1, 3.2, 3.4, 3.8 and 3.20.

“GAAP” - United States generally accepted accounting principles.

“Governmental Authorization” - any approval, consent, license, permit, waiver or other authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Body.

“Governmental Body” - any governmental agency or any court, arbitral tribunal, administrative agency or commission or other governmental or other regulatory authority or agency, federal, state, local or foreign.

“Hazardous Materials” - any waste or other substance that is listed, defined, designated or classified as, or otherwise determined to be, hazardous, radioactive or toxic or a pollutant or a contaminant under or pursuant to any Environmental Law, and specifically including petroleum and all derivatives thereof and asbestos-containing materials.

“Indebtedness” means (a) any indebtedness or other obligation of any of the Companies for borrowed money, whether current, short-term or long-term and whether secured or unsecured; (b) any indebtedness of any of the Companies evidenced by any note, bond, debenture or other security or similar instrument; (c) any liabilities of any of the Companies with respect to hedging obligations, including fuel hedges and interest rate or currency swaps, collars, caps and similar hedging obligations; (d) any liabilities of any of the Companies for the deferred purchase price of any equipment financing or acquired business (including any “earn-out” or similar payments); (e) any liabilities or obligations of any of the Companies in respect of any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which liabilities or obligations are required to be classified and accounted for under GAAP as capital leases; (f) any liabilities of any of the Companies under any performance bond or letter of credit or any bank overdrafts and similar charges; (g) any accrued interest, premiums, penalties and other obligations relating to the foregoing; and (h) any indebtedness referred to in clauses (a) through (g) above of any Person that is either guaranteed (including under any “keep well” or similar arrangement) by, or secured (including under any letter of credit, banker’s acceptance or similar credit transaction) by any Encumbrance upon any property or asset owned by, any of the Companies. Indebtedness shall also include accrued interest and any pre-payment penalties, “breakage costs,” redemption fees, costs and expenses or premiums and other amounts owing pursuant to the instruments evidencing Indebtedness, assuming that such Indebtedness is repaid on the Closing Date.

“Independent Accountant” - as defined in Section 11.4(a).

“Insurance Claim” - as defined in Section 5.12.

“Insurance Policies” - as defined in Section 5.12.

“Intellectual Property Assets” - as defined in Section 3.19.

“Interim Financial Statements” - as defined in Section 3.5.

“Knowledge” - a party will be deemed to have “Knowledge”of a particular fact or other matter if any of the following Persons is actually aware of such fact or other matter after reasonable inquiry of his or her direct reports: in the case of the Companies, Mark Savan, David Haddix, Michael Peterson, Sidney Spear, Andrew Shashlo, Rhonda Francis and Robert Keller, and, in the case of Buyer, Gary Robinette, Shawn Poe, John Wayne and Tim Johnson.

“Leased Real Property” - as defined in Section 3.6(b).

“Legal Requirement” - any federal, state, local, municipal, foreign, international, multinational or other administrative order, constitution, law, ordinance, regulation, statute or treaty.

“Liabilities” - debts, liabilities, obligations, duties and responsibilities of any kind and description, whether absolute or contingent, monetary or non-monetary, direct or indirect, known or unknown or matured or unmatured, or of any other nature.

“Licensed Intellectual Property” - as defined in Section 3.19(b).

“Material Adverse Change” - any effect, event, change, occurrence, circumstance, state of facts or development that, individually or together with any one or more effects, events, changes, occurrences, circumstances, states of fact or developments, has caused or would be reasonably expected to cause a material adverse change in the business, results of operations or financial condition of the Companies, taken as a whole; provided, however, that the following shall not be taken into account in determining whether a Material Adverse Change has occurred: (i) conditions affecting the global economy generally; (ii) any national or international political or social condition, including the engagement in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack; (iii) changes to financial, banking or securities markets (including any disruption thereof and any decline in the price of any security or any market index); (iv) any changes in weather, meteorological conditions or climate or natural disasters (including hurricanes, storms, tornados, flooding, earthquakes, volcanic eruptions or similar occurrences) affecting the Companies; (v) changes in GAAP; or (vi) the public announcement of the transactions contemplated by this Agreement (in the case of each of the foregoing clauses (i) through (v) only to the extent there is not a disproportionate adverse effect on the Companies when compared to other similarly situated businesses).

“Material Adverse Effect” - any effect, event, change, occurrence, circumstance, state of facts or development that, individually or together with any one or more effects, events, changes, occurrences, circumstances, states of fact or developments, has had or would be reasonably expected to have a material adverse effect upon the Companies’ business, results of operations or financial condition, taken as a whole; provided, however, that the following shall not be taken into account in determining whether a Material Adverse Effect has occurred: (i) conditions affecting the global economy generally; (ii) any national or international political or social condition, including the engagement in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack; (iii) changes to financial, banking or securities

markets (including any disruption thereof and any decline in the price of any security or any market index); (iv) any changes in weather, meteorological conditions or climate or natural disasters (including hurricanes, storms, tornados, flooding, earthquakes, volcanic eruptions or similar occurrences) affecting the Companies; (v) changes in GAAP; or (vi) the public announcement of the transactions contemplated by this Agreement (in the case of each of the foregoing clauses (i) through (v) only to the extent there is not a disproportionate adverse effect on the Companies when compared to other similarly situated businesses).

“Material Contracts” - as defined in Section 3.15(a).

“Order” - any legally binding award, decision, injunction, judgment, order, ruling, subpoena or verdict entered, issued, made or rendered by any court, administrative agency or other Governmental Body or by any arbitrator.

“Organizational Documents” - (i) the articles or certificate of incorporation and the bylaws of a corporation; (ii) the partnership agreement and any statement of partnership of a general partnership; (iii) any charter or similar document adopted or filed in connection with the creation, formation, or organization of a Person; and (iv) any amendment to any of the foregoing.

“Owned Intellectual Property” - as defined in Section 3.19(b).

“Owned Real Property” - as defined in Section 3.6(a).

“Patents” - as defined in Section 3.19(a).

“Permits” means all licenses, permits, franchises, clearances, authorizations, accreditations, certificates of authority, orders, registrations and approvals of any Governmental Body.

“Permitted Encumbrance” - means (a) statutory Encumbrances for current taxes not yet due or delinquent (or which may be paid without interest or penalties), or which are being disputed in good faith and for which adequate reserves have been established, (b) mechanics’, carriers’, workers’, repairers’ and other similar Encumbrances arising or incurred in the ordinary course of business relating to obligations as to which there is no default on the part of the Companies, or pledges, deposits or other Encumbrances securing the performance of bids, trade contracts, leases or statutory obligations (including workers’ compensation, unemployment insurance or other social security legislation) if the underlying obligations are not delinquent, (c) zoning, entitlement, conservation restriction and other land use and environmental regulations by governmental authorities that are not violated by any current use, occupancy or activity conducted by the Companies, and (d) easements, rights of way, licenses and restrictions and other similar encumbrances of the real property or minor defects or irregularities in title, which do not, individually or in the aggregate, materially detract from the value of the Facilities subject thereto or materially interfere with the conduct of the business of the Companies.

“Person” - any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union or other entity or Governmental Body.

“Personal Data” - information collected from any person that, alone or in combination with other information held by the Companies, allows the identification of or contact with a natural person or can be used to identify a natural person.

“Plans” - as defined in Section 3.11(a).

“Post‑Closing Period” - any Tax period beginning after the Closing Date; and, with respect to a Tax period that begins on or before the Closing Date and ends thereafter, the portion of such Tax period beginning after the Closing Date.

“Pre-Closing Consolidated Return” - as defined in Section 11.3(a).

“Pre-Closing Period” - any Tax period ending on or before the Closing Date; and, with respect to any Tax period that includes but does not end on the Closing Date, the portion of such period that ends on and includes the Closing Date.

“Pre-Closing Taxes” - as defined in Section 11.1.

“Proceeding” - any action, arbitration, audit, hearing, investigation, litigation or suit (whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Body or arbitrator.

“Product” - as defined in Section 3.22.

“Purchase Price” - as defined in Section 2.1.

“Real Property Leases” - as defined in Section 3.6(b).

“Release” - any spilling, leaking, emitting, discharging, depositing, escaping, leaching, dumping or other releasing into the Environment, whether intentional or unintentional.

“Representative” - with respect to a particular Person, any director, officer, employee, agent, consultant, advisor or other representative of such Person, including legal counsel, accountants and financial advisors.

“Restrictive Covenants” - as defined in Section 5.10(d).

“SEC” - the Securities and Exchange Commission.

“Securities Act” - the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Shareholder” - as defined in the Preamble of this Agreement.

“Shares” - as defined in the Recitals of this Agreement.

“Simex” - as defined in the Recitals of this Agreement.

“Simex Supply Agreement” - as defined in Section 2.4.

“Simonton” - as defined in the Recitals of this Agreement.

“Straddle Period” - as defined in Section 11.5.

“Straddle Returns” - as defined in Section 11.4(b).

“Subsidiary” - with respect to any Person, any corporation or other entity of which securities or other interests having the power to elect a majority of that corporation’s or other entity’s board of directors or similar governing body are held by such Person or one or more of its Subsidiaries; when used without reference to a particular Person, “Subsidiary” means a Subsidiary of the Companies.

“Survival Period” - as defined in Section 10.1.

“Tax” - any tax, governmental fee or other like assessment or charge of any kind whatsoever (including, but not limited to, withholding on amounts paid to or by any Person), together with any interest, penalty, addition to tax or additional amount imposed by any governmental authority (a “Taxing Authority”) responsible for the imposition of any such tax (domestic or foreign).

“Tax Return” - any return (including any information return), report, statement, schedule, election, declaration, disclosure, schedule, notice, form or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection or payment of any Tax.

“Tax Sharing Agreements” - means all existing agreements or arrangements (whether or not written) binding the Companies that provide for the allocation, apportionment, sharing or assignment of any Tax liability or benefit, or the transfer or assignment of income, revenues, receipts, or gains for the purpose of determining any Person’s Tax liability (other than agreements entered into in the ordinary course of business the primary purpose of which was not Tax).

“Taxing Authority” - as defined in the definition of Tax above.

“Termination Date” - as defined in Section 9.1(d).

“Trade Secrets” - as defined in Section 3.19(a).

“Trademarks” - as defined in Section 3.19(a).

“Transaction Expenses” means any fees, costs and expenses incurred or subject to reimbursement by any of the Companies, in each case in connection with the transactions contemplated hereby (whether incurred prior to or after the date hereof) and not paid prior to the Closing, including: (a) any brokerage, finders’ or other advisory fees, costs, expenses, commissions or similar payments; (b) any fees, costs and expenses of counsel, accountants or other advisors or service providers; and (c) any fees, costs and expenses or payments of any of the Companies or any of their respective Affiliates related to any transaction bonus, discretionary bonus, change-of-control payment, phantom equity payout, “stay-put” or other compensatory payments made (other than pursuant to any existing severance plans of the Companies described in Section 7.8) to any employee of any of the Companies or any of their respective Affiliates as a result of the execution of this

Agreement or in connection with the transactions contemplated hereby including the employer portion of any employment taxes payable with respect thereto.

“Transition Services Agreement” - as defined in Section 7.7.

“Treasury Regulations” - the U.S. Treasury regulations promulgated under the Code.

“WARN Act” - the Worker Adjustment and Retraining Notification Act, and any similar foreign, state, or local law.

1.2    Interpretive Provisions. Unless the express context otherwise requires:

(a)the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement;

(b)words defined in the singular shall have a comparable meaning when used in the plural, and vice versa;

(c)the words “Dollars” and “$” mean U.S. dollars;

(d)wherever the word “include,” “includes” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation”;

(e)with respect to the determination of any period of time, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”;

(f)the word “or” shall be disjunctive but not exclusive;

(g)the headings contained in this Agreement are intended solely for convenience and shall not affect the rights of the parties to this Agreement; and

(h)if the last day for the giving of any notice or the performance of any act required or permitted under this Agreement is a day that is not a business day, then the time for the giving of such notice or the performance of such action shall be extended to the next succeeding business day.

2.Sale of the Shares; Closing

2.1 Sale of Shares. Subject to the terms and conditions of this Agreement, at the Closing, in consideration of One Hundred and Thirty Million U.S. Dollars ($130,000,000.00) (the “Purchase Price”), the Shareholder agrees to sell, assign, transfer, convey and deliver to Buyer, and Buyer agrees to purchase and acquire, all of the Shares.

2.2 Purchase Price. The Purchase Price will be paid by Buyer at the Closing in immediately available funds by wire transfer to such account as the Shareholder shall designate by written notice to Buyer at least two (2) business days prior to Closing.

2.3 Closing. The closing (the “Closing”) of the transactions contemplated herein will take place electronically by exchange of PDFs (with the actual physical transfer of the items set forth in Section 2.4(a)(i), (ii) and (iv) being conveyed to Buyer on that date, or on such other date and at such other place as may be agreed upon in writing between the parties) on the date that is three (3) business days following the satisfaction or waiver of all of the conditions to closing in

Sections 7 and 8 hereof, or (ii) at such other time and place as determined by mutual agreement of the parties; provided that Buyer shall have the right to extend the timing for Closing for any reason until no later than sixty (60) days after the date hereof.

2.4    Closing Deliveries. At the Closing:

(a)the Shareholder will deliver to Buyer:

(i)stock certificates representing all of the Shares together with such stock powers signed by the Shareholder as Buyer may reasonably request;

(ii)stock certificates representing all of the outstanding shares in the Subsidiaries of Simonton or affidavits and indemnities of loss in lieu thereof;

(iii)a certificate of each officer and director of the Companies that he or she has no claim of any kind against the Companies and, if required by Buyer prior to Closing, the resignation of each officer and director;

(iv)the original record books, minute books and equity ownership register of the Companies;

(v)a non-foreign affidavit dated as of the Closing Date, sworn under penalty of perjury and in form and substance required under the Treasury Regulations issued pursuant to Code Section 1445 stating that the Shareholder is not a “foreign person” as defined in Code Section 1445;

(vi)a certificate, signed by an executive officer of the Shareholder and dated as of the Closing Date, certifying as to the matters set forth in Sections 7.1 and 7.2(a); and

(vii)such other documents as Buyer or its counsel may reasonably request.

(b)Buyer will deliver to the Shareholder:

(i)the Purchase Price to be paid to the Shareholder at Closing in accordance with Section 2.2; and

(ii)a certificate, signed by an executive officer of Buyer and dated as of the Closing Date, certifying as to the matters set forth in Sections 8.1 and 8.2(a);

(iii)such other documents as the Shareholder or its counsel may reasonably request.

(c)the Companies and the Shareholder shall enter into a supply agreement (the “Simex Supply Agreement”) in the form set forth herein in Exhibit A, pursuant to which the Companies will agree to supply vinyl extruded products and patio doors to the Shareholder and its Affiliates on the terms and conditions set forth therein.

2.5    Treatment of Payments. Any payments made by Buyer or the Shareholder under Section 10 or Section 11 shall be treated as an adjustment to the Purchase Price for all Tax and accounting purposes, except as otherwise required by Law.

3. Representations and Warranties of the Shareholder

The Shareholder represents and warrants to Buyer as follows:

3.1    Organization and Good Standing. The Shareholder and each of the Companies is a corporation duly organized, validly existing and in good standing under the laws of the State of

its incorporation. Each of the Companies has full corporate power and authority to conduct its business as it is now being conducted and to own or use its properties and assets that it purports to own or use. Each of the Companies is duly qualified to do business and is in good standing (to the extent such concept is applicable) in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified would not be material to the Companies, taken as a whole.

3.2    Authority and Due Execution. The Shareholder has all requisite power and authority to execute and deliver this Agreement and to consummate and perform the transactions contemplated hereby. The execution and delivery by the Shareholder of this Agreement and the consummation and performance of the transactions contemplated hereby has been duly and validly authorized and approved by the board of directors or other applicable governing body of the Shareholder, and no other proceeding, consent or authorization on the part of the Shareholder is necessary to authorize this Agreement or the consummation or performance of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Shareholder and constitutes a valid and legally binding obligation of the Shareholder, enforceable against the Shareholder in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Legal Requirements, now or hereafter in effect, relating to creditors’ rights generally.

3.3    No Conflict

(a)Except as set forth on Schedule 3.3, neither the execution and delivery of this Agreement nor the consummation or performance of any of the transactions contemplated herein will, directly or indirectly (with or without notice or lapse of time):

(i)contravene, conflict with or result in a violation of any provision of the Organizational Documents of the Companies or the Shareholder;

(ii)contravene, conflict with or result in a violation of any Order or Legal Requirement to which the Companies or the Shareholder, or any of the assets owned or used by the Companies, may be subject;

(iii)contravene, conflict with or result in a violation or breach of any provision of any Contract to which the Companies or the Shareholder is a party or to which any assets or properties of the Companies are subject; or

(iv)result in the imposition or creation of any Encumbrance other than Permitted Encumbrances upon or with respect to any of the assets owned or used by the Companies.

Except, in the case of clauses (ii) through (iv), where such contravention, conflict, violation or imposition would be material to the Companies.

(b)Except as set forth on Schedule 3.3 and any approvals required under the Competition Laws, the Shareholder is not and will not be required to give any notice to or obtain any material Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of the transactions contemplated herein.

3.4    Capitalization. The Shares transferred by the Shareholder to Buyer at the Closing represent 100% of the issued and outstanding shares of the capital stock of Simonton. Schedule 3.4 sets forth the complete and accurate list of all of the holders of the shares of capital stock in the Companies, including the number of such shares owned by each shareholder. All of the outstanding capital stock or other voting securities of each Company other than Simonton is owned by Simonton, directly or indirectly, free and clear of any Encumbrance (other than any restrictions imposed by Legal Requirement). Other than the Shares, there are no other equity securities of Simonton or options, warrants, calls or other rights or agreements to buy such securities or securities convertible into or exchangeable for equity securities of Simonton. The Shares have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. There are no outstanding obligations of the Companies to repurchase, redeem or otherwise acquire any Company Securities. No Company is party to any voting trust or other agreement with respect to the voting, redemption, sale, transfer or other disposition of any Company Securities. There are no outstanding or authorized restricted stock, restricted stock units, stock appreciation, phantom stock, profit participation or similar rights with respect to the Company Securities to which any Company is a party or is bound. The Companies have no authorized or outstanding bonds, debentures, notes or other Indebtedness the holders of which have the right to vote (or are convertible into, exchangeable for or evidencing the right to subscribe for or acquire securities having the right to vote) with the shareholders of the Companies on any matter. No Person has any right of first offer, right of first refusal or preemptive right in connection with any future offer, sale or issuance of Company Securities. There are no Contracts to which any of the Companies is a party relating to the issuance, sale or transfer of any equity securities or other securities of the Companies. Except as disclosed on Schedule 3.4, the Companies do not own, and do not have any Contract to acquire, any equity securities or other securities of any Person or any direct or indirect equity or ownership interest in any other business.

3.5    Financial Statements. The Companies have delivered to Buyer (a) the Companies’ unaudited consolidated balance sheets (the “Balance Sheet”) and statements of income and cash flows for the fiscal years ended December 31, 2012 and December 31, 2013 (together with the Balance Sheet, the “Financial Statements”), including in each case the notes thereto and (b) the Companies’ unaudited consolidated balance sheet as of June 30, 2014 and the related statements of income and cash flows for the 6-month period then ended (collectively, the “Interim Financial Statements”). The Financial Statements and the Interim Financial Statements fairly present in all material respects the financial condition and the results of operations as at the respective dates of and for the periods referred to in such Financial Statements and have been prepared, in all material respects, in accordance with GAAP consistently applied by FBHS during the periods involved, except as indicated in such statements, subject in the case of the Interim Financial Statements to (i) the absence of footnote disclosures and (ii) changes resulting from normal immaterial year-end adjustments. Except as set forth in the Financial Statements and the Interim Financial Statements, none of the Companies maintains any “off-balance-sheet arrangement” within the meaning of Item 303 of Regulation S-K of the SEC. The Companies’ system of internal controls over financial reporting is sufficient to provide reasonable assurance in all material respects that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, consistently applied.

3.6    Title to Properties; Encumbrances

(c)    Schedule 3.6(a) contains a complete and accurate list of all real property owned by the Companies (the “Owned Real Property”). With respect to each parcel of Owned Real Property (i) the Companies, as applicable, have good and marketable fee simple title, free and clear of all Encumbrances except for Permitted Encumbrances, (ii) the Companies have not leased or otherwise granted to any Person the right to use or occupy such parcel of Owned Real Property or any portion thereof, (iii) there are no outstanding options, rights of first offer or rights of first refusal to purchase such parcel of Owned Real Property or any portion thereof or interest therein, (iv) there is no pending or, to the Knowledge of the Companies, threatened, appropriation, condemnation or like proceeding or order materially affecting the Owned Real Property or any part thereof.

(d)    Schedule 3.6(b) contains a correct and complete list of all leases or subleases under which the Companies lease or sublease real property (each, a “Real Property Lease” and collectively, the “Real Property Leases”) and the street address of the premises demised under each Real Property Lease (each, a “Leased Real Property” and collectively, the “Leased Real Properties”). The Companies have delivered to Buyer true and complete copies of the Real Property Leases in effect as of the date hereof (including any amendments, modifications, supplements, extensions, renewals, guaranties and other agreements relating thereto) and the Companies have not leased or otherwise granted to any Person the right to use or occupy any Leased Real Property or any portion thereof. Each Real Property Lease is valid and binding on the Companies, as applicable, and, to the Knowledge of the Companies, each other party thereto, and is in full force and effect. The Companies have performed and complied with all material obligations required to be performed or complied with by them under each Real Property Lease. There is no material default under any Real Property Lease by the Companies or, to the Knowledge of the Companies, by any other party, and no event has occurred that with the lapse of time or the giving of notice or both would constitute a material default thereunder by the Companies, or, to the Knowledge of the Companies, by any other party thereto. The Companies, as applicable, have good and valid leasehold title to each Leased Real Property, free and clear of all Encumbrances other than Permitted Encumbrances.

(c)    The Owned Real Property and Leased Real Property (collectively, the “Facilities”) constitute all of the material real estate used in the operation of the respective businesses of the Companies.

(d)    The Companies own and have good and valid title to the Companies Assets, including all the properties and assets (whether tangible or intangible) that they purport to own located in the Facilities operated by the Companies or reflected as owned in the books and records of the Companies. Except as set forth on Schedule 3.6(d), all material properties and assets reflected in the Balance Sheet are free and clear of all Encumbrances other than Permitted Encumbrances.

3.7    No Undisclosed Liabilities. Except as set forth on Schedule 3.7 and except for those liabilities that are reflected or reserved against on the Balance Sheet and for liabilities incurred in the ordinary course of business consistent with the past practice since December 31, 2013 or as otherwise contemplated by this Agreement, the Companies do not have any Liabilities of any nature whatsoever (whether absolute, accrued, contingent or otherwise), that would be required under GAAP to be reflected in a balance sheet of the Companies, except Liabilities that are, individually or in the aggregate, not material to the Companies, taken as a whole.

3.8    Indebtedness. On the Closing Date the Companies shall have no Indebtedness to any Person, including, without limitation, to the Shareholder, other than normal accounts payable incurred in the ordinary course of business.

3.9    Taxes

(a)    All income and other material Tax Returns filed or required to be filed by or on behalf of the Companies have been filed when due and were true, correct and complete in all material respects when filed, to the extent solely related to the Companies. All Taxes shown as due and payable on such Tax Returns and all other material amounts of Taxes due and payable by or on behalf of the Companies have been timely paid. Schedule 3.9 contains a list of all jurisdictions (whether foreign or domestic) where the Companies currently file income Tax Returns.

(b)    The Companies have timely withheld, and will timely withhold, all material Taxes required to have been withheld in connection with amounts paid or owing to any lender, shareholder, employee, creditor, independent contractor or other Person and have complied in all material respects with all Tax information reporting provisions of all applicable Legal Requirements.

(c)    Except as set forth on Schedule 3.9, the Companies have not requested any extension of time within which to file any material Tax Return that has not yet been filed. Except as set forth on Schedule 3.9, the Companies have not granted any extension or waiver of the statute of limitations period applicable to any material Tax Return, which period (after giving effect to such extension or waiver) has not yet expired. The Companies have provided or made available to Buyer complete and accurate copies of all federal state, local and foreign income and all other material Tax Returns, examination reports and statements of deficiencies, or, in each case, portion thereof, assessed against or agreed to by the Companies for each of the taxable years ended since December 31, 2010, to the extent such Tax Returns, examinations reports and statements of deficiency, or, in each case, portion thereof, relate solely to the Companies.

(d)    Except as set forth on Schedule 3.9: (i) there is no material claim, audit, action, suit, proceeding, or investigation pending or proposed or threatened against or with respect to the Companies by any Taxing Authority, to the extent solely related to the Companies; (ii) no adjustment that would increase the Tax liability of the Companies in any material respect has been made, or proposed or threatened by a Taxing Authority during any audit of a Pre-Closing Period; (iii) no Taxing Authority has given written notice of any intention to assert any deficiency or claim for additional Taxes against the Companies; and (iv) no written claim has been made by any Taxing Authority in a jurisdiction where a Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.

(e)    The Companies have not entered into any material agreement or arrangement with any Taxing Authority with regard to the Tax liability of the Companies affecting any Tax period for which the applicable statute of limitations, after giving effect to extensions or waivers, has not expired.

(f)    Since December 31, 2010, the Companies have not participated in a “reportable transaction” within the meaning of Treasury Regulations Section 1.6011-4.

(g)    The Companies will not be required to include any adjustment in taxable income for any Post‑Closing Period as a result of the installment method of accounting, the completed contract method of accounting, the long-term contract method of accounting, the cash method of accounting, Sections 108(i) or 481 of the Code or comparable provisions of state, local or foreign Tax law.

(h)    The transactions contemplated by this Agreement do not constitute a “change in ownership or control” of FBHS within the meaning of Code Section 280G and the Treasury Regulations thereunder. There are no tax liens on any of the property or assets of the Companies other than liens for Taxes not yet due or which are being contested in good faith.

(i)    No Company has any liability for Taxes of any Person (other than members of the affiliated group, within the meaning of Section 1504(a) of the Code, filing consolidated federal income Tax returns of which FBHS is the common parent (the “FBHS Group”)) under Treasury Regulations Section 1.1502-6 or 1.1502-78 or similar provision of state, local or foreign Tax law, as a transferee or successor, by contract, or otherwise. Each Company is a member of the FBHS Group.

The representations and warranties contained in this Section 3.9 and Sections 3.11 and 3.14 are the sole and exclusive representations and warranties being made with respect to Taxes and Tax matters in this Agreement.

3.10    No Material Adverse Change. Since December 31, 2013 there has not been any Material Adverse Change.

3.11    Employee Benefits

(a)    Schedule 3.11(a)(1) sets forth a list of each medical, dental, life, disability, vacation pay, bonus, deferred compensation, severance pay, retention pay, change in control benefit, pension, profit-sharing, retirement, insurance, stock purchase, stock option, equity-based, compensation, benefits, employment, or other fringe plan, arrangement, contract, agreement, policy, or practice and each other material compensation or benefit plan, arrangement, contract, agreement, policy, or practice, whether written or oral, in each case either (i) under which any Business Employee (or former service provider of any of the Companies) has any present or future right to benefits and that is sponsored, maintained, or contributed to, or required to be sponsored, maintained, or contributed to, by FBHS or any of its Subsidiaries or (ii) with respect to which any of the Companies has any direct or indirect liability, contingent or otherwise (collectively, the “Plans”). Schedule 3.11(a)(2) separately identifies each Plan that is sponsored or maintained by a Company and that will be retained by any Company following the Closing (collectively, the “Company Plans”).

(b)    Except as provided in Section 7.8, neither FBHS nor any of its Subsidiaries has any agreement or commitment (whether or not legally binding) to create any new Plan or to modify or change any existing Plan, in either case in respect of Business Employees (or any former service provider of any of the Companies), in any respect unless such agreement or commitment is legally required, nor has the intention to do any of the foregoing been communicated to any Business Employee (or any former service provider of any of the Companies).

(c)    With respect to each material Plan (including for the avoidance of doubt, each Company Plan), the Companies have heretofore delivered to Buyer, to the extent applicable, true, correct, and complete copies of all documents constituting the most current version of each such Plan, including any related trust agreements, insurance contracts, or other funding or investment agreements and any amendments thereto, or written summaries of the terms of any such Plan that is not in writing. With respect to each Company Plan, the Companies have delivered to Buyer, to the extent applicable, true, correct and complete copies of (i) insurance contracts, (ii)  for the most recent plan year, (A) the annual report on Form 5500 and attached schedules, (B) financial statements, and (C) actuarial valuation reports, and (iii) all material correspondence with any Governmental Body regarding the operation or the administration of any such Company Plan, and with respect to each such Company Plan intended to qualify under Section 401 of the Code, the most recent determination letter received from the Internal Revenue Service.

(d)    Each Company Plan has been operated and administered in all material respects in accordance with its terms and applicable Legal Requirements. All contributions required to be made with respect to any Company Plan for any period through the date hereof have now been, or on the Closing Date will have been, timely made, except for outstanding contributions in the ordinary course, and all contributions not yet due have been accrued for in the financial statements of the Companies in accordance with applicable accounting procedures. There are no Company Plans that are intended to be qualified under Section 401(a) of the Code.

(e)    Each Plan that is not a Company Plan has been operated and administered in all material respects in accordance with its terms and applicable Legal Requirements except to the extent noncompliance of such Plan would not result in Liability to any of the Companies.

(f)    There are no pending or, to the Knowledge of the Companies, threatened claims by, on behalf of or against any of the Plans in effect as of the date hereof or any assets thereof, other than routine benefit claim matters that, if adversely determined, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Companies, and no material matter is pending (other than routine qualification determination filings) before any Governmental Body with respect to any Plan.

(g)    None of the Companies have maintained, contributed to, or have any Liability, contingent or otherwise, with respect to any plan covered by Title IV of ERISA, including any “multiemployer plan” (within the meaning of Section 3(37) of ERISA).

(h)    No event has occurred and to the Knowledge of the Companies no condition exists, that would, either directly or on a contingent basis, subject any of the Companies to any Liability

under Title IV of ERISA as a result of the Companies being treated as a single employer with FBHS and any of its Subsidiaries pursuant to Section 414 of the Code or 401(b) of ERISA.

(i)    Except as expressly provided for under this Agreement or as set forth on Schedule 3.11(i), neither the execution and delivery of this Agreement nor the consummation of transactions contemplated herein will (either alone or in combination with another event), entitle any Business Employee (or former service provider of any of the Companies) to (A) severance pay or any similar payment or any increase in severance pay upon any termination of employment after the date of this Agreement, (B) any payment, compensation, or benefit, or increase in the amount of any payment, compensation, or benefit due, to any Business Employee (or former service provider of any of the Companies), (C) acceleration of the time of payment or vesting or any funding (through a grantor trust or otherwise) of compensation or benefits, (D) any material obligation pursuant to any of the Plans, or (E) any limitation or restriction on the right, if any, of any of the Companies to merge, amend, or terminate any of the Company Plans.

3.12    Compliance with Legal Requirements; Governmental Authorizations

(a) Except as set forth on Schedule 3.12(a):

(i)the Companies are, and at all times have been, in compliance with each material Legal Requirement that is or was applicable to it or to the conduct or operation of its business or the ownership or use of any of its assets; and

(ii)the Companies have not received any written notice from any Governmental Body or any other Person regarding any actual or alleged violation of, or failure to comply with, any material Legal Requirement.

(b)    The Companies have been and are in compliance with the United States Foreign Corrupt Practices Act of 1977 and any other anti-corruption or anti-bribery Laws of any jurisdiction where the Companies do business.

(c)    Schedule 3.12(c) contains a complete and accurate list of each material Governmental Authorization currently held by the Companies. Except as set forth on Schedule 3.12(c), the Companies are, and have been, in full compliance with all of the material terms and requirements of each such Governmental Authorization identified or required to be identified on Schedule 3.12(c).

3.13    Legal Proceedings; Orders

Except as set forth on Schedule 3.13, there is no pending Proceeding:

(i)    that has been commenced by or against the Companies; or

(ii)    that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, the transactions contemplated herein.

Except as set forth on Schedule 3.13, to the Knowledge of the Companies, no such Proceeding has been threatened. None of the Shareholder and any of the Companies is subject to any outstanding Order that prohibits or otherwise restricts the ability of the Shareholder or any of the Companies to consummate fully the transactions contemplated hereby.

3.14    Absence of Certain Changes and Events. Except as set forth on Schedule 3.14, since December 31, 2013, the Companies have conducted their respective businesses only in the ordinary course of business consistent with past practice, and there has not been any:

(a)    payment or increase by the Companies of any bonuses, salaries or other compensation to any director or officer or employee (other than the payment of salaries and bonuses to employees in the ordinary course of business consistent with past practices), or entry into any employment, severance or similar Contract with any director, officer or employee or any amendment to any such employment, severance or similar Contract (except in the ordinary course of business consistent with past practice or pursuant to compensation plans or agreements in effect on the date hereof);

(b)    adoption of, or increase in benefits under, any Plan except as required by the terms thereof, or written or oral agreement for or with any Business Employees;

(c)    damage to or destruction or loss of any asset or property of the Companies, whether or not covered by insurance, which has been material to the Companies, taken as a whole;

(d)    termination of or receipt of written notice of termination or, to the Knowledge of the Companies, any other communication threatening termination of (i) any distributorship, manufacturing, co-packing, joint venture or credit agreement or similar agreement, or (ii) any other Contract or transaction involving a total remaining commitment by or to the Companies of at least $100,000;

(e)    sale (other than sales in the ordinary course of business consistent with past practice), lease or other disposition of any material asset or property of the Companies or mortgage, pledge or imposition of any material lien or other encumbrance on any such asset or property of the Companies;

(f)    payment of any dividend or other distribution of the Companies;

(g)    collection of accounts receivable of the Companies or payment of accounts payable of the Companies, except in the ordinary course of business consistent with past practice;

(h)    significant labor problem, work stoppage or other similar event or condition (whether or not covered by insurance);

(i)    capital expenditure or commitment of addition to property, plant or equipment used in the Business having a value in excess of $100,000;

(j)    incurrence, payment, discharge or satisfaction of any material claim, obligation or liability, except in the ordinary course of business;

(k)    adoption or proposal of any change in its certificate of incorporation or bylaws or equivalent organizational documents of any of the Companies;

(l)    issuance, sale, pledge, disposition, grant, transfer or encumbrance, or authorization of the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any Company Securities;

(m)    reclassification, combination, split, subdivision or amendment of the terms of, or redemption, purchase or other acquisition, directly or indirectly, of any of the Company Securities;

(n)except as may be required by Legal Requirement or GAAP, change in any material respect to any material method, policy, practice, procedure or principle of financial accounting;

(o)    commencement or settlement as of the date hereof (i) any material Proceeding involving or against any of the Companies or (ii) any Proceeding that relates to the transactions contemplated hereby;

(p)    except as set forth on Schedule 3.9, material Tax election or any change to any material Tax election, settlement or compromise of any claim for a material Tax refund or any other audit or other proceeding in respect of material Taxes, filing of any material amended Tax Return or consent to any extension or waiver of any statute of limitations period in respect of a material amount of Taxes; or

(q)    agreement, whether oral or written, by the Companies to do any of the foregoing.

3.15    Contracts

(a)    Schedule 3.15(a) contains a complete and accurate list, and the Companies have delivered or made available to Buyer true and complete copies of, all Material Contracts as of the date hereof. “Material Contracts” means any Contract to which any of the Companies is a party and which falls within any of the following categories:

(i)    each Contract with any employee, leased employee or contract employee;

(ii)    each lease, rental or occupancy agreement and other Contract affecting the ownership of, leasing of, title to, use of or any leasehold or other interest in any real property;

(iii)    each licensing agreement or other Contract (i) pursuant to which the Companies use any Licensed Intellectual Property or (ii) pursuant to which the Companies have granted to a third party any right in or to any Owned Intellectual Property, which reasonably could be material to the operation of the Companies’ business as currently conducted;

(iv)    each Contract with any labor union or association relating to any current or former employee of any of the Companies;

(v)    each Contract relating to Indebtedness of any of the Companies;

(vi)    each Contract under which any of the Companies would incur any change-in-control payment or similar compensation obligations to its employees by reason of any this Agreement or any of the transactions contemplated hereby;

(vii)    each Contract for the sale, transfer or acquisition of any of the assets, capital stock or businesses of any of the Companies (other than, in the case of sales or transfers of assets, in the ordinary course of business consistent with past practice) or for the grant to any Person of any preferential rights to purchase any of the assets, capital stock or businesses of any of the Companies, in each case under which there are material outstanding obligations;

(viii)    each Contract under which any of the Companies has continuing material indemnification obligations to any Person, other than those entered into in the ordinary course of business consistent with past practice;

(ix)    each Contract of any kind that involves an amount in excess of $100,000; and

(x)    each Contract containing covenants that in any way purport to restrict the business activity of the Companies or limit the freedom of the Companies to engage in any line of business or to compete with any Person or that provides for “most favored nations” terms or

establishes an exclusive sale or purchase obligation with respect to any product or geographic location.

(b)    Each Material Contract is a valid and binding obligation of one of the Companies, as applicable, is in full force and effect and is enforceable against the one of the Companies, as applicable, and, to the Knowledge of the Companies, against the other parties thereto, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Legal Requirements, now or hereafter in effect, relating to creditors’ rights generally. None of the Companies is in material breach, violation of or default under any Material Contract. To the Knowledge of the Companies, no event has occurred that, with notice or lapse of time or both, would constitute such a material breach or violation or default by any of the Companies under any Material Contract or the other parties thereto.

3.16    Environmental Matters. Except as set forth on Schedule 3.16:

(a)    The Companies are, and at all times since December 31, 2010 have been, in material compliance with all Environmental Laws. The Companies have obtained and are in material compliance with all Environmental Permits.  No material Environmental Claims have been asserted against the Companies nor do the Companies have Knowledge of any threatened or pending Environmental Claim against the Companies, and there are no Hazardous Materials present at any real property currently or formerly owned, leased or operated by any of the Companies or any predecessors in interest, or, to the Knowledge of the Companies, at any location where Hazardous Material generated or disposed of by any of the Companies are located,in a condition, concentration or circumstance that is a violation of any Environmental Laws or is in excess of the amount permitted pursuant to Environmental Law. For purposes of this Section 3.16, the term “Environmental Law” shall not include any changes to the law after the Closing Date.

(b)    There are no material pending or, to the Knowledge of the Companies, threatened claims, Encumbrances or other restrictions of any nature resulting from any Environmental Liabilities or arising under or pursuant to any Environmental Law, with respect to or affecting any of the Facilities or any other properties and assets (whether real, personal or mixed) in which the Companies have an interest.

(c)    The Companies have made available to Buyer all material records and files in the possession, custody or control of the Companies concerning compliance with or liability under Environmental Law, including those concerning the actual or suspected existence of Hazardous Material at the Facilities or real properties currently or formerly owned, operated, leased or used by the Companies.

3.17    Employees

(a)    The Companies have provided to Buyer a complete and accurate list, as of the date hereof, of the following information for each Business Employee: name; job title; current compensation paid or payable; service credited for purposes of vesting and eligibility to participate under the Plans; part-time or full-time status; union or non-union status; employee or

independent contractor status; and exempt or non-exempt status under the Fair Labor Standards Act. Within five (5) days prior to the Closing Date, the Shareholder shall deliver to Buyer an updated list to reflect changes in the Business Employees occurring through such date.

(b)    Except for the employees listed in Schedule 3.17(b), no employees or consultants of FBHS and its Subsidiaries other than the Business Employees are necessary to independently conduct and operate the Business in the manner and to the extent currently conducted by FBHS and its Subsidiaries. As of the Closing Date, no Business Employee shall be employed or retained as a consultant by FBHS or any of its Subsidiaries other than the Companies.

3.18    Labor Relations; Compliance

(a)    The Companies are not, and for the past 5 years have not been, party to any collective bargaining or other labor Contract, and, to the Knowledge of the Companies, no Business Employees are otherwise represented by a labor union, labor organization or works council. Except as set forth on Schedule 3.18, there is not presently pending or existing and, to the Companies’ Knowledge, there is not threatened (i) any strike, slowdown, picketing, work stoppage or employee grievance process or (ii) any Proceeding against or affecting the Companies relating to the alleged violation of any material Legal Requirement pertaining to labor relations or employment matters.

(b)    None of the Companies has any obligation to inform or consult with any Business Employee or any representative of any Business Employee in respect of the transactions contemplated by this Agreement.

(c)    With respect to the Business Employees, FBHS and its Subsidiaries have complied in all material respects with all Legal Requirements relating to employment, equal employment opportunity, nondiscrimination, immigration, wages and hours (including overtime and employee classifications), classification of employees versus independent contractors, benefits, collective bargaining, occupational safety and health and plant closing, and none of the Companies are liable for the payment of any material compensation, damages, taxes, fines, penalties or other amounts, however designated, for failure to comply with any of the foregoing Legal Requirements. No individuals other than the current Business Employees may validly claim to be a current salaried employee of any of the Companies.

(d)    No Company has incurred any liability under the WARN Act that remains unsatisfied. To the extent that, after the Closing, Buyer operates the Business in substantially the same manner operated by the Companies during the six-month period prior to the Closing, no Company will incur any liability with respect to any Business Employee under the WARN Act.

3.19    Intellectual Property

(a)    Intellectual property assets (“Intellectual Property Assets”) means all domestic and foreign: (i) patents, industrial designs, patent applications, industrial design applications, inventions and invention disclosures (“Patents”), (ii) statutory, common law and registered trademarks, slogans, logos, trade dress, service marks, designs and other indicia of source or origin, social media identifications (such as “Twitter® Handle”) and trade names (including

registrations and applications for registration of any of the foregoing) (“Trademarks”), (iii) copyrights and copyright applications in both published and unpublished works (“Copyrights”), (iv) trade secrets, manufacturing, process and packaging know-how and other proprietary or confidential information (“Trade Secrets”), (v) domain names, including registrations and applications to register any of the same and (vi) material computer software programs, including all source code, object code, specifications, designs and documentation related thereto.

(b)    All Intellectual Property Assets used in the operation of the business of the Companies (the “Company Intellectual Property”) is either owned by the Companies (the “Owned Intellectual Property”) or is used by the Companies pursuant to a valid license Contract (the “Licensed Intellectual Property”). Schedule 3.19(b) sets forth a complete and accurate list of all of the registered or applied-for Owned Intellectual Property. Except as set forth on Schedule 3.19(b), the Companies own all right, title and interest in and to each of the Owned Intellectual Property set forth on Schedule 3.19(b), free and clear of all Encumbrances.

(c)    The Companies are a party to each of the licenses and agreements set forth on Schedule 3.19(c) relating to Licensed Intellectual Property, pursuant to which (i) the Companies use any Licensed Intellectual Property or (ii) the Companies have granted to a third party any right in or to any Owned Intellectual Property. To the Knowledge of the Companies, such licenses and agreements are valid, legal and binding obligations enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Legal Requirements, now or hereafter in effect, relating to creditors’ rights generally. To the Companies’ Knowledge, except as set forth on Schedule 3.19(c) or Schedule 3.13, there are no outstanding or threatened claims with respect to any such license or agreement.

(d)    To the Knowledge of the Companies, neither the conduct of the Business of the Companies, nor the use of the Owned Intellectual Property and the Licensed Intellectual Property infringes or otherwise violates any Intellectual Property Assets or other proprietary rights of any other Person. Except as set forth in Schedule 3.13 or 3.19(c), there is no action pending or, to the Knowledge of the Companies, threatened alleging any such infringement or violation or challenging the Companies rights in or to any Company Intellectual Property.

(e)    To the Companies’ Knowledge, upon the Closing, the Companies will continue to have the right to use all Owned Intellectual Property and material Licensed Intellectual Property on substantially the same terms and conditions as the Companies enjoyed immediately prior to Closing.

(f)    The Companies are in material compliance with all applicable Laws regarding the collection, use and protection of Personal Data. To the Knowledge of the Companies, no suit, action, proceeding, arbitration, claim, review or investigation is pending or threatened against the Companies relating to the collection or use of Personal Data.

3.20    Brokers or Finders. Except as set forth on Schedule 3.20, none of the Companies, FBHS or the Shareholder has incurred any Liability for brokerage or finders’ fees or agents’ commissions or other similar payment in connection with this Agreement or the transactions contemplated herein.

3.21    Suppliers and Distributors. Schedule 3.21 sets forth a true and complete list, for the 12 months ended December 31, 2013, of (a) the twenty (20) largest customers of goods and

services of the Companies measured in aggregate sales in U.S. dollars and (b) the twenty (20) largest suppliers of goods and services to the Companies measured in aggregate purchases in U.S. dollars. Except as set forth on Schedule 3.21, there has not been any material adverse change in, or written notice of an intent to materially adversely modify, the business relationship between the Companies and any supplier or distributor named on Schedule 3.15 or Schedule 3.21 and, to the Companies’ Knowledge, no such supplier or distributor intends to terminate or adversely modify any material term of its agreement with the Companies.

3.22    Product Liability. There are no written statements, citations or decisions by any Governmental Body specifically stating that any product produced and sold or distributed by or on behalf of the Companies prior to the Closing (each, a “Product”) is defective or unsafe or fails to meet any standards promulgated by any such Governmental Body in any material respect. For the past 5 years there have been no recalls ordered by any such Governmental Body or any voluntary recalls by the Companies with respect to any Product.

3.23    Permits. The Business has obtained all of the material Permits necessary to permit the Business to own, operate, use and maintain its assets in the manner in which they are now owned, operated, used and maintained and to conduct the Business as currently conducted (the “Business Licenses”).

3.24    Affiliate Transactions. Except as set forth on Schedule 3.24, neither the Shareholder nor any Affiliate of the Shareholder (other than the Companies) is a party to or the beneficiary of any material Contract with any of the Companies or has any interest in any property used by any of the Companies.

3.25    Representations on Closing Date. The Representations set forth in this Section 3 shall be true in all material respects on the Closing Date (except with respect to representations and warranties made as of a specific time).

4. Representations and Warranties of Buyer

Buyer represents and warrants to the Shareholder as follows:

4.1    Organization and Good Standing. Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, with full corporate power and authority to conduct its business as it is now being conducted and to own or use its properties and assets that it purports to own or use.

4.2    Authority; No Conflict

(a)    Buyer has all requisite power and authority to execute and deliver this Agreement and to consummate and perform the transactions contemplated hereby. The execution and delivery by Buyer of this Agreement and the consummation and performance of the transactions contemplated hereby has been duly and validly authorized and approved by the board of directors

or other applicable governing body of Buyer, and no other proceeding, consent or authorization on the part of Buyer is necessary to authorize this Agreement or the consummation or performance of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Buyer and constitutes the legal, valid, and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Legal Requirements, now or hereafter in effect, relating to creditors’ rights generally.

(b)    Except for any approvals required under the Competition Laws, Buyer is not and will not be required to obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the transactions contemplated herein except those which have been obtained.

(c)    Except as set forth on Schedule 4.2, neither the execution and delivery of this Agreement nor the consummation or performance of any of the transactions contemplated herein will, directly or indirectly (with or without notice or lapse of time):

(i)contravene, conflict with or result in a violation of any provision of Buyer’s Organizational Documents;

(ii)contravene, conflict with or result in a violation of any Order or material Legal Requirement to which Buyer, or any of the assets owned or used by Buyer, may be subject; or

(iii)contravene, conflict with or result in a violation or breach of any provision of any Contract to which Buyer is a Party, other than Contracts which are immaterial to Buyer.

except, in the case of clause (ii), where such contravention, conflict, violation or imposition would not have a material adverse effect on Buyer’s ability to consummate the transactions contemplated hereby.

4.3    Sufficient Funds. Subject to the completion of the financing contemplated by that certain debt commitment letter delivered to Buyer by the financial institutions identified therein, Buyer will have at or prior to the Closing sufficient cash or other sources of immediately available funds to deliver the Purchase Price. Buyer acknowledges and agrees that its obligations hereunder are not subject to any conditions regarding its ability to obtain financing for the consummation of the transactions contemplated hereby.

4.4Certain Proceedings. There is no pending Proceeding that has been commenced against Buyer and that challenges, or may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the transaction contemplated herein. To Buyer’s Knowledge, no such Proceeding has been threatened.

4.5Brokers or Finders. Buyer has not incurred any obligation or liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payment in connection with this Agreement or the transaction contemplated herein.

5. Covenants of the Shareholder and the Companies

5.1    Access and Investigation. Between the date of this Agreement and the Closing Date, the Shareholder will, and will cause the Companies to: (a) afford Buyer and its

Representatives reasonable access upon reasonable notice and at reasonable times and in a manner so as not to interfere with the normal business operations of the Companies to the Companies’ personnel, customers, suppliers, properties, contracts, books and records, and other documents and data, (b) furnish Buyer with copies of all such contracts, books and records, and other existing documents and data as Buyer may reasonably request, and (c) furnish Buyer and Buyer’s Representatives with such additional financial, operating, and other data and information as Buyer may reasonably request, including furnishing working capital schedules and the supporting calculations prepared in accordance with the Balance Sheet Rules for the month ended immediately prior to the date of this Agreement and the months ending between the date of this Agreement and the Closing Date.

5.2    Operation of the Businesses of the Companies. Between the date of this Agreement and the Closing Date, the Shareholder will, and will cause the Companies to:

(a)    conduct the business of the Companies only in the ordinary course of business consistent with past practices, including:

(i)billing and collecting accounts receivable within terms only in the ordinary course of business consistent with past practices, and not offering terms or discounts outside of the ordinary course of business without the written consent of Buyer;

(ii)payment of accounts payable, Taxes, salaries, wages, benefits and other benefits in the ordinary course of business consistent with past practices; and

(iii)purchasing inventories and other supplies and services applicable to Business in the ordinary course of business consistent with past practices;

(b)    use commercially reasonable efforts to preserve the current business organization of the Companies, to keep available the services of the workforce, including, without limitation, current executive officers and key employees of the Companies, and to preserve the relationships with key suppliers and distributors, landlords, creditors and others having significant business relationships with the Companies;

(c)    not take any action which would cause the representation contained in Section 3.14 not to be true at any time between the date of this Agreement and the Closing Date;

(d)    not make any loan, advance or capital contribution to, or investment in, any other Person, other than in the ordinary course of business consistent with past practice; and

(e)    not amend, renew, modify or grant of any waiver or consent under, or enter into any new, Real Property Lease.

Prior to the Closing, Simonton will form a newly incorporated LLC entity in Delaware or West Virginia (“Newco”) which will be merged with Simonton Building Products, Inc., with Newco being the surviving entity (the “Restructuring”). Buyer agrees that the Restructuring will not violate this Section 5.2 or any other provision of this Agreement.

5.3    Required Approvals. As promptly as practicable after the date of this Agreement, the Shareholder will make all filings required by Legal Requirements to be made by it in order to consummate the transactions contemplated herein (including any required filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the filing fees for which shall be at Shareholder’s expense). Between the date of this Agreement and the Closing Date, the

Shareholder will reasonably cooperate with Buyer, at Buyer’s expense, with respect to all filings that Buyer elects to make or is required by Legal Requirements to make in connection with the transactions contemplated herein.

5.4    Reasonable Best Efforts. Between the date of this Agreement and the Closing Date, the Shareholder will use reasonable best efforts to cause the conditions in Section 7 to be satisfied. From the date hereof until the earlier of the Closing or the termination of this Agreement in accordance with Article 9, the Shareholder shall execute such documents and perform such further acts as may be reasonably required to carry out the provisions hereof and the transactions contemplated hereby.

5.5    Tax Matters. Except as contemplated by Schedule 5.5, prior to the Closing, without the prior written consent of Buyer (not to be unreasonably withheld) and except as otherwise required by law, none of the Shareholder, the Companies and any Affiliate of the Shareholder shall, to the extent it relates solely to the Companies, make or change any Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any amended Tax Return, enter into any closing agreement, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Companies in any taxable period (or portion thereof) beginning after the Closing Date in any material respect.

5.6    Consents. The Shareholder shall use its reasonable best efforts to obtain on or prior to Closing at its expense the consents identified on Schedule 3.3.

5.7    Closing Indebtedness and Intercompany Payables and Receivables. Prior to the Closing, the Shareholder and the Companies shall eliminate Closing Indebtedness and intercompany payables and receivables so that at the Closing there shall be no current payables or receivables from affiliates (which were disclosed in the Balance Sheet under Simonton accounting code 9569900) or Indebtedness.

5.8    Terminations of Transactions with Related Parties. On the Closing Date, all Liabilities between any of the Companies, on the one hand, and the Shareholder and its Subsidiaries (not including any of the Companies), on the other hand, shall be cancelled or, repaid.

5.9    Confidentiality. After the Closing, the Shareholder shall hold and shall cause each of its Affiliates to hold, and the Shareholder shall use its reasonable efforts to cause its and its Affiliates’ respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence, unless compelled to disclose by Legal Requirement, all confidential documents and information concerning the Companies, unless (a) such information becomes publicly available through no fault of such party, (b) disclosure is required in connection with FBHS’s public filings with the Securities and Exchange Commission, (c) the use of such information is necessary or appropriate in making any filing or obtaining any consent or approval required for the consummation of the transactions contemplated herein, or (d) the

furnishing or use of such information is required by legal proceedings, (and in the case of (d), the disclosing party shall reasonably cooperate with the other party to obtain confidential treatment).

5.10    Non-Competition; Non-Solicitation

(a)    In order for Buyer to have and enjoy the full benefit of the businesses of the Companies, and as a material inducement to Buyer to enter into this Agreement (without such inducement Buyer would not have entered into this Agreement), neither FBHS nor any of its Subsidiaries, other than the Companies, (each a “Restricted Person”) shall, directly or indirectly:

(i)    for a period of five years commencing on the Closing Date, undertake, participate or carry on or be engaged in the production, distribution and sale of vinyl-framed windows in the United States or Canada, or have any financial or other interest in, any other Person who is engaged in the production, distribution and sale of vinyl-framed windows in the United States or Canada;     

(ii)    for a period of two years commencing on the Closing Date, solicit, entice, encourage or intentionally influence, or attempt to solicit, entice, encourage or influence, any employee of the Companies to resign or leave the employ of the Companies or otherwise hire, employ, engage or contract any management-level employee of the Companies to perform services other than for the benefit of the Companies; or

(iii)    for a period of two years commencing on the Closing Date, solicit, entice, encourage or influence, or attempt to solicit, entice, encourage or influence, any customer of the Companies for vinyl-framed windows (including any Person who has been a customer of the Companies for vinyl-framed windows at any time during the period of 12 months before the Closing) to alter, reduce or terminate its business relationship with the Companies for the direct or indirect benefit of any business of such Restricted Person.

(b)    Notwithstanding Section 5.10(a), none of the following activities shall constitute a violation of Section 5.10(a): (i) the advertisement of job openings by use of newspapers, magazines, the internet and other media not directed at individual prospective employees, consultants or independent contractors; (ii) the Restricted Person holding not more than 5% of the outstanding securities of any class of any publicly-traded securities of a company that is engaged in the Business; (iii) the production, sale or distribution of PVC trim or patio doors (whether or not vinyl-framed), or (iv) the purchase by FBHS of a business where, following the completion of such purchase, less than $40,000,000 of the aggregate sales of FBHS and its Subsidiaries result from activities which could constitute a violation of Section 5.10(a), which shall be no more than or less than the offers submitted.

(c)    For a period of five years commencing on the Closing Date, in the event that FBHS or any of its Subsidiaries engages in an acquisition that would cause it to not be in compliance with Section 5.10(b)(iv), FBHS shall have one hundred eighty (180) days following such acquisition to engage in a divestiture (a “Divestiture”) that would result in FBHS being in compliance with Section 5.10(b)(iv) and FBHS shall provide Buyer with a right of first refusal with respect to such Divestiture. For a period of five years commencing on the Closing Date, in the event that FBHS or any of Subsidiaries intends to acquire any business that would constitute a violation of Section 5.10(a) but for Section 5.10(b)(iv), FBHS shall provide Buyer the option to purchase such business at fair market value, upon which FBHS and Buyer shall reasonably agree.

In the event that FBHS and Buyer cannot reasonably agree on the fair market value of such business within 30 days, FBHS and Buyer shall appoint a mutually agreeable appraiser who shall determine the fair market value of such business.

(d)    Notwithstanding anything to the contrary set forth herein, in the event of a breach of any of the provisions of Section 5.10(a) (the “Restrictive Covenants”):    

(i)    Buyer and the Companies shall have the right and remedy, without regard to any other available remedy, to (A) have the Restrictive Covenants specifically enforced by any court of competent jurisdiction and (B) have issued an injunction restraining any such breach without posting of a bond; it being understood that any breach of any of the Restrictive Covenants would cause irreparable and material Damage to Buyer and the Companies, the amount of which cannot be readily determined and as to which neither Buyer nor any of the Companies will have any adequate remedy at law or in damages;

(ii)    it is the desire and intent of the parties hereto that the Restrictive Covenants be enforced to the fullest extent permissible under the Legal Requirements and public policies applied in each jurisdiction in which enforcement is sought and if any Restrictive Covenant shall be adjudicated finally to be invalid or unenforceable, such Restrictive Covenant shall be deemed amended to the extent necessary in order that such provision be valid and enforceable, the remainder of such Restrictive Covenant shall not thereby be affected and shall be given full effect without regard to invalid portions and such amendment shall apply only with respect to the operation of the Restrictive Covenant in the particular jurisdiction in which such adjudication is made; and

(iii)    the parties acknowledge and agree that the Restrictive Covenants are necessary for the protection and preservation of the value and the goodwill of Buyer’s, the Companies’ and each of their Subsidiary’s businesses and are reasonable and valid in geographical and temporal scope and in all other respects.

5.11    Cooperation. Until the earlier of the consummation of the Closing and such time as this Agreement is terminated in accordance with Article 9, the Shareholder agrees to, and shall cause each of the Companies to, and shall use commercially reasonable efforts to cause its Representatives to, provide Buyer and its Representatives with such cooperation, at Buyer’s expense, in connection with the arrangement of financing in connection with the transactions contemplated hereby (“Financing”) as may be reasonably requested by Buyer, including providing such information and executing such documentation in connection with the Financing as Buyer may reasonably require; provided that (i) the Shareholder shall not be required to pay any commitment or other similar fee or incur any other out of pocket expense in connection with any such Financing, (ii) none of the Companies shall be required to pay any commitment or other similar fee or incur any other out of pocket expense in connection with any such Financing prior to the Closing, (iii) nothing herein shall require any of the Companies to take any action that would be effective prior to the consummation of the Closing and (iv) none of the Companies shall be required to execute any agreements prior to the consummation of the Closing unless such agreements and the other documents and instruments referred to above shall only be effective upon the consummation of the Closing. In addition, until 90 days after the Closing (unless this Agreement is terminated in accordance with Article 9), the Shareholder shall, at Buyer’s expense, use its commercially reasonable efforts, and shall use its commercially reasonable efforts to cause its Affiliates and its and their respective Representatives, to (x) cooperate with and provide

assistance to Buyer, including providing access to financial data and related information, valuations, forecasts, income tax information, employees, properties, books, contracts and records, in Buyer’s preparation of audited financial statements of the Companies and their Subsidiaries as of and for the years ended December 31, 2013 and 2012 and any pro forma financial statements (1) that Buyer is required under the Exchange Act to file with the SEC as a result of the transactions contemplated by this Agreement and (2) that Buyer and/or its Affiliates are required to file under the Securities Act if Buyer or its parent undertakes any offering of debt or equity securities, or that are to be included in any marketing materials or offering documents in connection with any such offering, and (y) cause the Shareholder’s and its Affiliates’ independent auditors to provide such consent, if any, as is reasonably required with respect to the inclusion of the financial statements in any filing with the SEC or in any marketing materials or offering documents (subject to any customary and reasonable requirements of such auditors).

5.12    Insurance Matters

(a)    Buyer acknowledges that the Companies, former Subsidiaries of the Companies, and parties with whom the Companies and such Subsidiaries have done business (collectively, the “Covered Parties”) have been covered for certain periods under insurance policies maintained by the Shareholder or Affiliates of the Shareholder. The parties acknowledge that the coverage under these policies will cease to apply to the Covered Parties for occurrences after the Closing Date. The Shareholder agrees, and shall cause its Affiliates, to allow the Covered Parties to continue to be covered by the insurance policies of the Shareholder or its Affiliates for pre-Closing occurrences related to the Covered Parties and the Shareholder shall, and shall cause its Affiliates to, maintain such policies and cooperate fully in the processing of claims related to such occurrences as described in the Transition Services Agreement. With respect to any event that occurs on or before the Closing Date that gives rise to a claim or claims (an “Insurance Claim”) under any policy or policies of insurance maintained by the Shareholder or any of its Affiliates (other than policies maintained solely by the Companies) that relate to the assets, business, operations, employees, officers and managers of the Business (the “Insurance Policies”) (each of which is listed on Schedule 5.12 along with the corresponding policy number), the Shareholder shall cooperate or cause its Affiliates to cooperate in a commercially reasonable manner in the making of any such Insurance Claim under any of the applicable Insurance Policies. The Shareholder shall, upon the written request of Buyer, provide to Buyer following the Closing Date, true, complete and correct copies of all loss-runs under any insurance policies maintained by the Shareholder or any of its Affiliates which relate to the Business.

(b)    Shareholder agrees that it will retain Winwood Insurance Company, Ltd. (“Winwood”), and all of the assets and liabilities associated therewith, and prior to the Closing will cause the transfer of the stock, assets and liabilities of Winwood to Shareholder or one of its Affiliates. Shareholder acknowledges that Winwood carried on business primarily as a captive reinsurer, participating in workers compensation, general liability and automotive liability reinsurance contracts, as well as product defect warranty coverage, for the Companies as well as others, and that, although Winwood ceased writing new business in 2002 and canceled all policies effective July 1, 2006, it continues to have actual and contingent liability under policies still in effect.  Accordingly, Shareholder agrees and covenants, from and after the date of this Agreement,

to timely respond to and pay all claims arising under any such policies, whether those claims are presented after the date of this Agreement to one of the Companies, to Buyer or to FBHS or any of its Affiliates, and to indemnify and hold the Companies, Buyer and its Affiliates harmless from any such claims and any Damages arising out of or related to such claims.

5.13    PVC Extrusion Lines. Between the date of this Agreement and the Closing Date, Shareholder will cause the PVC extrusion equipment lines, as well as the related molds and tooling if any, used by Simex, Inc. but on the balance sheets of Fypon LLC to be transferred to Simex, Inc.

5.14    401(k) Plan Rollovers. Effective no later than 60 days after Closing, FBHS and Buyer will effect a trust-to-trust transfer of account balances (and, if applicable, promissory notes evidencing loan balances of the Business Employees) of the Business Employees (the “Accounts”) under the Fortune Brands Home & Security Retirement Savings Plan and the Fortune Brands Home & Security Hourly Employees Retirement Savings Plan (collectively the “FBHS 401(k) Plans”) from the related trusts of the FBHS 401(k) Plans to the 401(k) plan sponsored by Buyer or one of its Affiliates, as applicable (the “Buyer 401(k) Plan”) and its related trust, which Buyer 401(k) Plan and related trust shall accept the transfer (the “Trust Transfer”). The Trust Transfer shall be in cash or in kind, as agreed by FBHS and Buyer. FBHS shall provide or cause to be provided to Buyer such documentation reasonably requested by Buyer to ensure the continued qualified status of the FBHS 401(k) Plans after the Closing and prior to the effectiveness of the Trust Transfer. FBHS and Buyer shall take all such actions necessary to ensure that the Trust Transfer complies with applicable laws. The Shareholder and FBHS have and, prior to the Transfer Date, shall fully comply with all applicable laws relating to the Accounts.

6.Covenants of Buyer

6.1    Required Approvals. As promptly as practicable after the date of this Agreement, Buyer will make all filings required by Legal Requirements to be made by it to consummate the transactions contemplated herein (including any required filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the filing fees for which shall be borne by Buyer). Between the date of this Agreement and the Closing Date, Buyer will cooperate with the Companies to obtain the consents set forth on Schedule 3.3 and cooperate with the Shareholder with respect to all filings that the Shareholder is required by Legal Requirements to make in connection with the transactions contemplated hereby.

6.2    Reasonable Best Efforts. Between the date of this Agreement and the Closing Date, Buyer will use reasonable best efforts to cause the conditions in Section 8 to be satisfied. From the date hereof until the earlier of the Closing or the termination of this Agreement in accordance with Article 9, Buyer shall execute such documents and perform such further acts as may be reasonably required to carry out the provisions hereof and the transactions contemplated hereby.

6.3    Employment. Buyer agrees to continue the employment of all full-time Business Employees who are actively employed by the Companies as of the Closing Date; provided,

however, that the foregoing shall not in any way limit the Companies’ right after the Closing Date to terminate the employment of any employee or change the level of pay or benefits provided to employees subject to the terms of any Company Plan.

6.4    Release. Between the date of this Agreement and the Closing Date, Buyer will use commercially reasonable efforts to cause a release of FBHS’s obligations under that certain Guaranty, dated January 7, 2011 issued by FBHS in favor of Easton Town Center II, LLC, but Buyer shall not be required to pay any monetary sum or modify that certain Office Lease, dated as of January 10, 2011, between Easton Towne Center II, LLC, as landlord, and Simonton Building Products, Inc., as tenant (as amended by that certain First Amendment, dated as of May 27, 2011, that certain Second Amendment, dated as of July 1, 2012 and that certain Third Amendment, dated as of July 1, 2013) to obtain such release.

7. Conditions Precedent to Buyer’s Obligation to Close

Buyer’s obligation to purchase the Shares and to take the other actions required to be taken by Buyer at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived in writing by Buyer, in whole or in part):

7.1    Accuracy of Representations. The representations and warranties set forth in Section 3 shall be true in all material respects (except that the representations and warranties set forth in Article 3 that are qualified by materiality (including by the phrase “Material Adverse Effect”, “Material Adverse Change” or “in all material respects” or any word or phrase of similar import) and the Fundamental Representations shall be true in all respects) as of the date of this Agreement and as of the Closing Date (except with respect to representations and warranties made as of a specific time which shall be accurate in all material respects as of such time) as if made on the Closing Date.

7.2    Shareholder Performance

(a)    All of the covenants and obligations that the Shareholder or the Companies are required to perform or to comply with pursuant to this Agreement at or prior to the Closing shall have been duly performed and complied with in all material respects.

(b)    Buyer shall have received at or prior to the Closing such documents, instruments or certificates listed in Section 2.4(a) hereof.

7.3    Simex Supply Agreement. The Simex Supply Agreement shall have been duly executed by Fypon LLC.

7.4    No Injunction. There must not be in effect any Legal Requirement or any injunction or other Order that prohibits the completion of the transactions contemplated herein.

7.5    Regulatory Consents. All consents required under the Competition Laws in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby shall have been made or obtained, as the case may be.

7.6    Material Adverse Effect. Since the date of the latest Balance Sheet, there shall not have occurred any Material Adverse Effect or Material Adverse Change.

7.7    Transition Services Agreement. The Transition Services Agreement, between the Shareholder and Simonton in the form set forth herein in Exhibit B (the “Transition Services Agreement”), shall have been duly executed by the Shareholder.

7.8    Notice of Termination of Severance Plans. The Shareholder shall cause the Companies to provide notice of termination (in a form acceptable to Buyer), effective 18 months after the date of such notice, of (i) the Fortune Brands Windows, Inc. Executive Severance Plan, effective as of January 1, 2013, as amended and restated and (ii) the Simonton Salaried Severance Plan, effective as of August 1, 2011, as amended and restated.

8. Conditions Precedent to the Shareholder’s Obligation to Close

The Shareholder’s obligation to sell to Buyer the Shares and to take the other actions required to be taken by the Shareholder at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived in writing by the Shareholder, in whole or in part):

8.1    Accuracy of Representations. The representations and warranties set forth in Section 4 shall be true in all material respects (except that the representations and warranties set forth in Article 4 that are qualified by materiality (including by the phrase “material adverse effect” or “in all material respects” or any word or phrase of similar import) shall be true in all respects) as of the date of this Agreement and as of the Closing Date (except with respect to representations and warranties made as of a specific time which shall be accurate in all material respects as of such time) as if made on the Closing Date.

8.2    Buyer’s Performance

(a)    All of the covenants and obligations that Buyer is required to perform or to comply with pursuant to this Agreement at or prior to the Closing must have been performed and complied with in all material respects.

(b)    Buyer must have delivered each of the documents required to be delivered by Buyer pursuant to Section 2.4(b) and must have paid the Purchase Price required to be paid to the Shareholder pursuant to Section 2.2.

8.3    Simex Supply Agreement. The Simex Supply Agreement shall have been duly executed by Simex.

8.4    No Injunction. There must not be in effect any Legal Requirement or any injunction or other Order that prohibits the transactions contemplated herein.

8.5    Regulatory Consents. All consents required under the Competition Laws in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby shall have been made or obtained, as the case may be.

9. Termination

9.1Termination Events. This Agreement may, by notice given prior to or at the Closing, be terminated:

(a)    by mutual written consent of Buyer and the Shareholder;

(b)    by Buyer (if it is not in breach of its representations, warranties, covenants or agreements under this Agreement so as to cause any of the conditions set forth in Section 8.1 or 8.2(a) not to be satisfied), upon written notice to the Shareholder, if there has been a material violation, breach or inaccuracy of any representation, warranty, covenant or agreement of the Shareholder contained in this Agreement, which violation, breach or inaccuracy would cause any of the conditions set forth in Section 7.1 or 7.2(a) not to be satisfied, and such violation, breach or inaccuracy has not been waived in writing by Buyer or cured by the Shareholder, as applicable, within 30 days after receipt by the Shareholder of written notice thereof from Buyer or is not reasonably capable of being cured prior to the Termination Date;

(c)    by the Shareholder (if it is not in breach of its representations, warranties, covenants or agreements under this Agreement so as to cause any of the conditions set forth in Section 7.1 or 7.2(a) not to be satisfied), upon written notice to Buyer, if there has been a material violation, breach or inaccuracy of any representation, warranty, agreement or covenant of Buyer contained in this Agreement, which violation, breach or inaccuracy would cause any of the conditions set forth in Section 8.1 or 8.2(a) not to be satisfied, and such violation, breach or inaccuracy has not been waived in writing by the Shareholder or cured by Buyer within 30 days after receipt by Buyer of written notice thereof from the Shareholder or is not reasonably capable of being cured prior to the Termination Date;

(d)    by either Buyer or the Shareholder if the Closing has not occurred (other than through the failure of any party seeking to terminate this Agreement to comply fully with its obligations under this Agreement) on or before October 31, 2014, unless otherwise extended by the mutual agreement of the parties hereto (the “Termination Date”).

9.2    Effect of Termination. If this Agreement is terminated pursuant to Section 9.1, all further obligations of the parties under this Agreement will terminate, except that the obligations in Sections 13.1 through 13.5 and 13.11 and this Section 9.2 will survive; provided, however, that if this Agreement is terminated by a party pursuant to Section 9.1(b) or (c), the terminating party’s right to seek Damages respecting the violation, breach or inaccuracy giving rise to such termination will survive such termination.

10. Indemnification; Remedies

10.1    Survival. All of the representations and warranties of the Shareholder and Buyer under this Agreement will survive the Closing for eighteen (18) months except for the Shareholder’s representations and warranties under Section 3.16 which shall survive for an additional period of twenty four (24) months (42 months in the aggregate) and except for the Shareholder’s representation and warranties set forth in Section 3.9 which shall survive until sixty (60) days after the expiration of all applicable statutes of limitations (giving effect to any waiver, mitigation or extension thereof) and all covenants of the Shareholder (other than the covenants contained in Section 5.2) and Buyer under this Agreement that by their terms are to be performed at or prior to the Closing shall terminate upon the Closing, the covenants of the Shareholder contained in Section 5.2 will survive the Closing for twelve (12) months and all covenants of the Shareholder and Buyer that by their terms are to be performed following the Closing shall survive in accordance with their terms (in each case, the “Survival Period”).

10.2    Indemnification and Payment of Damages by the Shareholder or Buyer

(a)    The Shareholder agrees to indemnify and hold Buyer and its officers, directors, employees and Affiliates (the “Buyer Indemnitees”) harmless from, and will pay to such indemnified party the amount of, any loss, liability, claim, damage (excluding incidental or consequential damages), or expense (including costs of investigation and defense and reasonable attorney’s fees), whether or not involving a third-party claim (collectively, “Damages”), arising, directly or indirectly, from or in connection with (i) any inaccuracy or breach of any representation or warranty made by the Shareholder under this Agreement, (ii) any breach of any covenant made by the Shareholder under this Agreement, (iii) any environmental claims associated with any 7-Eleven convenience food stores, (iv) any Liability relating to any plan covered by Title IV of ERISA, including any “multiemployer plan” (within the meaning of Section 3(37) of ERISA), that has been maintained or contributed to by FBHS or any other corporation or trade or business that, together with FBHS, is or was at a relevant time treated as a single employer under Section 414 of the Code or Section 4001(b) of ERISA, and any Liability relating to any legal compliance failures that affected the Accounts prior to the date of the Trust Transfer, (v) the Restructuring, including the failure to obtain any consent required by reason of the Restructuring, and (vi) the ownership or operation of Winwood and the transfer of Winwood to Shareholder or one of its Affiliates.

(b)    Buyer agrees to indemnify and hold the Shareholder and its officers, directors, employees and Affiliates (the “Shareholder Indemnitees”) harmless from, and will pay to such indemnified party the amount of, any Damages arising, directly or indirectly, from or in connection with (i) any inaccuracy or breach of any representation or warranty made by Buyer under this Agreement and (ii) any breach of any covenant made by Buyer under this Agreement.

10.3    Survival Period. No indemnifying party will have any liability (for indemnification or otherwise) with respect to any specific representation, warranty or covenant unless, on or before the expiration of the applicable Survival Period, unless the party seeking indemnification hereunder notifies such indemnifying party in writing of a claim for indemnification under

Section 10.2, specifying the factual basis of that claim in reasonable detail to the extent then known by it.

10.4    Limitations on Amount

The Shareholder will not have any liability in respect of any claim for indemnification pursuant to Section 10.2(a)(i) until the aggregate amount of such Damages equals or exceeds an amount equal to $1,300,000 (the “Deductible”) in which case Buyer shall be entitled to be indemnified for all such Damages in excess of the Deductible provided, that, Damages incurred in connection with or arising from any breach of the Fundamental Representations shall not be subject to the Deductible. Notwithstanding anything herein to the contrary, the maximum aggregate liability for indemnification by the Shareholder pursuant to Section 10.2(a)(i) is $15,000,000 (the “Cap”); provided, that, for Damages incurred in connection with or arising from any breach of the Fundamental Representations, the Cap shall be the Purchase Price. Notwithstanding the foregoing, the Deductible and the Cap shall not apply to Damages relating to or arising out of (i) any claim for indemnification under Section 10.2(a)(iii), (iv), (vi) or (vi), or (ii) intentional or fraudulent misrepresentations.

10.5    Procedure for Indemnification -- Third Party Claims

(a)    Promptly after receipt by any indemnified party of written notice of the commencement of any Proceeding against it, such indemnified party will, if a claim is to be made against an indemnifying party under Section 10.2, give prompt written notice prior to the expiration of the Survival Period to the indemnifying party of the commencement of such claim, but the failure to promptly notify the indemnifying party will not relieve the indemnifying party of any liability that it may have to such indemnified party, except to the extent that the indemnifying party demonstrates that the defense of such action is prejudiced by such indemnified party’s failure to give such prompt notice or where such notice is given after the expiration of the Survival Period.

(b)    If any Proceeding referred to in Section 10.5(a) is brought against any indemnified party and it gives notice to the indemnifying party of the commencement of such Proceeding, the indemnifying party will be entitled to participate in such Proceeding and, to the extent that it wishes, to assume the defense of such Proceeding with counsel of its choosing; provided that the indemnifying party shall not be entitled to assume or continue sole control of the defense of any Proceeding if (i) the Proceeding relates to or arises in connection with any criminal conduct, (ii) the Proceeding seeks an injunction or equitable relief against any indemnified party, (iii) the Proceeding has or would reasonably be expected to result in Damages in excess of the amounts available for indemnification pursuant to Section 10.4, (iv) the Proceeding would reasonably be expected to have a material adverse effect on the indemnified party’s business with any customers, suppliers, vendors or other service providers, or (v) the indemnifying party has denied that such Proceeding is subject to indemnification pursuant to this Article 10. After notice from the indemnifying party to such indemnified party of its election to assume the defense of such Proceeding, the indemnifying party will not, as long as the indemnifying party diligently conducts

such defense, be liable to such indemnified party under this Article 10 for any fees of other counsel retained by such indemnified party in connection with the defense of such Proceeding.

10.6    Procedure for Indemnification - Other Claims. A claim for indemnification under Section 10.2 for any matter not involving a third-party claim may be asserted by an indemnified party only by giving prompt written notice prior to the expiration of the Survival Period to the indemnifying party.

10.7    No Right of Contributions

. Neither of the Shareholder or FBHS shall, and none of their respective Affiliates shall, have any right of contribution against any the Companies, or any of the Companies’ respective former, current, or future general or limited partners, stockholders, managers, members, controlling persons, management companies or representatives for any claim asserted by any Buyer Indemnitee under this Article 10.

10.8    Limitations on Indemnification. Notwithstanding anything to the contrary in this Agreement, the Shareholder shall have no liability with respect to claims under Section 10 or Section 11 for any Damages relating to (A) the loss or unavailability of any Tax attribute (including any net operating loss, deduction, credit or Tax basis) or (B) except with respect to the representations and warranties in Section 3.9(e) and (g) and the covenant in Section 5.5, Taxes arising in taxable period (or portion thereof) beginning on or after the Closing Date.

10.9    Calculation of Damages. The amount of any Damages payable under Section 10 or Section 11 shall be net of any Tax benefit actually realized by the Buyer Indemnitees with respect to such Damages in the taxable year the indemnification payment is made, any prior taxable year or in the following two (2) taxable years.

11. Tax Indemnification; Tax Matters

11.1    Tax Indemnification. The Shareholder agrees to indemnify and hold the Buyer Indemnitees harmless from, and will pay to such indemnified party the amount of, without duplication, any Damages arising, directly or indirectly, from or in connection with (i) Taxes of the Companies for Pre-Closing Periods, including, if any, as a result of the Restructuring and the transfer of Winwood to Shareholder or one of its Affiliates (“Pre-Closing Taxes”), (ii) Taxes of any member of an affiliated, consolidated, combined or unitary group of which the Companies are or were members on or prior to the Closing Date by reason of liability under Treasury Regulations Section 1.1502-6 or 1.1502-78 or comparable provision of foreign, state or local Tax law; or (iii) Taxes or other payments required to be paid after the date hereof by the Companies to any party under any Tax Sharing Agreement (whether written or not) entered into prior to the Closing or by reason of being a successor-in-interest or transferee of another entity prior to the Closing; provided, that the Shareholder’s indemnification obligation under this Section 11.1 shall not include any Taxes arising from transactions not in the ordinary course of business occurring on the Closing Date after Buyer’s purchase of the Companies.

11.2    Tax Indemnification Procedures

(a)    After the Closing, each party to this Agreement shall promptly notify the other party in writing within ten (10) days of any demand, claim or notice of the commencement of an audit received by such party from any Taxing Authority or any other Person with respect to Taxes for which such other party is liable pursuant to this Agreement; provided, however, that a failure to give such notice will not affect such other party’s rights to indemnification under this Agreement, except to the extent that such party is actually prejudiced thereby. Such notice shall contain factual information (to the extent known) describing the asserted Tax liability and shall include copies of the relevant portion of any notice or other document received from any Taxing Authority or any other Person in respect of any such asserted Tax liability.

(b)    Payment by an indemnitor of any amount due to an indemnitee under this Agreement shall be made within ten (10) days following written notice by the indemnitee that payment of such amounts to the appropriate Taxing Authority or other applicable third party is due by the indemnitee, provided that the indemnitor shall not be required to make any payment earlier than five (5) business days before it is due to the appropriate Taxing Authority or applicable third party. In the case of a Tax that is contested in accordance with the provisions of Section 11.3, payment of such contested Tax will not be considered due earlier than the date a “final determination” to such effect is made by such Taxing Authority or a court. For this purpose, a “final determination” shall mean a settlement, compromise, or other agreement with the relevant Taxing Authority, whether contained in an IRS Form 870 or other comparable form, or otherwise, or such procedurally later event, such as a closing agreement with the relevant Taxing Authority, an agreement contained in IRS Form 870-AD or other comparable form, an agreement that constitutes a “determination” under Section 1313(a)(4) of the Code, a deficiency notice with respect to which the period for filing a petition with the Tax Court or the relevant state, local or foreign tribunal has expired or a decision of any court of competent jurisdiction that is not subject to appeal or as to which the time for appeal has expired.

(c)    All amounts required to be paid pursuant to this Section 11 shall be paid promptly in immediately available funds by wire transfer to a bank account designated by the indemnified party.

11.3    Tax Audits and Contests; Cooperation

(a)    After the Closing Date, except in the case of any audit, claim for refund, or administrative or judicial proceeding involving any asserted Tax liability or refund with respect to the Companies (any such audit, claim for refund, or proceeding relating to an asserted Tax liability referred to herein as a “Contest”) relating to a Tax Return of any consolidated, combined or unitary group of which FBHS and the Companies were members, (a “Pre-Closing Consolidated Return”), and except as provided in subsections (b) and (c) below, Buyer shall control the conduct, through counsel of its own choosing, of any Contest. For the avoidance of doubt, and notwithstanding anything in subsections (b) and (c) below, FBHS shall have the sole right to conduct any audit, claim for refund, or administrative or judicial proceeding involving any asserted Tax liability or refund with respect to any Tax Return of any consolidated combined or

unitary group of which FBHS is a member (a “FBHS Contest”) and Buyer shall have no participation rights with respect to any FBHS Contest.

(b)    In the case of a Contest after the Closing Date that relates solely to Pre-Closing Taxes of the Companies, FBHS shall control the conduct of such Contest, but Buyer shall have the right to participate in such Contest at its own expense, and FBHS shall not be able to settle, compromise and/or concede any portion of such Contest that is reasonably likely to affect the Tax liability of the Companies for any taxable year (or portion thereof) beginning after the Closing Date without the consent of Buyer, which consent shall not be unreasonably withheld, delayed or conditioned; provided that with respect to any such Contest other than a FBHS Contest, if FBHS fails to assume control of the conduct of any such Contest within a reasonable period following the receipt by FBHS of notice of such Contest, Buyer shall have the right to assume control of such Contest; provided that FBHS shall have the right to participate in such Contest at its own expense, and Buyer shall not settle, compromise and/or concede such Contest without the consent of FBHS, which consent shall not be unreasonably withheld, delayed or conditioned; provided, further, that, for the avoidance of doubt, any Buyer participation rights shall be limited to Contests solely involving the Companies.

(c)    In the case of a Contest that relates solely to the Companies for Straddle Periods, Buyer shall control the conduct of such Contest, but FBHS shall have the right to participate in such Contest at its own expense, and Buyer shall not settle, compromise and/or concede such Contest without the consent of FBHS, which consent shall not be unreasonably withheld, delayed or conditioned.

(d)    FBHS and the Shareholder, on the one hand, and Buyer, on the other hand, agree to furnish or cause to be furnished to each other, upon request, as promptly as practicable, such information (including access to books and records) and assistance relating to the Companies as is reasonably requested for the filing of any Tax Returns and the preparation, prosecution, defense or conduct of any Contest. FBHS and the Shareholder, on the one hand, and Buyer, on the other hand, shall reasonably cooperate with each other in the conduct of any Contest or other proceeding involving or otherwise relating to the Companies (or their income or assets) with respect to any Tax and each shall execute and deliver such powers of attorney and other documents as are necessary to carry out the intent of this Section 11.3(d). Any information obtained under this Section 11.3(d) shall be kept confidential, except as may be otherwise necessary in connection with the filing of Tax Returns or in the conduct of a Contest or other Tax proceeding.

(e)    Each of FBHS, the Shareholder, Buyer and the Companies shall (a) use its reasonable best efforts to properly retain and maintain the Tax and accounting records of the Companies that relate to Pre-Closing Periods for seven (7) years, (b) transfer such records to the Shareholder upon its written request prior to any such destruction, abandonment or disposition and (c) allow the Shareholder and its affiliates and their respective agents and representatives, at times and dates reasonably and mutually acceptable to the parties, to from time to time inspect and review such records as the Shareholder may deem necessary or appropriate; provided, however, that in all cases, such activities are to be conducted by the Shareholder during normal business hours and at the Shareholder’s sole expense. Any information obtained under this Section 11.3(e) shall be kept confidential, except as may be otherwise necessary in connection with the filing of Tax Returns or in the conduct of a Contest or other Tax proceeding.

11.4    Preparation of Tax Returns and Payment of Taxes

(a)    FBHS shall prepare (or cause to be prepared), and timely file all Tax Returns of the Companies with respect to any taxable period that ends on or prior to the Closing that are required to be filed with any Taxing Authority after the Closing Date, and shall pay (or cause to be paid) any Taxes due in respect of such Tax Returns. FBHS shall prepare such Tax Returns in a manner consistent with past practice, except as otherwise required by applicable law. FBHS shall (to the extent solely related to the Companies) deliver any such Tax Return, or in the case of a consolidated, combined or unitary Tax Return, the portion of any such Tax Return that relates to the Companies, to Buyer for its review at least twenty (20) days prior to the date on which such Tax Return is required to be filed. If Buyer disputes any item on such Tax Return, the parties shall use reasonable efforts to resolve their differences concerning the items of dispute. If any item of dispute remains unresolved for a period of twenty (20) days after the delivery of a the notice of dispute, either party shall be entitled to submit the dispute to a mutually agreeable internationally recognized independent registered public accounting firm that has not had a material relationship with the parties within the two years preceding the date of this Agreement (the “Independent Accountant”). The party submitting the dispute shall instruct the Independent Accountant to render a determination as to each unresolved item of dispute within sixty (60) days after its retention and the parties shall cooperate fully with the Independent Accountant so as to enable it to make such determination as quickly and as accurately as practicable within such time period. The Independent Accountant shall consider only those outstanding items of dispute. Each party may submit a “position paper” to the Independent Accountant setting forth the position of such party with respect to such Item of Dispute, and the parties may discuss such matters with the Independent Accountant; provided that no party shall have ex parte discussions with the Independent Account. The Independent Accountant shall immediately submit copies of all documents and other data made available by one party to the other party. The Independent Accountant’s determination as to each item of dispute submitted to it shall be in writing and shall be conclusive and binding upon the parties. The fees and expenses of the Independent Accountant shall be allocated to be paid by the parties based on the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accountant.

(b)    Buyer shall prepare (or cause to be prepared) and file or cause to be filed when due all Tax Returns that are required to be filed by or with respect to the Companies (other than those Tax Returns described in Section 11.4(a) or any Tax Returns related to the FBHS Group). With respect to Tax Returns that are required to be filed by or with respect to the Companies for Straddle Periods (“Straddle Returns”), such Straddle Returns shall be prepared in a manner consistent with past practice (unless otherwise required by applicable law), and the Shareholder shall be responsible for the Pre-Closing Taxes due in respect of such Straddle Returns in accordance with Section 11.1. Buyer shall notify the Shareholder of any amounts due from the Shareholder in respect of any Straddle Return no later than ten (10) business days prior to the date on which such Straddle Return is due, and the Shareholder shall remit such payment to Buyer no later than five (5) business dates prior to the date such Straddle Return is due. Buyer shall deliver any Straddle Return to the Shareholder for its review at least ten (10) days prior to the date on

which such Tax Return is required to be filed. If the Shareholder disputes any item on such Tax Return, procedures similar to Section 11.4(a) shall govern the resolution of such dispute.

(c)    Without the prior written consent of the FBHS, which consent shall not be unreasonably withheld, conditioned or delayed, and except as otherwise required by Law, Buyer shall not (A) amend, re-file, file or permit any Company to amend, re-file, or file any Tax Returns for a taxable period ending before the Closing Date or any Straddle Period Tax Return or (B) offer to extend or waive, or cause to be offered to extend or waive, or permit any Company to offer to extend or waive, any statute of limitations or other period for the assessment of any Tax or deficiency related to a taxable period ending before the Closing Date or with respect to any Straddle Period Tax Return.

11.5    Straddle Periods. For purposes of this Agreement, in the case of any Taxes of the Companies that are payable with respect to any Tax period that begins before and ends after the Closing Date (a “Straddle Period”), the portion of any such Taxes that constitutes Pre-Closing Taxes shall: (i) in the case of Taxes that are either (x) based upon or related to income or receipts or (y) imposed in connection with any sale, transfer or assignment or any deemed sale, transfer or assignment of property (real or personal, tangible or intangible), be deemed equal to the amount that would be payable if the Tax year or period ended on the Closing Date; and (ii) in the case of Taxes (other than those described in clause (i) above) that are imposed on a periodic basis with respect to the business or assets of the Companies or otherwise measured by the level of any item, be deemed to be the amount of such Taxes for the entire Straddle Period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding Tax period) multiplied by a fraction the numerator of which is the number of calendar days in the portion of the Straddle Period ending on the Closing Date and the denominator of which is the number of calendar days in the entire Straddle Period. For purposes of clause (i) of the preceding sentence, any exemption, deduction, credit or other item (including, without limitation, the effect of any graduated rates of Tax) that is calculated on an annual basis shall be allocated to the portion of the Straddle Period ending on the Closing Date on a pro rata basis determined by multiplying the total amount of such item allocated to the Straddle Period times a fraction, the numerator of which is the number of calendar days in the portion of the Straddle Period ending on the Closing Date and the denominator of which is the number of calendar days in the entire Straddle Period. In the case of any Tax based upon or measured by capital (including net worth or long-term debt) or intangibles, any amount thereof required to be allocated under this Section 11.5 shall be computed by reference to the level of such items on the Closing Date. The parties hereto will, to the extent permitted by applicable law, elect with the relevant Taxing Authority to treat a portion of any Straddle Period as a short taxable period ending as of the close of business on the Closing Date. Buyer and the Shareholder agree that any deductions associated with Transaction Expenses shall be included as deductions of the Companies in all Tax Returns for the Pre-Closing Periods to the extent permitted by Legal Requirement and further agree, except as otherwise required by Legal Requirement, that the “next day rule” of Treasury Regulations Section 1.1502-76(b)(1)(ii)(B) has no application with respect to such Transaction Expenses. Buyer and Shareholder further agree to apply the safe harbor election set forth in Internal Revenue Service Revenue Procedure 2011-29 to determine the amount of any success based fees in connection with this Agreement.

11.6    Refunds

(a)    The Shareholder will be entitled to any credits and refunds (including interest received thereon) in respect of any Taxes for which the Shareholder has agreed to indemnify Buyer pursuant to Section 10 or Section 11 (including, for the avoidance of doubt, any refund or credits for any taxable period of the Companies ending on or before the Closing Date or for the portion of any Straddle Period ending on the Closing Date) With respect to any net operating loss generated after the Closing Date, the Companies shall elect to waive any carryback under Code Section 172(b)(3). Buyer shall pay over to the Shareholder any such refund or credit within ten (10) days after receipt or entitlement thereto.

(b)    Except as provided in Sections 11.6(a) and the Companies will be entitled to any refunds (including any interest received thereon) in respect of any federal, state, local or foreign Tax liability of the Companies.

11.7    Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, value added and other such Taxes and fees (including any penalties and interest) incurred in connection with the transactions contemplated hereby shall be borne fifty percent (50%) by Buyer and fifty percent (50%) by the Shareholder when due. The party required under Applicable Law shall timely file any Tax Return with respect to such Taxes (and the non-filing party shall cooperate with respect thereto as necessary) and such party will provide such Tax Return to the other party for the other party’s review and approval at least ten (10) days prior to the date such Tax Return is filed.

11.8    Tax Sharing Agreements. Except as provided in Schedule 11.8, any and all existing Tax Sharing Agreements to which the Shareholder and the Companies are a party shall be terminated as of the Closing Date. After the Closing Date, the Companies shall have no further rights or liabilities thereunder.

12. Guarantee

12.1    Guarantee by FBHS. FBHS hereby guarantees the full and complete performance by the Shareholder of its obligations hereunder, including, without limitation, its obligations to indemnify Buyer with respect to indemnification claims under Section 10.2 hereof.

13. General Provisions

13.1    Expenses. Except as otherwise expressly provided in this Agreement, each party to this Agreement will bear its respective expenses incurred in connection with the preparation, execution, and performance of this Agreement, including all fees and expenses of agents, representatives, counsel, and accountants (“Expenses”) and the Shareholder shall pay the Transaction Expenses of the Companies that have not been paid prior to the Closing.

13.2    Public Announcements. Unless consented to by the Shareholder in advance or required by Legal Requirements, prior to the Closing, Buyer shall keep this Agreement strictly confidential and may not make any disclosure of this Agreement to any Person. Unless consented to by Buyer in advance or required by Legal Requirements, prior to the Closing, the Shareholder shall keep this Agreement strictly confidential and may not make any disclosure of this Agreement to any Person; provided that the foregoing shall not restrict disclosures of information made by or on behalf of Buyer and/or its Affiliates or successors, on the one hand, to its Affiliates, financing sources, accountants, and consultants, on the other hand, so long as Buyer notifies such Person of its commitment to confidentiality and remains responsible for any breach of confidentiality by such Person. Notwithstanding the foregoing, immediately after execution of this Agreement, the parties shall issue press releases in the forms attached hereto as Exhibit C. The Companies and Buyer will consult with each other concerning the means by which the Companies’ employees, customers, suppliers and distributors and others having dealings with the Companies will be informed of the transaction contemplated herein, and Buyer will have the right to be present for any such communication.

13.3    Confidentiality. Between the date of this Agreement and the Closing Date, Buyer and the Shareholder will maintain in confidence any written, oral, or other information obtained in confidence in connection with this Agreement or the transaction contemplated herein, unless (a) such information becomes publicly available through no fault of such party, (b) the use of such information is necessary or appropriate in making any filing or obtaining any consent or approval required for the consummation of the transactions contemplated herein, or (c) the furnishing or use of such information is required by legal proceedings, in which case, the disclosing party shall reasonably cooperate with the other party to obtain confidential treatment.

13.4    Notices. All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) sent by facsimile or electronic mail (with confirmation of receipt) or (c) reputable commercial overnight delivery service (including Federal Express and U.S. Postal Service overnight delivery service), in each case to the appropriate addresses, facsimile numbers and email addresses set forth below (or to such other addresses, facsimile numbers and email addresses as a party may designate by notice to the other parties):

To the Shareholder or FBHS:

Fortune Brands Home & Security, Inc.

520 Lake Cook Road

Deerfield, Illinois 60015-5611

Attn: General Counsel

Fax No.: 847-484-4490

e-mail: Robert.Biggart@fbhs.com

To Buyer:

Ply Gem Industries, Inc.

5020 Weston Parkway, Suite 400

Cary, North Carolina 27513

Attn: Tim Johnson, General Counsel

Fax No.: (919) 677-3914

e-mail: Tim.Johnson@plygem.com

13.5    Jurisdiction. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement and the transactions contemplated hereby shall be brought against any of the parties in the Court of Chancery of the State of Delaware (and, with respect to claims as to which such court refuses to accept jurisdiction, the federal district court for the District of Delaware or if such federal district court refuses to accept jurisdiction, the state courts of the State of Delaware), and each of the parties consents to the jurisdiction of such court (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein.

13.6    Waiver. Except as otherwise expressly provided herein, neither the failure nor any delay by any party in exercising any right, power, or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege.

13.7    Entire Agreement and Modification. This Agreement supersedes all prior agreements between the parties with respect to its subject matter and constitutes a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. This Agreement may not be amended except by a written agreement executed by the party to be charged with the amendment expressly referencing this Agreement and the intent to so amend this Agreement.

13.8    Assignments and Successors. Neither party may assign any of its rights under this Agreement without the prior consent of the other parties except that Buyer may assign its rights under this Agreement to (i) any Subsidiary of Buyer or (ii) its financing sources solely for collateral purposes, in each case, so long as Buyer remains liable for its obligations hereunder. Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of the parties.

13.9    Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full

force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

13.10    Use of Fortune Brands Name. Buyer shall promptly after the Closing amend the Organizational Documents of Simonton so that it no longer contains the words “Fortune Brands” in its Organizational Documents.

13.11    Governing Law. This Agreement and all claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement shall be governed by the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflict of laws thereof.

13.12    No Third Party Beneficiaries. Nothing in this Agreement shall confer any rights, remedies or claims upon any Person not a party or a permitted assignee of a party to this Agreement, other than the Companies, the Buyer Indemnitees and the Shareholder Indemnitees (and any of their respective successors, heirs, personal representatives or permitted assigns.).

13.13    Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which shall constitute one and the same agreement. The exchange of copies of this Agreement and of signature pages by electronic mail or facsimile transmission shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by electronic mail or facsimile shall be deemed to be their original signatures for all purposes.

13.14    Waiver of Jury Trial. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (C) IT MAKES SUCH WAIVER VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13.14.

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first written above.

Ply Gem Industries, Inc.

By: /s/ Shawn K. Poe

Shawn K. Poe

Vice President

Fortune Brands Windows & Doors, Inc.

By:/s/ Robert K. Biggart

Robert K. Biggart

Vice President & Assistant Secretary

Fortune Brands Home & Security, Inc.

By:/s/ Robert K. Biggart

Robert K. Biggart

Senior Vice President, General Counsel & Secretary

Listing of Exhibits and Schedules

Exhibit A-Simex Supply Agreement

Exhibit B-Transition Services Agreement

Exhibit C-Press Releases

Schedule 3.3-Contracts with restrictions

Schedule 3.4- Stockholder list

Schedule 3.6(a)-Real property

Schedule 3.6(b)-Leased property

Schedule 3.6(d)-Properties with encumbrances

Schedule 3.7-Liability disclosures

Schedule 3.9-Tax disclosures

Schedule 3.11(a)(1)-Employee benefits

Schedule 3.11(a)(2)-Employee benefits continuing

Schedule 3.11(i)-Severance and equity clauses

Schedule 3.12(a)-Compliance disclosure

Schedule 3.12(c)-Governmental Authorizations

Schedule 3.13-Legal proceedings

Schedule 3.14-Change events

Schedule 3.15(a)-Material contracts

Schedule 3.16-Environmental matters

Schedule 3.17(b)-Employees necessary to operate

Schedule 3.18-Employement matters

Schedule 3.19(b)-Owned intellectual property

Schedule 3.19(c)-Licenses and agreements party to

Schedule 3.20-Broker fee obligations

Schedule 3.21-Significant customer and supplier lists

Schedule 3.24-Related party agreements

Schedule 4.2-Conflicts

Schedule 5.5-Tax matters

Schedule 5.12-Insurance policies

Schedule 11.8-Tax sharing agreements

The foregoing Exhibits and Schedules, the contents of which have been identified above, have not been filed with this Agreement in reliance on Item 601(b)(2) of Regulation S-K promulgated under the Securities Act of 1933, as amended. Ply Gem Holdings, Inc. agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request.

EX-31.1

Exhibit 31.1

Certification Pursuant To

Section 302 of the Sarbanes-Oxley Act of 2002

I, Gary E. Robinette, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Ply Gem Holdings, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)  all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

Date: November 7, 2014

	/s/ Gary E. Robinette
Name:	Gary E. Robinette
Title:	President, Chief Executive Officer, and Vice Chairman of the Board

EX-31.2

Exhibit 31.2

Certification Pursuant To

Section 302 of the Sarbanes-Oxley Act of 2002

I, Shawn K. Poe, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Ply Gem Holdings, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)  all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2014

	/s/ Shawn K. Poe
Name:	Shawn K. Poe
Title:	Vice President, Chief Financial Officer, Treasurer and Secretary

EX-32.1

Exhibit 32.1

Certification Pursuant to

18 U.S.C. Section 1350

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report on Form 10-Q of Ply Gem Holdings, Inc., a Delaware corporation (the “Company”), for the quarterly period ended September 27, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.           the Report fully complies, in all material respects, with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.           the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  November 7, 2014	/s/ Gary E. Robinette
	Gary E. Robinette
	President, Chief Executive Officer, and Vice Chairman of the Board

EX-32.2

Exhibit 32.2

Certification Pursuant to

18 U.S.C. Section 1350

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report on Form 10-Q of Ply Gem Holdings, Inc., a Delaware corporation (the “Company”), for the quarterly period ended September 27, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.           the Report fully complies, in all material respects, with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.           the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  November 7, 2014	/s/ Shawn K. Poe
	Shawn K. Poe
	Vice President, Chief Financial Officer, Treasurer and Secretary

XML

GOODWILL (Details) (USD $)	9 Months Ended		12 Months Ended	9 Months Ended		9 Months Ended			9 Months Ended
	Sep. 27, 2014 reporting_unit	Sep. 28, 2013 reporting_unit	Dec. 31, 2013	Sep. 27, 2014 Siding, Fencing and Stone [Member]	Dec. 31, 2013 Siding, Fencing and Stone [Member]	Sep. 27, 2014 Windows and Doors [Member]	Dec. 31, 2013 Windows and Doors [Member]	Sep. 19, 2014 Simonton [Member]	Sep. 27, 2014 Simonton [Member] Siding, Fencing and Stone [Member]	Sep. 27, 2014 Simonton [Member] Windows and Doors [Member]
Goodwill [Line Items]
Number of reporting units	2	2
Goodwill impairment			$ 0
Goodwill, Gross				467,197,000	468,367,000	433,421,000	401,861,000
Goodwill, Impaired, Accumulated Impairment Loss				(122,227,000)	(122,227,000)	(327,773,000)	(327,773,000)
Goodwill	450,618,000		420,228,000	344,970,000	346,140,000	105,648,000	74,088,000	32,344,000
Goodwill, Translation Adjustments				(1,170,000)		(784,000)
Goodwill, Acquired During Period									$ 0	$ 32,344,000

XML

SEGMENT INFORMATION (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014 segment	Sep. 28, 2013 segment	Dec. 31, 2013
Segment Reporting Information [Line Items]
Reportable segments			2	2
Net sales	$ 437,848,000	$ 407,426,000	$ 1,116,524,000	$ 1,032,663,000
Operating earnings (loss)	41,927,000	30,920,000	53,575,000	31,010,000
Total assets	1,304,862,000		1,304,862,000		1,042,251,000
Siding, Fencing and Stone [Member]
Segment Reporting Information [Line Items]
Net sales	244,416,000	228,214,000	609,419,000	565,010,000
Operating earnings (loss)	44,756,000	39,476,000	89,484,000	92,998,000
Total assets	722,440,000		722,440,000		655,252,000
Windows and Doors [Member]
Segment Reporting Information [Line Items]
Net sales	193,432,000	179,212,000	507,105,000	467,653,000
Operating earnings (loss)	3,773,000	(4,489,000)	(17,793,000)	(22,549,000)
Total assets	540,793,000		540,793,000		305,789,000
Unallocated [Member]
Segment Reporting Information [Line Items]
Operating earnings (loss)	(6,602,000)	(4,067,000)	(18,116,000)	(39,439,000)
Total assets	$ 41,629,000		$ 41,629,000		$ 81,210,000

XML

INCOME TAXES (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014	Sep. 28, 2013	Dec. 31, 2013
Income Tax Contingency [Line Items]
Estimated effective income tax rate			9.30%
Estimated effective income tax rate including discrete items			45.90%
Tax expense	$ 10,514,000		$ 15,900,000
Valuation Allowances and Reserves, Adjustments			7,900,000
Deferred tax liability resulting from goodwill	6,200,000		6,200,000
Increase in tax contingency reserve			300,000
Tax receivable agreement adjustment	13,988,000	(6,669,000)	14,419,000	1,474,000
tax receivable agreement payable	26,042,000		26,042,000		11,623,000
estimate of maximum liability [Member]
Income Tax Contingency [Line Items]
tax receivable agreement payable	100,000,000		100,000,000
tax receivable agreement expense in the period [Member]
Income Tax Contingency [Line Items]
Tax receivable agreement adjustment			(14,400,000)
eighty five percentage receivable by affiliate [Member]
Income Tax Contingency [Line Items]
Tax receivable agreement adjustment			0.85
fifteen percent retained by Ply Gem [Member]
Income Tax Contingency [Line Items]
Tax receivable agreement adjustment			0.15
foreign jurisdiction [Member]
Income Tax Contingency [Line Items]
Book goodwill not amortized	20,200,000		20,200,000
Simonton [Member]
Income Tax Contingency [Line Items]
Valuation Allowance, Deferred Tax Asset, Change in Amount			$ 25,000,000

XML

RESTRUCTURING (Tables)

9 Months Ended

Sep. 27, 2014

Restructuring Cost and Reserve [Line Items]

Restructuring and Related Costs [Table Text Block]

The following table summarizes the Company's restructuring activity for the nine months ended September 27, 2014:

(Amounts in thousands)	Accrued as of		Adjustments			Expensed		Cash payments			Accrued as of
	December 31, 2013		during 2014			during 2014		during 2014			September 27, 2014
Western Canada
Severance costs	$	603	$	(80	)	$	49	$	(485	)	$	87
Contract terminations	157		(24		)	—		—			133
Equipment removal and other	533		(69		)	2,963		(3,350		)	77
	$	1,293	$	(173	)	$	3,012	$	(3,835	)	$	297

The Company recorded restructuring costs in selling, general and administrative expenses in the condensed consolidated statements of operations in the periods and segments shown in the following table:

	For the three months ended				For the nine months ended
(Amounts in thousands)	September 27, 2014		September 28, 2013		September 27, 2014		September 28, 2013
Siding, Fencing and Stone	$	—	$	—	$	—	$	—
Windows and Doors	819		—		3,012		—
	$	819	$	—	$	3,012	$	—

XML

INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 27, 2014

Finite-Lived Intangible Assets, Net [Abstract]

Components of intangible assets

The table that follows presents the major components of intangible assets as of September 27, 2014 and December 31, 2013:

(Amounts in thousands)	Average Amortization Period			Accumulated			Net Carrying
	(in Years)	Cost		Amortization			Value
As of September 27, 2014
Patents	14	$	12,770	$	(9,958	)	$	2,812
Trademarks/Tradenames	11	117,660		(69,304		)	48,356
Customer relationships	13	221,155		(118,962		)	102,193
Other	5	4,390		(2,745		)	1,645
Total intangible assets	12	$	355,975	$	(200,969	)	$	155,006
As of December 31, 2013:
Patents	14	$	12,770	$	(9,250	)	$	3,520
Trademarks/Tradenames	10	91,884		(65,801		)	26,083
Customer relationships	12	187,055		(107,721		)	79,334
Other	5	3,427		(2,352		)	1,075
Total intangible assets	12	$	295,136	$	(185,124	)	$	110,012

Schedule of expected amortization expense

Estimated amortization expense for the fiscal years 2014 through 2018 is shown in the following table:

	Amortization
(Amounts in thousands)	expense
2014 (remainder of year)	$	5,723
2015	25,051
2016	24,374
2017	20,511
2018	19,731

XML

RESTRUCTURING (Details) (USD $)	3 Months Ended		9 Months Ended		15 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014	Sep. 28, 2013	Dec. 31, 2014	Dec. 31, 2013
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	$ 297,000		$ 297,000			$ 1,293,000
Restructuring and Related Cost, Expected Cost					2,900,000
Restructuring Reserve, Accrual Adjustment			(173,000)
Restructuring Charges	819,000	0	3,012,000	0
Contract Termination [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	133,000		133,000			157,000
Restructuring and Related Cost, Expected Cost					200,000
Restructuring Reserve, Accrual Adjustment			(24,000)
Restructuring Charges			0
Payments for Restructuring			0
Employee Relocation [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	87,000		87,000			603,000
Restructuring and Related Cost, Expected Cost					1,100,000
Restructuring Reserve, Accrual Adjustment			(80,000)
Restructuring Charges			49,000
Payments for Restructuring			(485,000)
Other Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	77,000		77,000			533,000
Restructuring and Related Cost, Expected Cost					1,600,000
Restructuring Reserve, Accrual Adjustment			(69,000)
Restructuring Charges			2,963,000
Payments for Restructuring			(3,350,000)
Ply Gem Canada [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring			(3,835,000)
Siding, Fencing and Stone [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	0	0	0	0
Windows and Doors [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	819,000	0	3,012,000	0
Windows and Doors [Member] | Ply Gem Canada [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	$ (1,100,000)	$ (1,000,000)	$ (4,400,000)	$ (2,900,000)

XML

LONG-TERM DEBT (Details) (USD $)	9 Months Ended			9 Months Ended				0 Months Ended	9 Months Ended						0 Months Ended			0 Months Ended	9 Months Ended		9 Months Ended							9 Months Ended										9 Months Ended			12 Months Ended				9 Months Ended			9 Months Ended					4 Months Ended	9 Months Ended										9 Months Ended			0 Months Ended			9 Months Ended	12 Months Ended			12 Months Ended	0 Months Ended			9 Months Ended				9 Months Ended	0 Months Ended	1 Months Ended	9 Months Ended	0 Months Ended			9 Months Ended			9 Months Ended		0 Months Ended		9 Months Ended							9 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Dec. 31, 2013	Sep. 27, 2014 extinguishment portion only [Member]	Sep. 27, 2014 Term Loan Facility due 2021 [Member]	Sep. 28, 2013 Term Loan Facility due 2021 [Member]	Jan. 30, 2014 Term Loan Facility due 2021 [Member]	Jun. 28, 2013 8.25% senior secured notes due 2018 [Member]	Sep. 27, 2014 8.25% senior secured notes due 2018 [Member]	Sep. 28, 2013 8.25% senior secured notes due 2018 [Member]	Sep. 27, 2014 Third party fees for 8.25% Senior Secured Notes [Member]	Sep. 28, 2013 Third party fees for 8.25% Senior Secured Notes [Member]	Sep. 27, 2014 Third party fees for Term Loan Facility [Member]	Sep. 28, 2013 Third party fees for Term Loan Facility [Member]	Sep. 19, 2014 Six Point Five Senior Notes tack on due 2022 [Member]	Aug. 31, 2011 Senior Secured Asset-Based Revolving Credit Facility due 2016 [Member]	Jan. 30, 2014 Senior Secured Term Loan Facility due 2021 [Member] [Member]	Jan. 30, 2014 Term Loan Facility due 2021 [Member]	Sep. 27, 2014 Term Loan Facility due 2021 [Member]	Dec. 31, 2013 Term Loan Facility due 2021 [Member]	Sep. 27, 2014 Term Loan Facility due 2021 [Member] Ply Gem Industries [Member] Base Rate [Member]	Sep. 27, 2014 Term Loan Facility due 2021 [Member] Ply Gem Industries [Member] Libor Rate [Member]	Sep. 27, 2014 Term Loan Facility due 2021 [Member] Ply Gem Industries [Member] Interest Rate Floor [Member]	Sep. 27, 2014 Term Loan Facility due 2021 [Member] Ply Gem Industries [Member] eurocurrency loan [Member]	Sep. 27, 2014 Term Loan Facility due 2021 [Member] Ply Gem Industries [Member] alternate base rate loan [Member]	Sep. 27, 2014 Term Loan Facility due 2021 [Member] Option One [Member] Ply Gem Industries [Member]	Sep. 27, 2014 Term Loan Facility due 2021 [Member] Option Two [Member] Ply Gem Industries [Member]	Sep. 27, 2014 Six Point Five Senior Notes due 2022 [Member] [Member]	Jan. 30, 2014 Six Point Five Senior Notes due 2022 [Member] [Member]	Dec. 31, 2013 Six Point Five Senior Notes due 2022 [Member] [Member]	Sep. 27, 2014 Six Point Five Senior Notes due 2022 [Member] [Member] Debt Limitation One [Member]	Sep. 27, 2014 Six Point Five Senior Notes due 2022 [Member] [Member] Debt Limitation Two [Member] Purchase Money Indebtedness [Member]	Sep. 27, 2014 Six Point Five Senior Notes due 2022 [Member] [Member] Debt Limitation Two [Member] Debt of foreign subsidiaries [Member]	Sep. 27, 2014 Six Point Five Senior Notes due 2022 [Member] [Member] Debt Limitation Two [Member] General debt basket [Member]	Sep. 27, 2014 Six Point Five Senior Notes due 2022 [Member] [Member] Debt Limitation Three [Member] [Member] Purchase Money Indebtedness [Member]	Sep. 27, 2014 Six Point Five Senior Notes due 2022 [Member] [Member] Debt Limitation Three [Member] [Member] Debt of foreign subsidiaries [Member]	Sep. 27, 2014 Six Point Five Senior Notes due 2022 [Member] [Member] Debt Limitation Three [Member] [Member] General debt basket [Member]	Sep. 27, 2014 Six Point Five Senior Notes due 2022 [Member] [Member] Prior to February 1, 2017 [Member]	Sep. 27, 2014 Six Point Five Senior Notes due 2022 [Member] [Member] Prior to February 1, 2017 [Member] Redemption period one [Member]	Sep. 27, 2014 Six Point Five Senior Notes due 2022 [Member] [Member] Prior to February 1, 2017 [Member] Maximum [Member]	Dec. 31, 2013 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member]	Nov. 05, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member]	Sep. 27, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member]	Nov. 01, 2013 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member]	Sep. 27, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Debt and equity transactions limitations [Member]	Sep. 27, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Industries [Member]	Nov. 05, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Industries [Member]	Sep. 27, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Industries [Member] Fixed charge coverage ratio [Member]	Sep. 27, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Industries [Member] Option Three [Member] [Member] Cash dominion requirement [Member]	Sep. 27, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Industries [Member] Option One [Member] Fixed charge coverage ratio [Member]	Sep. 27, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Industries [Member] Option One [Member] Cash dominion requirement [Member]	Sep. 27, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Industries [Member] Option Two [Member] Fixed charge coverage ratio [Member]	Apr. 30, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Industries [Member] Option Two [Member] Cash dominion requirement [Member]	Sep. 27, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Industries [Member] Option Two [Member] Cash dominion requirement [Member]	Sep. 27, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Industries [Member] Base Rate [Member]	Sep. 27, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Industries [Member] Eurodollar [Member]	Sep. 27, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Industries [Member] Maximum [Member]	Sep. 27, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Industries [Member] Minimum [Member]	Sep. 27, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Canada [Member]	Nov. 01, 2013 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Canadian Subsidiaries [Member]	Sep. 27, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Purchase Money Indebtedness [Member] Debt and equity transactions limitations [Member]	Nov. 05, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] percent increase [Member]	Nov. 05, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] remaining available [Member]	Sep. 27, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] initial base rate [Member] Ply Gem Industries [Member] Base Rate [Member]	Nov. 05, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Purchase Money Indebtedness [Member] Ply Gem Canada [Member]	Nov. 05, 2014 Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Purchase Money Indebtedness [Member] Canadian Subsidiaries [Member]	Mar. 01, 2014 8.25% senior secured notes due 2018 [Member]	Jan. 30, 2014 8.25% senior secured notes due 2018 [Member]	Jun. 28, 2013 8.25% senior secured notes due 2018 [Member]	Sep. 27, 2014 8.25% senior secured notes due 2018 [Member]	Dec. 31, 2013 8.25% senior secured notes due 2018 [Member]	Feb. 16, 2012 8.25% senior secured notes due 2018 [Member]	Feb. 11, 2011 8.25% senior secured notes due 2018 [Member]	Dec. 31, 2013 8.25% senior secured notes due 2018 [Member] Redemption period two [Member] Option Two [Member]	Feb. 16, 2014 9.375% Senior notes due 2017 [Member]	Jan. 30, 2014 9.375% Senior notes due 2017 [Member]	Jun. 22, 2013 9.375% Senior notes due 2017 [Member]	Sep. 27, 2014 9.375% Senior notes due 2017 [Member]	Sep. 28, 2013 9.375% Senior notes due 2017 [Member]	Dec. 31, 2013 9.375% Senior notes due 2017 [Member]	Sep. 27, 2012 9.375% Senior notes due 2017 [Member]	Sep. 28, 2013 9.375% Senior notes due 2017 [Member] Redemption period one [Member]	Mar. 13, 2011 11.75% Senior secured notes due 2013 [Member]	Feb. 28, 2011 11.75% Senior secured notes due 2013 [Member]	Sep. 27, 2014 Subordinated debt [Member] Debt and equity transactions limitations [Member]	Jan. 30, 2014 Six Point Five Senior Notes Due 2022 and Term Loan Facility Due 2021 [Member]	Jan. 30, 2014 Six Point Five Senior Notes Due 2022 and Term Loan Facility Due 2021 [Member] debt discount created from January 2014 refinancing [Member]	Jan. 30, 2014 Six Point Five Senior Notes due 2022 [Member] [Member] Term Loan Facility due 2021 [Member]	Sep. 27, 2014 Nine Point Three Seven Five Senior Unsecured Notes Due 2017 [Member] 8.25% senior secured notes due 2018 [Member]	Sep. 28, 2013 Nine Point Three Seven Five Senior Unsecured Notes Due 2017 [Member] 8.25% senior secured notes due 2018 [Member]	Jan. 30, 2014 Nine Point Three Seven Five Senior Unsecured Notes Due 2017 [Member] 8.25% senior secured notes due 2018 [Member]	Sep. 27, 2014 Gain (Loss) on Extinguishment of Debt [Member] eight point two five senior and nine point three seven five senior unsecured [Member]	Sep. 28, 2013 Gain (Loss) on Extinguishment of Debt [Member] eight point two five senior and nine point three seven five senior unsecured [Member]	Jan. 30, 2014 Gain (Loss) on Extinguishment of Debt [Member] Six Point Five Senior Notes Due 2022 and Term Loan Facility Due 2021 [Member]	Jan. 30, 2014 Debt Issuance Costs [Member] Six Point Five Senior Notes Due 2022 and Term Loan Facility Due 2021 [Member]	Sep. 27, 2014 modification of debt [Member] eight point two five senior and nine point three seven five senior unsecured [Member]	Sep. 27, 2014 equity offering threshold [Member] Six Point Five Senior Notes due 2022 [Member] [Member] Prior to February 1, 2017 [Member] Redemption period one [Member]	Sep. 27, 2014 certain non-ordinary course asset sales [Member] Term Loan Facility due 2021 [Member]	Sep. 27, 2014 excess cash flow [Member] Term Loan Facility due 2021 [Member] Option Three [Member] [Member]	Sep. 27, 2014 excess cash flow [Member] Term Loan Facility due 2021 [Member] Option One [Member]	Sep. 27, 2014 excess cash flow [Member] Term Loan Facility due 2021 [Member] Option Two [Member]	Sep. 27, 2014 certain issuances of debt [Member] Term Loan Facility due 2021 [Member]	Sep. 27, 2014 Threshold for fee calculation [Member] Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Industries [Member]	Sep. 27, 2014 Option One [Member] Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Industries [Member]	Sep. 27, 2014 Option Two [Member] Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member] Ply Gem Industries [Member]	Sep. 19, 2014 cash used to fund acquisition [Member] Six Point Five Senior Notes tack on due 2022 [Member]	Sep. 19, 2014 cash used to pay down ABL facility [Member] Six Point Five Senior Notes tack on due 2022 [Member]
Debt Instrument [Line Items]
Purchase Commitment, Remaining Minimum Amount Committed	$ 27,200,000
Long-term debt, less current portion	1,008,525,000		817,028,000
Long-term Debt																			395,267,000	0								597,558,000		0											0		20,000,000																											0	725,574,000							0		91,454,000
Long-term Debt, Current Maturities	(4,300,000)		0
Debt, Long-term and Short-term, Combined Amount	1,012,825,000
Debt instrument, face amount															150,000,000		430,000,000	430,000,000											500,000,000																																											40,000,000	800,000,000								160,000,000
Long-term Debt, Authorized Redemption Amount, Percentage of Outstanding Principal at 106 Point 50 Redemption Price																																								40.00%
Interest rate on debt (in hundredths)																			4.00%										6.50%																																									8.25%			8.25%								9.375%
Extinguishment of debt																																																																				705,900,000								94,700,000							400,000	724,600,000
Net proceeds from debt																		427,900,000
Unamortized discount							1,900,000								10,100,000			2,200,000	33,658,000	0								52,442,000		0																																								0	30,426,000							0		4,546,000											34,400,000
Deferred Finance Costs, Gross															1,900,000
Cash																																																																																																										3,100,000
Long-term Line of Credit, Noncurrent																																																																																																											10,000,000
Unamortized Debt Issuance Expense	25,100,000		17,700,000																																																																																								14,900,000
Debt issuance costs	16,721,000	62,000
Note maturity date																			Jan. 30, 2021									Feb. 01, 2022																																										Feb. 15, 2018								Apr. 15, 2017
Redemption price, percentage of principal																																						100.00%
Debt Instrument, Interest Rate, Effective Percentage																		1.76%											4.24%
Redemption price, including premium, percentage of aggregate principal amount																																							106.50%																																			103.00%								109.375%
Long-term Debt, Required Remaining Amount Outstanding for Redemption at 106 Point 50 Percent																																																																																																	50.00%
Long-term Debt, Redemption of Debt																																																																					84,000,000		84,000,000						64,000,000
Minimum required interest coverage ratio																												2.00																				1.0
Maximum borrowing threshold on credit facility under six point five percent notes																															350,000,000
Maximum indebtedness under six point five percent notes																															575,000,000
Debt Instrument, Minimum Interest Coverage Ratio Required for Incurring Additional Debt																												4.00
Purchase money indebtedness threshold under six point five percent notes																																35,000,000			0.10
foreign debt threshold under the six point five percent notes																																	60,000,000			0.15
general debt basket threshold under the six point five percent notes																																		75,000,000			0.20
Maximum borrowing capacity under credit facilities																212,500,000																										300,000,000	250,000,000	250,000,000			250,000,000													50,000,000	25,000,000				50,000,000	50,000,000
Accordion feature line increase																																										50,000,000	350,000,000	100,000,000																		0	50,000,000
Allowable revolving commitments increase																			140,000,000
Basis spread on variable interest rate																					0.50%	1.00%	1.00%	3.00%	2.00%																														0.50%	1.75%	2.00%	1.50%						0.75%
Interest rate during period																																														1.72%
Based percentage used to determine excess availability																																													25.00%					10.00%	12.50%
Excess availability																																																				17,500,000	20,000,000	22,500,000
Percentage of equity guaranteed by parent company																																																											35.00%
Limitation on new borrowings																																																																																					112,500,000
Foreign debt restriction threshold																																													10,000,000
Contractual availability																																											224,300,000
Borrowing base availability reflecting of ABL borrowings																																											221,400,000
Line of credit outstanding																																											20,000,000
Letters of credit outstanding																																											5,700,000
Proceeds from issuance of long-term debt															138,000,000																																																																							927,900,000
Cumulative early tender premiums								(2,500,000)	0	(2,520,000)																																																																			(6,000,000)	0	(6,000,000)													8,493,000	0
Payment of accrued interest																																																																					2,600,000								1,100,000
Extinguishment of Debt, Unamortized Discount Charged to Expense					(255,000)	0		3,800,000	0	3,831,000																																																																			3,700,000	0	3,666,000										(4,773,000)	0
Write off of Deferred Debt Issuance Cost								1,800,000	0	1,766,000																																																																			1,200,000	0	1,165,000										(2,067,000)	0		(2,067,000)				(300,000)
Gains (Losses) on Extinguishment of Debt	21,364,000	18,948,000		15,588,000																																																																	(8,100,000)								(10,800,000)
Extinguishment of Debt, Gain (Loss), Net of Tax		(18,948,000)
Extinguishment of Debt, Transaction Costs																																																																																								14,700,000						5,500,000	9,200,000
Gains (Losses) On Modification Or Extinguishment Of Debt	(21,364,000)	(18,948,000)								(18,900,000)
Gain (Loss) on Repurchase of Debt Instrument	(5,776,000)	0									(302,000)	0	(5,474,000)	0
debt instrument, periodic payment, principal, percentage basis																			1.00%
accordion feature line increase ratio threshold																			3.75
prepayment penalty																			1.00%
term loan repayment requirements																																																																																																			0.00%	50.00%	25.00%
Long-term Debt, Required secured debt Ratio																										2.50	2.00
excess cash flow threshold for prepayment																			15,000,000
excess cash flow subject to prepayment																																																																																																		100.00%				100.00%
Tender Offer Price, Per 1000																																																																				1,067.50								1,108.36
Debt Instrument, Early Tender Payment Price, Per 1000																																																																				30.00								30.00
Repayments of Long-term Debt	853,075,000	148,000,000																																																																		780,200,000								107,600,000
Cumulative early tender premiums																																																																				47,600,000								10,300,000											52,600,000	61,100,000
Redemption of debt																																																																			50,100,000								1,300,000
Redemption price																																																																			1.06188								1
Debt Issuance Cost																																									1,300,000
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage																																																																																																								0.375%	0.25%
Line of Credit Facility, Commitment Fee Amount																																																																																																							100,000,000	100,000,000
Debt Instrument, Excess Availability length																																																	5 years
tax receivable agreement indebtedness threshold																																													$ 100,000,000
make whole premium																																																																											110.179%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Disclosure (Details) (USD $)	Sep. 27, 2014	Dec. 31, 2013
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative, Notional Amount	$ 43,000,000
Foreign Currency Cash Flow Hedge Liability at Fair Value	47,000	0
Quoted Prices in Active Markets (Level 1) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	1,048,116,000	908,580,000
Quoted Prices in Active Markets (Level 1) [Member] | Six Point Five Senior Notes due 2022 [Member] [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	625,625,000
Quoted Prices in Active Markets (Level 1) [Member] | Term Loan Facility due 2021 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	422,491,000
Quoted Prices in Active Markets (Level 1) [Member] | 9.375% Senior notes due 2017 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities		103,440,000
Quoted Prices in Active Markets (Level 1) [Member] | Senior Secured Notes-8.25% [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities		805,140,000
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	0	0
Significant Other Observable Inputs (Level 2) [Member] | Six Point Five Senior Notes due 2022 [Member] [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	0
Significant Other Observable Inputs (Level 2) [Member] | 9.375% Senior notes due 2017 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities		0
Significant Other Observable Inputs (Level 2) [Member] | Senior Secured Notes-8.25% [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities		0
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	0	0
Significant Unobservable Inputs (Level 3) [Member] | Six Point Five Senior Notes due 2022 [Member] [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	0
Significant Unobservable Inputs (Level 3) [Member] | 9.375% Senior notes due 2017 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities		0
Significant Unobservable Inputs (Level 3) [Member] | Senior Secured Notes-8.25% [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities		0
Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	1,078,925,000	852,000,000
Carrying Value [Member] | Six Point Five Senior Notes due 2022 [Member] [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	650,000,000
Carrying Value [Member] | Term Loan Facility due 2021 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	428,925,000
Carrying Value [Member] | 9.375% Senior notes due 2017 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities		96,000,000
Carrying Value [Member] | Senior Secured Notes-8.25% [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities		756,000,000
Fair Value Total [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	1,048,116,000	908,580,000
Fair Value Total [Member] | Six Point Five Senior Notes due 2022 [Member] [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	625,625,000
Fair Value Total [Member] | Term Loan Facility due 2021 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	422,491,000
Fair Value Total [Member] | 9.375% Senior notes due 2017 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities		103,440,000
Fair Value Total [Member] | Senior Secured Notes-8.25% [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities		$ 805,140,000

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GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION, Condensed Consolidating Balance Sheet (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Dec. 31, 2013	Jun. 29, 2013	Dec. 31, 2012
Proceeds from (Repayments of) Lines of Credit	$ 20,000	$ (1,000)
Current Assets:
Cash and cash equivalents	26,782	23,116	69,801	23,116	27,194
Accounts receivable, net	278,138		140,062
Inventories:
Raw materials	75,858		51,313
Work in process	28,359		23,817
Finished goods	71,490		60,340
Total inventory	175,707		135,470
Prepaid expenses and other current assets	20,502		23,214
Deferred income taxes	6,554		3,178
Total current assets	507,683		371,725
Investments in subsidiaries	0		0
Property and Equipment, at cost:
Land	8,017		4,528
Buildings and improvements	65,670		43,691
Machinery and equipment	360,775		321,614
Total property and equipment	434,462		369,833
Less accumulated depreciation	(273,893)		(258,186)
Total property and equipment, net	160,569		111,647
Other Assets:
Intangible assets, net	155,006		110,012
Goodwill	450,618		420,228
Deferred income taxes	0		5,406
Intercompany note receivable	0		0
Other	30,986		23,233
Total other assets	636,610		558,879
Total Assets	1,304,862		1,042,251
Long-term Debt, Current Maturities	4,300		0
Current Liabilities:
Accounts payable	116,976		82,981
Accrued expenses	147,557		112,940
Total current liabilities	268,833		195,921
Deferred income taxes	22,520		17,115
Intercompany note payable	0		0
tax receivable agreement payable	26,042		11,623
Other long-term liabilities	52,398		52,560
Long-term debt, less current portion	1,008,525		817,028
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	0		0
Common stock	678		672
Additional paid-in-capital	744,529		741,789
(Accumulated deficit) retained earnings	(810,036)		(791,243)
Accumulated other comprehensive loss	(8,627)		(3,214)
Total stockholders' deficit	(73,456)		(51,996)
Total Liabilities and Stockholder's Deficit	1,304,862		1,042,251
Guarantor Ply Gem Holdings, Inc. [Member]
Proceeds from (Repayments of) Lines of Credit	0	0
Current Assets:
Cash and cash equivalents	0		0	0	0
Accounts receivable, net	0		0
Inventories:
Raw materials	0		0
Work in process	0		0
Finished goods	0		0
Total inventory	0		0
Prepaid expenses and other current assets	0		0
Deferred income taxes	0		0
Total current assets	0		0
Investments in subsidiaries	(73,456)		(51,996)
Property and Equipment, at cost:
Land	0		0
Buildings and improvements	0		0
Machinery and equipment	0		0
Total property and equipment	0		0
Less accumulated depreciation	0		0
Total property and equipment, net	0		0
Other Assets:
Intangible assets, net	0		0
Goodwill	0		0
Deferred income taxes			0
Intercompany note receivable	0		0
Other	0		0
Total other assets	0		0
Total Assets	(73,456)		(51,996)
Long-term Debt, Current Maturities	0
Current Liabilities:
Accounts payable	0		0
Accrued expenses	0		0
Total current liabilities	0		0
Deferred income taxes	0		0
Intercompany note payable	0		0
tax receivable agreement payable	0		0
Other long-term liabilities	0		0
Long-term debt, less current portion	0		0
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	0		0
Common stock	678		672
Additional paid-in-capital	744,529		741,789
(Accumulated deficit) retained earnings	(810,036)		(791,243)
Accumulated other comprehensive loss	(8,627)		(3,214)
Total stockholders' deficit	(73,456)		(51,996)
Total Liabilities and Stockholder's Deficit	(73,456)		(51,996)
Issuer Ply Gem Industries, Inc. [Member]
Proceeds from (Repayments of) Lines of Credit	20,000	(1,000)
Current Assets:
Cash and cash equivalents	12,151		57,800	16,643	23,332
Accounts receivable, net	0		0
Inventories:
Raw materials	0		0
Work in process	0		0
Finished goods	0		0
Total inventory	0		0
Prepaid expenses and other current assets	461		613
Deferred income taxes	0		0
Total current assets	12,612		58,413
Investments in subsidiaries	(8,108)		(229,668)
Property and Equipment, at cost:
Land	0		0
Buildings and improvements	0		0
Machinery and equipment	2,701		3,275
Total property and equipment	2,701		3,275
Less accumulated depreciation	(1,967)		(1,385)
Total property and equipment, net	734		1,890
Other Assets:
Intangible assets, net	0		0
Goodwill	0		0
Deferred income taxes			0
Intercompany note receivable	953,510		958,631
Other	28,283		20,907
Total other assets	981,793		979,538
Total Assets	987,031		810,173
Long-term Debt, Current Maturities	4,300
Current Liabilities:
Accounts payable	541		601
Accrued expenses	15,756		31,056
Total current liabilities	20,597		31,657
Deferred income taxes	0		0
Intercompany note payable	0		0
tax receivable agreement payable	26,042		11,623
Other long-term liabilities	5,323		1,861
Long-term debt, less current portion	1,008,525		817,028
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	0		0
Common stock	678		672
Additional paid-in-capital	744,529		741,789
(Accumulated deficit) retained earnings	(810,036)		(791,243)
Accumulated other comprehensive loss	(8,627)		(3,214)
Total stockholders' deficit	(73,456)		(51,996)
Total Liabilities and Stockholder's Deficit	987,031		810,173
Guarantor Subsidiaries [Member]
Proceeds from (Repayments of) Lines of Credit	0	0
Current Assets:
Cash and cash equivalents	(3,427)		(4,970)	(7,979)	(4,307)
Accounts receivable, net	229,183		110,475
Inventories:
Raw materials	62,437		41,593
Work in process	27,018		22,781
Finished goods	52,699		42,751
Total inventory	142,154		107,125
Prepaid expenses and other current assets	15,494		17,270
Deferred income taxes	6,554		2,825
Total current assets	389,958		232,725
Investments in subsidiaries	0		0
Property and Equipment, at cost:
Land	7,100		3,565
Buildings and improvements	60,030		38,059
Machinery and equipment	341,481		300,089
Total property and equipment	408,611		341,713
Less accumulated depreciation	(264,168)		(249,344)
Total property and equipment, net	144,443		92,369
Other Assets:
Intangible assets, net	128,345		77,968
Goodwill	415,386		383,042
Deferred income taxes			0
Intercompany note receivable	0		0
Other	2,703		2,326
Total other assets	546,434		463,336
Total Assets	1,080,835		788,430
Long-term Debt, Current Maturities	0
Current Liabilities:
Accounts payable	91,518		66,847
Accrued expenses	106,557		62,120
Total current liabilities	198,075		128,967
Deferred income taxes	14,784		9,005
Intercompany note payable	842,051		859,768
tax receivable agreement payable	0		0
Other long-term liabilities	42,880		46,315
Long-term debt, less current portion	0		0
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	0		0
Common stock	0		0
Additional paid-in-capital	622,281		423,584
(Accumulated deficit) retained earnings	(639,236)		(679,209)
Accumulated other comprehensive loss	0		0
Total stockholders' deficit	(16,955)		(255,625)
Total Liabilities and Stockholder's Deficit	1,080,835		788,430
Non-Guarantor Subsidiary [Member]
Proceeds from (Repayments of) Lines of Credit	0	0
Current Assets:
Cash and cash equivalents	18,058		16,971	14,452	8,169
Accounts receivable, net	48,955		29,587
Inventories:
Raw materials	13,421		9,720
Work in process	1,341		1,036
Finished goods	18,791		17,589
Total inventory	33,553		28,345
Prepaid expenses and other current assets	4,547		5,331
Deferred income taxes	0		353
Total current assets	105,113		80,587
Investments in subsidiaries	0		0
Property and Equipment, at cost:
Land	917		963
Buildings and improvements	5,640		5,632
Machinery and equipment	16,593		18,250
Total property and equipment	23,150		24,845
Less accumulated depreciation	(7,758)		(7,457)
Total property and equipment, net	15,392		17,388
Other Assets:
Intangible assets, net	26,661		32,044
Goodwill	35,232		37,186
Deferred income taxes			5,406
Intercompany note receivable	0		0
Other	0		0
Total other assets	61,893		74,636
Total Assets	182,398		172,611
Long-term Debt, Current Maturities	0
Current Liabilities:
Accounts payable	24,917		15,533
Accrued expenses	25,244		19,764
Total current liabilities	50,161		35,297
Deferred income taxes	7,736		8,110
Intercompany note payable	111,459		98,863
tax receivable agreement payable	0		0
Other long-term liabilities	4,195		4,384
Long-term debt, less current portion	0		0
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	0		0
Common stock	0		0
Additional paid-in-capital	13,581		12,727
(Accumulated deficit) retained earnings	636		16,167
Accumulated other comprehensive loss	(5,370)		(2,937)
Total stockholders' deficit	8,847		25,957
Total Liabilities and Stockholder's Deficit	182,398		172,611
Consolidating Adjustments [Member]
Proceeds from (Repayments of) Lines of Credit	0	0
Current Assets:
Cash and cash equivalents	0		0	0	0
Accounts receivable, net	0		0
Inventories:
Raw materials	0		0
Work in process	0		0
Finished goods	0		0
Total inventory	0		0
Prepaid expenses and other current assets	0		0
Deferred income taxes	0		0
Total current assets	0		0
Investments in subsidiaries	81,564		281,664
Property and Equipment, at cost:
Land	0		0
Buildings and improvements	0		0
Machinery and equipment	0		0
Total property and equipment	0		0
Less accumulated depreciation	0		0
Total property and equipment, net	0		0
Other Assets:
Intangible assets, net	0		0
Goodwill	0		0
Deferred income taxes			0
Intercompany note receivable	(953,510)		(958,631)
Other	0		0
Total other assets	(953,510)		(958,631)
Total Assets	(871,946)		(676,967)
Long-term Debt, Current Maturities	0
Current Liabilities:
Accounts payable	0		0
Accrued expenses	0		0
Total current liabilities	0		0
Deferred income taxes	0		0
Intercompany note payable	(953,510)		(958,631)
tax receivable agreement payable	0		0
Other long-term liabilities	0		0
Long-term debt, less current portion	0		0
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	0		0
Common stock	(678)		(672)
Additional paid-in-capital	(1,380,391)		(1,178,100)
(Accumulated deficit) retained earnings	1,448,636		1,454,285
Accumulated other comprehensive loss	13,997		6,151
Total stockholders' deficit	81,564		281,664
Total Liabilities and Stockholder's Deficit	$ (871,946)		$ (676,967)

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STOCK-BASED COMPENSATION (Details) (USD $)	3 Months Ended		9 Months Ended			12 Months Ended		0 Months Ended		3 Months Ended	9 Months Ended	1 Months Ended		3 Months Ended	9 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014 Stock Options [Member]	Dec. 31, 2013 Stock Options [Member]	May 23, 2013 Stock Options [Member]	May 14, 2014 Restricted Stock [Member] Board of Directors [Member]	Mar. 04, 2014 Restricted Stock [Member] Board of Directors [Member]	Sep. 27, 2014 Restricted Stock [Member] Board of Directors [Member]	Sep. 27, 2014 Restricted Stock [Member] Board of Directors [Member]	Dec. 31, 2012 Restricted Stock [Member] December Award [Member] member_of_board_of_directors	Dec. 31, 2012 Restricted Stock [Member] December Award [Member] Board of Directors [Member]	Sep. 28, 2013 Restricted Stock [Member] December Award [Member] Board of Directors [Member]	Sep. 28, 2013 Restricted Stock [Member] December Award [Member] Board of Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Stock options outstanding at beginning of period (in shares)					3,285,750		3,386,008
Granted					151,147
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price					$ 15.11
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period					(618,615)
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price					$ 1.76
Forfeited or expired (in shares)					(105,494)
Stock options outstanding at end of period (in shares)					2,712,788	3,285,750	3,386,008
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Weighted average exercise price at beginning of period (in dollars per share)					$ 11.04
Weighted average exercise price at end of period (in dollars per share)					$ 13.39	$ 11.04
Weighted average remaining contractual term					5 years 8 months 15 days	5 years 2 months 25 days
Vested options (in shares)	2,091,234		2,091,234
Vesting percentage (in hundredths)			100.00%
Total unrecognized compensation expense	$ 2,400,000		$ 2,400,000
Weighted average recognition period of unrecognized compensation expense			1 year 9 months 20 days
Restricted Stock [Abstract]
Restricted shares								5,240	3,523				3,886
Independent members of the Board of Directors receiving award												3
Compensation expense	$ 600,000	$ 600,000	$ 1,500,000	$ 1,500,000						$ 76,000	$ 182,000			$ 45,000	$ 90,000
Time period over which award will be expensed								8 months	10 months				12 months
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price					$ 10.85

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INTANGIBLE ASSETS

9 Months Ended

Sep. 27, 2014

Finite-Lived Intangible Assets, Net [Abstract]

INTANGIBLE ASSETS, NET

INTANGIBLE ASSETS

The table that follows presents the major components of intangible assets as of September 27, 2014 and December 31, 2013:

(Amounts in thousands)	Average Amortization Period			Accumulated			Net Carrying
	(in Years)	Cost		Amortization			Value
As of September 27, 2014
Patents	14	$	12,770	$	(9,958	)	$	2,812
Trademarks/Tradenames	11	117,660		(69,304		)	48,356
Customer relationships	13	221,155		(118,962		)	102,193
Other	5	4,390		(2,745		)	1,645
Total intangible assets	12	$	355,975	$	(200,969	)	$	155,006
As of December 31, 2013:
Patents	14	$	12,770	$	(9,250	)	$	3,520
Trademarks/Tradenames	10	91,884		(65,801		)	26,083
Customer relationships	12	187,055		(107,721		)	79,334
Other	5	3,427		(2,352		)	1,075
Total intangible assets	12	$	295,136	$	(185,124	)	$	110,012

Estimated amortization expense for the fiscal years 2014 through 2018 is shown in the following table:

	Amortization
(Amounts in thousands)	expense
2014 (remainder of year)	$	5,723
2015	25,051
2016	24,374
2017	20,511
2018	19,731

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PENSION PLANS (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 27, 2014 pension_plan	Sep. 28, 2013 pension_plan	Sep. 27, 2014 pension_plan	Sep. 28, 2013 pension_plan
Compensation and Retirement Disclosure [Abstract]
Number of separate pension plans	2	2	2	2
Net periodic benefit costs
Service cost	$ 0	$ 29	$ 0	$ 87
Interest cost	476	440	1,427	1,320
Expected return on plan assets	(567)	(513)	(1,702)	(1,539)
Amortization of loss	116	234	347	702
Net periodic benefit expense	$ 25	$ 190	$ 72	$ 570

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COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 27, 2014

Commitments and Contingencies Disclosure [Abstract]

Components of the indemnification

Company has recorded liabilities related to these indemnifications of approximately $0.5 million and $0.4 million, respectively, in current liabilities and $2.5 million and $2.7 million, respectively, in long-term liabilities, consisting of the following:

(Amounts in thousands)	September 27, 2014		December 31, 2013
Product claim liabilities	$	140	$	140
Multi-employer pension plan withdrawal liability	2,251		2,362
Other	647		576
	$	3,038	$	3,078

Changes in the Company's warranty liabilities

Changes in the Company’s short-term and long-term warranty liabilities are as follows:

	For the three months ended						For the nine months ended
(Amounts in thousands)	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
Balance, beginning of period	$	40,397		$	40,554		$	42,466		$	37,870
Acquisitions - Simonton, Gienow, and Mitten	5,370			—			5,370			4,675
Warranty expense during period	2,897			3,827			8,209			8,197
Settlements made during period	(5,148		)	(4,012		)	(12,529		)	(10,373		)
Balance, end of period	$	43,516		$	40,369		$	43,516		$	40,369

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PENSION PLANS (Tables)

9 Months Ended

Sep. 27, 2014

Compensation and Retirement Disclosure [Abstract]

Net periodic benefit expense

The Company’s net periodic benefit expense for the combined plans for the periods indicated consists of the following components:

(Amounts in thousands)	For the three months ended						For the nine months ended
	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
Service cost	$	—		$	29		$	—		$	87
Interest cost	476			440			1,427			1,320
Expected return on plan assets	(567		)	(513		)	(1,702		)	(1,539		)
Amortization of loss	116			234			347			702
Net periodic benefit expense	$	25		$	190		$	72		$	570

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COMMITMENTS AND CONTINGENCIES (Details) (USD $)	9 Months Ended	12 Months Ended			9 Months Ended	3 Months Ended		9 Months Ended
	Sep. 27, 2014	Dec. 31, 2011	Dec. 31, 2013	Sep. 27, 2014 indemnification of liabilities in excess of [Member]	Sep. 27, 2014 attorney fees [Member]	Sep. 27, 2014 Warranty claims [Member]	Sep. 28, 2013 Warranty claims [Member]	Sep. 27, 2014 Warranty claims [Member]	Sep. 28, 2013 Warranty claims [Member]	Sep. 27, 2014 warranty accruals acquired in acquisition [Member]	Sep. 28, 2013 warranty accruals acquired in acquisition [Member]	May 31, 2013 warranty accruals acquired in acquisition [Member]	Sep. 27, 2014 class action settlement [Member]	Sep. 27, 2014 Other Current Liabilities [Member] class action settlement [Member]	Dec. 31, 2013 Other Current Liabilities [Member] class action settlement [Member]	Sep. 27, 2014 Other Noncurrent Liabilities [Member] class action settlement [Member]	Dec. 31, 2013 Other Noncurrent Liabilities [Member] class action settlement [Member]
Indemnification [Abstract]
Receivable related to indemnification	$ 3,000,000		$ 3,100,000
Current liabilities related to indemnifications	500,000		400,000
Long-term liabilities related to indemnifications	2,500,000		2,700,000
Product claim liabilities	140,000		140,000
Multi-employer pension plan withdrawal liability	2,251,000		2,362,000
Other	647,000		576,000	2,500,000
Liabilities for contingency	3,038,000		3,078,000
Warranty claims [Abstract]
Warranty liabilities, Current	11,387,000		10,861,000
Warranty liabilities, Noncurrent	32,129,000		31,605,000
Change in the Company's warranty liabilities [Roll Forward]
Balance, beginning of period						40,397,000	40,554,000	42,466,000	37,870,000	5,370,000	0	4,675,000
Warranty expense during period						2,897,000	3,827,000	8,209,000	8,197,000
Settlements made during period						(5,148,000)	(4,012,000)	(12,529,000)	(10,373,000)
Balance, end of period						43,516,000	40,369,000	43,516,000	40,369,000	5,370,000	0	4,675,000
Environmental [Abstract]
Environmental remediation estimate		1,800,000
Environmental liability within current liabilities	300,000		300,000
Environmental liability within other long-term liabilities	1,200,000		1,200,000
Litigation Settlement, Amount	5,000,000				(2,500,000)
Loss Contingency, Estimate of Possible Loss													$ 4,600,000	$ 2,594,000	$ 0	$ 2,000,000	$ 0

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ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES (Tables)

9 Months Ended

Sep. 27, 2014

Payables and Accruals [Abstract]

Accrued expenses and other long term liabilities

Accrued expenses consist of the following at September 27, 2014 and December 31, 2013:

(Amounts in thousands)	September 27, 2014		December 31, 2013
Insurance	$	9,292	$	3,926
Employee compensation and benefits	17,445		8,916
Sales and marketing	42,989		34,215
Product warranty	11,387		10,861
Accrued freight	2,701		1,350
Accrued interest	9,813		25,477
Accrued environmental liability	456		463
Accrued pension	2,258		2,258
Accrued sales returns and discounts	4,063		3,263
Accrued taxes	4,418		3,433
Litigation accrual	2,594		—
Other	40,141		18,778
	$	147,557	$	112,940

Other long-term liabilities consist of the following at September 27, 2014 and December 31, 2013:

(Amounts in thousands)	September 27, 2014		December 31, 2013
Insurance	$	2,043	$	2,213
Pension liabilities	5,176		6,622
Multi-employer pension withdrawal liability	2,251		2,362
Product warranty	32,129		31,605
Long-term product claim liability	140		140
Long-term environmental liability	1,227		1,247
Liabilities for tax uncertainties	3,188		2,934
Litigation accrual	2,000		—
Other	4,244		5,437
	$	52,398	$	52,560

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STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 27, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Rollforward of stock options outstanding

A rollforward of stock options outstanding during the nine months ended September 27, 2014 is presented below: 

	Stock Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Balance at January 1, 2014	3,285,750		$	11.04	5.24
Granted	151,147		15.11		—
Exercised	(618,615	)	1.76		—
Forfeited or expired	(105,494	)	10.85		—
Balance at September 27, 2014	2,712,788		$	13.39	5.71

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GOODWILL

9 Months Ended

Sep. 27, 2014

Goodwill [Abstract]

GOODWILL

GOODWILL

The Company records the excess of the fair value of the acquisition consideration over the net tangible and intangible assets of acquired companies as goodwill.  The Company performs an annual test for goodwill impairment at the November month end each year and also at any other date when events or changes in circumstances indicate that the carrying value of these assets may exceed their fair value.  The Company has defined its reporting units and performs the impairment testing of goodwill at the operating segment level.  The Company has two reporting units: (1) Siding, Fencing and Stone and (2) Windows and Doors.  Separate valuations are performed for each of these reporting units in order to test for impairment.      

The Company uses the two-step method to determine goodwill impairment.  If the carrying amount of a reporting unit exceeds its fair value (“Step One”), the Company measures the possible goodwill impairment based upon a hypothetical allocation of the fair value estimate of the reporting unit to all of the underlying assets and liabilities of the reporting unit, including previously unrecognized intangible assets (“Step Two”).  The excess of the reporting unit’s fair value over the amounts assigned to its assets and liabilities is the implied fair value of goodwill.  An impairment loss is recognized to the extent that a reporting unit’s recorded goodwill exceeds the implied fair value of goodwill. The Company has elected not to utilize the qualitative Step Zero impairment assessment. There was no goodwill impairment for the year ended December 31, 2013 and no impairment indicators which would trigger an interim impairment test during the three and nine months ended September 27, 2014. However, the Company will continue to evaluate goodwill during future periods and future declines in the residential housing and repair and remodeling markets or the Company's market capitalization could result in goodwill impairments.  

To determine the fair value of its reporting units, the Company equally considers both the income and market valuation methodologies.  The income valuation methodology uses the fair value of the cash flows that the reporting unit can be expected to generate in the future. This method requires management to project revenues, operating expenses, working capital investment, capital spending and cash flows for the reporting unit over a multi-year period as well as determine the weighted average cost of capital to be used as the discount rate.  The Company also utilizes the market valuation method to estimate the fair value of the reporting units by utilizing comparable public company multiples.  These comparable public company multiples are then applied to the reporting unit’s financial performance.  The market approach is more volatile as an indicator of fair value as compared to the income approach as internal forecasts and projections have historically been more stable.  Since each approach has its merits, the Company equally weights the approaches to balance the internal and external factors affecting the Company’s fair value.

The Company’s fair value estimates of its reporting units and goodwill are sensitive to a number of assumptions including discount rates, cash flow projections, operating margins, and comparable market multiples.  In order to accurately forecast future cash flows, the Company estimates single family housing starts and the repair and remodeling market's growth rates.  However, there is no assurance that: (1) valuation multiples will not decline, (2) discount rates will not increase, or (3) the earnings, book values or projected earnings and cash flows of the Company's reporting units will not decline. 

The reporting unit goodwill balances were as follows as of September 27, 2014 and December 31, 2013:

(Amounts in thousands)
	September 27, 2014		December 31, 2013
Siding, Fencing and Stone	$	344,970	$	346,140
Windows and Doors	105,648		74,088
	$	450,618	$	420,228

The changes in the goodwill balances from December 31, 2013 to September 27, 2014 relate to currency translation adjustments and the additional $32.3 million of goodwill established in the Simonton acquisition as described in Note 2. A goodwill rollforward for 2014 is included in the table below:

	Windows and			Siding, Fencing
(Amounts in thousands)	Doors			and Stone
Balance as of December 31, 2013
Goodwill	$	401,861		$	468,367
Accumulated impairment losses	(327,773		)	(122,227		)
	$	74,088		$	346,140
Currency translation adjustments	(784		)	(1,170		)
Simonton acquisition	32,344			—
Balance as of September 27, 2014
Goodwill	433,421			467,197
Accumulated impairment losses	(327,773		)	(122,227		)
	$	105,648		$	344,970

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SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 27, 2014

Segment Reporting [Abstract]

Summary of the Company's segment information

Following is a summary of the Company’s segment information:

	For the three months ended						For the nine months ended
(Amounts in thousands)	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
Net sales
Siding, Fencing and Stone	$	244,416		$	228,214		$	609,419		$	565,010
Windows and Doors	193,432			179,212			507,105			467,653
	$	437,848		$	407,426		$	1,116,524		$	1,032,663
Operating earnings (loss)
Siding, Fencing and Stone	$	44,756		$	39,476		$	89,484		$	92,998
Windows and Doors	3,773			(4,489		)	(17,793		)	(22,549		)
Unallocated	(6,602		)	(4,067		)	(18,116		)	(39,439		)
	$	41,927		$	30,920		$	53,575		$	31,010
	Total assets as of
	September 27, 2014			December 31, 2013
Total assets
Siding, Fencing and Stone	$	722,440		$	655,252
Windows and Doors	540,793			305,789
Unallocated	41,629			81,210
	$	1,304,862		$	1,042,251

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INTANGIBLE ASSETS (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 27, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Average Amortization Period (in years)	12 years	12 years
Cost	$ 355,975	$ 295,136
Accumulated Amortization	(200,969)	(185,124)
Net Carrying Value	155,006	110,012
Estimated future amortization [Abstract]
2014 (remainder of year)	5,723
2015	25,051
2016	24,374
2017	20,511
2018	19,731
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Average Amortization Period (in years)	14 years	14 years
Cost	12,770	12,770
Accumulated Amortization	(9,958)	(9,250)
Net Carrying Value	2,812	3,520
Trademarks/Tradenames [Member]
Finite-Lived Intangible Assets [Line Items]
Average Amortization Period (in years)	11 years	10 years
Cost	117,660	91,884
Accumulated Amortization	(69,304)	(65,801)
Net Carrying Value	48,356	26,083
Customer relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Average Amortization Period (in years)	13 years	12 years
Cost	221,155	187,055
Accumulated Amortization	(118,962)	(107,721)
Net Carrying Value	102,193	79,334
Other [Member]
Finite-Lived Intangible Assets [Line Items]
Average Amortization Period (in years)	5 years	5 years
Cost	4,390	3,427
Accumulated Amortization	(2,745)	(2,352)
Net Carrying Value	$ 1,645	$ 1,075

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GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION, Condensed Consolidating Statement of Cash Flows (Details) (USD $)	9 Months Ended												12 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014 Guarantor Ply Gem Holdings, Inc. [Member]	Sep. 28, 2013 Guarantor Ply Gem Holdings, Inc. [Member]	Sep. 27, 2014 Issuer Ply Gem Industries, Inc. [Member]	Sep. 28, 2013 Issuer Ply Gem Industries, Inc. [Member]	Sep. 27, 2014 Guarantor Subsidiaries [Member]	Sep. 28, 2013 Guarantor Subsidiaries [Member]	Sep. 27, 2014 Non-Guarantor Subsidiary [Member]	Sep. 28, 2013 Non-Guarantor Subsidiary [Member]	Sep. 27, 2014 Consolidating Adjustments [Member]	Sep. 28, 2013 Consolidating Adjustments [Member]	Dec. 31, 2013 IPO net proceeds [Member]
Cash flows from operating activities:
Net income (loss)	$ (18,793,000)	$ (62,089,000)	$ (18,793,000)	$ (62,089,000)	$ (18,793,000)	$ (62,089,000)	$ 39,973,000	$ (12,282,000)	$ (15,531,000)	$ 458,000	$ (5,649,000)	$ 73,913,000
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization expense	33,916,000	32,983,000	0	0	486,000	315,000	27,239,000	28,744,000	6,191,000	3,924,000	0	0
Fair-value premium on purchased inventory	38,000	2,015,000	0	0	0	0	38,000	0	0	2,015,000	0	0
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability	(264,000)	(358,000)	0		0		(264,000)		0		0
Restructuring Costs	3,012,000	0	0		0		0		3,012,000		0
Non-cash interest expense, net	11,606,000	9,457,000	0	0	11,606,000	9,457,000	0	0	0	0	0	0
(Gain) Loss on foreign currency transactions	(517,000)	(755,000)	0	0	0	0	0	0	(517,000)	(755,000)	0	0
Litigation Settlement, Amount	(5,000,000)		0		0		4,593,000		0		0
Gains (Losses) On Modification Or Extinguishment Of Debt	21,364,000	18,948,000	0	0	(21,364,000)	18,948,000	0	0	0	0	0	0
Management fee write off--prepaid	0	2,682,000		0		2,682,000		0		0		0
Initial public offering costs	0	(23,527,000)		0		(23,527,000)		0		0		0
Stock based compensation	1,672,000	1,631,000	0	0	1,672,000	1,631,000	0	0	0	0	0	0
Deferred income taxes	(17,195,000)	1,765,000	0	0	0	0	(22,227,000)	1,937,000	5,032,000	(172,000)	0	0
Tax receivable agreement liability adjustment	14,419,000	1,474,000	0	0	14,419,000	1,474,000	0	0	0	0	0	0
(Decrease) increase in tax uncertainty, net of valuation allowance	254,000	(1,279,000)	0	0	0	0	254,000	(1,279,000)	0	0	0	0
Equity Income In Consolidated Subsidiaries	0	0	18,793,000	62,089,000	(24,442,000)	11,824,000	0	0	0	0	5,649,000	(73,913,000)
Other	(224,000)	(5,000)	0	0	0	0	(50,000)	(5,000)	(174,000)	0	0	0
Changes in operating assets and liabilities:
Accounts receivable, net	(102,728,000)	(75,403,000)	0	0	0	0	(81,439,000)	(67,244,000)	(21,289,000)	(8,159,000)	0	0
Inventories	(24,074,000)	(11,730,000)	0	0	0	0	(17,394,000)	(13,605,000)	(6,680,000)	1,875,000	0	0
Prepaid expenses and other current assets	2,607,000	(5,181,000)	0	0	189,000	(5,322,000)	2,673,000	(294,000)	(255,000)	435,000	0	0
Accounts payable	15,180,000	(4,192,000)	0	0	(60,000)	107,000	5,873,000	3,142,000	9,367,000	(7,441,000)	0	0
Accrued expenses	(1,468,000)	26,552,000	0	0	(18,259,000)	(2,713,000)	11,865,000	17,428,000	4,926,000	11,837,000	0	0
advisory termination fee to affiliate	0	(18,852,000)		0		(18,852,000)		0		0		0
Cash payments on restructuring liabilities	(4,412,000)	(2,893,000)	0	0	0	0	(577,000)	(2,535,000)	(3,835,000)	(358,000)	0	0
Other	4,571,000	(912,000)	0	0	2,000	0	(1,997,000)	87,000	6,566,000	(999,000)	0	0
Net cash used in operating activities	(55,409,000)	(84,632,000)	0	0	(11,816,000)	(42,538,000)	(31,440,000)	(46,264,000)	(12,153,000)	4,170,000	0	0
Cash flows from investing activities:
Capital expenditures	(14,524,000)	(16,314,000)	0	0	(1,075,000)	(542,000)	(11,907,000)	(15,014,000)	(1,542,000)	(758,000)	0	0
Payments to Acquire Businesses, Net of Cash Acquired	(130,856,000)	(99,282,000)	0	0	(130,856,000)	(99,282,000)	0	0	0	0	0	0
Proceeds from sale of assets	744,000	24,000	0	0	0	0	109,000	24,000	635,000	0	0	0
Net cash used in investing activities	(144,636,000)	(115,572,000)	0	0	(131,931,000)	(99,824,000)	(11,798,000)	(14,990,000)	(907,000)	(758,000)	0	0
Cash flows from financing activities:
Proceeds from Issuance of Senior Long-term Debt	1,067,725,000	0	0		1,067,725,000		0		0		0
Net revolver borrowings (payments)	20,000,000	(1,000,000)	0	0	20,000,000	(1,000,000)	0	0	0	0	0	0
Payment of early call premium	(61,142,000)	(8,520,000)		0		8,520,000		0		0		0
Repayments of Senior Debt	(853,075,000)	(148,000,000)	0	0	(853,075,000)	(148,000,000)	0	0	0	0	0	0
Payments of Debt Extinguishment Costs	(61,142,000)		0		(61,142,000)		0		0		0
Proceeds from Stock Options Exercised	1,073,000	0	0		1,073,000		0		0		0
Proceeds from Issuance of Common Stock	0	353,407,000		0		353,407,000		0		0		0	353,407,000
Proceeds from intercompany investment	0	0	0	0	59,762,000	(60,152,000)	(44,781,000)	(57,582,000)	(14,981,000)	(2,570,000)	0	0
Payments of Debt Issuance Costs	(16,721,000)	(62,000)	0	0	(16,721,000)	(62,000)	0	0	0	0	0	0
Net cash provided by financing activities	157,860,000	195,825,000	0	0	98,098,000	135,673,000	44,781,000	57,582,000	14,981,000	2,570,000	0	0
Impact of exchange rate movements on cash	(834,000)	301,000	0	0	0	0	0	0	(834,000)	301,000	0	0
Net decrease in cash and cash equivalents	(43,019,000)	(4,078,000)	0	0	(45,649,000)	(6,689,000)	1,543,000	(3,672,000)	1,087,000	6,283,000	0	0
Cash and cash equivalents at the beginning of the period	69,801,000	27,194,000	0	0	57,800,000	23,332,000	(4,970,000)	(4,307,000)	16,971,000	8,169,000	0	0
Cash and cash equivalents at the end of the period	$ 26,782,000	$ 23,116,000	$ 0		$ 12,151,000		$ (3,427,000)		$ 18,058,000		$ 0

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014	Sep. 28, 2013
Net sales	$ 437,848	$ 407,426	$ 1,116,524	$ 1,032,663
Cost of products sold	339,259	323,258	890,717	832,389
Gross profit	98,589	84,168	225,807	200,274
Operating expenses:
Selling, general and administrative expenses	51,355	47,597	156,391	131,162
Amortization of intangible assets	5,307	5,651	15,841	14,575
Initial public offering costs			0	23,527
Total operating expenses	56,662	53,248	172,232	169,264
Operating earnings	41,927	30,920	53,575	31,010
Foreign currency (loss) gain	(766)	(376)	(517)	(755)
Interest expense	(16,300)	(22,045)	(52,065)	(70,605)
Interest income	18	285	64	359
Tax receivable agreement liability adjustment	13,988	(6,669)	14,419	1,474
Loss on modification or extinguishment of debt			(21,364)	(18,948)
Income (Loss) before provision (benefit) for income taxes	10,891	15,453	(34,726)	(60,413)
Provision (benefit) for income taxes	(10,514)	(1,442)	(15,933)	1,676
Net income (loss)	21,405	16,895	(18,793)	(62,089)
Comprehensive income (loss)	$ 17,282	$ 20,969	$ (24,206)	$ (60,998)
Earnings Per Share, Basic	$ 0.32	$ 0.25
Basic	$ 0.32	$ 0.25
Weighted Average Number of Shares Outstanding, Basic	67,844,546	67,120,389
Diluted	67,944,470	68,244,727
Earnings Per Share, Basic and Diluted			$ (0.28)	$ (1.08)
Weighted Average Number of Shares Outstanding, Basic and Diluted			67,807,801	57,538,917

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ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014	Sep. 28, 2013	Dec. 31, 2013
Accrued expenses [Abstract]
Insurance	$ 9,292,000		$ 9,292,000		$ 3,926,000
Employee compensation and benefits	17,445,000		17,445,000		8,916,000
Sales and marketing	42,989,000		42,989,000		34,215,000
Product warranty	11,387,000		11,387,000		10,861,000
Accrued freight	2,701,000		2,701,000		1,350,000
Accrued interest	9,813,000		9,813,000		25,477,000
Accrued environmental liability	456,000		456,000		463,000
Accrued pension	2,258,000		2,258,000		2,258,000
Accrued sales returns and discounts	4,063,000		4,063,000		3,263,000
Accrued taxes	4,418,000		4,418,000		3,433,000
Other	40,141,000		40,141,000		18,778,000
Accrued expenses	147,557,000		147,557,000		112,940,000
Other long-term liabilities [Abstract]
Insurance	2,043,000		2,043,000		2,213,000
Pension liabilities	5,176,000		5,176,000		6,622,000
Multi-employer pension withdrawal liability	2,251,000		2,251,000		2,362,000
Product warranty	32,129,000		32,129,000		31,605,000
Long-term product claim liability	140,000		140,000		140,000
Long-term environmental liability	1,227,000		1,227,000		1,247,000
Liabilities for tax uncertainties	3,188,000		3,188,000		2,934,000
Other	4,244,000		4,244,000		5,437,000
Other long-term liabilities	52,398,000		52,398,000		52,560,000
Long term incentive plan expense	500,000	200,000	1,500,000	1,100,000
Long term incentive plan liabilities	3,300,000		3,300,000		4,600,000
Other Employee Related Liabilities, Current	2,300,000		2,300,000		2,900,000
other employee related liabilities, noncurrent	1,000,000		1,000,000		1,700,000
class action settlement [Member]
Accrued expenses [Abstract]
Loss Contingency Accrual, Provision	4,600,000		4,600,000
class action settlement [Member] | Other Noncurrent Liabilities [Member]
Accrued expenses [Abstract]
Loss Contingency Accrual, Provision	2,000,000		2,000,000		0
class action settlement [Member] | Other Current Liabilities [Member]
Accrued expenses [Abstract]
Loss Contingency Accrual, Provision	2,594,000		2,594,000		0
Type of Restructuring [Domain]
Other long-term liabilities [Abstract]
Cash payments on restructuring liabilities			3,835,000
Windows and Doors [Member] | Type of Restructuring [Domain]
Other long-term liabilities [Abstract]
Cash payments on restructuring liabilities	$ 1,100,000	$ 1,000,000	$ 4,400,000	$ 2,900,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 27, 2014

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Ply Gem Holdings, Inc. and its subsidiaries (referred to herein as “Ply Gem Holdings”, “Ply Gem”, the “Company”, “we”, “us”, or “our”) have been prepared in accordance with U.S. generally accepted accounting principles as described in the consolidated financial statements and related notes included in our 2013 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2014.  These statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles and should be read in conjunction with our 2013 Annual Report on Form 10-K.  In management’s opinion, all normal and recurring adjustments considered necessary for a fair presentation have been included.  Operating results for the period from January 1, 2014 through September 27, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014.

On May 23, 2013, the Company issued 18,157,895 shares of common stock at an initial public offering price of $21.00 per share and received net proceeds of approximately $353.4 million in an initial public offering ("IPO") of its common stock after deducting underwriting discounts and commissions of approximately $25.4 million and offering expenses of approximately $2.5 million. Prior to the IPO, the Company also issued a total of 48,962,494 shares of common stock in connection with the merger of Ply Gem Prime Holdings, Inc. (“Ply Gem Prime”) into Ply Gem Holdings, with Ply Gem Holdings being the surviving entity.

The condensed consolidated balance sheet at December 31, 2013 has been derived from the audited consolidated financial statements of Ply Gem Holdings at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

The Company’s fiscal quarters are based on periods ending on the Saturday of the last week in the quarter.  Therefore, the financial results of certain fiscal quarters will not be comparable to the prior and subsequent fiscal quarters.  The accompanying financial statements include the Company’s condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 27, 2014 and September 28, 2013, the condensed consolidated statements of cash flows for the nine months ended September 27, 2014 and September 28, 2013, and the condensed consolidated balance sheets as of September 27, 2014 and December 31, 2013.

Ply Gem is a diversified manufacturer of residential and commercial building products, which are sold primarily in the United States and Canada, and include a wide variety of products for the residential and commercial construction, the do-it-yourself and the professional remodeling and renovation markets.  The demand for the Company’s products is seasonal, particularly in the Northeast and Midwest regions of the United States and Canada where inclement weather during the winter months usually reduces the level of building and remodeling activity in both the home repair and remodeling and new home construction sectors.  The Company’s sales are usually lower during the first and fourth quarters.

To a significant extent our performance is dependent upon the levels of home repair and remodeling and new home construction spending, all of which are affected by such factors as interest rates, inflation, consumer confidence, unemployment, and availability of consumer credit.

Initial Public Offering and Related Transactions

As a result of the IPO, the Company expensed within operations approximately $23.5 million in costs associated with the offering that were not directly attributable to the securities offered. The following table summarizes these costs for the nine months ended September 28, 2013. No such costs were incurred during the nine months ended September 27, 2014.

(Amounts in thousands)
Advisory termination fee to affiliate	$	18,852
2013 management fee as of date of termination	2,682
Other transaction expenses for the IPO	1,993
	$	23,527

Further, the Company incurred approximately $27.9 million in costs associated with the IPO that have been recorded within additional paid-in-capital. These costs include underwriter fees along with legal, accounting, printing and other general expenses directly associated with the public offering.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Ply Gem Holdings and its subsidiaries, all of which are wholly owned.  All intercompany accounts and transactions have been eliminated.

Accounting Policies and Use of Estimates

The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles involves estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of income and expense during the reporting periods.  Certain of the Company’s accounting policies require the application of judgment in selecting the appropriate assumptions for calculating financial estimates.  By their nature, these judgments are subject to an inherent degree of uncertainty.  The Company periodically evaluates the judgments and estimates used in their critical accounting policies to ensure that such judgments and estimates are reasonable.  Such estimates include the allowance for doubtful accounts receivable, rebates, pensions, valuation reserve for inventories, warranty reserves, insurance reserves, legal contingencies, assumptions used in the calculation of income taxes and the tax receivable agreement liability, projected cash flows used in the goodwill and intangible asset impairment tests, and environmental accruals and other contingencies.  These judgments are based on the Company’s historical experience, current trends and information available from other sources, and are based on management’s best estimates and judgments.  The Company adjusts such estimates and assumptions when facts and circumstances dictate.  Illiquid credit markets, volatile equity markets, foreign currency, litigation risk, and the depressed housing and remodeling markets have combined to increase the uncertainty inherent in such estimates and assumptions.  If different conditions result from those assumptions used in the Company’s judgments, actual results could be materially different from the Company’s estimates.

Cash and Cash Equivalents

Cash equivalents consist of short-term highly liquid investments with original maturities of three months or less and which are readily convertible into cash.

Accounts Receivable

Accounts receivable-trade are recorded at their net realizable value.  The allowance for doubtful accounts was $4.5 million at September 27, 2014 and December 31, 2013.  The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company estimates the allowance for doubtful accounts based on a variety of factors including the length of time receivables are past due, the financial health of its customers, unusual macroeconomic conditions and historical experience. If the financial condition of its customers deteriorates or other circumstances occur that result in an impairment of customers’ ability to make payments, the Company records additional allowances as needed. The Company writes off uncollectible trade accounts receivable against the allowance for doubtful accounts when collection efforts have been exhausted and/or any legal action taken by the Company has concluded.

Inventories

Inventories in the accompanying condensed consolidated balance sheets are valued at the lower of cost or market and are determined primarily by the first-in, first-out (FIFO) method.  The Company records provisions, as appropriate, to write-down obsolete and excess inventory to estimated net realizable value.  The process for evaluating obsolete and excess inventory often requires the Company to make subjective judgments and estimates concerning future sales levels, quantities and prices at which such inventory will be able to be sold in the normal course of business.  Accelerating the disposal process or incorrect estimates of future sales potential may cause actual results to differ from the estimates at the time such inventory is disposed or sold. As of September 27, 2014, the Company had inventory purchase commitments of approximately $27.2 million.

Inventory reserves were approximately $10.4 million at September 27, 2014, increasing during the nine months ended September 27, 2014 by $1.5 million compared to the December 31, 2013 reserve balance of approximately $8.9 million.

Property and Equipment

Property and equipment are presented at cost.  Depreciation of property and equipment are provided on a straight-line basis over estimated useful lives, which are generally as follows: 

Buildings and improvements	10-37 years
Machinery and equipment, including leases	3-15 years
Leasehold improvements	Term of lease or useful life, whichever is shorter

Expenditures for maintenance and repairs are expensed when incurred. Expenditures for renewals and betterments are capitalized.  When assets are sold, or otherwise disposed, the cost and related accumulated depreciation are eliminated and the resulting gain or loss is recognized in operations.  

Intangible Assets, Goodwill and Other Long-lived Assets

Long-lived assets

The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.  The Company performs an undiscounted operating cash flow analysis to determine if impairment exists.  If an impairment is determined to exist, any related impairment loss is calculated based on the asset’s fair value and the discounted cash flow.

The Company tests for long-lived asset impairment at the following asset group levels: (i) the combined U.S. Siding, Fencing and Stone companies in the Siding, Fencing and Stone segment (“Siding”), (ii) the combined U.S. Windows companies in the Windows and Doors segment (“US Windows”), (iii) the combined Simonton windows companies in the Windows and Doors segment, (iv) Gienow Canada Inc. ("Gienow Canada") (a combined Western Canadian company created by the January 2014 amalgamation of the Company's legacy Western Canadian business and the Gienow entity acquired in April 2013) in the Windows and Doors segment, and (v) Mitten (formerly known as Mitten, Inc.) in the Siding, Fencing and Stone segment. For purposes of recognition and measurement of an impairment loss, a long-lived asset or asset group should represent the lowest level for which an entity can separately identify cash flows that are largely independent of the cash flows of other assets and liabilities.  There were no indicators of impairment during the three and nine months ended September 27, 2014.

Goodwill and other intangible assets

The Company evaluates goodwill for impairment on an annual basis and whenever events or business conditions warrant.  All other intangible assets are amortized over their estimated useful lives and are assessed for impairment as necessary.  The Company assesses goodwill for impairment at the November month end each year and also at any other date when events or changes in circumstances indicate that the carrying value of these assets may exceed their fair value.  To evaluate goodwill for impairment, the Company estimates the fair value of reporting units considering such factors as discounted cash flows and valuation multiples for comparable publicly traded companies.  A significant reduction in projected sales and earnings, which would lead to a reduction in future cash flows, could indicate potential impairment.  There were no indicators of impairment during the three and nine months ended September 27, 2014 that would trigger an interim impairment test.  The Company will continue to evaluate goodwill during future periods and future declines in the residential housing and repair and remodeling markets could result in goodwill impairments.

Debt Issuance Costs

Debt issuance costs, composed of facility, agency, and certain legal fees associated with issuing new debt financing, are amortized over the contractual term of the related agreement using the effective interest method.  Net debt issuance costs totaled approximately $25.1 million and $17.7 million as of September 27, 2014 and December 31, 2013, respectively, and have been recorded in other long term assets in the accompanying condensed consolidated balance sheets. Amortization of debt issuance costs for the three months ended September 27, 2014 and September 28, 2013 was approximately $0.8 million and $1.2 million, respectively.  Amortization of debt issuance costs for the nine months ended September 27, 2014 and September 28, 2013 was approximately $2.8 million and $3.2 million, respectively. Amortization of debt issuance costs is recorded in interest expense in the accompanying condensed consolidated statements of operations and comprehensive income (loss).

Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes which requires that deferred tax assets and liabilities be recorded to reflect the future tax consequences of temporary differences between the book and tax basis of various assets and liabilities.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect of changes in tax rates on deferred tax assets and liabilities is recognized as income or expense in the period in which the rate change occurs.  A valuation allowance is established to offset any deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Estimates are required with respect to, among other things, the appropriate state income tax rates used in the various states that the Company and its subsidiaries are required to file, the potential utilization of operating and capital loss carry-forwards for both federal and state income tax purposes and valuation allowances required, if any, for tax assets that may not be realized in the future.  The Company establishes reserves when, despite our belief that our tax return positions are fully supportable, certain positions could be challenged, and the positions may not be fully sustained.  As a result of the 2013 Ply Gem Prime and Ply Gem Holdings merger, U.S. federal income tax returns will be prepared and filed by Ply Gem Holdings on behalf of itself, Ply Gem Industries, Inc. (“Ply Gem Industries”), and its U.S. subsidiaries.  The Company has executed a tax sharing agreement with Ply Gem Industries and Ply Gem Holdings pursuant to which tax liabilities for each respective party are computed on a stand-alone basis.  The Company along with its U.S. subsidiaries file a consolidated federal income tax return, separate state income tax returns, combined state returns, and unitary state returns. Gienow Canada and Mitten both file separate Canadian federal income tax returns and separate provincial returns. Simonton will join the filing of the consolidated U.S. federal returns. Simonton will also join the filings of certain combined and unitary state income tax returns as well as continue to file certain state returns on a separate company basis.

Environmental

The Company accrues for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable. Environmental remediation obligation accruals are adjusted as further information develops or circumstances change.  Costs of future expenditures for environmental remediation obligations are not discounted to their present value.  Recoveries of environmental remediation costs from other parties are recorded as assets when their receipt is deemed probable.

Commitments and Contingencies

The Company accrues for all direct costs associated with the estimated resolution of contingencies at the earliest date at which it is deemed probable that a liability has been incurred and the amount of such liability can be reasonably estimated.  Costs accrued have been estimated based upon an analysis of potential results, assuming a combination of litigation and settlement strategies and outcomes. Insurance recoveries are recorded as assets when their receipt is deemed probable.

Foreign Currency

Gienow Canada and Mitten, the Company’s Canadian subsidiaries, utilize the Canadian dollar as their functional currency.  For reporting purposes, the Company translates the assets and liabilities of its foreign entities at the exchange rates in effect at period-end.  Net sales and expenses are translated using average exchange rates in effect during the period.  Gains and losses from foreign currency translation are credited or charged to accumulated other comprehensive income or loss in the accompanying condensed consolidated balance sheets.

The Company recorded a loss from foreign currency transactions of approximately $(0.8) million for the three months ended September 27, 2014 and a loss of approximately $(0.4) million for the three months ended September 28, 2013. The Company recorded a loss from foreign currency transactions of approximately $(0.5) million for the nine months ended September 27, 2014 and a loss of approximately $(0.8) million for the nine months ended September 28, 2013. As of September 27, 2014 and December 31, 2013, accumulated other comprehensive loss included a currency translation adjustment of approximately $(5.4) million and $(2.9) million, respectively.

Derivative Financial Instruments

During the nine months ended September 27, 2014, the Company entered into a foreign currency zero-cost collar agreement to hedge approximately $43.0 million of its 2014 non-functional currency inventory purchases to protect the Company from variability in cash flows attributable to changes in the U.S. dollar relative to the Canadian dollar.

The Company has designated this zero-cost collar agreement as a cash flow hedge. As a cash flow hedge, unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. The zero-cost collar agreement is highly correlated to the changes in foreign currency rates to which the Company is exposed. Unrealized gains and losses on this agreement are designated as effective or ineffective. The effective portion of such gains or losses is recorded as a component of accumulated other comprehensive income or loss, while the ineffective portion of such gains or losses is recorded as a component of cost of goods sold. Future realized gains and losses in connection with each inventory purchase will be reclassified from accumulated other comprehensive income or loss to cost of goods sold.

The changes in fair values of derivatives that have been designated and qualify as cash flow hedges are recorded in accumulated other comprehensive income or loss and are reclassified into cost of goods sold in the same period the hedged item affects earnings. Due to the high degree of effectiveness between the hedging instrument and the underlying exposures being hedged, fluctuations in the value of the derivative instrument are generally offset by changes in the fair value or cash flows of the underlying exposures being hedged. The changes in the fair value of derivatives that do not qualify as effective are immediately recognized in earnings.

The gains and losses on the derivative contract that are reclassified from accumulated other comprehensive income or loss to current period earnings are included in the line item in which the hedged item is recorded in the same period the forecasted transaction affects earnings. As of September 27, 2014, approximately $47,000 of the deferred net loss on derivative instruments included in accumulated other comprehensive loss is expected to be reclassified as cost of goods sold during the next twelve months. This expectation is based on the expected timing of the occurrence of the hedged forecasted transactions.

The fair value of the foreign currency zero-cost collar agreement is estimated using industry standard valuation models using market-based observable inputs, including spot rates, forward points, interest rates and volatility inputs (Level 2). A summary of the recorded liability included in the accompanying condensed consolidated balance sheets is as follows:

(Amounts in thousands)
	September 27, 2014			December 31, 2013
Foreign currency hedge (included in accrued expenses)	$	(47	)	$	—

Fair Value Measurement

The accounting standard for fair value discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flows), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The standard utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

• Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

• Level 3: Inputs that reflect the reporting entity’s own assumptions.

The hierarchy requires the use of observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.  The Company’s population of recurring financial assets and liabilities subject to fair value measurements and the necessary disclosures are as follows:

					Quoted Prices in Active Markets		Significant Other		Significant
(Amounts in thousands)			Fair		for Identical		Observable		Unobservable
	Carrying		Value		Assets		Inputs		Inputs
Description	Value		Total		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Senior Notes-6.50%	$	650,000	$	625,625	$	625,625	$	—	$	—
Term Loan Facility	428,925		422,491		422,491		—		—
As of September 27, 2014	$	1,078,925	$	1,048,116	$	1,048,116	$	—	$	—
Liabilities:
Senior Notes-9.375%	$	96,000	$	103,440	$	103,440	$	—	$	—
Senior Secured Notes-8.25%	756,000		805,140		805,140		—		—
As of December 31, 2013	$	852,000	$	908,580	$	908,580	$	—	$	—

The fair value of the long-term debt instruments was determined by utilizing available market information.  The carrying value of the Company’s other assets and liabilities approximates their fair value.  

Earnings (Loss) Per Common Share

Basic earnings (loss) per share ("EPS") is computed based upon weighted-average shares outstanding during the period. Dilutive earnings per share is computed consistently with the basic computation while giving effect to all dilutive potential common shares and common share equivalents that were outstanding during the period. Ply Gem Holdings uses the treasury stock method to reflect the potential dilutive effect of unvested stock awards and unexercised options.

The Company was in a net loss position for the nine months ended September 27, 2014 and for the nine months ended September 28, 2013 and therefore the impact of stock options and unvested restricted stock were excluded from the computation of diluted earnings (loss) per share for those specific periods, as the inclusion of such amounts would be anti-dilutive.

The computation of the dilutive effect of other potential common shares included options and unvested restricted stock representing approximately 0.1 million shares of common stock for the three months ended September 27, 2014 and excluded approximately 0.1 million shares of common stock for the nine months ended September 27, 2014. The computation of the dilutive effect of other potential common shares included options and unvested restricted stock representing approximately 0.2 million shares of common stock for the three months ended September 28, 2013 and excluded approximately 0.2 million shares of common stock for the nine months ended September 28, 2013. Under the treasury stock method, the inclusion of these stock awards would have been anti-dilutive.

Prior to the IPO, the Company issued a total of 48,962,494 shares of common stock in connection with the merger of Ply Gem Prime into Ply Gem Holdings. Therefore, for purposes of EPS, the Company had 48,962,494 shares of common stock outstanding for the 2013 period through May 23, 2013. The Company calculated the amounts as net loss divided by the 48,962,494 shares of common stock outstanding for the 2013 period through May 23, 2013 plus the weighted-average shares outstanding subsequent to the IPO on May 23, 2013 through September 28, 2013. Prior to the IPO, all options and unvested restricted shares were instruments that were exercisable into Ply Gem Prime stock. Subsequently, those options and unvested restricted share grants were converted into Ply Gem Holdings instruments and as such will be treated prospectively from the date of the IPO for the calculation of dilutive income per share.

New Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update ("ASU") No. 2014-08, Presentation of Financial Statements and Property, Plant, and Equipment, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. Under the new guidance, a discontinued operation is defined as a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results. The change is effective for fiscal years, and interim reporting periods within those years, beginning on or after December 15, 2014, which means the first quarter of Ply Gem's fiscal year 2016, with early adoption permitted. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. This new guidance is not expected to affect the Company's consolidated financial position, results of operations or cash flows.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which completes the joint effort by the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and improve financial reporting by creating common revenue recognition guidance for GAAP and International Financial Reporting Standards ("IFRS"). ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using IFRS and GAAP. The core principle of this update is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The changes are effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, which means the first quarter of Ply Gem's fiscal year 2017. This update will be effective for the Company beginning in the first quarter of fiscal year 2017, and allows for full retrospective adoption applied to all periods presented or retrospective adoption with the cumulative effect of initially applying this update recognized at the date of initial application. The method of adoption has not been determined yet by the Company. The Company is currently reviewing the revised guidance and assessing the potential impact on the consolidated financial statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Textuals (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014	Sep. 28, 2013	Dec. 31, 2013	May 23, 2013
Initial Public Offering [Line Items]
Unamortized Debt Issuance Expense	$ 25,100,000		$ 25,100,000		$ 17,700,000
Shares, Issued						48,962,494
Common stock, shares outstanding (in shares)	67,845,371		67,845,371		67,223,233
Initial public offering costs			0	23,527,000
Proceeds from Issuance of Common Stock			0	353,407,000
Accounts receivable, allowances	4,518,000		4,518,000		4,453,000
Sale of Stock, Price Per Share						$ 21.00
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	100,000	200,000	100,000	200,000
Inventory purchase commitments	27,200,000		27,200,000
Inventory reserves balance	10,400,000		10,400,000		8,900,000
Decrease (increase) in inventory reserve			1,500,000
Amortization of debt issuance costs	800,000	1,200,000	2,800,000	3,200,000
(Gain) loss on foreign currency transactions	766,000	376,000	517,000	755,000
Currency translation adjustment	(5,009,000)	4,074,000	(5,366,000)	1,091,000	(2,900,000)
advisory termination fee-ipo [Member]
Initial Public Offering [Line Items]
Initial public offering costs				18,852,000
management fee subsequently expensed in connection with IPO [Member]
Initial Public Offering [Line Items]
Initial public offering costs				2,682,000
transaction expenses for IPO [Member]
Initial Public Offering [Line Items]
Initial public offering costs				1,993,000
underwriting [Member]
Initial Public Offering [Line Items]
Initial public offering costs					25,400,000
IPO issuance costs [Member]
Initial Public Offering [Line Items]
Initial public offering costs					2,500,000
IPO costs-expensed in operating [Member]
Initial Public Offering [Line Items]
Initial public offering costs				23,527,000
total capitalized IPO costs [Member]
Initial Public Offering [Line Items]
Initial public offering costs				27,900,000
IPO issued shares [Member]
Initial Public Offering [Line Items]
Shares, Issued						18,157,895
IPO net proceeds [Member]
Initial Public Offering [Line Items]
Proceeds from Issuance of Common Stock					$ 353,407,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 27, 2014

Derivatives, Fair Value [Line Items]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

A summary of the recorded liability included in the accompanying condensed consolidated balance sheets is as follows:

(Amounts in thousands)
	September 27, 2014			December 31, 2013
Foreign currency hedge (included in accrued expenses)	$	(47	)	$	—

Initial Public Offering and Related Transactions

The following table summarizes these costs for the nine months ended September 28, 2013. No such costs were incurred during the nine months ended September 27, 2014.

(Amounts in thousands)
Advisory termination fee to affiliate	$	18,852
2013 management fee as of date of termination	2,682
Other transaction expenses for the IPO	1,993
	$	23,527

Schedule of property and equpiment

 Depreciation of property and equipment are provided on a straight-line basis over estimated useful lives, which are generally as follows: 

Buildings and improvements	10-37 years
Machinery and equipment, including leases	3-15 years
Leasehold improvements	Term of lease or useful life, whichever is shorter

Summary of fair value liabilities

The Company’s population of recurring financial assets and liabilities subject to fair value measurements and the necessary disclosures are as follows:

					Quoted Prices in Active Markets		Significant Other		Significant
(Amounts in thousands)			Fair		for Identical		Observable		Unobservable
	Carrying		Value		Assets		Inputs		Inputs
Description	Value		Total		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Senior Notes-6.50%	$	650,000	$	625,625	$	625,625	$	—	$	—
Term Loan Facility	428,925		422,491		422,491		—		—
As of September 27, 2014	$	1,078,925	$	1,048,116	$	1,048,116	$	—	$	—
Liabilities:
Senior Notes-9.375%	$	96,000	$	103,440	$	103,440	$	—	$	—
Senior Secured Notes-8.25%	756,000		805,140		805,140		—		—
As of December 31, 2013	$	852,000	$	908,580	$	908,580	$	—	$	—

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 27, 2014	Sep. 28, 2013
Property and Equipment [Line Items]
initial public offering costs	$ 0	$ 23,527
Building and improvements [Member] | Minimum [Member]
Property and Equipment [Line Items]
Estimated useful life	10 years
Building and improvements [Member] | Maximum [Member]
Property and Equipment [Line Items]
Estimated useful life	37 years
Machinery and equipment, including leases [Member] | Minimum [Member]
Property and Equipment [Line Items]
Estimated useful life	3 years
Machinery and equipment, including leases [Member] | Maximum [Member]
Property and Equipment [Line Items]
Estimated useful life	15 years
Leasehold improvements [Member]
Property and Equipment [Line Items]
Property plant and equipment useful life description	Term of lease or useful life, whichever is shorter
advisory termination fee-ipo [Member]
Property and Equipment [Line Items]
initial public offering costs		18,852
management fee subsequently expensed in connection with IPO [Member]
Property and Equipment [Line Items]
initial public offering costs		2,682
transaction expenses for IPO [Member]
Property and Equipment [Line Items]
initial public offering costs		1,993
IPO costs-expensed in operating [Member]
Property and Equipment [Line Items]
initial public offering costs		$ 23,527

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GOODWILL (Tables)

9 Months Ended

Sep. 27, 2014

Goodwill [Line Items]

Schedule of Goodwill [Table Text Block]

A goodwill rollforward for 2014 is included in the table below:

	Windows and			Siding, Fencing
(Amounts in thousands)	Doors			and Stone
Balance as of December 31, 2013
Goodwill	$	401,861		$	468,367
Accumulated impairment losses	(327,773		)	(122,227		)
	$	74,088		$	346,140
Currency translation adjustments	(784		)	(1,170		)
Simonton acquisition	32,344			—
Balance as of September 27, 2014
Goodwill	433,421			467,197
Accumulated impairment losses	(327,773		)	(122,227		)
	$	105,648		$	344,970

Schedule of reporting unit goodwill balances

The reporting unit goodwill balances were as follows as of September 27, 2014 and December 31, 2013:

(Amounts in thousands)
	September 27, 2014		December 31, 2013
Siding, Fencing and Stone	$	344,970	$	346,140
Windows and Doors	105,648		74,088
	$	450,618	$	420,228

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ACQUISITIONS

9 Months Ended

Sep. 27, 2014

ACQUISITIONS [Abstract]

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

ACQUISITIONS

Simonton

On September 19, 2014, Ply Gem completed an acquisition for cash consideration of approximately $130.0 million to acquire the capital stock of Fortune Brands Windows Inc., and its direct and indirect wholly owned subsidiaries Simonton Building Products LLC, Simonton Industries, Inc., Simonton Windows, Inc., and SimEx, Inc. Fortune Brand Windows’ name has subsequently been changed to Simonton Windows & Doors, Inc. (“Simonton”). Simonton is a premier repair and remodeling window company with leading brand recognition within this market which will provide the Company with long-term value. Simonton manufactures top quality vinyl windows and doors and provides industry-leading customization options, delivery times, and customer service. Simonton has manufacturing plant locations in California, Illinois, and West Virginia with administrative offices in Ohio. The Simonton acquisition will balance our end window market mix by moving our market exposure to approximately 60% and 40% for the new construction and repair and remodeling markets, respectively, as compared to the approximate 80% and 20% legacy split for the Company’s window business. By incorporating the Company’s siding net sales, the Company’s market exposure is expected to be approximately 50% and 50% for the new construction and repair and remodeling markets, respectively. Simonton will strategically fit into the Company’s existing footprint and broaden our service offering to existing and new customers within the building product industry. The Company accounted for the transaction as an acquisition in accordance with the provisions of Accounting Standards Codification 805, Business Combinations, which results in a new valuation for the assets and liabilities of Simonton based upon fair values as of the acquisition date.

Since the acquisition was recently completed on September 19, 2014, the final acquisition accounting allocation remains subject to further adjustments. The specific accounts subject to ongoing purchase accounting adjustments include various income tax assets and liabilities, accounts receivable, inventories, prepaid expenses and other current assets, property and equipment, goodwill, intangibles, accounts payable, accrued expenses, and other liabilities. Therefore, the measurement date remains open as of September 27, 2014, and the preliminary acquisition accounting allocation detailed below is subject to adjustment. The Company anticipates completing these acquisition accounting adjustments during 2015.

The Company determined the fair value of the tangible and intangible assets and the liabilities acquired, and recorded goodwill based on the excess of fair value of the acquisition consideration over such fair value, as follows:

(Amounts in thousands)
Cash	$	(856	)
Accounts receivable	37,269
Inventories	17,673
Prepaid expenses and other current assets	2,233
Property and equipment	53,655
Intangible assets	62,170
Goodwill	32,344
Other assets	426
Accounts payable and accrued expenses	(45,555		)
Deferred income taxes	(24,979		)
Other liabilities	(4,380		)
	$	130,000

The $32.3 million of goodwill was allocated to the Windows and Doors segment and none of the goodwill is expected to be deductible for tax purposes. The goodwill is attributable to the workforce of the acquired business and the synergies expected to be realized after the Company’s acquisition of Simonton. As of the acquisition date and as of September 27, 2014, Simonton was in a net deferred tax liability position, which was evaluated with the Company’s existing net deferred tax asset position as of September 27, 2014 considering the Company’s full valuation allowance position. This resulted in a reversal of approximately $25.0 million in the Company's valuation allowance during the three and nine months ended September 27, 2014. The reversal was recorded in the Company's condensed consolidated statement of operations and comprehensive income (loss) in the provision (benefit) for income taxes.

For the three and nine months ended September 27, 2014, Simonton contributed net sales of approximately $7.2 million from the acquisition date (September 19, 2014), which has been included within the Company’s condensed consolidated statement of operations and comprehensive income (loss). If the Simonton acquisition would have occurred at the beginning of 2013, the Company’s consolidated net sales would have been $1,344.4 million and $1,251.7 million for the nine months ended September 27, 2014 and September 28, 2013, respectively, with a net loss of $18.8 million and $66.2 million for the nine months ended September 27, 2014 and September 28, 2013, respectively.

During the three and nine months ended September 27, 2014, the Company incurred $0.6 million of acquisition-related costs for Simonton. These expenses are included in selling, general, and administrative expense in the Company’s condensed consolidated statement of operations and comprehensive income (loss) within the Windows and Doors segment.

Gienow

On April 9, 2013, the Company, through its wholly-owned Canadian subsidiary Gienow Canada Inc., acquired Gienow WinDoor Ltd. for $20.4 million, through the purchase of all of the capital stock of Gienow WinDoor Ltd. Immediately subsequent to the acquisition, Gienow WinDoor Ltd. was amalgamated into Gienow Canada Inc. (the surviving entity, "Gienow"). In January 2014, Gienow was amalgamated with the Company's legacy Western Canadian business. Gienow is in the business of manufacturing, distributing, and selling windows, doors, and related products and services to industrial and residential customers in Canada and the United States. Gienow has a manufacturing facility located in Calgary, Alberta, Canada. The Company accounted for the transaction as a purchase in accordance with the provisions of Accounting Standards Codification 805, Business Combinations, which results in a new valuation for the assets and liabilities of Gienow based upon fair values as of the acquisition date.

The Company determined the fair value of the tangible and intangible assets and the liabilities acquired, and recorded goodwill based on the excess of fair value of the acquisition consideration over such fair values, as follows:

(Amounts in thousands)
Accounts receivable	$	11,714
Inventories	6,814
Other current assets	1,118
Property and equipment	4,746
Deferred taxes	2,657
Intangible assets	1,083
Goodwill	3,717
Accounts payable and accrued expenses	(10,041		)
Other liabilities	(1,428		)
	$	20,380

The $3.7 million of goodwill was allocated to the Windows and Doors segment and none of the goodwill is expected to be deductible for tax purposes.

Mitten

On May 31, 2013, Ply Gem completed an acquisition for cash consideration of approximately $76.8 million to acquire the capital stock of Mitten Inc. (now known as Mitten), a leading manufacturer and distributor of vinyl siding and accessories in Canada. Mitten is located in Ontario, Canada, and therefore the acquisition expanded the Company's presence in Eastern Canada and enabled the Company to expand its current distribution of its portfolio of exterior building products to this market for its siding and windows businesses. The Company accounted for the transaction as an acquisition in accordance with the provisions of Accounting Standards Codification 805, Business Combinations, which results in a new valuation for the assets and liabilities of Mitten based upon fair values as of the acquisition date.

The Company determined the fair value of the tangible and intangible assets and the liabilities acquired, and recorded goodwill based on the excess of fair value of the acquisition consideration over such fair values, as follows:

(Amounts in thousands)
Accounts receivable	$	18,393
Inventories	22,592
Other current assets	904
Property and equipment	9,279
Other assets	1,439
Intangible assets	35,400
Goodwill	26,098
Accounts payable and accrued expenses	(27,499		)
Deferred taxes	(9,786		)
	$	76,820

The allocation reflects a $2.1 million working capital adjustment that was recognized during the fourth quarter of 2013. The $26.1 million of goodwill was allocated to the Siding, Fencing and Stone segment and none of the goodwill is expected to be deductible for tax purposes.

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 27, 2014	Dec. 31, 2013	Sep. 28, 2013	Jun. 29, 2013	Dec. 31, 2012
Current Assets:
Cash and cash equivalents	$ 26,782	$ 69,801	$ 23,116	$ 23,116	$ 27,194
Accounts receivable, less allowances of $4,518 and $4,453, respectively	278,138	140,062
Inventories:
Raw materials	75,858	51,313
Work in process	28,359	23,817
Finished goods	71,490	60,340
Total inventory	175,707	135,470
Prepaid expenses and other current assets	20,502	23,214
Deferred income taxes	6,554	3,178
Total current assets	507,683	371,725
Property and Equipment, at cost:
Land	8,017	4,528
Buildings and improvements	65,670	43,691
Machinery and equipment	360,775	321,614
Total property and equipment	434,462	369,833
Less accumulated depreciation	(273,893)	(258,186)
Total property and equipment, net	160,569	111,647
Other Assets:
Intangible assets, net	155,006	110,012
Goodwill	450,618	420,228
Deferred income taxes	0	5,406
Other	30,986	23,233
Total other assets	636,610	558,879
Total Assets	1,304,862	1,042,251
Current Liabilities:
Accounts payable	116,976	82,981
Accrued expenses	147,557	112,940
Long-term Debt, Current Maturities	4,300	0
Total current liabilities	268,833	195,921
Deferred income taxes	22,520	17,115
Payable to related parties pursuant to tax receivable agreement	26,042	11,623
Other long-term liabilities	52,398	52,560
Long-term debt, less current portion	1,008,525	817,028
Commitments and contingencies
Stockholders' Deficit:
Preferred stock $0.01 par, 50,000,000 shares authorized, none issued and outstanding	0	0
Common stock $0.01 par, 250,000,000 shares authorized, 67,845,371 and 67,223,233 issued and outstanding, respectively	678	672
Additional paid-in-capital	744,529	741,789
Accumulated deficit	(810,036)	(791,243)
Accumulated other comprehensive loss	(8,627)	(3,214)
Total stockholders' deficit	(73,456)	(51,996)
Total Liabilities and Stockholder's Deficit	$ 1,304,862	$ 1,042,251

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SEGMENT INFORMATION

9 Months Ended

Sep. 27, 2014

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Company defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by management in deciding how to allocate resources and in assessing performance.  The Company has two reportable segments:  (1) Siding, Fencing and Stone and (2) Windows and Doors.

The income before income taxes of each segment includes the revenue generated on transactions involving products within that segment less identifiable expenses.  Unallocated income and expenses include items which are not directly attributed to or allocated to either of the Company’s reporting segments.  Such items include interest, legal costs, corporate payroll, and unallocated finance, and accounting expenses. Unallocated corporate assets include cash and certain receivables.  Interest expense is presented net of interest income.

Following is a summary of the Company’s segment information:

	For the three months ended						For the nine months ended
(Amounts in thousands)	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
Net sales
Siding, Fencing and Stone	$	244,416		$	228,214		$	609,419		$	565,010
Windows and Doors	193,432			179,212			507,105			467,653
	$	437,848		$	407,426		$	1,116,524		$	1,032,663
Operating earnings (loss)
Siding, Fencing and Stone	$	44,756		$	39,476		$	89,484		$	92,998
Windows and Doors	3,773			(4,489		)	(17,793		)	(22,549		)
Unallocated	(6,602		)	(4,067		)	(18,116		)	(39,439		)
	$	41,927		$	30,920		$	53,575		$	31,010
	Total assets as of
	September 27, 2014			December 31, 2013
Total assets
Siding, Fencing and Stone	$	722,440		$	655,252
Windows and Doors	540,793			305,789
Unallocated	41,629			81,210
	$	1,304,862		$	1,042,251

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Document and Entity Information	9 Months Ended
	Sep. 27, 2014	Nov. 07, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	PLY GEM HOLDINGS INC
Entity Central Index Key	0001284807
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 27, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		67,845,371

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 27, 2014

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

Under the General Advisory Agreement (the “General Advisory Agreement”) the Company entered into with CI Capital Partners LLC (“CI Capital Partners”), formerly Caxton-Iseman Capital LLC, CI Capital Partners provided the Company with acquisition and financial advisory services as the Board of Directors reasonably requested.  Under the General Advisory Agreement the Company paid and expensed, as a component of selling, general, and administrative expenses, a management fee of approximately $0.0 million and $0.4 million for the three and nine months ended September 28, 2013, respectively. The General Advisory Agreement was terminated in May 2013 and as a result, no management fee was paid during the three and nine months ended September 27, 2014.

During 2012, the Company and CI Capital Partners amended the General Advisory Agreement to, among other things, extend the term for a period of ten years to November 6, 2022. In connection with the IPO in May 2013, the General Advisory Agreement was terminated prior to the end of the initial term, as such, Ply Gem Industries paid to CI Capital Partners an amount equal to the present value of the annual advisory fees that would have been payable for three years, based on the Company’s cost of funds to borrow amounts under the Company’s senior credit facilities. This payment of approximately $18.9 million was made in May 2013 and was expensed within initial public offering costs in the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended September 28, 2013. The Company also expensed approximately $2.7 million of the 2013 capitalized advisory fees paid to CI Capital Partners as a result of the termination within initial public offering costs in the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended September 28, 2013. The Company also paid CI Capital Partners approximately $0.4 million for advisory services in connection with the Gienow acquisition during the nine months ended September 28, 2013 and this amount was expensed within selling, general, and administrative expenses in the condensed consolidated statement of operations and comprehensive income (loss) during the nine months ended September 28, 2013.

In May 2013, the Company finalized an agreement with the Company's President and Chief Executive officer providing a one-time cash bonus of $1.5 million upon the successful completion of an IPO prior to December 31, 2013, subject to his continued employment with the Company through this date. This bonus agreement was made in lieu of any benefits that the President and Chief Executive Officer may have received under the Tax Receivable Agreement and was paid during May 2013 and expensed within initial public offering costs in the condensed consolidated statement of operations and comprehensive income (loss) during the nine months ended September 28, 2013.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 27, 2014	Dec. 31, 2013
Current Assets:
Accounts receivable, allowances	$ 4,518	$ 4,453
Stockholders' Deficit:
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Common stock, shares issued (in shares)	67,845,371	67,223,233
Common stock, shares outstanding (in shares)	67,845,371	67,223,233

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PENSION PLANS

9 Months Ended

Sep. 27, 2014

Compensation and Retirement Disclosure [Abstract]

PENSION PLANS

PENSION PLANS

The Company has two pension plans, the Ply Gem Group Pension Plan and the MW Manufacturers, Inc. Retirement Plan. The Company’s net periodic benefit expense for the combined plans for the periods indicated consists of the following components:

(Amounts in thousands)	For the three months ended						For the nine months ended
	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
Service cost	$	—		$	29		$	—		$	87
Interest cost	476			440			1,427			1,320
Expected return on plan assets	(567		)	(513		)	(1,702		)	(1,539		)
Amortization of loss	116			234			347			702
Net periodic benefit expense	$	25		$	190		$	72		$	570

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LONG-TERM DEBT

9 Months Ended

Sep. 27, 2014

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

LONG-TERM DEBT

Long-term debt in the accompanying condensed consolidated balance sheets at September 27, 2014 and December 31, 2013 consists of the following:

(Amounts in thousands)
	September 27, 2014			December 31, 2013
Senior secured asset based revolving credit facility	$	20,000		$	—
Term Loan due 2021, net of unamortized early tender premium
and discount of $33,658 and $0, respectively	395,267			—
6.50% Senior notes due 2022, net of unamortized early tender premium
and discount of $52,442 and $0, respectively	597,558			—
8.25% Senior secured notes due 2018, net of unamortized early
tender premium and discount of $0 and $30,426, respectively	—			725,574
9.375% Senior notes due 2017, net of unamortized
discount of $0 and $4,546, respectively	—			91,454
	$	1,012,825		$	817,028
Less current portion of long-term debt	(4,300		)	—
	$	1,008,525		$	817,028

Recent developments

As described in the following paragraph, Ply Gem Industries modified its debt structure during the nine months ended September 27, 2014. On January 30, 2014, Ply Gem Industries completed an offering of $500.0 million aggregate principal amount of 6.50% Senior Notes due 2022 (the “6.50% Senior Notes”) and also entered into a $430.0 million senior secured term loan facility due 2021 (the “Term Loan Facility”). The approximate $927.9 million of net proceeds from the issuance of the 6.50% Senior Notes and the borrowings under the Term Loan Facility were used by Ply Gem Industries to purchase all of its 8.25% Senior Secured Notes due 2018 (the "8.25% Senior Secured Notes") and 9.375% Senior Notes due 2017 (the "9.375% Senior Notes") tendered in the tender offers described below, to satisfy and discharge the remaining obligations under the indentures governing the 8.25% Senior Secured Notes and 9.375% Senior Notes and to pay related fees and expenses.

On January 30, 2014, Ply Gem Industries purchased approximately $705.9 million of the outstanding 8.25% Senior Secured Notes in a tender offer at a price of $1,067.50 per $1,000 principal amount, which included an early tender payment of $30.00 per $1,000 principal amount, plus accrued and unpaid interest. On January 30, 2014, Ply Gem Industries also purchased approximately $94.7 million of the outstanding 9.375% Senior Notes in a tender offer at a price of $1,108.36 per $1,000 principal amount, which included an early tender payment of $30.00 per $1,000 principal amount, plus accrued and unpaid interest. As a result, Ply Gem Industries paid aggregate consideration of approximately $780.2 million for the tendered 8.25% Senior Secured Notes, including a tender premium of approximately $47.6 million, and paid aggregate consideration of approximately $107.6 million for the tendered 9.375% Senior Notes, including a tender premium of approximately $10.3 million. On March 1, 2014, pursuant to the terms of the indenture governing the 8.25% Senior Secured Notes, Ply Gem Industries redeemed the remaining approximate $50.1 million principal amount of the outstanding 8.25% Senior Secured Notes at a redemption price equal to 106.188% of the principal amount thereof, plus accrued and unpaid interest. On February 16, 2014, pursuant to the terms of the indenture governing the 9.375% Senior Notes, Ply Gem Industries redeemed the remaining approximate $1.3 million principal amount of the outstanding 9.375% Senior Notes at a redemption price equal to 100% of the principal amount plus the “make-whole” premium required under the indenture governing the 9.375% Senior Notes (which equated to 110.179% of the principal amount thereof), plus accrued and unpaid interest. As of March 1, 2014, there were no longer outstanding any 8.25% Senior Secured Notes. As of February 16, 2014, there were no longer outstanding any 9.375% Senior Notes.

On September 19, 2014, Ply Gem Industries issued an additional $150.0 million aggregate principal amount of its 6.50% Senior Notes (“Senior Tack-on Notes”).  The net proceeds from the transaction were approximately $138.0 million after deducting $10.1 million for the debt discount and $1.9 million in transaction costs. The proceeds from the issuance of the Senior Tack-on Notes and approximately $3.1 million of cash on hand were used by Ply Gem Industries to fund Ply Gem Industries’ purchase of all the issued and outstanding shares of common stock of Simonton, to pay fees and expenses related to the offering of the Senior Tack-on Notes and the Simonton acquisition and for general corporate purposes, including the repayment of approximately $10.0 million of indebtedness under the Company’s senior secured asset-backed revolving credit facility (the "ABL Facility"). The additional $150.0 million of 6.50% Senior Tack-on Notes have the same terms and covenants as the original $500.0 million of 6.50% Senior Notes due 2022. The 6.50% Senior Notes originally issued in January 2014 and the Senior Tack-on Notes issued in September 2014 (collectively, the "6.50% Senior Notes") will mature on February 1, 2022 and bear interest at the rate of 6.50%.

6.50% Senior Notes due 2022

On January 30, 2014, Ply Gem Industries issued $500.0 million of 6.50% Senior Notes at par. On September 19, 2014, Ply Gem Industries issued an additional $150.0 million of 6.50% Senior Notes at a discount of approximately $10.1 million. Interest accrues at 6.50% per annum and is paid semi-annually on February 1 and August 1 of each year. The 6.50% Senior Notes will mature on February 1, 2022.

Prior to February 1, 2017, Ply Gem Industries may redeem up to 40% of aggregate principal amount of the 6.50% Senior Notes with the net cash proceeds from certain equity offerings at a redemption price equal to 106.50% of the aggregate principal amount of the 6.50% Senior Notes to be redeemed, plus accrued and unpaid interest, if any, provided that at least 50% of the aggregate principal amount of the 6.50% Senior Notes remains outstanding after the redemption. Prior to February 1, 2017, Ply Gem Industries may redeem the 6.50% Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus a “make-whole” premium plus accrued and unpaid interest, if any. At any time on or after February 1, 2017, Ply Gem Industries may redeem the 6.50% Senior Notes, in whole or in part, at declining redemption prices set forth in the indenture governing the 6.50% Senior Notes plus, in each case, accrued and unpaid interest, if any, to the redemption date. The effective interest rate for the 6.50% Senior Notes is 4.24% after considering each of the different interest expense components of this instrument, including the coupon payment and the deferred debt issuance costs.

The 6.50% Senior Notes are fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by Ply Gem Holdings and all of the wholly-owned domestic subsidiaries of Ply Gem Industries (the “Guarantors”).  The indenture governing the 6.50% Senior Notes contains certain covenants that limit the ability of Ply Gem Industries and its restricted subsidiaries to incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem their stock, make loans and investments, sell assets, incur certain liens, enter into agreements restricting their ability to pay dividends, enter into transactions with affiliates, and consolidate, merge or sell assets.  In particular, Ply Gem Industries and its restricted subsidiaries may not incur additional debt (other than permitted debt (as defined in the indenture) in limited circumstances) unless, after giving effect to such incurrence, the consolidated interest coverage ratio of Ply Gem Industries would be at least 2.00 to 1.00.  In the absence of satisfying the consolidated interest coverage ratio test, Ply Gem Industries and its restricted subsidiaries may only incur additional debt under certain circumstances, including, but not limited to, debt under credit facilities (as defined in the indenture) (x) in an amount not to exceed the greater of (a) $350.0 million and (b) the borrowing base (as defined in the indenture) and (y) in an amount not to exceed the greater of (A) $575.0 million and (B) the aggregate amount of indebtedness (as defined in the indenture) that that would cause the consolidated secured debt ratio (as defined in the indenture) to be equal to 4.00 to 1.00; purchase money indebtedness in an aggregate amount not to exceed the greater of (x) $35.0 million and (y) 10% of consolidated net tangible assets (as defined in the indenture) at any one time outstanding; debt of foreign subsidiaries in an aggregate amount not to exceed the greater of (x) $60.0 million and (y) 15% of consolidated net tangible assets (as defined in the indenture) at any one time outstanding; debt pursuant to a general basket in an aggregate amount at any one time outstanding not to exceed the greater of (x) $75.0 million and (y) 20% of consolidated net tangible assets; and the refinancing of debt under certain circumstances. On January 30, 2014, Ply Gem Industries and the Guarantors entered into a registration rights agreement relating to the 6.50% Senior Notes. Ply Gem Industries will be required to pay additional interest on the 6.50% Senior Notes if it fails to comply with certain of its obligations under the registration rights agreement within specified time periods.

On September 5, 2014, Ply Gem Industries completed an exchange offer with respect to the 6.50% Senior Notes issued in January 2014 to exchange $500.0 million 6.50% Senior Notes registered under the Securities Act for $500.0 million of the issued and outstanding 6.50% Senior Notes. Upon completion of the exchange offer, all $500.0 million of issued and outstanding 6.50% Senior Notes were registered under the Securities Act.  However, the $150.0 million of Senior Tack-on Notes issued in September 2014 have not yet been registered under the Securities Act.

Term Loan Facility due 2021

On January 30, 2014, Ply Gem Industries entered into a credit agreement governing the terms of its new $430.0 million Term Loan Facility. Ply Gem Industries borrowed $430.0 million under the Term Loan Facility on January 30, 2014, with an original discount of approximately $2.2 million, yielding proceeds of approximately $427.9 million. The Term Loan Facility will mature on January 30, 2021. The Term Loan Facility requires scheduled quarterly payments in an aggregate annual amount equal to 1.00% of the original aggregate principal amount of the Term Loan Facility with the balance due at maturity. Interest on outstanding borrowings under the Term Loan Facility will be paid quarterly.

Borrowings under the Term Loan Facility bear interest at a rate equal to, at Ply Gem Industries’ option, either (a) a base rate determined by reference to the highest of (i) the prime rate of the administrative agent under the credit agreement, (ii) the federal funds rate plus 0.50% and (iii) the adjusted LIBO rate for a one-month interest period plus 1.00% or (b) a LIBO rate determined by reference to the cost of funds for eurocurrency deposits in dollars for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a 1.00% floor, plus, in each case, an applicable margin of 3.00% for any eurocurrency loan and 2.00% for any alternate base rate loan. As of September 27, 2014, the Company's interest rate on the Term Loan Facility was 4.00%. The effective interest rate for the Term Loan is 1.76% after considering each of the different interest expense components of this instrument, including the coupon payment, the deferred debt issuance costs and the original issue discount.

The Term Loan Facility allows Ply Gem Industries to request one or more incremental term loan facilities in an aggregate amount not to exceed the greater of (x) $140.0 million and (y) an amount such that Ply Gem Industries’ consolidated senior secured debt ratio (as defined in the credit agreement), on a pro forma basis, does not exceed 3.75 to 1.00, in each case, subject to certain conditions and receipt of commitments by existing or additional financial institutions or institutional lenders. Ply Gem Industries may voluntarily repay outstanding loans under the Term Loan Facility at any time without premium or penalty, other than customary “breakage” costs with respect to LIBOR loans and with respect to certain repricing transactions occurring within six months of January 30, 2014, which shall be subject to a prepayment premium of 1.00%.

The Term Loan Facility requires Ply Gem Industries to prepay outstanding term loans, subject to certain exceptions, with: (i) 50% (which percentage will be reduced to 25% if our consolidated senior secured debt ratio is equal or less than 2.50 to 1.00 but greater than 2.00 to 1.00 and to 0% if our consolidated senior secured debt ratio is equal to or less than 2.00 to 1.00) of our annual excess cash flow (as defined in the credit agreement), to the extent such excess cash flow exceeds $15.0 million, commencing with the fiscal year ending December 31, 2015; (ii) 100% of the net cash proceeds of certain non-ordinary course asset sales or certain insurance and condemnation proceeds, in each case subject to certain exceptions and reinvestment rights; and (iii) 100% of the net cash proceeds of certain issuances of debt, other than proceeds from debt permitted under the Term Loan Facility.

The Term Loan Facility is secured on a first-priority lien basis by the stock of Ply Gem Industries and by substantially all of the assets (other than the assets securing the obligations under the ABL Facility, which primarily consist of accounts receivable, inventory, cash, deposit accounts, securities accounts, chattel paper, contract rights, instruments, documents related thereto and proceeds of the foregoing) of Ply Gem Industries and the Guarantors that are subsidiaries of Ply Gem Industries and on a second-priority lien basis by the assets that secure the ABL Facility.

The Term Loan Facility includes negative covenants, subject to certain exceptions, that are substantially the same as the negative covenants in the 6.50% Senior Notes and also does not contain any restrictive financial covenants. The Term Loan Facility also restricts the ability of Ply Gem Industries’ subsidiaries to enter into agreements restricting their ability to grant liens to secure the Term Loan Facility and contains a restriction on changes in fiscal year.

8.25% Senior Secured Notes due 2018

On February 11, 2011, Ply Gem Industries issued $800.0 million of 8.25% Senior Secured Notes at par.  Ply Gem Industries used the proceeds to purchase approximately $724.6 million principal amount of its outstanding 11.75% Senior Secured Notes in a tender offer, to redeem the remaining approximate $0.4 million principal amount of outstanding 11.75% Senior Secured Notes, and to pay related fees and expenses.  A portion of the early tender premiums and the original unamortized discount on the 11.75% Senior Secured Notes was recorded as a discount on the $800.0 million of 8.25% Senior Secured Notes given that the 2011 transaction was predominately accounted for as a loan modification.  On February 15, 2012, Ply Gem Industries issued an additional $40.0 million principal amount of its 8.25% Senior Secured Notes. The 8.25% Senior Secured Notes would have matured on February 15, 2018 and bore interest at the rate of 8.25% per annum.   Interest was paid semi-annually on February 15 and August 15 of each year. The 8.25% Senior Secured Notes were fully and unconditionally and jointly and severally guaranteed on a senior secured basis by the Guarantors. The 8.25% Senior Secured Notes and the related guarantees were secured on a first-priority lien basis by substantially all of the assets (other than the assets securing our obligations under the ABL Facility, which consist of accounts receivable, inventory, cash, deposit accounts, securities accounts, chattel paper and proceeds of the foregoing and certain assets such as contract rights, instruments and documents related thereto) of Ply Gem Industries and the Guarantors and on a second-priority lien basis by the assets that secure the ABL Facility.

As a result of the 2013 initial public offering, on June 28, 2013, Ply Gem Industries redeemed $84.0 million aggregate principal amount of its 8.25% Senior Secured Notes at a redemption price equal to 103%, plus accrued and unpaid interest thereon of approximately $2.6 million. The call premium for this redemption was approximately $2.5 million. Additionally, the Company expensed approximately $3.8 million of unamortized discount and $1.8 million of unamortized debt issuance costs in connection with this redemption and the related loss on debt extinguishment.

On January 30, 2014, Ply Gem Industries purchased approximately $705.9 million of its outstanding 8.25% Senior Secured Notes in a tender offer at a price of $1,067.50 per $1,000 principal amount, which included an early tender payment of $30.00 per $1,000 principal amount, plus accrued and unpaid interest. On January 30, 2014, Ply Gem Industries irrevocably deposited with the trustee for the 8.25% Senior Secured Notes an amount sufficient to satisfy and discharge its obligations under the 8.25% Senior Secured Notes and the indenture. On March 1, 2014, Ply Gem Industries redeemed the remaining outstanding principal amount of the 8.25% Senior Secured Notes at a redemption price equal to 106.188% of the principal amount thereof, plus accrued and unpaid interest to the redemption date. Following the redemption, there were no longer any 8.25% Senior Secured Notes outstanding.

Senior Secured Asset Based Revolving Credit Facility due 2018

On November 1, 2013, Ply Gem Holdings, Inc., Ply Gem Industries, Inc., Ply Gem Canada, Gienow Canada Inc., and Mitten Inc. (together with Ply Gem Canada and Gienow, the “Canadian Borrowers”) entered into an amended and restated credit agreement governing the ABL Facility. Among other things, the amendment and restatement of the credit agreement governing the ABL Facility: (i) increased the overall facility to $250.0 million from $212.5 million, (ii) increased the accordion feature to $100.0 million, (iii) reduced the applicable margin for borrowings under the ABL Facility to a range from 1.50% to 2.00% for Eurodollar rate loans, depending on availability, and (iv) increased the amount available under the ABL Facility to Ply Gem Industries' Canadian subsidiaries to $50.0 million. In November 2014, the Company exercised a portion of the accordion feature under the ABL Facility for $50.0 million, or 50% of the eligible accordion, increasing the ABL Facility from $250.0 million to $300.0 million to primarily account for the additional borrowing base acquired from Simonton. Under the terms of the ABL Facility, the Company has the ability to further increase the revolving commitments up to another $50.0 million to $350.0 million, subject to certain terms and conditions. All outstanding loans under the ABL Facility are due and payable in full on November 1, 2018. Under the ABL Facility, $250.0 million is available to Ply Gem Industries and $50.0 million is available to the Canadian Borrowers. The following summary describes the ABL Facility after giving effect to the amendment and restatement. As a result of the ABL Facility amendment in which the loan syndication consisted of previous members who either maintained or increased their position as well as new syndication members, the Company capitalized new debt issuance costs of $1.3 million and will amortize these costs through 2018.

The ABL Facility provides for revolving credit financing of up to $300.0 million subject to borrowing base availability, including sub-facilities for letters of credit, swingline loans and borrowings in Canadian dollars and United States dollars, $250.0 million of the ABL Facility is available to Ply Gem Industries and $50.0 million is available to the Canadian Borrowers.

Borrowings under the ABL Facility bear interest at a rate per annum equal to, at Ply Gem Industries’ option, either (a) a base rate determined by reference to the higher of (1) the corporate base rate of the administrative agent under the ABL Facility and (2) the federal funds rate plus 0.5% or (b) a Eurodollar rate determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, in each case plus an applicable margin.  The initial applicable margin for borrowings under the ABL Facility was 0.75% for base rate loans and 1.75% for Eurodollar rate loans.  The applicable margin for borrowings under the ABL Facility is subject to step ups and step downs based on average excess availability under the ABL Facility.  Swingline loans bear interest at a rate per annum equal to the base rate plus the applicable margin.

In addition to paying interest on outstanding principal under the ABL Facility, Ply Gem Industries is required to pay a commitment fee in respect of the unutilized commitments thereunder, which fee will be determined based on utilization of the ABL Facility (increasing when utilization is low and decreasing when utilization is high) multiplied by a commitment fee rate determined by reference to average excess availability under the ABL Facility. The commitment fee rate during any fiscal quarter is 0.375% when average excess availability is greater than $100.0 million for the preceding fiscal quarter and 0.25% when average availability is less than or equal to $100.0 million for the preceding fiscal quarter.  Ply Gem Industries must also pay customary letter of credit fees equal to the applicable margin on Eurodollar loans and agency fees.   As of September 27, 2014, the Company’s interest rate on the ABL Facility was approximately 1.72%.  The ABL Facility requires that if (a) excess availability is less than the greater of (x) 10.0% of the lower of the borrowing base and the aggregate commitments and (y) $17.5 million or (b) any event of default has occurred and is continuing, Ply Gem Industries must comply with a minimum fixed charge coverage ratio test of 1.0 to 1.0.  If the excess availability under the ABL Facility is less than the greater of (a) 12.5% of the lesser of the borrowing base and the aggregate commitments and (b) $22.5 million ($20.0 million for the months of January, February, March and April) for a period of 5 consecutive days or an event of default has occurred and is continuing, all cash from Ply Gem Industries material deposit accounts (including all concentration accounts) will be swept daily into a collection account controlled by the administrative agent under the ABL Facility and used to repay outstanding loans and cash collateralize letters of credit.

All obligations under the ABL Facility are unconditionally guaranteed by Ply Gem Holdings and substantially all of Ply Gem Industries’ existing and future, direct and indirect, wholly owned domestic subsidiaries.  All obligations under the ABL Facility, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of the assets of Ply Gem Industries and the guarantors, including a first-priority security interest in personal property consisting of accounts receivable, inventory, cash, deposit accounts, and certain related assets and proceeds of the foregoing and a second-priority security interest in, and mortgages on, substantially all of Ply Gem Industries’ and the Guarantors’ material owned real property and equipment and all assets that secure the Term Loan Facility on a first-priority basis.  In addition to being secured by the collateral securing the obligations of Ply Gem Industries under the domestic collateral package, the obligations of the Canadian Borrowers, which are borrowers under the Canadian sub-facility under the ABL Facility, are also secured by a first-priority security interest in substantially all of the assets of such Canadian subsidiaries, plus additional mortgages in Canada, and a pledge by Ply Gem Industries of the remaining 35% of the equity interests of the Canadian Borrowers pledged only to secure the Canadian sub-facility.

The ABL Facility contains certain covenants that limit Ply Gem Industries’ ability and the ability of Ply Gem Industries’ subsidiaries to incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem their stock, make loans and investments, sell assets, incur certain liens, enter into transactions with affiliates, and consolidate, merge or sell assets.  In particular, Ply Gem Industries is permitted to incur additional debt in limited circumstances, including, but not limited to, permitted subordinated indebtedness in an aggregate principal amount not to exceed $112.5 million at any time outstanding (subject to the ability to incur additional permitted subordinated debt provided that immediately after giving effect to such incurrence excess availability is more than 25% of the lesser of the total borrowing base and the aggregate commitments and Ply Gem Industries is in pro forma compliance with the fixed charge coverage ratio), purchase money indebtedness in an aggregate amount not to exceed $25.0 million at any one time outstanding, debt of foreign subsidiaries (other than Canadian subsidiaries) in an aggregate amount not to exceed $10.0 million at any one time outstanding, indebtedness in connection with the tax receivable agreement in an aggregate principal amount not to exceed $100.0 million, and the refinancing of debt under certain circumstances.  

As of September 27, 2014, Ply Gem Industries had approximately $224.3 million of contractual availability and approximately $221.4 million of borrowing base availability under the ABL Facility, reflecting $20.0 million of borrowings outstanding and approximately $5.7 million of letters of credit and priority payables reserves.

9.375% Senior Notes due 2017

On September 27, 2012, Ply Gem Industries issued $160.0 million of 9.375% Senior Notes at par. Ply Gem Industries used the proceeds of the offering, together with cash on hand, to satisfy and discharge its obligations under the 13.125% Senior Subordinated Notes and the indenture governing the 13.125% Senior Subordinated Notes. The 9.375% Senior Notes would have matured on April 15, 2017 and bore interest at the rate of 9.375% per annum. Interest was paid semi-annually on April 15 and October 15 of each year. The 9.375% Senior Notes were unsecured and fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by the Guarantors.

A portion of the early call premium and the original unamortized discount on the 13.125% Senior Subordinated Notes was recorded as a discount on the $160.0 million of 9.375% Senior Notes, given that the transaction was predominately accounted for as a loan modification.

As a result of the 2013 initial public offering, on June 22, 2013, Ply Gem Industries redeemed $64.0 million aggregate principal amount of the 9.375% Senior Notes at a redemption price equal to 109.375%, plus accrued and unpaid interest thereon of approximately $1.1 million. The call premium for this redemption was approximately $6.0 million. Additionally, the Company expensed approximately $3.7 million of unamortized discount and $1.2 million of unamortized debt issuance costs in connection with this redemption and the related loss on debt extinguishment.

On January 30, 2014, Ply Gem Industries purchased approximately $94.7 million of the outstanding 9.375% Senior Notes at a tender price of $1,108.36 per $1,000 principal amount, which included an early tender payment of $30.00 per $1,000 principal amount, plus accrued and unpaid interest. On January 30, 2014, Ply Gem Industries irrevocably deposited with the trustee for the 9.375% Senior Notes an amount sufficient to satisfy and discharge its obligations under the 9.375% Senior Notes and the indenture. On February 16, 2014, Ply Gem Industries redeemed the remaining outstanding principal amount of the 9.375% Senior Notes at a redemption price equal to 100% of the principal amount plus the “make-whole” premium required under the indenture (which equated to 110.179% of the principal amount thereof), plus accrued and unpaid interest. Following the redemption, there were no longer any 9.375% Senior Notes outstanding.

Loss on debt modification or extinguishment

As a result of the January 2014 6.50% Senior Notes and Term Loan Facility issuance and the tender, redemption, and repurchase of the 8.25% Senior Secured Notes and the 9.375% Senior Notes (the "January 2014 Refinancing") during the nine months ended September 27, 2014, the Company performed an analysis to determine the proper accounting treatment for the January 2014 Refinancing. Specifically, the Company evaluated each creditor with ownership in both the new 6.50% Senior Notes and/or Term Loan Facility debt instruments and the old 8.25% Senior Secured Notes and/or 9.375% Senior Notes to determine whether the transaction should be accounted for as a modification or an extinguishment of debt as it relates to each individual creditor. The Company had approximately $34.4 million of unamortized debt discount and $14.9 million of unamortized debt issuance costs associated with the 8.25% Senior Secured Notes and 9.375% Senior Notes, of which approximately $4.8 million and $2.1 million, respectively, were expensed as a loss on extinguishment of debt in the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended September 27, 2014 as a result of the January 2014 Refinancing.

The Company also incurred an early tender premium of approximately $61.1 million in conjunction with this transaction, of which approximately $52.6 million was recorded as a discount on the 6.50% Senior Notes and the Term Loan Facility and approximately $8.5 million was expensed as a loss on extinguishment of debt in the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended September 27, 2014. The Company also expensed approximately $0.3 million for the third party fees for the 8.25% Senior Secured Notes and 9.375% Senior Notes as a result of the January 2014 Refinancing for the nine months ended September 27, 2014. The Company also incurred approximately $14.7 million of costs associated with the 6.50% Senior Notes and Term Loan Facility, of which approximately $9.2 million was recorded as debt issuance costs and approximately $5.5 million was expensed as a loss on modification of debt in the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended September 27, 2014. Additionally, the Company incurred an original issue discount of approximately $2.2 million for the Term Loan Facility, of which approximately $1.9 million was recorded as a discount and approximately $0.3 million was expensed as a loss on extinguishment of debt in the condensed consolidated statement of operations and comprehensive income (loss) for the nine months ended September 27, 2014.

As a result of the June 28, 2013 redemption of approximately $84.0 million aggregate principal amount of the 8.25% Senior Secured Notes, the Company recorded a loss on debt extinguishment of approximately $8.1 million in the condensed consolidated statement of operations for the nine months ended September 28, 2013.

As a result of the June 22, 2013 redemption of approximately $64.0 million aggregate principal amount of the 9.375% Senior Notes, the Company recorded a loss on debt extinguishment of approximately $10.8 million in the condensed consolidated statement of operations for the nine months ended September 28, 2013.

Based on the January 2014 Refinancing, the Company recognized a loss on debt modification or extinguishment of approximately $21.4 million for the nine months ended September 27, 2014 and approximately $18.9 million for the nine months ended September 28, 2013 related to the 2013 redemptions, as summarized in the table below.

(Amounts in thousands)	For the nine months ended
	September 27, 2014			September 28, 2013
Loss on extinguishment of debt:
Tender premium	$	(8,493	)	$	—
8.25% Senior Secured Notes and 9.375% Senior Notes unamortized discount	(4,773		)	—
8.25% Senior Secured Notes and 9.375% Senior Notes unamortized debt issuance costs	(2,067		)	—
Term Loan Facility unamortized discount	(255		)	—
Call premium for 8.25% Senior Secured Notes	—			(2,520		)
8.25% Senior Secured Notes unamortized discount	—			(3,831		)
8.25% Senior Secured Notes unamortized debt issuance costs	—			(1,766		)
Call premium for 9.375% Senior Notes	—			(6,000		)
9.375% Senior Notes unamortized discount	—			(3,666		)
9.375% Senior Notes unamortized debt issuance costs	—			(1,165		)
	(15,588		)	(18,948		)
Loss on modification of debt:
Third party fees for 8.25% Senior Secured Notes and 9.375% Senior Notes	(302		)	—
Third party fees for 6.50% Senior Notes and Term Loan Facility	(5,474		)	—
	(5,776		)	—
Total loss on modification or extinguishment of debt	$	(21,364	)	$	(18,948	)

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ACQUISITIONS (Tables)

9 Months Ended

Sep. 27, 2014

Business Acquisition [Line Items]

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

(Amounts in thousands)
Cash	$	(856	)
Accounts receivable	37,269
Inventories	17,673
Prepaid expenses and other current assets	2,233
Property and equipment	53,655
Intangible assets	62,170
Goodwill	32,344
Other assets	426
Accounts payable and accrued expenses	(45,555		)
Deferred income taxes	(24,979		)
Other liabilities	(4,380		)
	$	130,000

(Amounts in thousands)
Accounts receivable	$	11,714
Inventories	6,814
Other current assets	1,118
Property and equipment	4,746
Deferred taxes	2,657
Intangible assets	1,083
Goodwill	3,717
Accounts payable and accrued expenses	(10,041		)
Other liabilities	(1,428		)
	$	20,380

(Amounts in thousands)
Accounts receivable	$	18,393
Inventories	22,592
Other current assets	904
Property and equipment	9,279
Other assets	1,439
Intangible assets	35,400
Goodwill	26,098
Accounts payable and accrued expenses	(27,499		)
Deferred taxes	(9,786		)
	$	76,820

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RESTRUCTURING (Notes)

9 Months Ended

Sep. 27, 2014

Restructuring Cost and Reserve [Line Items]

Restructuring and Related Activities Disclosure [Text Block]

On September 30, 2013, the Company announced that it will realign production across two manufacturing facilities in Calgary, Alberta, Canada, in an effort to improve the Company’s overall operating efficiency. The two manufacturing facilities resulted from the Company’s acquisition of Gienow, completed in April 2013, combined with the pre-existing manufacturing facility of Ply Gem Canada. These realignment plans include shifting the majority of the vinyl window and door production into Gienow’s manufacturing facility in Calgary, Alberta, Canada, while maintaining wood window and door production in Ply Gem Canada’s manufacturing facility also located in Calgary, Alberta, Canada. In connection with this realignment, distribution was realigned across Gienow and Ply Gem Canada distribution centers in Western Canada.

Production began to be realigned during 2013, with the majority completed by March 2014. In connection with these plans, the Company originally expected to incur pre-tax exit and restructuring cash and non-cash costs totaling approximately $2.9 million, which includes approximately $0.2 million for contract termination costs, approximately $1.1 million of personnel-related costs and approximately $1.6 million of other facilities-related costs.

The following table summarizes the Company's restructuring activity for the nine months ended September 27, 2014:

(Amounts in thousands)	Accrued as of		Adjustments			Expensed		Cash payments			Accrued as of
	December 31, 2013		during 2014			during 2014		during 2014			September 27, 2014
Western Canada
Severance costs	$	603	$	(80	)	$	49	$	(485	)	$	87
Contract terminations	157		(24		)	—		—			133
Equipment removal and other	533		(69		)	2,963		(3,350		)	77
	$	1,293	$	(173	)	$	3,012	$	(3,835	)	$	297

The adjustments incurred in the nine months ended September 27, 2014 related to the foreign currency translation impact of the related balances during the period.

The Company recorded restructuring costs in selling, general and administrative expenses in the condensed consolidated statements of operations in the periods and segments shown in the following table:

	For the three months ended				For the nine months ended
(Amounts in thousands)	September 27, 2014		September 28, 2013		September 27, 2014		September 28, 2013
Siding, Fencing and Stone	$	—	$	—	$	—	$	—
Windows and Doors	819		—		3,012		—
	$	819	$	—	$	3,012	$	—

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INCOME TAXES

9 Months Ended

Sep. 27, 2014

Income Tax Disclosure [Abstract]

INCOME TAXES

 INCOME TAXES

Effective tax rate

Under FASB Accounting Standards Codification 740-270, Income Taxes - Interim Reporting, each interim period is considered an integral part of the annual period and tax expense is measured using an estimated annual effective rate. Estimates of the annual effective tax rate at the end of interim periods are, of necessity, based on evaluation of possible future events and transactions and may be subject to subsequent refinement or revision. The Company calculates its quarterly tax provision consistent with the guidance provided by ASC 740-270, whereby the Company forecasts its estimated annual effective tax rate then applies that rate to its year-to-date pre-tax book (loss) income. In addition, we exclude jurisdictions with a projected loss for the year or the year-to-date loss where we cannot recognize a tax benefit from our estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections. In addition to the tax resulting from applying the estimated annual effective tax rate to pre-tax income (loss), the Company includes certain items treated as discrete events to arrive at an estimated effective tax rate. Future changes in the forecasted annual income (loss) projections, tax rate changes, or discrete tax items could result in significant adjustments to quarterly income tax expense (benefit) in future periods in accordance with ASC 740-270.

For the nine months ended September 27, 2014, the Company's estimated effective income tax rate was approximately 9.3%, which varied from the statutory rate primarily due to state income tax expense, valuation allowance, tax contingencies, and foreign income taxes. The effective tax rate including discrete items was 45.9%. The tax benefit for the three and nine months ended September 27, 2014 is approximately $10.5 million and $15.9 million, respectively.

Valuation allowance

As of September 27, 2014, a full valuation allowance has been provided against certain deferred tax assets as it is presently deemed more likely than not that the benefit of such net tax assets will not be utilized. During the nine months ended September 27, 2014, the Company established a full valuation allowance on its deferred tax assets for Gienow Canada of approximately $7.9 million as a result of its operating performance and challenges associated with combining two separate manufacturing facilities into a single facility.

As a result of the Simonton acquisition on September 19, 2014, the Company evaluated Simonton's net deferred tax liability position with Ply Gem's full valuation allowance position, which resulted in a $25.0 million reversal of valuation allowance during the three and nine months ended September 27, 2014. All of the Company's subsidiaries, excluding Mitten, are in a full valuation allowance position as of September 27, 2014. Due to recent cumulative losses incurred by the Company, management did not rely upon projections of future taxable income in assessing the recoverability of deferred tax assets. The Company currently has book goodwill of approximately $20.2 million that is not amortized, which results in a deferred tax liability of approximately $6.2 million at September 27, 2014. Therefore, the reversal of deferred tax liabilities related to this goodwill is not considered a source of future taxable income in assessing the realization of its deferred tax assets. The Company continues to evaluate its ability to realize the net deferred tax assets and its estimates are subject to change.

Tax uncertainties

Despite the Company’s belief that its tax return positions are consistent with applicable tax laws, the Company believes that certain positions could be challenged by taxing authorities. The Company’s tax reserves reflect the difference between the tax benefit claimed on tax returns and the amount recognized in the condensed consolidated financial statements. These reserves have been established based on management’s assessment as to potential exposure attributable to permanent differences and interest applicable to both permanent and temporary differences. The tax reserves are reviewed periodically and adjusted in light of changing facts and circumstances, such as progress of tax audits, lapse of applicable statutes of limitations and changes in tax law. Certain income tax returns are currently under examination by various taxing authorities. During the nine months ended September 27, 2014, the Company increased its tax contingency reserve by approximately $0.3 million as a result of interest accrued on existing uncertain tax positions.

Tax Receivable Agreement

On May 22, 2013, the Company entered into a Tax Receivable Agreement (the “Tax Receivable Agreement”) with PG ITR Holdco, L.P. (the “Tax Receivable Entity”). The Tax Receivable Agreement generally provides for the payment by the Company to the Tax Receivable Entity of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that the Company actually realizes in periods ending after the IPO as a result of (i) net operating loss ("NOL") carryovers from periods (or portions thereof) ending before January 1, 2013, (ii) deductible expenses attributable to the transactions related to the IPO and (iii) deductions related to imputed interest deemed to be paid by the Company as a result of or attributable to payments under the Tax Receivable Agreement. The term of the Tax Receivable Agreement will continue until all such benefits have been utilized or expired. The Company will retain the benefit of the remaining 15% of these tax savings. The Tax Receivable Agreement will obligate the Company to make payments to the Tax Receivable Entity generally equal to 85% of the applicable cash savings that is actually realized as a result of utilizing NOL carryovers once the tax returns are filed for that respective tax year.

The Company estimates that the total anticipated amount of future payments under the Tax Receivable Agreement will be approximately $100.0 million assuming no material changes in the relevant tax law, that the Company earns sufficient taxable income to utilize the net operating loss carrying forwards, and that utilization of such tax attributes is not subject to limitation under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code") as the result of an “ownership change”. It is possible that future transactions or events or changes in estimates could increase or decrease the actual tax benefits realized from these tax attributes and the corresponding Tax Receivable Agreement payments and liability.

As of September 27, 2014, the Company had a non-current liability of approximately $26.0 million for the amount due pursuant to the Tax Receivable Agreement related to NOL carryovers. The Company recognized a $14.0 million and $14.4 million expense for the change in this liability during the three and nine months ended September 27, 2014, respectively, mostly as a result of Simonton's net deferred tax liabilities acquired which will create future taxable income to utilize net operating loss carryforwards.

Other

As of September 27, 2014, the Company has not established U.S. deferred taxes on unremitted earnings of the Company’s foreign subsidiaries. Notwithstanding the provisions within the American Jobs Creation Act of 2004, the Company continues to consider these amounts to be permanently invested.

On December 23, 2011, the U.S. Treasury Department issued comprehensive temporary and proposed regulations addressing the treatment of expenditures related to tangible property for tax purposes. The final regulations were issued on September 13, 2013 and are effective for tax years beginning January 1, 2014. The Company is evaluating the changes necessary to comply with the regulations and the related administrative procedures and is not currently aware of any adjustments that would be material to the Company’s condensed consolidated financial statements.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 27, 2014

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Indemnifications

In connection with the Ply Gem acquisition, in which Ply Gem Industries was acquired from Nortek, Inc. (“Nortek”) in February 2004, Nortek has agreed to indemnify the Company for certain liabilities as set forth in the stock purchase agreement governing the Ply Gem acquisition.  In the event Nortek is unable to satisfy amounts due under these indemnifications, the Company would be liable.  The Company believes that Nortek has the financial capacity to honor its indemnification obligations and therefore does not anticipate incurring any losses related to liabilities indemnified by Nortek under the stock purchase agreement.  A receivable related to this indemnification has been recorded in other long-term assets of approximately $3.0 million and $3.1 million at September 27, 2014 and December 31, 2013, respectively.  As of September 27, 2014 and December 31, 2013, the Company has recorded liabilities related to these indemnifications of approximately $0.5 million and $0.4 million, respectively, in current liabilities and $2.5 million and $2.7 million, respectively, in long-term liabilities, consisting of the following:

(Amounts in thousands)	September 27, 2014		December 31, 2013
Product claim liabilities	$	140	$	140
Multi-employer pension plan withdrawal liability	2,251		2,362
Other	647		576
	$	3,038	$	3,078

Warranty claims

The Company sells a number of products and offers a number of warranties.  The specific terms and conditions of these warranties vary depending on the product sold.  The Company estimates the costs that may be incurred under their warranties and records a liability for such costs at the time of sale.  Factors that affect the Company’s warranty liabilities include the number of units sold, historical and anticipated rates of warranty claims, cost per claim and new product introduction.  The Company assesses the adequacy of the recorded warranty claims and adjusts the amounts as necessary.  As of September 27, 2014 and December 31, 2013, warranty liabilities of approximately $11.4 million and $10.9 million, respectively, have been recorded in current liabilities and approximately $32.1 million and $31.6 million, respectively, have been recorded in long term liabilities.

Changes in the Company’s short-term and long-term warranty liabilities are as follows:

	For the three months ended						For the nine months ended
(Amounts in thousands)	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
Balance, beginning of period	$	40,397		$	40,554		$	42,466		$	37,870
Acquisitions - Simonton, Gienow, and Mitten	5,370			—			5,370			4,675
Warranty expense during period	2,897			3,827			8,209			8,197
Settlements made during period	(5,148		)	(4,012		)	(12,529		)	(10,373		)
Balance, end of period	$	43,516		$	40,369		$	43,516		$	40,369

Environmental

The Company is subject to United States and Canadian federal, state, provincial and local laws and regulations relating to pollution and the protection of the environment, including those governing emissions to air, discharges to water, use, storage and transport of hazardous materials, storage, treatment and disposal of waste, remediation of contaminated sites, and protection of worker health and safety. From time to time, the Company's facilities are subject to investigation by governmental regulators. In addition, the Company has been identified as one of many potentially responsible parties for contamination present at certain offsite locations to which it or its predecessors are alleged to have sent hazardous materials for recycling or disposal. The Company may be held liable, or incur fines or penalties, in connection with such requirements or liabilities for, among other things, releases of hazardous substances occurring on or emanating from current or formerly owned or operated properties or any associated offsite disposal location, or for known or newly-discovered contamination at any of the Company's properties from activities conducted by previous occupants. The amount of any liability, fine or penalty may be material, and certain environmental laws impose strict, and under certain circumstances joint and several, liability for the cost of addressing releases of hazardous substances upon certain classes of persons, including site owners or operators and persons that disposed or arranged for the disposal of hazardous substances at contaminated sites.

MW Manufacturers Inc. (“MW”), a subsidiary of MWM Holding, entered into an Administrative Order on Consent, effective September 12, 2011, with the United States Environmental Protection Agency (“EPA”), Region III, under Section 3008(h) of the Resource Conservation and Recovery Act (RCRA), with respect to its Rocky Mount, Virginia property.  During 2011, as part of the Administrative Order on Consent, MW provided the EPA, among other things, a RCRA Facility Investigation Workplan as well as a preliminary cost estimate of approximately $1.8 million for the predicted assessment, remediation and monitoring activities to be conducted pursuant to the Consent Order over the remediation period, which is currently estimated through 2023. During 2012, the EPA approved the RCRA Facility Investigation Workplan (the "Workplan"), and MW is currently implementing the Workplan. The Company has recorded approximately $0.3 million of this environmental liability within current liabilities and approximately $1.2 million within other long-term liabilities in the Company’s condensed consolidated balance sheet at September 27, 2014 and December 31, 2013.  The Company will adjust this environmental remediation liability in future periods, if necessary, as further information develops or circumstances change.

Certain liabilities with respect to this contamination relate to the previous closure of an underground storage tank and were assumed by U.S. Industries, Inc., pursuant to its indemnity obligation under the stock purchase agreement dated August 11, 1995, whereby U.S. Industries, Inc. sold the stock of MW to FPI Acquisition Corp. (“Fenway Partners”). As the successor-in-interest of Fenway Partners, the Company is similarly indemnified by U.S. Industries, Inc.  The Company’s ability to seek indemnification from U.S. Industries, Inc. is, however, limited by the terms and limits of the indemnity as well as the strength of U.S. Industries, Inc.’s financial condition, which could change in the future.  As of September 27, 2014, no recovery has been recognized on the Company’s condensed consolidated balance sheet, but the Company will actively pursue the validity of this indemnity in future periods and will recognize future recoveries in the period in which they become probable.

The State of Nebraska is investigating certain groundwater contamination in northern York, Nebraska, comprised primarily of volatile organic compounds (“VOC”) (predominantly trichloroethene (“TCE”)). In December 2013, the EPA announced its proposal to add this groundwater contamination site to the Superfund National Priorities List (“NPL”) after it was referred to the EPA by the State of Nebraska. Sampling was conducted at the Kroy Building Products, Inc. (“Kroy”) facility in York, Nebraska during the first quarter of 2010, however the facility has not received any official communications concerning this sampling event or the addition of the groundwater contamination site to the NPL. Alcan Aluminum Corporation (“Alcan”) has assumed the obligation to indemnify the Company with respect to certain liabilities for environmental contamination of the Kroy facility occurring prior to 1994. Notwithstanding this indemnity, however, under applicable Federal and State laws, Kroy, and Ply Gem as its parent, could be held liable for all or part of the costs associated with the matter under certain circumstances. Moreover, the ability of Kroy and Ply Gem to seek indemnification may be limited by the strength of Alcan’s financial condition as well as the terms and limits of the indemnity.

The Company is currently involved in environmental proceedings involving Gienow Canada Inc. (f/k/a Ply Gem Canada, Inc.) and Alberta Environment (arising from subsurface contamination discovered at our Calgary, Alberta property), and the Company may in the future be subject to environmental proceedings involving Thermal-Gard, Inc. (arising from groundwater contamination in Punxsutawney, Pennsylvania), Mastic Home Exteriors, Inc. (“MHE”) (relating to a closed landfill site in Sidney, Ohio as well as participating as a potentially responsible party in nine contaminated sites in Indiana, Ohio and South Carolina), and Simonton (relating to closed lagoons and certain contamination in Paris, Illinois as well as certain contamination associated with certain 7-Eleven convenience food stores). Under the stock purchase agreement governing the MHE acquisition, Alcoa Securities Corporation and Alcoa, Inc. are to indemnify the Company for certain environmental liabilities in excess of $2.5 million, including liabilities relating to the landfill site in Sidney, Ohio and the nine contaminated sites in Indiana, Ohio and South Carolina. Under the stock purchase agreement governing the Simonton acquisition, Fortune Brands Windows & Doors, Inc., is to indemnify the Company for any environmental claims associated with the 7-Eleven convenience food stores.  Our former subsidiary, Hoover Treated Wood Products, Inc., is involved in an environmental proceeding with the Georgia Department of Natural Resources in connection with a contaminated landfill site in Thomson, Georgia.  While the Company had assumed an obligation to indemnify the purchaser of our former subsidiary when the Company sold Hoover Treated Wood Products, Inc., the Company's obligation has been novated and assumed by Nortek. The Company's ability to seek indemnification or enforce these and other obligations is, however, limited by the strength of the financial condition of the indemnitor or responsible party, which could change in the future, as well as the terms and limits of any such indemnities or obligations.

Based on current information, the Company is not aware of any compliance obligations, claims, releases or investigations that will have a material adverse effect on our results of operations, cash flows or financial position except as otherwise disclosed in the Company's condensed consolidated financial statements. However, there can be no guarantee that previously known or newly-discovered matters or any inability to enforce our available indemnification rights against previous owners of the Company's subsidiaries will not result in material costs or liabilities. While the stock purchase agreements governing certain of our acquisitions provide that the sellers will indemnify us, subject to certain limitations, for certain environmental liabilities, our ability to seek indemnification from the respective sellers is limited by various factors, including the financial condition of the indemnitor or responsible party as well as by the terms and limits of such indemnities or obligations. As a result, there can be no assurance that we could receive any indemnification from the sellers, and any related environmental liabilities, costs or penalties could have a material adverse effect on our financial condition and results of operations.

Self-insured risks

The Company maintains a broad range of insurance policies which include general liability insurance coverage and workers compensation. These insurance policies protect the Company against a portion of the risk of loss from claims. However, the Company retains a portion of the overall risk for such claims through its self-insured per occurrence and aggregate retentions, deductibles, and claims in excess of available insurance policy limits. The Company's general liability insurance includes coverage for certain damages arising out of product design and manufacturing defects. The Company's insurance coverage is generally subject to a per occurrence retention.

The Company reserves for costs associated with claims, as well as incurred but not reported losses (“IBNR”), based on an outside actuarial analysis of its historical claims. These estimates make up a significant portion of the Company's liability and are subject to a high degree of uncertainty due to a variety of factors, including changes in type of claims, claims reporting and resolution patterns, frequency and timing of claims, third party recoveries, estimates of claim values, claims management expenses (including legal fees and expert fees), insurance industry practices, the regulatory environment, and legal precedent. Adjustments to estimated reserves are recorded in the period in which the change in estimate occurs.

Litigation

During the past several years, the Company incurred increased litigation expense primarily related to the claims discussed below. The Company believes it has valid defenses to the claims discussed below and will vigorously defend all such claims; however, litigation is subject to many uncertainties and there cannot be any assurance that the Company will ultimately prevail or, in the event of an unfavorable outcome or settlement of litigation, that the ultimate liability would not be material and would not have a material adverse effect on the business, results of operations, cash flows or financial position of the Company.

In John Gulbankian and Robert D. Callahan v. MW Manufacturers, Inc. (“Gulbankian”), a purported class action filed in March 2010 in the United States District Court for the District of Massachusetts (the “Court”), plaintiffs, on behalf of themselves and all others similarly situated, allege damages as a result of the defective design and manufacture of MW's V-Wood windows. In Eric Hartshorn and Bethany Perry v. MW Manufacturers, Inc. (“Hartshorn”), a purported class action filed in July 2012 in the Court, plaintiffs, on behalf of themselves and all others similarly situated, allege damages as a result of the defective design and manufacture of MW's Freedom and Freedom 800 windows. On April 22, 2014, plaintiffs in both the Gulbankian and Hartshorn cases filed a Consolidated Amended Class Action Complaint, making similar claims against all MW vinyl clad windows, including MW’s V-Wood, Freedom, Freedom 600 and Freedom 800 windows. The plaintiffs seek a variety of relief, including (i) economic and compensatory damages, (ii) treble damages, (iii) punitive damages, and (iv) attorneys' fees and costs of litigation.

During 2014, MW engaged in mediation sessions with plaintiffs’ counsel for both the Gulbankian and Hartshorn cases. MW signed a settlement agreement with plaintiffs as of April 18, 2014 that would settle both the Gulbankian and Hartshorn cases on a nationwide basis (the “Vinyl Clad Settlement Agreement”). The Court granted preliminary approval of this settlement on May 23, 2014. If the Court grants final approval, the Vinyl Clad Settlement Agreement provides for a cash payment for eligible consumers submitting qualified claims showing, among other requirements, certain damage to the frames of their MW vinyl clad windows. Under the Vinyl Clad Settlement Agreement, MW has also agreed to pay attorneys' fees and costs to plaintiffs' counsel in an amount not to exceed $2.5 million. The Court will make a determination regarding counsel’s fees and costs upon final approval of the settlement. The Vinyl Clad Settlement Agreement provides that this settlement would apply to any and all MW vinyl clad windows manufactured from January 1, 1987 through May 23, 2014. While a final approval hearing occurred on October 29, 2014, the Court has not issued a ruling. It is expected that, if the settlement receives final approval, it will result in the dismissal of Karl Memari v. Ply Gem Prime Holdings, Inc. et al., another pending lawsuit discussed below that is seeking class certification with respect to vinyl clad windows manufactured by MW. The settlement is not final until the Court grants final approval of the settlement, and the Court may, in its sole discretion, determine not to grant final approval of the settlement. If the Court does not grant final approval of the settlement, the Vinyl Clad Settlement Agreement will not be binding on the parties. The Company and MW deny all liability in the settlement and with respect to the facts and claims alleged. The Company, however, is aware of the substantial burden, expense, inconvenience and distraction of continued litigation, and agreed to settle the litigation to avoid these.

As a result of this settlement, the Company recognized a $5.0 million expense during the nine months ended September 27, 2014 within selling, general, and administrative expenses in the Company’s condensed consolidated statement of operations and comprehensive income (loss) in the Company's Windows and Doors segment. It is possible that the Company may incur costs in excess of the recorded amounts; however, the Company currently expects that the total net cost to resolve the lawsuits will not exceed approximately $5.0 million. Approximately $4.6 million of this liability is currently outstanding, with $2.6 million as a current liability within accrued expenses and $2.0 million as a noncurrent liability within other long-term liabilities in the Company’s condensed consolidated balance sheet as of September 27, 2014.

In Karl Memari v. Ply Gem Prime Holdings, Inc. et al., a purported class action filed in March 2013 in the United States District Court for the District of South Carolina, Charleston Division, plaintiff, on behalf of himself and all others similarly situated, alleges damages as a result of the illegality and/or defects of MW's vinyl clad windows. The plaintiff seeks a variety of relief, including (i) actual and compensatory damages, (ii) punitive damages, and (iii) attorneys' fees and costs of litigation. Discovery regarding class certification has closed, however, the hearing regarding class certification has not yet been scheduled as this case is currently stayed pending the final approval hearing in the Gulbankian and Hartshorn matters. While the damages sought in this action have not yet been quantified, it is expected that, if the settlement of the Gulbankian and Hartshorn cases receives final approval, it will result in the dismissal of this action.

In Anthony Pagliaroni v. Mastic Home Exteriors, Inc. and Deceuninck North America, LLC, a purported class action filed in January 2012 in the United States District Court for the District of Massachusetts, plaintiff, on behalf of himself and all others similarly situated, alleges damages as a result of the defective design and manufacture of Oasis composite deck and railing, which was manufactured by Deceuninck North America, LLC (“Deceuninck”) and sold by Mastic Home Exteriors, Inc. (“MHE”). The plaintiff seeks a variety of relief, including (i) economic and compensatory damages, (ii) treble damages, (iii) punitive damages, and (iv) attorneys' fees and costs of litigation. The damages sought in this action have not yet been quantified. Discovery regarding class certification has closed, however, the hearing regarding class certification has not yet been scheduled. Deceuninck, as the manufacturer of Oasis deck and railing, has agreed to indemnify MHE for certain liabilities related to this claim pursuant to the sales and distribution agreement, as amended, between Deceuninck and MHE. MHE's ability to seek indemnification from Deceuninck is, however, limited by the terms of the indemnity as well as the strength of Deceuninck's financial condition, which could change in the future.

In The Muhler Company, Inc. v. Ply Gem Prime Holdings, Inc. et al., a lawsuit filed in April 2011 in the United States District Court for the District of South Carolina, Charleston Division, plaintiff alleges unfair competition and trade practices. The plaintiff seeks a variety of relief, including (i) consequential damages, (ii) treble damages, (iii) punitive damages, and (iv) attorneys' fees and costs of litigation. In April 2013, the Court granted the Company's motion for summary judgment with respect to the federal Lanham Act claims. As such, only state unfair competition and trade practices claims currently remain. In May 2013, the plaintiff filed a notice of appeal to the U.S. Court of Appeals for the Fourth Circuit with respect to the summary judgment granted on the federal Lanham Act claims, and the Fourth Circuit denied interlocutory appeal. The damages sought in this action have not yet been quantified.

In J-Channel Industries Corporation v. Lowe’s Companies, Inc., and Ply Gem Industries, Inc., a purported patent infringement case filed in August 2013 in the United States District Court for the Eastern Division of Tennessee, Northern Division, plaintiff, a wholly owned subsidiary of CopyTele, Inc., a company specializing in patent monetization and patent assertion, alleged damages as a result of patent infringement by certain windows having an integrated “j-channel” feature. The plaintiff sought a variety of relief, including (i) economic and compensatory damages and (ii) attorneys' fees and costs of litigation. This action was settled and paid during the three and nine months ended September 27, 2014.

In rePly Gem Holdings, Inc., Securities Litigation isa purported federal securities class action filed on May 19, 2014 in the United States District Court for the Southern District of New York against Ply Gem Holdings, Inc., several of its directors and officers, and the underwriters associated with the Company’s IPO. It is filed on behalf of all persons or entities, other than the defendants, who purchased the common shares of the Company pursuant and/or traceable to the Company’s IPO and seeks remedies under Sections 11 and 15 of the Securities Act of 1933, alleging that the Company’s Form S-1 registration statement was negligently prepared and materially inaccurate, containing untrue statements of material fact and omitting material information which was required to be disclosed. The plaintiffs seek a variety of relief, including (i) damages together with interest thereon and (ii) attorneys’ fees and costs of litigation. On October 14, 2014, Strathclyde Pension Fund was certified as lead plaintiff, and class counsel was appointed. The damages sought in this action have not yet been quantified. Pursuant to the Underwriting Agreement, dated May 22, 2013, entered into in connection with the IPO, the Company has agreed to reimburse the underwriters for the legal fees and other expenses reasonably incurred by the underwriters’ law firm in its representation of the underwriters in connection with this matter. Pursuant to Indemnification Agreements, dated as of May 22, 2013, between the Company and each of the directors and officers named in this action, the Company has agreed to assume the defense of such directors and officers. The Company believes the purported federal securities class action is without merit and will vigorously defend against the lawsuit.

Other contingencies

The Company is subject to other contingencies, including legal proceedings and claims arising out of its businesses that cover a wide range of matters, including, among others, environmental matters, contract and employment claims, personal injury, product liability, warranty and modification, adjustment or replacement of component parts of units sold, which may include product recalls.  Product liability, environmental and other legal proceedings also include matters with respect to businesses previously owned.  The Company has used various substances in their products and manufacturing operations, which have been or may be deemed to be hazardous or dangerous, and the extent of its potential liability, if any, under environmental, product liability and workers’ compensation statutes, rules, regulations and case law is unclear.  Further, due to the lack of adequate information and the potential impact of present regulations and any future regulations, there are certain circumstances in which no range of potential exposure may be reasonably estimated.  Also, it is not possible to ascertain the ultimate legal and financial liability with respect to certain contingent liabilities, including lawsuits, and therefore no such estimate has been made.

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ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES

9 Months Ended

Sep. 27, 2014

Payables and Accruals [Abstract]

ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES

ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES

Accrued expenses consist of the following at September 27, 2014 and December 31, 2013:

(Amounts in thousands)	September 27, 2014		December 31, 2013
Insurance	$	9,292	$	3,926
Employee compensation and benefits	17,445		8,916
Sales and marketing	42,989		34,215
Product warranty	11,387		10,861
Accrued freight	2,701		1,350
Accrued interest	9,813		25,477
Accrued environmental liability	456		463
Accrued pension	2,258		2,258
Accrued sales returns and discounts	4,063		3,263
Accrued taxes	4,418		3,433
Litigation accrual	2,594		—
Other	40,141		18,778
	$	147,557	$	112,940

Other long-term liabilities consist of the following at September 27, 2014 and December 31, 2013:

(Amounts in thousands)	September 27, 2014		December 31, 2013
Insurance	$	2,043	$	2,213
Pension liabilities	5,176		6,622
Multi-employer pension withdrawal liability	2,251		2,362
Product warranty	32,129		31,605
Long-term product claim liability	140		140
Long-term environmental liability	1,227		1,247
Liabilities for tax uncertainties	3,188		2,934
Litigation accrual	2,000		—
Other	4,244		5,437
	$	52,398	$	52,560

Long-term incentive plan

The Company has a long-term incentive plan (“LTIP”) for certain employees. The long-term incentive plan was implemented to retain and incentivize key employees. During the three months ended September 27, 2014 and September 28, 2013, the Company recognized a LTIP expense of $0.5 million and $0.2 million, respectively, which has been recorded within selling, general, and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss). During the nine months ended September 27, 2014 and September 28, 2013, the Company recognized a LTIP expense of $1.5 million and $1.1 million, respectively, which has been recorded within selling, general, and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss). The LTIP liability is $3.3 million and $4.6 million as of September 27, 2014 and December 31, 2013, respectively, of which $2.3 million and $2.9 million has been recorded within accrued expenses and $1.0 million and $1.7 million in other long-term liabilities in the condensed consolidated balance sheets as of September 27, 2014 and December 31, 2013, respectively.

Other liabilities

During the three months ended September 27, 2014 and September 28, 2013, the Company made approximately $1.1 million and $1.0 million, in cash payments on restructuring liabilities, respectively. During the nine months ended September 27, 2014 and September 28, 2013, the Company made approximately $4.4 million and $2.9 million, in cash payments on restructuring liabilities, respectively. These payments were for a restructuring and integration program implemented in Western Canada and general back office centralization efforts incurred as well as product simplification costs incurred for the entire Windows and Doors segment.

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STOCK-BASED COMPENSATION

9 Months Ended

Sep. 27, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

A rollforward of stock options outstanding during the nine months ended September 27, 2014 is presented below: 

	Stock Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Balance at January 1, 2014	3,285,750		$	11.04	5.24
Granted	151,147		15.11		—
Exercised	(618,615	)	1.76		—
Forfeited or expired	(105,494	)	10.85		—
Balance at September 27, 2014	2,712,788		$	13.39	5.71

In connection with the merger in conjunction with the IPO, options to purchase shares of common stock of Ply Gem Prime were converted into 3,386,008 options to purchase shares of Ply Gem Holdings common stock with adjustments to the per share exercise prices.

As of September 27, 2014, 2,091,234 options were 100% vested.  At September 27, 2014, the Company had approximately $2.4 million of total unrecognized compensation expense that will be recognized over the weighted average period of 1.80 years.  The Company recorded compensation expense of $0.6 million and $0.6 million for the three months ended September 27, 2014 and September 28, 2013, respectively, and $1.5 million and $1.5 million for the nine months ended September 27, 2014 and September 28, 2013, respectively, related to the vesting of these options.

Restricted stock

During December 2012, the Company issued 3,886 restricted shares of common stock to each of three independent members of the Board of Directors.  These shares will vest over the 2012 through 2013 twelve month period and the Company is expensing these items ratably over the twelve month period up to the vesting date. During the three and nine months ended September 28, 2013, the Company expensed $45,000 and $90,000, respectively, related to these grants in selling, general, and administrative expenses within the condensed consolidated statement of operations and comprehensive income (loss).

During March 2014, the Company issued 3,523 restricted shares of common stock to each of three independent members of the Board of Directors.  These shares will vest over the approximate ten-month period to December 31, 2014 and the Company is expensing these items ratably over the ten-month period up to the vesting date. One issuance of these shares, or 3,523 shares, became immediately fully vested during May 2014. Additionally during May 2014, the Company issued 5,240 restricted shares of common stock to each of the two new independent members of the Board of Directors.  These shares will vest over the approximate eight-month period to December 31, 2014 and the Company is expensing these items ratably over the eight-month period up to the vesting date. During the three and nine months ended September 27, 2014, the Company expensed approximately $76,000 and $182,000, respectively, related to all of these grants in selling, general, and administrative expenses within the condensed consolidated statement of operations and comprehensive income (loss).

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GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Tables)

9 Months Ended

Sep. 27, 2014

GUARANTOR / NON GUARANTOR FINANCIAL INFORMATION [Abstract]

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the three months ended September 27, 2014
	Guarantor		Issuer						Non-
	Ply Gem		Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.		Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Net sales	$	—	$	—		$	352,856		$	84,992		$	—		$	437,848
Cost of products sold	—		—			275,938			63,321			—			339,259
Gross profit	—		—			76,918			21,671			—			98,589
Operating expenses:
Selling, general and
administrative expenses	—		6,602			28,502			16,251			—			51,355
Intercompany administrative
charges	—		—			4,528			1,047			(5,575		)	—
Amortization of intangible assets	—		—			4,008			1,299			—			5,307
Total operating expenses	—		6,602			37,038			18,597			(5,575		)	56,662
Operating earnings (loss)	—		(6,602		)	39,880			3,074			5,575			41,927
Foreign currency loss	—		—			—			(766		)	—			(766		)
Intercompany interest	—		13,328			(11,723		)	(1,605		)	—			—
Interest expense	—		(16,296		)	(4		)	—			—			(16,300		)
Interest income	—		1			4			13			—			18
Tax receivable agreement liability adjustment	—		(13,988		)	—			—			—			(13,988		)
Intercompany administrative income	—		5,575			—			—			(5,575		)	—
Income (loss) before equity in
subsidiaries' income	—		(17,982		)	28,157			716			—			10,891
Equity in subsidiaries' income	21,405		39,387			—			—			(60,792		)	—
Income before provision
(benefit) for income taxes	21,405		21,405			28,157			716			(60,792		)	10,891
Provision (benefit) for income taxes	—		—			(11,159		)	645			—			(10,514		)
Net income	$	21,405	$	21,405		$	39,316		$	71		$	(60,792	)	$	21,405
Other comprehensive income (loss):
Foreign currency translation adjustments	—		—			—			(5,009		)	—			(5,009		)
Unrealized gain on derivative instrument	—		—			—			886			—			886
Total comprehensive income (loss)	$	21,405	$	21,405		$	39,316		$	(4,052	)	$	(60,792	)	$	17,282

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the three months ended September 28, 2013
	Guarantor		Issuer						Non-
	Ply Gem		Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.		Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
Net sales	$	—	$	—		$	316,548		$	90,878		$	—		$	407,426
Cost of products sold	—		—			256,912			66,346			—			323,258
Gross profit	—		—			59,636			24,532			—			84,168
Operating expenses:
Selling, general and
administrative expenses	—		4,067			26,780			16,750			—			47,597
Intercompany administrative
charges	—		—			4,235			1,941			(6,176		)	—
Amortization of intangible assets	—		—			4,221			1,430			—			5,651
Total operating expenses	—		4,067			35,236			20,121			(6,176		)	53,248
Operating earnings (loss)	—		(4,067		)	24,400			4,411			6,176			30,920
Foreign currency loss	—		—			—			(376		)	—			(376		)
Intercompany interest	—		17,842			(17,509		)	(333		)	—			—
Interest expense	—		(22,070		)	(9		)	34			—			(22,045		)
Interest income	—		1			165			119			—			285
Tax receivable agreement liability adjustment	—		6,669			—			—			—			6,669
Intercompany administrative income	—		6,176			—			—			(6,176		)	—
Income before equity in
subsidiaries' income	—		4,551			7,047			3,855			—			15,453
Equity in subsidiaries' income	16,895		12,344			—			—			(29,239		)	—
Income before provision (benefit)
for income taxes	16,895		16,895			7,047			3,855			(29,239		)	15,453
Provision (benefit) for income taxes	—		—			(2,124		)	682			—			(1,442		)
Net income	$	16,895	$	16,895		$	9,171		$	3,173		$	(29,239	)	$	16,895
Other comprehensive income:
Foreign currency translation adjustments	—		—			—			4,074			—			4,074
Total comprehensive income	$	16,895	$	16,895		$	9,171		$	7,247		$	(29,239	)	$	20,969

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the nine months ended September 27, 2014
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Net sales	$	—		$	—		$	905,393		$	211,131		$	—		$	1,116,524
Cost of products sold	—			—			728,675			162,042			—			890,717
Gross profit	—			—			176,718			49,089			—			225,807
Operating expenses:
Selling, general and
administrative expenses	—			18,116			90,553			47,722			—			156,391
Intercompany administrative
charges	—			—			12,774			4,567			(17,341		)	—
Amortization of intangible assets	—			—			11,793			4,048			—			15,841
Total operating expenses	—			18,116			115,120			56,337			(17,341		)	172,232
Operating earnings (loss)	—			(18,116		)	61,598			(7,248		)	17,341			53,575
Foreign currency loss	—			—			—			(517		)	—			(517		)
Intercompany interest	—			45,352			(42,753		)	(2,599		)	—			—
Interest expense	—			(52,033		)	(30		)	(2		)	—			(52,065		)
Interest income	—			4			24			36			—			64
Tax receivable agreement liability adjustment	—			(14,419		)	—			—			—			(14,419		)
Loss on modification or
extinguishment of debt	—			(21,364		)	—			—			—			(21,364		)
Intercompany administrative income	—			17,341			—			—			(17,341		)	—
Income (loss) before equity in
subsidiaries' loss	—			(43,235		)	18,839			(10,330		)	—			(34,726		)
Equity in subsidiaries' income (loss)	(18,793		)	24,442			—			—			(5,649		)	—
Income (loss) before provision
(benefit) for income taxes	(18,793		)	(18,793		)	18,839			(10,330		)	(5,649		)	(34,726		)
Provision (benefit) for income taxes	—			—			(21,134		)	5,201			—			(15,933		)
Net income (loss)	$	(18,793	)	$	(18,793	)	$	39,973		$	(15,531	)	$	(5,649	)	$	(18,793	)
Other comprehensive loss:
Foreign currency translation adjustments	—			—			—			(5,366		)	—			(5,366		)
Unrealized loss on derivative instrument	—			—			—			(47		)	—			(47		)
Total comprehensive income (loss)	$	(18,793	)	$	(18,793	)	$	39,973		$	(20,944	)	$	(5,649	)	$	(24,206	)

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the nine months ended September 28, 2013
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
Net sales	$	—		$	—		$	872,528		$	160,135		$	—		$	1,032,663
Cost of products sold	—			—			713,064			119,325			—			832,389
Gross profit	—			—			159,464			40,810			—			200,274
Operating expenses:
Selling, general and
administrative expenses	—			15,912			83,032			32,218			—			131,162
Intercompany administrative
charges	—			—			15,134			5,047			(20,181		)	—
Amortization of intangible assets	—			—			12,629			1,946			—			14,575
Initial public offering costs	—			23,527			—			—			—			23,527
Total operating expenses	—			39,439			110,795			39,211			(20,181		)	169,264
Operating earnings (loss)	—			(39,439		)	48,669			1,599			20,181			31,010
Foreign currency loss	—			—			—			(755		)	—			(755		)
Intercompany interest	—			59,992			(59,238		)	(754		)	—			—
Interest expense	—			(70,583		)	(28		)	6			—			(70,605		)
Interest income	—			6			181			172			—			359
Tax receivable agreement liability adjustment	—			(1,474		)	—			—			—			(1,474		)
Loss on modification or
extinguishment of debt	—			(18,948		)	—			—			—			(18,948		)
Intercompany administrative income	—			20,181			—			—			(20,181		)	—
Income (loss) before equity in
subsidiaries' loss	—			(50,265		)	(10,416		)	268			—			(60,413		)
Equity in subsidiaries' income (loss)	(62,089		)	(11,824		)	—			—			73,913			—
Income (loss) before provision (benefit)
for income taxes	(62,089		)	(62,089		)	(10,416		)	268			73,913			(60,413		)
Provision (benefit) for income taxes	—			—			1,866			(190		)	—			1,676
Net income (loss)	$	(62,089	)	$	(62,089	)	$	(12,282	)	$	458		$	73,913		$	(62,089	)
Other comprehensive loss:
Foreign currency translation adjustments	—			—			—			1,091			—			1,091
Total comprehensive income (loss)	$	(62,089	)	$	(62,089	)	$	(12,282	)	$	1,549		$	73,913		$	(60,998	)

CONDENSED CONSOLIDATING BALANCE SHEET

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
As of September 27, 2014
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
ASSETS	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Current Assets:
Cash and cash equivalents	$	—		$	12,151		$	(3,427	)	$	18,058		$	—		$	26,782
Accounts receivable, net	—			—			229,183			48,955			—			278,138
Inventories:
Raw materials	—			—			62,437			13,421			—			75,858
Work in process	—			—			27,018			1,341			—			28,359
Finished goods	—			—			52,699			18,791			—			71,490
Total inventory	—			—			142,154			33,553			—			175,707
Prepaid expenses and other
current assets	—			461			15,494			4,547			—			20,502
Deferred income taxes	—			—			6,554			—			—			6,554
Total current assets	—			12,612			389,958			105,113			—			507,683
Investments in subsidiaries	(73,456		)	(8,108		)	—			—			81,564			—
Property and Equipment, at cost:
Land	—			—			7,100			917			—			8,017
Buildings and improvements	—			—			60,030			5,640			—			65,670
Machinery and equipment	—			2,701			341,481			16,593			—			360,775
	—			2,701			408,611			23,150			—			434,462
Less accumulated depreciation	—			(1,967		)	(264,168		)	(7,758		)	—			(273,893		)
Total property and equipment, net	—			734			144,443			15,392			—			160,569
Other Assets:
Intangible assets, net	—			—			128,345			26,661			—			155,006
Goodwill	—			—			415,386			35,232			—			450,618
Intercompany note receivable	—			953,510			—			—			(953,510		)	—
Other	—			28,283			2,703			—			—			30,986
Total other assets	—			981,793			546,434			61,893			(953,510		)	636,610
	$	(73,456	)	$	987,031		$	1,080,835		$	182,398		$	(871,946	)	$	1,304,862
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	—		$	541		$	91,518		$	24,917		$	—		$	116,976
Accrued expenses	—			15,756			106,557			25,244			—			147,557
Current portion of long-term debt	—			4,300			—			—			—			4,300
Total current liabilities	—			20,597			198,075			50,161			—			268,833
Deferred income taxes	—			—			14,784			7,736			—			22,520
Intercompany note payable	—			—			842,051			111,459			(953,510		)	—
Payable to related parties pursuant to
tax receivable agreement	—			26,042			—			—			—			26,042
Other long-term liabilities	—			5,323			42,880			4,195			—			52,398
Long-term debt, less current portion	—			1,008,525			—			—			—			1,008,525
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	—			—			—			—			—			—
Common stock	678			678			—			—			(678		)	678
Additional paid-in-capital	744,529			744,529			622,281			13,581			(1,380,391		)	744,529
(Accumulated deficit) retained earnings	(810,036		)	(810,036		)	(639,236		)	636			1,448,636			(810,036		)
Accumulated other
comprehensive loss	(8,627		)	(8,627		)	—			(5,370		)	13,997			(8,627		)
Total stockholders' (deficit) equity	(73,456		)	(73,456		)	(16,955		)	8,847			81,564			(73,456		)
	$	(73,456	)	$	987,031		$	1,080,835		$	182,398		$	(871,946	)	$	1,304,862

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2013
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	—		$	57,800		$	(4,970	)	$	16,971		$	—		$	69,801
Accounts receivable, net	—			—			110,475			29,587			—			140,062
Inventories:
Raw materials	—			—			41,593			9,720			—			51,313
Work in process	—			—			22,781			1,036			—			23,817
Finished goods	—			—			42,751			17,589			—			60,340
Total inventory	—			—			107,125			28,345			—			135,470
Prepaid expenses and other
current assets	—			613			17,270			5,331			—			23,214
Deferred income taxes	—			—			2,825			353			—			3,178
Total current assets	—			58,413			232,725			80,587			—			371,725
Investments in subsidiaries	(51,996		)	(229,668		)	—			—			281,664			—
Property and Equipment, at cost:
Land	—			—			3,565			963			—			4,528
Buildings and improvements	—			—			38,059			5,632			—			43,691
Machinery and equipment	—			3,275			300,089			18,250			—			321,614
	—			3,275			341,713			24,845			—			369,833
Less accumulated depreciation	—			(1,385		)	(249,344		)	(7,457		)	—			(258,186		)
Total property and equipment, net	—			1,890			92,369			17,388			—			111,647
Other Assets:
Intangible assets, net	—			—			77,968			32,044			—			110,012
Goodwill	—			—			383,042			37,186			—			420,228
Deferred income taxes	—			—			—			5,406			—			5,406
Intercompany note receivable	—			958,631			—			—			(958,631		)	—
Other	—			20,907			2,326			—			—			23,233
Total other assets	—			979,538			463,336			74,636			(958,631		)	558,879
	$	(51,996	)	$	810,173		$	788,430		$	172,611		$	(676,967	)	$	1,042,251
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	—		$	601		$	66,847		$	15,533		$	—		$	82,981
Accrued expenses	—			31,056			62,120			19,764			—			112,940
Total current liabilities	—			31,657			128,967			35,297			—			195,921
Deferred income taxes	—			—			9,005			8,110			—			17,115
Intercompany note payable	—			—			859,768			98,863			(958,631		)	—
Payable to related parties pursuant to
tax receivable agreement	—			11,623			—			—			—			11,623
Other long-term liabilities	—			1,861			46,315			4,384			—			52,560
Long-term debt	—			817,028			—			—			—			817,028
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	—			—			—			—			—			—
Common stock	672			672			—			—			(672		)	672
Additional paid-in-capital	741,789			741,789			423,584			12,727			(1,178,100		)	741,789
(Accumulated deficit) retained earnings	(791,243		)	(791,243		)	(679,209		)	16,167			1,454,285			(791,243		)
Accumulated other
comprehensive income (loss)	(3,214		)	(3,214		)	—			(2,937		)	6,151			(3,214		)
Total stockholders' (deficit) equity	(51,996		)	(51,996		)	(255,625		)	25,957			281,664			(51,996		)
	$	(51,996	)	$	810,173		$	788,430		$	172,611		$	(676,967	)	$	1,042,251

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the nine months ended September 27, 2014
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(18,793	)	$	(18,793	)	$	39,973		$	(15,531	)	$	(5,649	)	$	(18,793	)
Adjustments to reconcile net income (loss)
to cash used in operating activities:
Depreciation and amortization expense	—			486			27,239			6,191			—			33,916
Fair-value premium on purchased inventory	—			—			38			—			—			38
Fair-value decrease of contingent acquisition liability	—			—			(264		)	—			—			(264		)
Non-cash restructuring costs	—			—			—			3,012			—			3,012
Non-cash interest expense, net	—			11,606			—			—			—			11,606
Loss on foreign currency transactions	—			—			—			517			—			517
Non-cash litigation expense	—			—			4,593			—			—			4,593
Loss on modification or extinguishment of debt	—			21,364			—			—			—			21,364
Stock based compensation	—			1,672			—			—			—			1,672
Deferred income taxes	—			—			(22,227		)	5,032			—			(17,195		)
Tax receivable agreement liability adjustment	—			14,419			—			—			—			14,419
Increase in tax uncertainty,
net of valuation allowance	—			—			254			—			—			254
Equity in subsidiaries' net loss	18,793			(24,442		)	—			—			5,649			—
Other	—			—			(50		)	(174		)	—			(224		)
Changes in operating assets and liabilities:
Accounts receivable, net	—			—			(81,439		)	(21,289		)	—			(102,728		)
Inventories	—			—			(17,394		)	(6,680		)	—			(24,074		)
Prepaid expenses and other assets	—			189			2,673			(255		)	—			2,607
Accounts payable	—			(60		)	5,873			9,367			—			15,180
Accrued expenses	—			(18,259		)	11,865			4,926			—			(1,468		)
Cash payments on restructuring liabilities	—			—			(577		)	(3,835		)	—			(4,412		)
Other	—			2			(1,997		)	6,566			—			4,571
Net cash used in
operating activities	—			(11,816		)	(31,440		)	(12,153		)	—			(55,409		)
Cash flows from investing activities:
Acquisitions, net of cash acquired and
outstanding checks assumed	—			(130,856		)	—			—			—			(130,856		)
Capital expenditures	—			(1,075		)	(11,907		)	(1,542		)	—			(14,524		)
Proceeds from sale of assets	—			—			109			635			—			744
Net cash used in
investing activities	—			(131,931		)	(11,798		)	(907		)	—			(144,636		)
Cash flows from financing activities:
Proceeds from long-term debt	—			1,067,725			—			—			—			1,067,725
Net revolver borrowings	—			20,000			—			—			—			20,000
Payments on long-term debt	—			(853,075		)	—			—			—			(853,075		)
Payment of tender and early call premiums	—			(61,142		)	—			—			—			(61,142		)
Proceeds from exercises of employee stock options	—			1,073			—			—			—			1,073
Proceeds from intercompany
investment	—			(59,762		)	44,781			14,981			—			—
Debt issuance costs paid	—			(16,721		)	—			—			—			(16,721		)
Net cash provided by (used in)
financing activities	—			98,098			44,781			14,981			—			157,860
Impact of exchange rate movements on cash	—			—			—			(834		)	—			(834		)
Net increase (decrease) in cash
and cash equivalents	—			(45,649		)	1,543			1,087			—			(43,019		)
Cash and cash equivalents at the
beginning of the period	—			57,800			(4,970		)	16,971			—			69,801
Cash and cash equivalents at the end
of the period	$	—		$	12,151		$	(3,427	)	$	18,058		$	—		$	26,782

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the nine months ended September 28, 2013
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(62,089	)	$	(62,089	)	$	(12,282	)	$	458		$	73,913		$	(62,089	)
Adjustments to reconcile net income (loss)
to cash provided by (used in) operating activities:
Depreciation and amortization expense	—			315			28,744			3,924			—			32,983
Fair-value premium on purchased inventory	—			—			—			2,015			—			2,015
Fair-value decrease of contingent acquisition liability	—			—			(358		)	—			—			(358		)
Non-cash interest expense, net	—			9,457			—			—			—			9,457
Loss on foreign currency transactions	—			—			—			755			—			755
Loss on modification or extinguishment of debt	—			18,948			—			—			—			18,948
Prepaid management fee write off	—			2,682			—			—			—			2,682
Stock based compensation	—			1,631			—			—			—			1,631
Deferred income taxes	—			—			1,937			(172		)	—			1,765
Tax receivable agreement liability adjustment	—			1,474			—			—			—			1,474
Reduction in tax uncertainty,
net of valuation allowance	—			—			(1,279		)	—			—			(1,279		)
Equity in subsidiaries' net loss	62,089			11,824			—			—			(73,913		)	—
Other	—			—			(5		)	—			—			(5		)
Changes in operating assets and liabilities:
Accounts receivable, net	—			—			(67,244		)	(8,159		)	—			(75,403		)
Inventories	—			—			(13,605		)	1,875			—			(11,730		)
Prepaid expenses and other
current assets	—			(5,322		)	(294		)	435			—			(5,181		)
Accounts payable	—			107			3,142			(7,441		)	—			(4,192		)
Accrued expenses	—			(2,713		)	17,428			11,837			—			26,552
Payment of advisory termination fee to affiliate	—			(18,852		)	—			—			—			(18,852		)
Cash payments on restructuring liabilities	—			—			(2,535		)	(358		)	—			(2,893		)
Other	—			—			87			(999		)	—			(912		)
Net cash provided by (used in)
operating activities	—			(42,538		)	(46,264		)	4,170			—			(84,632		)
Cash flows from investing activities:
Acquisitions, net of cash acquired	—			(99,282		)	—			—			—			(99,282		)
Capital expenditures	—			(542		)	(15,014		)	(758		)	—			(16,314		)
Proceeds from sale of assets	—			—			24			—			—			24
Net cash used in
investing activities	—			(99,824		)	(14,990		)	(758		)	—			(115,572		)
Cash flows from financing activities:
Net revolver payments	—			(1,000		)	—			—			—			(1,000		)
Payments on long-term debt	—			(148,000		)	—			—			—			(148,000		)
Payment of early call premium	—			(8,520		)	—			—			—			(8,520		)
Net proceeds from issuance of common stock	—			353,407			—			—			—			353,407
Proceeds from intercompany
investment	—			(60,152		)	57,582			2,570			—			—
Debt issuance costs paid	—			(62		)	—			—			—			(62		)
Net cash provided by
financing activities	—			135,673			57,582			2,570			—			195,825
Impact of exchange rate movement
on cash	—			—			—			301			—			301
Net increase (decrease) in cash
and cash equivalents	—			(6,689		)	(3,672		)	6,283			—			(4,078		)
Cash and cash equivalents at the
beginning of the period	—			23,332			(4,307		)	8,169			—			27,194
Cash and cash equivalents at the end
of the period	$	—		$	16,643		$	(7,979	)	$	14,452		$	—		$	23,116

XML

GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION, Condensed Consolidating Statements of Operations (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014	Sep. 28, 2013	Dec. 31, 2013
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS [Abstract]
Net sales	$ 437,848,000	$ 407,426,000	$ 1,116,524,000	$ 1,032,663,000
Cost of products sold	339,259,000	323,258,000	890,717,000	832,389,000
Gross profit	98,589,000	84,168,000	225,807,000	200,274,000
Operating expenses:
Selling, general and administrative expenses	51,355,000	47,597,000	156,391,000	131,162,000
Intercompany administrative charges	0	0	0	0
Initial public offering costs			0	23,527,000
Amortization of intangible assets	5,307,000	5,651,000	15,841,000	14,575,000
Total operating expenses	56,662,000	53,248,000	172,232,000	169,264,000
Operating earnings	41,927,000	30,920,000	53,575,000	31,010,000
Foreign currency (loss) gain	(766,000)	(376,000)	(517,000)	(755,000)
Intercompany interest	0	0	0	0
Interest expense	(16,300,000)	(22,045,000)	(52,065,000)	(70,605,000)
Interest income	18,000	285,000	64,000	359,000
Tax receivable agreement liability adjustment	13,988,000	(6,669,000)	14,419,000	1,474,000
Gains (Losses) on Extinguishment of Debt			21,364,000	18,948,000
Intercompany administrative income	0	0	0	0
Equity in subsidiaries' income	0	0	0	0
Income (Loss) before provision (benefit) for income taxes	10,891,000	15,453,000	(34,726,000)	(60,413,000)
Provision (benefit) for income taxes	(10,514,000)	(1,442,000)	(15,933,000)	1,676,000
Net income (loss)	21,405,000	16,895,000	(18,793,000)	(62,089,000)
Other comprehensive income (loss):
Currency translation	(5,009,000)	4,074,000	(5,366,000)	1,091,000	(2,900,000)
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	886,000	0	(47,000)	0
Total comprehensive income	17,282,000	20,969,000	(24,206,000)	(60,998,000)
Income (Loss) from Operations before Extraordinary Items	10,891,000	15,453,000	(34,726,000)	(60,413,000)
Guarantor Ply Gem Holdings, Inc. [Member]
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS [Abstract]
Net sales	0	0	0	0
Cost of products sold	0	0	0	0
Gross profit	0	0	0	0
Operating expenses:
Selling, general and administrative expenses	0	0	0	0
Intercompany administrative charges	0	0	0	0
Initial public offering costs				0
Amortization of intangible assets	0	0	0	0
Total operating expenses	0	0	0	0
Operating earnings	0	0	0	0
Foreign currency (loss) gain	0	0	0	0
Intercompany interest	0	0	0	0
Interest expense	0	0	0	0
Interest income	0	0	0	0
Tax receivable agreement liability adjustment	0	0	0	0
Gains (Losses) on Extinguishment of Debt			0	0
Intercompany administrative income	0	0	0	0
Equity in subsidiaries' income	21,405,000	16,895,000	(18,793,000)	(62,089,000)
Income (Loss) before provision (benefit) for income taxes	21,405,000	16,895,000	(18,793,000)	(62,089,000)
Provision (benefit) for income taxes	0	0	0	0
Net income (loss)	21,405,000	16,895,000	(18,793,000)	(62,089,000)
Other comprehensive income (loss):
Currency translation	0	0	0	0
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	0		0
Total comprehensive income	21,405,000	16,895,000	(18,793,000)	(62,089,000)
Income (Loss) from Operations before Extraordinary Items	0	0	0	0
Issuer Ply Gem Industries, Inc. [Member]
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS [Abstract]
Net sales	0	0	0	0
Cost of products sold	0	0	0	0
Gross profit	0	0	0	0
Operating expenses:
Selling, general and administrative expenses	6,602,000	4,067,000	18,116,000	15,912,000
Intercompany administrative charges	0	0	0	0
Initial public offering costs				23,527,000
Amortization of intangible assets	0	0	0	0
Total operating expenses	6,602,000	4,067,000	18,116,000	39,439,000
Operating earnings	(6,602,000)	(4,067,000)	(18,116,000)	(39,439,000)
Foreign currency (loss) gain	0	0	0	0
Intercompany interest	13,328,000	17,842,000	45,352,000	59,992,000
Interest expense	(16,296,000)	(22,070,000)	(52,033,000)	(70,583,000)
Interest income	1,000	1,000	4,000	6,000
Tax receivable agreement liability adjustment	13,988,000	(6,669,000)	14,419,000	1,474,000
Gains (Losses) on Extinguishment of Debt			21,364,000	18,948,000
Intercompany administrative income	5,575,000	6,176,000	17,341,000	20,181,000
Equity in subsidiaries' income	39,387,000	12,344,000	24,442,000	(11,824,000)
Income (Loss) before provision (benefit) for income taxes	21,405,000	16,895,000	(18,793,000)	(62,089,000)
Provision (benefit) for income taxes	0	0	0	0
Net income (loss)	21,405,000	16,895,000	(18,793,000)	(62,089,000)
Other comprehensive income (loss):
Currency translation	0	0	0	0
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	0		0
Total comprehensive income	21,405,000	16,895,000	(18,793,000)	(62,089,000)
Income (Loss) from Operations before Extraordinary Items	(17,982,000)	4,551,000	(43,235,000)	(50,265,000)
Guarantor Subsidiaries [Member]
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS [Abstract]
Net sales	352,856,000	316,548,000	905,393,000	872,528,000
Cost of products sold	275,938,000	256,912,000	728,675,000	713,064,000
Gross profit	76,918,000	59,636,000	176,718,000	159,464,000
Operating expenses:
Selling, general and administrative expenses	28,502,000	26,780,000	90,553,000	83,032,000
Intercompany administrative charges	4,528,000	4,235,000	12,774,000	15,134,000
Initial public offering costs				0
Amortization of intangible assets	4,008,000	4,221,000	11,793,000	12,629,000
Total operating expenses	37,038,000	35,236,000	115,120,000	110,795,000
Operating earnings	39,880,000	24,400,000	61,598,000	48,669,000
Foreign currency (loss) gain	0	0	0	0
Intercompany interest	(11,723,000)	(17,509,000)	(42,753,000)	(59,238,000)
Interest expense	(4,000)	(9,000)	(30,000)	(28,000)
Interest income	4,000	165,000	24,000	181,000
Tax receivable agreement liability adjustment	0	0	0	0
Gains (Losses) on Extinguishment of Debt			0	0
Intercompany administrative income	0	0	0	0
Equity in subsidiaries' income	0	0	0	0
Income (Loss) before provision (benefit) for income taxes	28,157,000	7,047,000	18,839,000	(10,416,000)
Provision (benefit) for income taxes	(11,159,000)	(2,124,000)	(21,134,000)	1,866,000
Net income (loss)	39,316,000	9,171,000	39,973,000	(12,282,000)
Other comprehensive income (loss):
Currency translation	0	0	0	0
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	0		0
Total comprehensive income	39,316,000	9,171,000	39,973,000	(12,282,000)
Income (Loss) from Operations before Extraordinary Items	28,157,000	7,047,000	18,839,000	(10,416,000)
Non-Guarantor Subsidiary [Member]
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS [Abstract]
Net sales	84,992,000	90,878,000	211,131,000	160,135,000
Cost of products sold	63,321,000	66,346,000	162,042,000	119,325,000
Gross profit	21,671,000	24,532,000	49,089,000	40,810,000
Operating expenses:
Selling, general and administrative expenses	16,251,000	16,750,000	47,722,000	32,218,000
Intercompany administrative charges	1,047,000	1,941,000	4,567,000	5,047,000
Initial public offering costs				0
Amortization of intangible assets	1,299,000	1,430,000	4,048,000	1,946,000
Total operating expenses	18,597,000	20,121,000	56,337,000	39,211,000
Operating earnings	3,074,000	4,411,000	(7,248,000)	1,599,000
Foreign currency (loss) gain	(766,000)	(376,000)	(517,000)	(755,000)
Intercompany interest	(1,605,000)	(333,000)	(2,599,000)	(754,000)
Interest expense	0	34,000	(2,000)	6,000
Interest income	13,000	119,000	36,000	172,000
Tax receivable agreement liability adjustment	0	0	0	0
Gains (Losses) on Extinguishment of Debt			0	0
Intercompany administrative income	0	0	0	0
Equity in subsidiaries' income	0	0	0	0
Income (Loss) before provision (benefit) for income taxes	716,000	3,855,000	(10,330,000)	268,000
Provision (benefit) for income taxes	645,000	682,000	5,201,000	(190,000)
Net income (loss)	71,000	3,173,000	(15,531,000)	458,000
Other comprehensive income (loss):
Currency translation	(5,009,000)	4,074,000	(5,366,000)	1,091,000
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	886,000		(47,000)
Total comprehensive income	(4,052,000)	7,247,000	(20,944,000)	1,549,000
Income (Loss) from Operations before Extraordinary Items	716,000	3,855,000	(10,330,000)	268,000
Consolidating Adjustments [Member]
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS [Abstract]
Net sales	0	0	0	0
Cost of products sold	0	0	0	0
Gross profit	0	0	0	0
Operating expenses:
Selling, general and administrative expenses	0	0	0	0
Intercompany administrative charges	(5,575,000)	(6,176,000)	(17,341,000)	(20,181,000)
Initial public offering costs				0
Amortization of intangible assets	0	0	0	0
Total operating expenses	(5,575,000)	(6,176,000)	(17,341,000)	(20,181,000)
Operating earnings	5,575,000	6,176,000	17,341,000	20,181,000
Foreign currency (loss) gain	0	0	0	0
Intercompany interest	0	0	0	0
Interest expense	0	0	0	0
Interest income	0	0	0	0
Tax receivable agreement liability adjustment	0	0	0	0
Gains (Losses) on Extinguishment of Debt			0	0
Intercompany administrative income	(5,575,000)	(6,176,000)	(17,341,000)	(20,181,000)
Equity in subsidiaries' income	(60,792,000)	(29,239,000)	(5,649,000)	73,913,000
Income (Loss) before provision (benefit) for income taxes	(60,792,000)	(29,239,000)	(5,649,000)	73,913,000
Provision (benefit) for income taxes	0	0	0	0
Net income (loss)	(60,792,000)	(29,239,000)	(5,649,000)	73,913,000
Other comprehensive income (loss):
Currency translation	0	0	0	0
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	0		0
Total comprehensive income	(60,792,000)	(29,239,000)	(5,649,000)	73,913,000
Income (Loss) from Operations before Extraordinary Items	$ 0	$ 0	$ 0	$ 0

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 27, 2014

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Ply Gem Holdings, Inc. and its subsidiaries (referred to herein as “Ply Gem Holdings”, “Ply Gem”, the “Company”, “we”, “us”, or “our”) have been prepared in accordance with U.S. generally accepted accounting principles as described in the consolidated financial statements and related notes included in our 2013 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2014.  These statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles and should be read in conjunction with our 2013 Annual Report on Form 10-K.  In management’s opinion, all normal and recurring adjustments considered necessary for a fair presentation have been included.  Operating results for the period from January 1, 2014 through September 27, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014.

On May 23, 2013, the Company issued 18,157,895 shares of common stock at an initial public offering price of $21.00 per share and received net proceeds of approximately $353.4 million in an initial public offering ("IPO") of its common stock after deducting underwriting discounts and commissions of approximately $25.4 million and offering expenses of approximately $2.5 million. Prior to the IPO, the Company also issued a total of 48,962,494 shares of common stock in connection with the merger of Ply Gem Prime Holdings, Inc. (“Ply Gem Prime”) into Ply Gem Holdings, with Ply Gem Holdings being the surviving entity.

The condensed consolidated balance sheet at December 31, 2013 has been derived from the audited consolidated financial statements of Ply Gem Holdings at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

The Company’s fiscal quarters are based on periods ending on the Saturday of the last week in the quarter.  Therefore, the financial results of certain fiscal quarters will not be comparable to the prior and subsequent fiscal quarters.  The accompanying financial statements include the Company’s condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 27, 2014 and September 28, 2013, the condensed consolidated statements of cash flows for the nine months ended September 27, 2014 and September 28, 2013, and the condensed consolidated balance sheets as of September 27, 2014 and December 31, 2013.

Ply Gem is a diversified manufacturer of residential and commercial building products, which are sold primarily in the United States and Canada, and include a wide variety of products for the residential and commercial construction, the do-it-yourself and the professional remodeling and renovation markets.  The demand for the Company’s products is seasonal, particularly in the Northeast and Midwest regions of the United States and Canada where inclement weather during the winter months usually reduces the level of building and remodeling activity in both the home repair and remodeling and new home construction sectors.  The Company’s sales are usually lower during the first and fourth quarters.

To a significant extent our performance is dependent upon the levels of home repair and remodeling and new home construction spending, all of which are affected by such factors as interest rates, inflation, consumer confidence, unemployment, and availability of consumer credit.

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Ply Gem Holdings and its subsidiaries, all of which are wholly owned.  All intercompany accounts and transactions have been eliminated.

Accounting Policies and Use of Estimates

Accounting Policies and Use of Estimates

The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles involves estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of income and expense during the reporting periods.  Certain of the Company’s accounting policies require the application of judgment in selecting the appropriate assumptions for calculating financial estimates.  By their nature, these judgments are subject to an inherent degree of uncertainty.  The Company periodically evaluates the judgments and estimates used in their critical accounting policies to ensure that such judgments and estimates are reasonable.  Such estimates include the allowance for doubtful accounts receivable, rebates, pensions, valuation reserve for inventories, warranty reserves, insurance reserves, legal contingencies, assumptions used in the calculation of income taxes and the tax receivable agreement liability, projected cash flows used in the goodwill and intangible asset impairment tests, and environmental accruals and other contingencies.  These judgments are based on the Company’s historical experience, current trends and information available from other sources, and are based on management’s best estimates and judgments.  The Company adjusts such estimates and assumptions when facts and circumstances dictate.  Illiquid credit markets, volatile equity markets, foreign currency, litigation risk, and the depressed housing and remodeling markets have combined to increase the uncertainty inherent in such estimates and assumptions.  If different conditions result from those assumptions used in the Company’s judgments, actual results could be materially different from the Company’s estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash equivalents consist of short-term highly liquid investments with original maturities of three months or less and which are readily convertible into cash.

Accounts Receivable

Accounts Receivable

Accounts receivable-trade are recorded at their net realizable value.  The allowance for doubtful accounts was $4.5 million at September 27, 2014 and December 31, 2013.  The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company estimates the allowance for doubtful accounts based on a variety of factors including the length of time receivables are past due, the financial health of its customers, unusual macroeconomic conditions and historical experience. If the financial condition of its customers deteriorates or other circumstances occur that result in an impairment of customers’ ability to make payments, the Company records additional allowances as needed. The Company writes off uncollectible trade accounts receivable against the allowance for doubtful accounts when collection efforts have been exhausted and/or any legal action taken by the Company has concluded.

Inventories

Inventories

Inventories in the accompanying condensed consolidated balance sheets are valued at the lower of cost or market and are determined primarily by the first-in, first-out (FIFO) method.  The Company records provisions, as appropriate, to write-down obsolete and excess inventory to estimated net realizable value.  The process for evaluating obsolete and excess inventory often requires the Company to make subjective judgments and estimates concerning future sales levels, quantities and prices at which such inventory will be able to be sold in the normal course of business.  Accelerating the disposal process or incorrect estimates of future sales potential may cause actual results to differ from the estimates at the time such inventory is disposed or sold. As of September 27, 2014, the Company had inventory purchase commitments of approximately $27.2 million.

Inventory reserves were approximately $10.4 million at September 27, 2014, increasing during the nine months ended September 27, 2014 by $1.5 million compared to the December 31, 2013 reserve balance of approximately $8.9 million.

Property and Equipment

Property and Equipment

Property and equipment are presented at cost.  Depreciation of property and equipment are provided on a straight-line basis over estimated useful lives, which are generally as follows: 

Buildings and improvements	10-37 years
Machinery and equipment, including leases	3-15 years
Leasehold improvements	Term of lease or useful life, whichever is shorter

Expenditures for maintenance and repairs are expensed when incurred. Expenditures for renewals and betterments are capitalized.  When assets are sold, or otherwise disposed, the cost and related accumulated depreciation are eliminated and the resulting gain or loss is recognized in operations.  

Long-lived assets

Long-lived assets

The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.  The Company performs an undiscounted operating cash flow analysis to determine if impairment exists.  If an impairment is determined to exist, any related impairment loss is calculated based on the asset’s fair value and the discounted cash flow.

The Company tests for long-lived asset impairment at the following asset group levels: (i) the combined U.S. Siding, Fencing and Stone companies in the Siding, Fencing and Stone segment (“Siding”), (ii) the combined U.S. Windows companies in the Windows and Doors segment (“US Windows”), (iii) the combined Simonton windows companies in the Windows and Doors segment, (iv) Gienow Canada Inc. ("Gienow Canada") (a combined Western Canadian company created by the January 2014 amalgamation of the Company's legacy Western Canadian business and the Gienow entity acquired in April 2013) in the Windows and Doors segment, and (v) Mitten (formerly known as Mitten, Inc.) in the Siding, Fencing and Stone segment. For purposes of recognition and measurement of an impairment loss, a long-lived asset or asset group should represent the lowest level for which an entity can separately identify cash flows that are largely independent of the cash flows of other assets and liabilities.  There were no indicators of impairment during the three and nine months ended September 27, 2014.

Goodwill and other intangible assets

Goodwill and other intangible assets

The Company evaluates goodwill for impairment on an annual basis and whenever events or business conditions warrant.  All other intangible assets are amortized over their estimated useful lives and are assessed for impairment as necessary.  The Company assesses goodwill for impairment at the November month end each year and also at any other date when events or changes in circumstances indicate that the carrying value of these assets may exceed their fair value.  To evaluate goodwill for impairment, the Company estimates the fair value of reporting units considering such factors as discounted cash flows and valuation multiples for comparable publicly traded companies.  A significant reduction in projected sales and earnings, which would lead to a reduction in future cash flows, could indicate potential impairment.  There were no indicators of impairment during the three and nine months ended September 27, 2014 that would trigger an interim impairment test.  The Company will continue to evaluate goodwill during future periods and future declines in the residential housing and repair and remodeling markets could result in goodwill impairments.

Debt Issuance Costs

Debt Issuance Costs

Debt issuance costs, composed of facility, agency, and certain legal fees associated with issuing new debt financing, are amortized over the contractual term of the related agreement using the effective interest method.  Net debt issuance costs totaled approximately $25.1 million and $17.7 million as of September 27, 2014 and December 31, 2013, respectively, and have been recorded in other long term assets in the accompanying condensed consolidated balance sheets. Amortization of debt issuance costs for the three months ended September 27, 2014 and September 28, 2013 was approximately $0.8 million and $1.2 million, respectively.  Amortization of debt issuance costs for the nine months ended September 27, 2014 and September 28, 2013 was approximately $2.8 million and $3.2 million, respectively. Amortization of debt issuance costs is recorded in interest expense in the accompanying condensed consolidated statements of operations and comprehensive income (loss).

Income Taxes

Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes which requires that deferred tax assets and liabilities be recorded to reflect the future tax consequences of temporary differences between the book and tax basis of various assets and liabilities.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect of changes in tax rates on deferred tax assets and liabilities is recognized as income or expense in the period in which the rate change occurs.  A valuation allowance is established to offset any deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Estimates are required with respect to, among other things, the appropriate state income tax rates used in the various states that the Company and its subsidiaries are required to file, the potential utilization of operating and capital loss carry-forwards for both federal and state income tax purposes and valuation allowances required, if any, for tax assets that may not be realized in the future.  The Company establishes reserves when, despite our belief that our tax return positions are fully supportable, certain positions could be challenged, and the positions may not be fully sustained.  As a result of the 2013 Ply Gem Prime and Ply Gem Holdings merger, U.S. federal income tax returns will be prepared and filed by Ply Gem Holdings on behalf of itself, Ply Gem Industries, Inc. (“Ply Gem Industries”), and its U.S. subsidiaries.  The Company has executed a tax sharing agreement with Ply Gem Industries and Ply Gem Holdings pursuant to which tax liabilities for each respective party are computed on a stand-alone basis.  The Company along with its U.S. subsidiaries file a consolidated federal income tax return, separate state income tax returns, combined state returns, and unitary state returns. Gienow Canada and Mitten both file separate Canadian federal income tax returns and separate provincial returns. Simonton will join the filing of the consolidated U.S. federal returns. Simonton will also join the filings of certain combined and unitary state income tax returns as well as continue to file certain state returns on a separate company basis.

Environmental

Environmental

The Company accrues for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable. Environmental remediation obligation accruals are adjusted as further information develops or circumstances change.  Costs of future expenditures for environmental remediation obligations are not discounted to their present value.  Recoveries of environmental remediation costs from other parties are recorded as assets when their receipt is deemed probable.

Commitments and Contingencies, Policy [Policy Text Block]

Commitments and Contingencies

The Company accrues for all direct costs associated with the estimated resolution of contingencies at the earliest date at which it is deemed probable that a liability has been incurred and the amount of such liability can be reasonably estimated.  Costs accrued have been estimated based upon an analysis of potential results, assuming a combination of litigation and settlement strategies and outcomes. Insurance recoveries are recorded as assets when their receipt is deemed probable.

Foreign Currency

Foreign Currency

Gienow Canada and Mitten, the Company’s Canadian subsidiaries, utilize the Canadian dollar as their functional currency.  For reporting purposes, the Company translates the assets and liabilities of its foreign entities at the exchange rates in effect at period-end.  Net sales and expenses are translated using average exchange rates in effect during the period.  Gains and losses from foreign currency translation are credited or charged to accumulated other comprehensive income or loss in the accompanying condensed consolidated balance sheets.

The Company recorded a loss from foreign currency transactions of approximately $(0.8) million for the three months ended September 27, 2014 and a loss of approximately $(0.4) million for the three months ended September 28, 2013. The Company recorded a loss from foreign currency transactions of approximately $(0.5) million for the nine months ended September 27, 2014 and a loss of approximately $(0.8) million for the nine months ended September 28, 2013. As of September 27, 2014 and December 31, 2013, accumulated other comprehensive loss included a currency translation adjustment of approximately $(5.4) million and $(2.9) million, respectively.

Derivative Instruments and Hedging Activities Disclosures [Line Items]

IPO [Table Text Block]

The following table summarizes these costs for the nine months ended September 28, 2013. No such costs were incurred during the nine months ended September 27, 2014.

(Amounts in thousands)
Advisory termination fee to affiliate	$	18,852
2013 management fee as of date of termination	2,682
Other transaction expenses for the IPO	1,993
	$	23,527

Initial Public Offering And Related Transactions [Policy Text Block]

Initial Public Offering and Related Transactions

As a result of the IPO, the Company expensed within operations approximately $23.5 million in costs associated with the offering that were not directly attributable to the securities offered.

Derivatives, Policy [Policy Text Block]

Derivative Financial Instruments

During the nine months ended September 27, 2014, the Company entered into a foreign currency zero-cost collar agreement to hedge approximately $43.0 million of its 2014 non-functional currency inventory purchases to protect the Company from variability in cash flows attributable to changes in the U.S. dollar relative to the Canadian dollar.

The Company has designated this zero-cost collar agreement as a cash flow hedge. As a cash flow hedge, unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. The zero-cost collar agreement is highly correlated to the changes in foreign currency rates to which the Company is exposed. Unrealized gains and losses on this agreement are designated as effective or ineffective. The effective portion of such gains or losses is recorded as a component of accumulated other comprehensive income or loss, while the ineffective portion of such gains or losses is recorded as a component of cost of goods sold. Future realized gains and losses in connection with each inventory purchase will be reclassified from accumulated other comprehensive income or loss to cost of goods sold.

The changes in fair values of derivatives that have been designated and qualify as cash flow hedges are recorded in accumulated other comprehensive income or loss and are reclassified into cost of goods sold in the same period the hedged item affects earnings. Due to the high degree of effectiveness between the hedging instrument and the underlying exposures being hedged, fluctuations in the value of the derivative instrument are generally offset by changes in the fair value or cash flows of the underlying exposures being hedged. The changes in the fair value of derivatives that do not qualify as effective are immediately recognized in earnings.

The gains and losses on the derivative contract that are reclassified from accumulated other comprehensive income or loss to current period earnings are included in the line item in which the hedged item is recorded in the same period the forecasted transaction affects earnings. As of September 27, 2014, approximately $47,000 of the deferred net loss on derivative instruments included in accumulated other comprehensive loss is expected to be reclassified as cost of goods sold during the next twelve months. This expectation is based on the expected timing of the occurrence of the hedged forecasted transactions.

The fair value of the foreign currency zero-cost collar agreement is estimated using industry standard valuation models using market-based observable inputs, including spot rates, forward points, interest rates and volatility inputs (Level 2).

Fair Value Measurement

Fair Value Measurement

The accounting standard for fair value discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flows), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The standard utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

• Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

• Level 3: Inputs that reflect the reporting entity’s own assumptions.

The hierarchy requires the use of observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. 

Earnings (loss) per common share

Earnings (Loss) Per Common Share

Basic earnings (loss) per share ("EPS") is computed based upon weighted-average shares outstanding during the period. Dilutive earnings per share is computed consistently with the basic computation while giving effect to all dilutive potential common shares and common share equivalents that were outstanding during the period. Ply Gem Holdings uses the treasury stock method to reflect the potential dilutive effect of unvested stock awards and unexercised options.

The Company was in a net loss position for the nine months ended September 27, 2014 and for the nine months ended September 28, 2013 and therefore the impact of stock options and unvested restricted stock were excluded from the computation of diluted earnings (loss) per share for those specific periods, as the inclusion of such amounts would be anti-dilutive.

The computation of the dilutive effect of other potential common shares included options and unvested restricted stock representing approximately 0.1 million shares of common stock for the three months ended September 27, 2014 and excluded approximately 0.1 million shares of common stock for the nine months ended September 27, 2014. The computation of the dilutive effect of other potential common shares included options and unvested restricted stock representing approximately 0.2 million shares of common stock for the three months ended September 28, 2013 and excluded approximately 0.2 million shares of common stock for the nine months ended September 28, 2013. Under the treasury stock method, the inclusion of these stock awards would have been anti-dilutive.

Prior to the IPO, the Company issued a total of 48,962,494 shares of common stock in connection with the merger of Ply Gem Prime into Ply Gem Holdings. Therefore, for purposes of EPS, the Company had 48,962,494 shares of common stock outstanding for the 2013 period through May 23, 2013. The Company calculated the amounts as net loss divided by the 48,962,494 shares of common stock outstanding for the 2013 period through May 23, 2013 plus the weighted-average shares outstanding subsequent to the IPO on May 23, 2013 through September 28, 2013. Prior to the IPO, all options and unvested restricted shares were instruments that were exercisable into Ply Gem Prime stock. Subsequently, those options and unvested restricted share grants were converted into Ply Gem Holdings instruments and as such will be treated prospectively from the date of the IPO for the calculation of dilutive income per share.

New accounting pronouncements

New Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update ("ASU") No. 2014-08, Presentation of Financial Statements and Property, Plant, and Equipment, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. Under the new guidance, a discontinued operation is defined as a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results. The change is effective for fiscal years, and interim reporting periods within those years, beginning on or after December 15, 2014, which means the first quarter of Ply Gem's fiscal year 2016, with early adoption permitted. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. This new guidance is not expected to affect the Company's consolidated financial position, results of operations or cash flows.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which completes the joint effort by the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and improve financial reporting by creating common revenue recognition guidance for GAAP and International Financial Reporting Standards ("IFRS"). ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using IFRS and GAAP. The core principle of this update is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The changes are effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, which means the first quarter of Ply Gem's fiscal year 2017. This update will be effective for the Company beginning in the first quarter of fiscal year 2017, and allows for full retrospective adoption applied to all periods presented or retrospective adoption with the cumulative effect of initially applying this update recognized at the date of initial application. The method of adoption has not been determined yet by the Company. The Company is currently reviewing the revised guidance and assessing the potential impact on the consolidated financial statements.

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COMPREHENSIVE INCOME (LOSS) (Tables)

9 Months Ended

Sep. 27, 2014

Equity [Abstract]

Schedule of comprehensive income (loss)

Comprehensive income (loss), net of tax is comprised of the following:

(Amounts in thousands)	For the three months ended					For the nine months ended
	September 27, 2014			September 28, 2013		September 27, 2014			September 28, 2013
Net income (loss)	$	21,405		$	16,895	$	(18,793	)	$	(62,089	)
Foreign currency translation adjustment	(5,009		)	4,074		(5,366		)	1,091
Unrealized gain (loss) on derivative instrument	886			—		(47		)	—
Comprehensive income (loss)	$	17,282		$	20,969	$	(24,206	)	$	(60,998	)

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RELATED PARTY TRANSACTIONS (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 28, 2013	Mar. 30, 2013	Sep. 27, 2014	Sep. 28, 2013
Related Party Transaction [Line Items]
Initial public offering costs			$ 0	$ 23,527,000
Officers' Compensation				1,500,000
CI Capital Partners [Member]
Related Party Transaction [Line Items]
Management fees	0		0	400,000
Extension in initial term period of agreement		10 years
Related Party Transaction, Expenses from Transactions with Related Party				400,000
advisory termination fee-ipo [Member]
Related Party Transaction [Line Items]
Initial public offering costs				18,852,000
management fee subsequently expensed in connection with IPO [Member]
Related Party Transaction [Line Items]
Initial public offering costs				$ 2,682,000

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COMPREHENSIVE INCOME (LOSS) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014	Sep. 28, 2013
Equity [Abstract]
Net income (loss)	$ 21,405	$ 16,895	$ (18,793)	$ (62,089)
Foreign currency translation adjustment	(5,009)	4,074	(5,366)	1,091
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	886	0	(47)	0
Total comprehensive income	$ 17,282	$ 20,969	$ (24,206)	$ (60,998)

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
	Sep. 27, 2014	Sep. 28, 2013
Cash flows from operating activities:
Net income (loss)	$ (18,793,000)	$ (62,089,000)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization expense	33,916,000	32,983,000
Fair-value premium on purchased inventory	38,000	2,015,000
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability	(264,000)	(358,000)
Restructuring Costs	3,012,000	0
Non-cash interest expense, net	11,606,000	9,457,000
Loss on foreign currency transactions	517,000	755,000
Business Acquisition, Contingent Consideration [Line Items]
Loss Contingency, Loss in Period	4,593,000
Gains (Losses) on Extinguishment of Debt	21,364,000	18,948,000
Prepaid management fee write off	0	2,682,000
Stock based compensation	1,672,000	1,631,000
Deferred income taxes	(17,195,000)	1,765,000
Tax receivable agreement liability adjustment	14,419,000	1,474,000
Increase (reduction) in tax uncertainty, net of valuation allowance	254,000	(1,279,000)
Other	(224,000)	(5,000)
Changes in operating assets and liabilities:
Accounts receivable, net	(102,728,000)	(75,403,000)
Inventories	(24,074,000)	(11,730,000)
Prepaid expenses and other assets	2,607,000	(5,181,000)
Accounts payable	15,180,000	(4,192,000)
Accrued expenses	(1,468,000)	26,552,000
Payment of advisory termination fee to affiliate	0	(18,852,000)
Cash payments on restructuring liabilities	(4,412,000)	(2,893,000)
Other	4,571,000	(912,000)
Net cash used in operating activities	(55,409,000)	(84,632,000)
Cash flows from investing activities:
Capital expenditures	(14,524,000)	(16,314,000)
Acquisitions, net of cash acquired	(130,856,000)	(99,282,000)
Proceeds from sale of assets	744,000	24,000
Net cash used in investing activities	(144,636,000)	(115,572,000)
Cash flows from financing activities:
Proceeds from long-term debt	1,067,725,000	0
Net revolver borrowings (payments)	20,000,000	(1,000,000)
Payments of long-term debt	(853,075,000)	(148,000,000)
Payment of early call premium	(61,142,000)	(8,520,000)
Proceeds from Issuance of common stock	0	353,407,000
Proceeds from Stock Options Exercised	1,073,000	0
Debt issuance costs paid	(16,721,000)	(62,000)
Net cash provided by financing activities	157,860,000	195,825,000
Impact of exchange rate movements on cash	(834,000)	301,000
Net decrease in cash and cash equivalents	(43,019,000)	(4,078,000)
Cash and cash equivalents at the beginning of the period	69,801,000	27,194,000
Cash and cash equivalents at the end of the period	26,782,000	23,116,000
class action settlement [Member]
Business Acquisition, Contingent Consideration [Line Items]
Loss Contingency, Loss in Period		$ 0

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COMPREHENSIVE INCOME (LOSS)

9 Months Ended

Sep. 27, 2014

Equity [Abstract]

COMPREHENSIVE INCOME (LOSS)

COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss), net of tax is comprised of the following:

(Amounts in thousands)	For the three months ended					For the nine months ended
	September 27, 2014			September 28, 2013		September 27, 2014			September 28, 2013
Net income (loss)	$	21,405		$	16,895	$	(18,793	)	$	(62,089	)
Foreign currency translation adjustment	(5,009		)	4,074		(5,366		)	1,091
Unrealized gain (loss) on derivative instrument	886			—		(47		)	—
Comprehensive income (loss)	$	17,282		$	20,969	$	(24,206	)	$	(60,998	)

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LONG-TERM DEBT (Tables)

9 Months Ended

Sep. 27, 2014

Extinguishment of Debt [Line Items]

Schedule of Long-term Debt Instruments

Long-term debt in the accompanying condensed consolidated balance sheets at September 27, 2014 and December 31, 2013 consists of the following:

(Amounts in thousands)
	September 27, 2014			December 31, 2013
Senior secured asset based revolving credit facility	$	20,000		$	—
Term Loan due 2021, net of unamortized early tender premium
and discount of $33,658 and $0, respectively	395,267			—
6.50% Senior notes due 2022, net of unamortized early tender premium
and discount of $52,442 and $0, respectively	597,558			—
8.25% Senior secured notes due 2018, net of unamortized early
tender premium and discount of $0 and $30,426, respectively	—			725,574
9.375% Senior notes due 2017, net of unamortized
discount of $0 and $4,546, respectively	—			91,454
	$	1,012,825		$	817,028
Less current portion of long-term debt	(4,300		)	—
	$	1,008,525		$	817,028

Schedule of Extinguishment and Modification of Debt [Table Text Block]

Based on the January 2014 Refinancing, the Company recognized a loss on debt modification or extinguishment of approximately $21.4 million for the nine months ended September 27, 2014 and approximately $18.9 million for the nine months ended September 28, 2013 related to the 2013 redemptions, as summarized in the table below.

(Amounts in thousands)	For the nine months ended
	September 27, 2014			September 28, 2013
Loss on extinguishment of debt:
Tender premium	$	(8,493	)	$	—
8.25% Senior Secured Notes and 9.375% Senior Notes unamortized discount	(4,773		)	—
8.25% Senior Secured Notes and 9.375% Senior Notes unamortized debt issuance costs	(2,067		)	—
Term Loan Facility unamortized discount	(255		)	—
Call premium for 8.25% Senior Secured Notes	—			(2,520		)
8.25% Senior Secured Notes unamortized discount	—			(3,831		)
8.25% Senior Secured Notes unamortized debt issuance costs	—			(1,766		)
Call premium for 9.375% Senior Notes	—			(6,000		)
9.375% Senior Notes unamortized discount	—			(3,666		)
9.375% Senior Notes unamortized debt issuance costs	—			(1,165		)
	(15,588		)	(18,948		)
Loss on modification of debt:
Third party fees for 8.25% Senior Secured Notes and 9.375% Senior Notes	(302		)	—
Third party fees for 6.50% Senior Notes and Term Loan Facility	(5,474		)	—
	(5,776		)	—
Total loss on modification or extinguishment of debt	$	(21,364	)	$	(18,948	)

XML

ACQUSITIONS (Details) (USD $)	3 Months Ended		9 Months Ended			0 Months Ended		9 Months Ended				0 Months Ended	9 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014	Sep. 28, 2013	Dec. 31, 2013	Apr. 09, 2013 Gienow [Member]	Sep. 19, 2014 Simonton [Member]	Sep. 27, 2014 Simonton [Member]	Sep. 28, 2013 Simonton [Member]	Sep. 27, 2014 new construction [Member]	Sep. 27, 2014 R&R [Member]	May 31, 2013 Mitten [Member]	Sep. 27, 2014 Ply Gem Industries [Member] new construction [Member]	Sep. 27, 2014 Ply Gem Industries [Member] R&R [Member]	Sep. 27, 2014 Simonton [Member] new construction [Member]	Sep. 27, 2014 Simonton [Member] R&R [Member]	Sep. 19, 2014 Cash [Member] Simonton [Member]	Apr. 09, 2013 Inventory [Member] Gienow [Member]	Sep. 19, 2014 Inventory [Member] Simonton [Member]	May 31, 2013 Inventory [Member] Mitten [Member]	Apr. 09, 2013 Accounts Receivable [Member] Gienow [Member]	Sep. 19, 2014 Accounts Receivable [Member] Simonton [Member]	May 31, 2013 Accounts Receivable [Member] Mitten [Member]	Apr. 09, 2013 Other Current Assets [Member] Gienow [Member]	Sep. 19, 2014 Other Current Assets [Member] Simonton [Member]	May 31, 2013 Other Current Assets [Member] Mitten [Member]	Apr. 09, 2013 Property, Plant and Equipment, Other Types [Member] Gienow [Member]	Sep. 19, 2014 Property, Plant and Equipment, Other Types [Member] Simonton [Member]	May 31, 2013 Property, Plant and Equipment, Other Types [Member] Mitten [Member]	Apr. 09, 2013 deferred tax asset [Member] Gienow [Member]	Sep. 19, 2014 deferred tax asset [Member] Simonton [Member]	Sep. 19, 2014 Other Assets [Member] Simonton [Member]	May 31, 2013 Other Assets [Member] Mitten [Member]	Apr. 09, 2013 Other Intangible Assets [Member] Gienow [Member]	Sep. 19, 2014 Other Intangible Assets [Member] Simonton [Member]	May 31, 2013 Other Intangible Assets [Member] Mitten [Member]	May 31, 2013 Goodwill [Member] Mitten [Member]	Apr. 09, 2013 Accounts Payable [Member] Gienow [Member]	Sep. 19, 2014 Accounts Payable [Member] Simonton [Member]	May 31, 2013 Accounts Payable [Member] Mitten [Member]	Apr. 09, 2013 Other Liabilities [Member] Gienow [Member]	Sep. 19, 2014 Other Liabilities [Member] Simonton [Member]	May 31, 2013 Deferred Income Tax Charges [Member] Mitten [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents																	$ (856,000)
Business Combination, Acquired Receivables, Fair Value																					11,714,000	37,269,000	18,393,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory																		6,814,000	17,673,000	22,592,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets																								1,118,000	2,233,000	904,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment																											4,746,000	53,655,000	9,279,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Assets Noncurrent																														2,657,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles																																		1,083,000	62,170,000	35,400,000
Goodwill	450,618,000		450,618,000		420,228,000	3,717,000	32,344,000																														26,098,000
Valuation Allowances and Reserves, Adjustments			7,900,000					25,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable																																						(10,041,000)	(45,555,000)	(27,499,000)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities Noncurrent																															(24,979,000)												(9,786,000)
Consideration paid in acquisition																																									(1,428,000)	(4,380,000)
Net sales	437,848,000	407,426,000	1,116,524,000	1,032,663,000				7,200,000		0.80	0.20		0.50	0.50	0.60	0.40
Business Acquisition, Pro Forma Revenue								1,344,400,000	1,251,700,000
Net income (loss)	21,405,000	16,895,000	(18,793,000)	(62,089,000)
Business Acquisition, Pro Forma Net Income (Loss)								18,800,000	66,200,000
Business Combination, Separately Recognized Transactions, Additional Disclosures, Acquisition Cost Expensed								600,000
Business Combination, Consideration Transferred						20,380,000	130,000,000					76,820,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Assets																																$ 426,000	$ 1,439,000

XML

GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION

9 Months Ended

Sep. 27, 2014

GUARANTOR / NON GUARANTOR FINANCIAL INFORMATION [Abstract]

GUARANTOR / NON-GUARANTOR FINANCIAL INFORMATION

15.   GUARANTOR/NON-GUARANTOR

The 6.50% Senior Notes were issued by our direct 100% owned subsidiary, Ply Gem Industries, and are fully and unconditionally guaranteed on a joint and several basis by the Company and certain of Ply Gem Industries’ 100% owned subsidiaries.  Ply Gem Industries is a 100% owned subsidiary of Ply Gem Holdings. Accordingly, the following guarantor and non-guarantor information is presented as of September 27, 2014 and December 31, 2013, and for the three and nine months ended September 27, 2014 and September 28, 2013.  The non-guarantor information presented represents our Canadian subsidiaries: Gienow and Mitten.

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the three months ended September 27, 2014
	Guarantor		Issuer						Non-
	Ply Gem		Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.		Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Net sales	$	—	$	—		$	352,856		$	84,992		$	—		$	437,848
Cost of products sold	—		—			275,938			63,321			—			339,259
Gross profit	—		—			76,918			21,671			—			98,589
Operating expenses:
Selling, general and
administrative expenses	—		6,602			28,502			16,251			—			51,355
Intercompany administrative
charges	—		—			4,528			1,047			(5,575		)	—
Amortization of intangible assets	—		—			4,008			1,299			—			5,307
Total operating expenses	—		6,602			37,038			18,597			(5,575		)	56,662
Operating earnings (loss)	—		(6,602		)	39,880			3,074			5,575			41,927
Foreign currency loss	—		—			—			(766		)	—			(766		)
Intercompany interest	—		13,328			(11,723		)	(1,605		)	—			—
Interest expense	—		(16,296		)	(4		)	—			—			(16,300		)
Interest income	—		1			4			13			—			18
Tax receivable agreement liability adjustment	—		(13,988		)	—			—			—			(13,988		)
Intercompany administrative income	—		5,575			—			—			(5,575		)	—
Income (loss) before equity in
subsidiaries' income	—		(17,982		)	28,157			716			—			10,891
Equity in subsidiaries' income	21,405		39,387			—			—			(60,792		)	—
Income before provision
(benefit) for income taxes	21,405		21,405			28,157			716			(60,792		)	10,891
Provision (benefit) for income taxes	—		—			(11,159		)	645			—			(10,514		)
Net income	$	21,405	$	21,405		$	39,316		$	71		$	(60,792	)	$	21,405
Other comprehensive income (loss):
Foreign currency translation adjustments	—		—			—			(5,009		)	—			(5,009		)
Unrealized gain on derivative instrument	—		—			—			886			—			886
Total comprehensive income (loss)	$	21,405	$	21,405		$	39,316		$	(4,052	)	$	(60,792	)	$	17,282

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the three months ended September 28, 2013
	Guarantor		Issuer						Non-
	Ply Gem		Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.		Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
Net sales	$	—	$	—		$	316,548		$	90,878		$	—		$	407,426
Cost of products sold	—		—			256,912			66,346			—			323,258
Gross profit	—		—			59,636			24,532			—			84,168
Operating expenses:
Selling, general and
administrative expenses	—		4,067			26,780			16,750			—			47,597
Intercompany administrative
charges	—		—			4,235			1,941			(6,176		)	—
Amortization of intangible assets	—		—			4,221			1,430			—			5,651
Total operating expenses	—		4,067			35,236			20,121			(6,176		)	53,248
Operating earnings (loss)	—		(4,067		)	24,400			4,411			6,176			30,920
Foreign currency loss	—		—			—			(376		)	—			(376		)
Intercompany interest	—		17,842			(17,509		)	(333		)	—			—
Interest expense	—		(22,070		)	(9		)	34			—			(22,045		)
Interest income	—		1			165			119			—			285
Tax receivable agreement liability adjustment	—		6,669			—			—			—			6,669
Intercompany administrative income	—		6,176			—			—			(6,176		)	—
Income before equity in
subsidiaries' income	—		4,551			7,047			3,855			—			15,453
Equity in subsidiaries' income	16,895		12,344			—			—			(29,239		)	—
Income before provision (benefit)
for income taxes	16,895		16,895			7,047			3,855			(29,239		)	15,453
Provision (benefit) for income taxes	—		—			(2,124		)	682			—			(1,442		)
Net income	$	16,895	$	16,895		$	9,171		$	3,173		$	(29,239	)	$	16,895
Other comprehensive income:
Foreign currency translation adjustments	—		—			—			4,074			—			4,074
Total comprehensive income	$	16,895	$	16,895		$	9,171		$	7,247		$	(29,239	)	$	20,969

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the nine months ended September 27, 2014
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Net sales	$	—		$	—		$	905,393		$	211,131		$	—		$	1,116,524
Cost of products sold	—			—			728,675			162,042			—			890,717
Gross profit	—			—			176,718			49,089			—			225,807
Operating expenses:
Selling, general and
administrative expenses	—			18,116			90,553			47,722			—			156,391
Intercompany administrative
charges	—			—			12,774			4,567			(17,341		)	—
Amortization of intangible assets	—			—			11,793			4,048			—			15,841
Total operating expenses	—			18,116			115,120			56,337			(17,341		)	172,232
Operating earnings (loss)	—			(18,116		)	61,598			(7,248		)	17,341			53,575
Foreign currency loss	—			—			—			(517		)	—			(517		)
Intercompany interest	—			45,352			(42,753		)	(2,599		)	—			—
Interest expense	—			(52,033		)	(30		)	(2		)	—			(52,065		)
Interest income	—			4			24			36			—			64
Tax receivable agreement liability adjustment	—			(14,419		)	—			—			—			(14,419		)
Loss on modification or
extinguishment of debt	—			(21,364		)	—			—			—			(21,364		)
Intercompany administrative income	—			17,341			—			—			(17,341		)	—
Income (loss) before equity in
subsidiaries' loss	—			(43,235		)	18,839			(10,330		)	—			(34,726		)
Equity in subsidiaries' income (loss)	(18,793		)	24,442			—			—			(5,649		)	—
Income (loss) before provision
(benefit) for income taxes	(18,793		)	(18,793		)	18,839			(10,330		)	(5,649		)	(34,726		)
Provision (benefit) for income taxes	—			—			(21,134		)	5,201			—			(15,933		)
Net income (loss)	$	(18,793	)	$	(18,793	)	$	39,973		$	(15,531	)	$	(5,649	)	$	(18,793	)
Other comprehensive loss:
Foreign currency translation adjustments	—			—			—			(5,366		)	—			(5,366		)
Unrealized loss on derivative instrument	—			—			—			(47		)	—			(47		)
Total comprehensive income (loss)	$	(18,793	)	$	(18,793	)	$	39,973		$	(20,944	)	$	(5,649	)	$	(24,206	)

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the nine months ended September 28, 2013
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
Net sales	$	—		$	—		$	872,528		$	160,135		$	—		$	1,032,663
Cost of products sold	—			—			713,064			119,325			—			832,389
Gross profit	—			—			159,464			40,810			—			200,274
Operating expenses:
Selling, general and
administrative expenses	—			15,912			83,032			32,218			—			131,162
Intercompany administrative
charges	—			—			15,134			5,047			(20,181		)	—
Amortization of intangible assets	—			—			12,629			1,946			—			14,575
Initial public offering costs	—			23,527			—			—			—			23,527
Total operating expenses	—			39,439			110,795			39,211			(20,181		)	169,264
Operating earnings (loss)	—			(39,439		)	48,669			1,599			20,181			31,010
Foreign currency loss	—			—			—			(755		)	—			(755		)
Intercompany interest	—			59,992			(59,238		)	(754		)	—			—
Interest expense	—			(70,583		)	(28		)	6			—			(70,605		)
Interest income	—			6			181			172			—			359
Tax receivable agreement liability adjustment	—			(1,474		)	—			—			—			(1,474		)
Loss on modification or
extinguishment of debt	—			(18,948		)	—			—			—			(18,948		)
Intercompany administrative income	—			20,181			—			—			(20,181		)	—
Income (loss) before equity in
subsidiaries' loss	—			(50,265		)	(10,416		)	268			—			(60,413		)
Equity in subsidiaries' income (loss)	(62,089		)	(11,824		)	—			—			73,913			—
Income (loss) before provision (benefit)
for income taxes	(62,089		)	(62,089		)	(10,416		)	268			73,913			(60,413		)
Provision (benefit) for income taxes	—			—			1,866			(190		)	—			1,676
Net income (loss)	$	(62,089	)	$	(62,089	)	$	(12,282	)	$	458		$	73,913		$	(62,089	)
Other comprehensive loss:
Foreign currency translation adjustments	—			—			—			1,091			—			1,091
Total comprehensive income (loss)	$	(62,089	)	$	(62,089	)	$	(12,282	)	$	1,549		$	73,913		$	(60,998	)

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
As of September 27, 2014
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
ASSETS	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Current Assets:
Cash and cash equivalents	$	—		$	12,151		$	(3,427	)	$	18,058		$	—		$	26,782
Accounts receivable, net	—			—			229,183			48,955			—			278,138
Inventories:
Raw materials	—			—			62,437			13,421			—			75,858
Work in process	—			—			27,018			1,341			—			28,359
Finished goods	—			—			52,699			18,791			—			71,490
Total inventory	—			—			142,154			33,553			—			175,707
Prepaid expenses and other
current assets	—			461			15,494			4,547			—			20,502
Deferred income taxes	—			—			6,554			—			—			6,554
Total current assets	—			12,612			389,958			105,113			—			507,683
Investments in subsidiaries	(73,456		)	(8,108		)	—			—			81,564			—
Property and Equipment, at cost:
Land	—			—			7,100			917			—			8,017
Buildings and improvements	—			—			60,030			5,640			—			65,670
Machinery and equipment	—			2,701			341,481			16,593			—			360,775
	—			2,701			408,611			23,150			—			434,462
Less accumulated depreciation	—			(1,967		)	(264,168		)	(7,758		)	—			(273,893		)
Total property and equipment, net	—			734			144,443			15,392			—			160,569
Other Assets:
Intangible assets, net	—			—			128,345			26,661			—			155,006
Goodwill	—			—			415,386			35,232			—			450,618
Intercompany note receivable	—			953,510			—			—			(953,510		)	—
Other	—			28,283			2,703			—			—			30,986
Total other assets	—			981,793			546,434			61,893			(953,510		)	636,610
	$	(73,456	)	$	987,031		$	1,080,835		$	182,398		$	(871,946	)	$	1,304,862
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	—		$	541		$	91,518		$	24,917		$	—		$	116,976
Accrued expenses	—			15,756			106,557			25,244			—			147,557
Current portion of long-term debt	—			4,300			—			—			—			4,300
Total current liabilities	—			20,597			198,075			50,161			—			268,833
Deferred income taxes	—			—			14,784			7,736			—			22,520
Intercompany note payable	—			—			842,051			111,459			(953,510		)	—
Payable to related parties pursuant to
tax receivable agreement	—			26,042			—			—			—			26,042
Other long-term liabilities	—			5,323			42,880			4,195			—			52,398
Long-term debt, less current portion	—			1,008,525			—			—			—			1,008,525
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	—			—			—			—			—			—
Common stock	678			678			—			—			(678		)	678
Additional paid-in-capital	744,529			744,529			622,281			13,581			(1,380,391		)	744,529
(Accumulated deficit) retained earnings	(810,036		)	(810,036		)	(639,236		)	636			1,448,636			(810,036		)
Accumulated other
comprehensive loss	(8,627		)	(8,627		)	—			(5,370		)	13,997			(8,627		)
Total stockholders' (deficit) equity	(73,456		)	(73,456		)	(16,955		)	8,847			81,564			(73,456		)
	$	(73,456	)	$	987,031		$	1,080,835		$	182,398		$	(871,946	)	$	1,304,862

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2013
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	—		$	57,800		$	(4,970	)	$	16,971		$	—		$	69,801
Accounts receivable, net	—			—			110,475			29,587			—			140,062
Inventories:
Raw materials	—			—			41,593			9,720			—			51,313
Work in process	—			—			22,781			1,036			—			23,817
Finished goods	—			—			42,751			17,589			—			60,340
Total inventory	—			—			107,125			28,345			—			135,470
Prepaid expenses and other
current assets	—			613			17,270			5,331			—			23,214
Deferred income taxes	—			—			2,825			353			—			3,178
Total current assets	—			58,413			232,725			80,587			—			371,725
Investments in subsidiaries	(51,996		)	(229,668		)	—			—			281,664			—
Property and Equipment, at cost:
Land	—			—			3,565			963			—			4,528
Buildings and improvements	—			—			38,059			5,632			—			43,691
Machinery and equipment	—			3,275			300,089			18,250			—			321,614
	—			3,275			341,713			24,845			—			369,833
Less accumulated depreciation	—			(1,385		)	(249,344		)	(7,457		)	—			(258,186		)
Total property and equipment, net	—			1,890			92,369			17,388			—			111,647
Other Assets:
Intangible assets, net	—			—			77,968			32,044			—			110,012
Goodwill	—			—			383,042			37,186			—			420,228
Deferred income taxes	—			—			—			5,406			—			5,406
Intercompany note receivable	—			958,631			—			—			(958,631		)	—
Other	—			20,907			2,326			—			—			23,233
Total other assets	—			979,538			463,336			74,636			(958,631		)	558,879
	$	(51,996	)	$	810,173		$	788,430		$	172,611		$	(676,967	)	$	1,042,251
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	—		$	601		$	66,847		$	15,533		$	—		$	82,981
Accrued expenses	—			31,056			62,120			19,764			—			112,940
Total current liabilities	—			31,657			128,967			35,297			—			195,921
Deferred income taxes	—			—			9,005			8,110			—			17,115
Intercompany note payable	—			—			859,768			98,863			(958,631		)	—
Payable to related parties pursuant to
tax receivable agreement	—			11,623			—			—			—			11,623
Other long-term liabilities	—			1,861			46,315			4,384			—			52,560
Long-term debt	—			817,028			—			—			—			817,028
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	—			—			—			—			—			—
Common stock	672			672			—			—			(672		)	672
Additional paid-in-capital	741,789			741,789			423,584			12,727			(1,178,100		)	741,789
(Accumulated deficit) retained earnings	(791,243		)	(791,243		)	(679,209		)	16,167			1,454,285			(791,243		)
Accumulated other
comprehensive income (loss)	(3,214		)	(3,214		)	—			(2,937		)	6,151			(3,214		)
Total stockholders' (deficit) equity	(51,996		)	(51,996		)	(255,625		)	25,957			281,664			(51,996		)
	$	(51,996	)	$	810,173		$	788,430		$	172,611		$	(676,967	)	$	1,042,251

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the nine months ended September 27, 2014
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(18,793	)	$	(18,793	)	$	39,973		$	(15,531	)	$	(5,649	)	$	(18,793	)
Adjustments to reconcile net income (loss)
to cash used in operating activities:
Depreciation and amortization expense	—			486			27,239			6,191			—			33,916
Fair-value premium on purchased inventory	—			—			38			—			—			38
Fair-value decrease of contingent acquisition liability	—			—			(264		)	—			—			(264		)
Non-cash restructuring costs	—			—			—			3,012			—			3,012
Non-cash interest expense, net	—			11,606			—			—			—			11,606
Loss on foreign currency transactions	—			—			—			517			—			517
Non-cash litigation expense	—			—			4,593			—			—			4,593
Loss on modification or extinguishment of debt	—			21,364			—			—			—			21,364
Stock based compensation	—			1,672			—			—			—			1,672
Deferred income taxes	—			—			(22,227		)	5,032			—			(17,195		)
Tax receivable agreement liability adjustment	—			14,419			—			—			—			14,419
Increase in tax uncertainty,
net of valuation allowance	—			—			254			—			—			254
Equity in subsidiaries' net loss	18,793			(24,442		)	—			—			5,649			—
Other	—			—			(50		)	(174		)	—			(224		)
Changes in operating assets and liabilities:
Accounts receivable, net	—			—			(81,439		)	(21,289		)	—			(102,728		)
Inventories	—			—			(17,394		)	(6,680		)	—			(24,074		)
Prepaid expenses and other assets	—			189			2,673			(255		)	—			2,607
Accounts payable	—			(60		)	5,873			9,367			—			15,180
Accrued expenses	—			(18,259		)	11,865			4,926			—			(1,468		)
Cash payments on restructuring liabilities	—			—			(577		)	(3,835		)	—			(4,412		)
Other	—			2			(1,997		)	6,566			—			4,571
Net cash used in
operating activities	—			(11,816		)	(31,440		)	(12,153		)	—			(55,409		)
Cash flows from investing activities:
Acquisitions, net of cash acquired and
outstanding checks assumed	—			(130,856		)	—			—			—			(130,856		)
Capital expenditures	—			(1,075		)	(11,907		)	(1,542		)	—			(14,524		)
Proceeds from sale of assets	—			—			109			635			—			744
Net cash used in
investing activities	—			(131,931		)	(11,798		)	(907		)	—			(144,636		)
Cash flows from financing activities:
Proceeds from long-term debt	—			1,067,725			—			—			—			1,067,725
Net revolver borrowings	—			20,000			—			—			—			20,000
Payments on long-term debt	—			(853,075		)	—			—			—			(853,075		)
Payment of tender and early call premiums	—			(61,142		)	—			—			—			(61,142		)
Proceeds from exercises of employee stock options	—			1,073			—			—			—			1,073
Proceeds from intercompany
investment	—			(59,762		)	44,781			14,981			—			—
Debt issuance costs paid	—			(16,721		)	—			—			—			(16,721		)
Net cash provided by (used in)
financing activities	—			98,098			44,781			14,981			—			157,860
Impact of exchange rate movements on cash	—			—			—			(834		)	—			(834		)
Net increase (decrease) in cash
and cash equivalents	—			(45,649		)	1,543			1,087			—			(43,019		)
Cash and cash equivalents at the
beginning of the period	—			57,800			(4,970		)	16,971			—			69,801
Cash and cash equivalents at the end
of the period	$	—		$	12,151		$	(3,427	)	$	18,058		$	—		$	26,782

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the nine months ended September 28, 2013
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(62,089	)	$	(62,089	)	$	(12,282	)	$	458		$	73,913		$	(62,089	)
Adjustments to reconcile net income (loss)
to cash provided by (used in) operating activities:
Depreciation and amortization expense	—			315			28,744			3,924			—			32,983
Fair-value premium on purchased inventory	—			—			—			2,015			—			2,015
Fair-value decrease of contingent acquisition liability	—			—			(358		)	—			—			(358		)
Non-cash interest expense, net	—			9,457			—			—			—			9,457
Loss on foreign currency transactions	—			—			—			755			—			755
Loss on modification or extinguishment of debt	—			18,948			—			—			—			18,948
Prepaid management fee write off	—			2,682			—			—			—			2,682
Stock based compensation	—			1,631			—			—			—			1,631
Deferred income taxes	—			—			1,937			(172		)	—			1,765
Tax receivable agreement liability adjustment	—			1,474			—			—			—			1,474
Reduction in tax uncertainty,
net of valuation allowance	—			—			(1,279		)	—			—			(1,279		)
Equity in subsidiaries' net loss	62,089			11,824			—			—			(73,913		)	—
Other	—			—			(5		)	—			—			(5		)
Changes in operating assets and liabilities:
Accounts receivable, net	—			—			(67,244		)	(8,159		)	—			(75,403		)
Inventories	—			—			(13,605		)	1,875			—			(11,730		)
Prepaid expenses and other
current assets	—			(5,322		)	(294		)	435			—			(5,181		)
Accounts payable	—			107			3,142			(7,441		)	—			(4,192		)
Accrued expenses	—			(2,713		)	17,428			11,837			—			26,552
Payment of advisory termination fee to affiliate	—			(18,852		)	—			—			—			(18,852		)
Cash payments on restructuring liabilities	—			—			(2,535		)	(358		)	—			(2,893		)
Other	—			—			87			(999		)	—			(912		)
Net cash provided by (used in)
operating activities	—			(42,538		)	(46,264		)	4,170			—			(84,632		)
Cash flows from investing activities:
Acquisitions, net of cash acquired	—			(99,282		)	—			—			—			(99,282		)
Capital expenditures	—			(542		)	(15,014		)	(758		)	—			(16,314		)
Proceeds from sale of assets	—			—			24			—			—			24
Net cash used in
investing activities	—			(99,824		)	(14,990		)	(758		)	—			(115,572		)
Cash flows from financing activities:
Net revolver payments	—			(1,000		)	—			—			—			(1,000		)
Payments on long-term debt	—			(148,000		)	—			—			—			(148,000		)
Payment of early call premium	—			(8,520		)	—			—			—			(8,520		)
Net proceeds from issuance of common stock	—			353,407			—			—			—			353,407
Proceeds from intercompany
investment	—			(60,152		)	57,582			2,570			—			—
Debt issuance costs paid	—			(62		)	—			—			—			(62		)
Net cash provided by
financing activities	—			135,673			57,582			2,570			—			195,825
Impact of exchange rate movement
on cash	—			—			—			301			—			301
Net increase (decrease) in cash
and cash equivalents	—			(6,689		)	(3,672		)	6,283			—			(4,078		)
Cash and cash equivalents at the
beginning of the period	—			23,332			(4,307		)	8,169			—			27,194
Cash and cash equivalents at the end
of the period	$	—		$	16,643		$	(7,979	)	$	14,452		$	—		$	23,116