10-Q 1 e10-q.txt FORM 10-Q FOR QUARTER ENDED JUNE 30, 2000 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ----------------------- F0RM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES --- EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2000 ---------------------------------------- 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: 0-24956 ASSOCIATED MATERIALS INCORPORATED ------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware 75-1872487 ------------------------------------------------------------------------------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation of Organization) Identification No.) 2200 Ross Avenue, Suite 4100 East, Dallas, Texas 75201 ------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code (214) 220-4600 ---------------------------- Not Applicable -------------------------------------------------------------------------------- Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report Indicate by check Y whether the registrant (1) has filed all reports required to be filed by Section 13 of 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 Y No --- Shares of Common Stock, $.0025 par value outstanding at August 10, 2000: 6,508,965 Shares of Class B Common Stock, $.0025 par value outstanding at August 10, 2000: 1,550,000 2 ASSOCIATED MATERIALS INCORPORATED FORM 10-Q FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2000
Page No. ------- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets............................................................ 1 June 30, 2000 (Unaudited) and December 31, 1999 Statements of Operations (Unaudited)...................................... 2 Quarter and six months ended June 30, 2000 and 1999 Statements of Cash Flows (Unaudited)...................................... 3 Six months ended June 30, 2000 and 1999 Notes to Financial Statements (Unaudited)................................. 4 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition......................................... 6 Item 3. Quantitative and Qualitative Disclosures About Market Risk........... 10 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders.................. 11 Item 6. Exhibits and Reports on Form 8-K..................................... 11 SIGNATURES...................................................................... 12
3 Part I. Financial Information Item 1. Financial Statements ASSOCIATED MATERIALS INCORPORATED BALANCE SHEETS (In Thousands, Except Share Data)
June 30, December 31, 2000 1999 ----------- ------------ (Unaudited) ASSETS Current assets: Cash and cash equivalents ............................... $ 18,656 $ 3,432 Accounts receivable, net ................................ 58,235 52,583 Inventories ............................................. 80,358 69,651 Income taxes receivable ................................. -- 226 Other current assets .................................... 5,039 3,872 --------- --------- Total current assets ....................................... 162,288 129,764 Property, plant and equipment, net ......................... 68,316 71,682 Investment in Amercord Inc. ................................ 2,393 2,393 Other assets ............................................... 2,318 2,457 --------- --------- Total assets ............................................... $ 235,315 $ 206,296 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable ........................................ $ 30,043 $ 16,933 Accrued liabilities ..................................... 21,719 26,953 Income taxes payable .................................... 4,993 -- --------- --------- Total current liabilities .................................. 56,755 43,886 Deferred income taxes ...................................... 5,329 2,236 Other liabilities .......................................... 5,699 5,848 Long-term debt ............................................. 75,000 75,000 Commitments and contingencies Stockholders' equity: Preferred stock, $.01 par value: Authorized shares - 100,000 at June 30, 2000 and December 31, 1999 Issued shares - 0 at June 30, 2000 and December 31, 1999 ................................. -- -- Common stock, $.0025 par value: Authorized shares - 15,000,000 Issued shares - 7,064,361 at June 30, 2000 and 7,024,666 at December 31, 1999 ............. 17 17 Common stock, Class B, $.0025 par value: Authorized and issued shares - 1,550,000 at June 30, 2000 and December 31, 1999 ............ 4 4 Less: Treasury stock, at cost - 555,396 shares at June 30, 2000 and December 31, 1999 ............... (6,626) (6,626) Capital in excess of par ............................. 13,676 13,154 Retained earnings .................................... 85,461 72,777 --------- --------- Total stockholders' equity ........................... 92,532 79,326 --------- --------- Total liabilities and stockholders' equity ................. $ 235,315 $ 206,296 ========= =========
See accompanying notes. -1- 4 ASSOCIATED MATERIALS INCORPORATED STATEMENTS OF OPERATIONS (Unaudited) (In Thousands, Except Per Share Data)
Quarter Ended Six Months Ended June 30, June 30, --------------------- --------------------- 2000 1999 2000 1999 --------- --------- --------- --------- Net sales ........................................ $ 133,374 $ 118,908 $ 235,880 $ 203,505 Cost of sales .................................... 93,641 80,075 167,554 139,517 --------- --------- --------- --------- 39,733 38,833 68,326 63,988 Selling, general and administrative expense ...... 27,018 24,246 51,301 46,141 --------- --------- --------- --------- Income from operations ........................... 12,715 14,587 17,025 17,847 Interest expense ................................. 1,724 1,760 3,448 3,439 --------- --------- --------- --------- 10,991 12,827 13,577 14,408 Equity in loss of Amercord Inc. .................. -- (317) -- (545) Gain on sale of UltraCraft ....................... 8,348 -- 8,348 -- --------- --------- --------- --------- Income before income taxes ....................... 19,339 12,510 21,925 13,863 Income tax expense ............................... 7,445 4,914 8,440 5,467 --------- --------- --------- --------- Net income ....................................... $ 11,894 $ 7,596 $ 13,485 $ 8,396 ========= ========= ========= ========= Earnings Per Common Share - Basic: Net income per common share ...................... $ 1.48 $ 0.94 $ 1.68 $ 1.02 ========= ========= ========= ========= Earnings Per Common Share - Assuming Dilution: Net income per common share ...................... $ 1.43 $ 0.91 $ 1.63 $ 1.00 ========= ========= ========= =========
See accompanying notes. -2- 5 ASSOCIATED MATERIALS INCORPORATED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands)
Six Months Ended June 30, -------------------- 2000 1999 -------- -------- OPERATING ACTIVITIES Net income ...................................................... $ 13,485 $ 8,396 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ............................. 4,745 4,019 Deferred income taxes ..................................... 3,093 924 Loss in earnings of Amercord Inc. ......................... -- 545 Loss on sale of assets .................................... 3 -- Gain on sale of UltraCraft ................................ (8,348) -- Changes in operating assets and liabilities: Accounts receivable, net ............................... (9,155) (10,504) Inventories ............................................ (12,885) (9,882) Income taxes receivable/payable ........................ 5,219 3,418 Accounts payable and accrued liabilities ............... 8,591 11,620 Other assets and liabilities ........................... (1,625) (546) -------- -------- Net cash provided by operating activities ....................... 3,123 7,990 INVESTING ACTIVITIES Proceeds from sale of assets .................................... 48 21 Proceeds from sale of UltraCraft ................................ 19,220 -- Additions to property, plant and equipment ...................... (6,888) (13,375) -------- -------- Net cash provided by (used by) investing activities ............. 12,380 (13,354) FINANCING ACTIVITIES Net proceeds from issuance of common stock ...................... 488 431 Principal payments of long-term debt ............................ -- (3,600) Dividends paid .................................................. (801) (845) Treasury stock acquired ......................................... -- (3,927) Options exercised ............................................... 34 30 -------- -------- Net cash used by financing activities ........................... (279) (7,911) Net increase (decrease) in cash ................................. 15,224 (13,275) Cash at beginning of period ..................................... 3,432 14,964 -------- -------- Cash at end of period ........................................... $ 18,656 $ 1,689 ======== ======== Supplemental information: Cash paid for interest .......................................... $ 3,647 $ 3,439 ======== ======== Cash paid for income taxes ...................................... $ 848 $ 2,420 ======== ========
See accompanying notes. -3- 6 ASSOCIATED MATERIALS INCORPORATED NOTES TO FINANCIAL STATEMENTS FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2000 (Unaudited) NOTE 1 - BASIS OF PRESENTATION The unaudited financial statements of Associated Materials Incorporated (the "Company") for the quarter and six months ended June 30, 2000 have been prepared in accordance with generally accepted accounting principles for interim financial reporting, the instructions to Form 10-Q, and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999 filed with the Securities and Exchange Commission. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the interim financial information have been included. The results of operations for any interim period are not necessarily indicative of the results of operations for a full year. NOTE 2 - INVENTORIES Inventories are valued at the lower of cost (first in, first out) or market. Inventories consist of the following (in thousands):
June 30, December 31, 2000 1999 ------- ------------ Raw materials .......................... $21,696 $20,043 Work in process ........................ 5,886 5,937 Finished goods and purchased stock ..... 52,776 43,671 ------- ------- $80,358 $69,651 ======= ========
NOTE 3 - STOCKHOLDERS' EQUITY Under its stock repurchase program, the Company is authorized to purchase up to 800,000 shares of common stock in open market transactions. The Company did not purchase any shares of its common stock during the six months ended June 30, 2000. NOTE 4 - ULTRACRAFT SALE The Company completed the sale of its UltraCraft operation, a manufacturer of semi-custom frameless cabinets, in June 2000. Pre-tax net proceeds from the sale were $19.2 million after working capital adjustment and transaction costs. The Company recorded a pre-tax gain on the sale of $8.3 million. UltraCraft represented approximately 5.7% of the Company's net sales for 1999. Under the terms of the indenture pursuant to which the Company issued its 9 1/4% subordinated notes, the Company is obligated to make an offer to repurchase these notes using the after tax net proceeds from the UltraCraft sale, to the extent the Company does not use these net proceeds within one year of the sale to repay senior indebtedness or to acquire assets used in, or other businesses similar to, the business currently conducted by the Company. -4- 7 NOTE 5 - EARNINGS PER COMMON SHARE The following table sets forth the computation of basic and diluted earnings per share:
Quarter Ended Six Months Ended June 30, June 30, ----------------- ----------------- 2000 1999 2000 1999 ------- ------- ------- ------- Numerator: Numerator for basic and diluted earnings per common share ............................... $11,894 $ 7,596 $13,485 $ 8,396 Denominator: Denominator for basic earnings per common - share weighted-average shares ............. 8,021 8,097 8,020 8,218 Effect of dilutive securities: Employee stock options ..................... 286 211 251 179 ------- ------- ------- ------- Denominator for diluted earnings per common share - adjusted weighted-average shares ... 8,307 8,308 8,271 8,397 Basic earnings per common share .................. $ 1.48 $ 0.94 $ 1.68 $ 1.02 ======= ======= ======= ======= Diluted earnings per common share ................ $ 1.43 $ 0.91 $ 1.63 $ 1.00 ======= ======= ======= =======
Options to purchase 40,000 shares of common stock were excluded from the calculation of weighted average shares outstanding for the quarter and six months ended June 30, 2000 and June 30, 1999 because the average exercise price of these shares was higher than the average market price of the common stock during the period. -5- 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS Quarter Ended June 30, 2000 Compared to Quarter Ended June 30, 1999 The table below sets forth for the periods indicated certain items of the Company's financial statements by segment:
Quarter Ended June 30, ------------------------------------------------------------------- 2000 1999 ----------------------------- -------------------------------- Percentage of Percentage of Amount Total Net Sales Amount Total Net Sales -------- --------------- ------------ --------------- Total Company: Net sales - Alside .......... $118,531 88.9% $109,155 91.8% Net sales - AmerCable ....... 14,843 11.1 9,753 8.2 -------- -------- -------- -------- Total net sales .......... 133,374 100.0 118,908 100.0 Gross profit ................ 39,733 29.8 38,833 32.7 Selling, general and administrative expense (1) 27,018 20.3 24,246 20.4 -------- -------- -------- -------- Income from operations ...... $ 12,715 9.5% $ 14,587 12.3% ======== ======== ======== ======== Alside: Net sales ................... $118,531 100.0% $109,155 100.0% Gross profit ................ 37,045 31.3 37,647 34.5 Selling, general and administrative expense ... 24,424 20.6 22,306 20.4 -------- -------- -------- -------- Income from operations ...... $ 12,621 10.7% $ 15,341 14.1% ======== ======== ======== ======== AmerCable: Net sales ................... $ 14,843 100.0% $ 9,753 100.0% Gross profit ................ 2,688 18.1 1,186 12.2 Selling, general and administrative expense ... 1,512 10.2 998 10.2 -------- -------- -------- -------- Income from operations ...... $ 1,176 7.9% $ 188 2.0% ======== ======== ======== ========
(1) Consolidated selling, general and administrative expenses include corporate expenses of $1,082,000 and $942,000 for the quarters ended June 30, 2000 and 1999, respectively. Overview The Company's net sales increased $14.5 million to $133.4 million for the second quarter of 2000 as compared to the 1999 period due to higher sales at the Company's Alside and AmerCable divisions. Income from operations decreased 12.8% to $12.7 million for the second quarter of 2000 due to lower gross profits and higher selling, general and administrative expense at its Alside division. The Company's net income increased to $11.9 million or $1.43 per share for the second quarter of 2000 as compared to $7.6 million or $0.91 per share for the same period in 1999 due to the sale of the Company's UltraCraft operation, a manufacturer of semi-custom frameless cabinets, which resulted in a pre-tax gain of $8.3 million. The Company's second quarter 2000 net income and earnings per share were $6.8 million and $0.81, respectively, exclusive of the UltraCraft sale. ALSIDE. Alside's net sales increased $9.4 million to $118.5 million for the quarter ended June 30, 2000 as compared to $109.2 million for the same period in 1999 due primarily to higher selling prices as price increases -6- 9 were implemented to offset higher vinyl resin prices. Unit sales of vinyl siding and vinyl windows increased 1.5% and 3.7%, respectively for the second quarter of 2000 as compared to the 1999 period. Gross profit as a percentage of sales decreased to 31.3% as compared to 34.5% for the 1999 period due to higher vinyl resin prices and lower fixed cost absorption resulting from lower than anticipated production volume. Selling, general and administrative expense increased 9.5% to $24.4 million for the second quarter of 2000. This increase was due in large part to the expansion of Alside's Supply Center network from 70 to 78 during 2000. Income from operations decreased $2.7 million to $12.6 million for the 2000 period as compared to $15.3 million for the same period in 1999. AMERCABLE. AmerCable's net sales increased 52.2% to $14.8 million for the second quarter of 2000 as compared with $9.8 million for the same period in 1999 due primarily to higher sales volume of industrial and mining cable products. Gross profit as a percentage of sales increased to 18.1% for the 2000 period as compared to 12.2% for the 1999 period due to increased sales volume and improved fixed cost absorption due to higher production volume. Selling, general and administrative expenses remained constant as a percentage of net sales but increased to $1.5 million for the second quarter of 2000 as compared to $1.0 million for the same period in 1999 due to higher personnel costs including higher incentive compensation. Income from operations increased $1.0 million to $1.2 million for the quarter ended June 30, 2000 as compared to $188,000 for the same period in 1999. OTHER. Net interest expense decreased $36,000 or 2.0% for the second quarter of 2000 compared with the same period in 1999 due primarily to an increase in the Company's interest income. The Company recorded interest income of $102,000 for the quarter ended June 30, 2000. In the fourth quarter of 1999, Amercord was recapitalized. In this transaction, the Company reduced its ownership in Amercord from 50.0% to 9.9%. The Company currently accounts for Amercord using the cost method of accounting. Prior to Amercord's recapitalization, the Company accounted for Amercord using the equity method of accounting. The Company recorded a loss of $317,000 on its equity in the losses of Amercord during the second quarter of 1999. -7- 10 Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999. The table below sets forth for the periods indicated certain items of the Company's financial statements by segments.
Six Months Ended June 30, ------------------------------------------------------------------- 2000 1999 -------------------------------- ------------------------------ Percentage of Percentage of Amount Total Net Sales Amount Total Net Sales -------- --------------- -------- --------------- Total Company: Net sales - Alside .................. $205,167 87.0% $183,264 90.1% Net sales - AmerCable ............... 30,713 13.0 20,241 9.9 -------- -------- -------- -------- Total net sales .................. 235,880 100.0 203,505 100.0 Gross profit ........................ 68,326 29.0 63,988 31.4 Selling, general and administrative expense (1) ....... 51,301 21.8 46,141 22.7 -------- -------- -------- -------- Income from operations .............. $ 17,025 7.2% $ 17,847 8.7% ======== ======== ======== ======== Alside: Net sales ........................... $205,167 100.0% $183,264 100.0% Gross profit ........................ 62,543 30.5 60,802 33.2 Selling, general and administrative expense ........... 46,173 22.5 42,121 23.0 -------- -------- -------- -------- Income from operations .............. $ 16,370 8.0% $ 18,681 10.2% ======== ======== ======== ======== AmerCable: Net sales ........................... $ 30,713 100.0% $ 20,241 100.0% Gross profit ........................ 5,783 18.8 3,186 15.7 Selling, general and administrative expense ........... 3,083 10.0 2,192 10.8 -------- -------- -------- -------- Income from operations .............. $ 2,700 8.8% $ 994 4.9% ======== ======== ======== ========
(1) Consolidated selling, general and administrative expenses include corporate expenses of $2,045,000 and $1,828,000 for the six-month periods ended June 30, 2000 and 1999, respectively. Overview The Company's net sales increased 15.9% or $32.4 million to $235.9 million for the six months ended June 30, 2000 as compared to $203.5 million for the same period in 1999 due to higher selling prices and higher sales volume at the Company's Alside division and higher sales volume at its AmerCable division. Income from operations decreased 4.6% to $17.0 million for the six months ended June 30, 2000 due to lower profits at its Alside division, which were partially offset by higher profits at AmerCable. The Company's net income increased to $13.5 million or $1.63 per share for the six months ended June 30, 2000 as compared to $8.4 million or $1.00 per share for the same period in 1999 due to the sale of the Company's UltraCraft operation, which resulted in a pre-tax gain of $8.3 million. Exclusive of the UltraCraft sale, net income and earnings per share were $8.3 million and $1.01, respectively for the six months ended June 30, 2000. ALSIDE. Alside's net sales increased 12.0% to $205.2 million for the six months ended June 30, 2000 as compared to $183.3 million for the same period in 1999 due primarily to higher sales volume and higher selling prices for vinyl products as higher vinyl resin costs were passed through as higher selling prices. Gross profit as a percentage of net sales decreased to 30.5% for the six months ended June 30, 2000 as compared to 33.2% for the same period in 1999 due to lower than anticipated production volume and Alside's inability to recover any incremental margin on the selling price increases that resulted due to higher vinyl resin prices. Selling, general and administrative expense increased to $46.2 million for the six months ended June 30, 2000, but decreased as a -8- 11 percentage of sales. The higher selling, general and administrative costs were due primarily to an increase in the number of Supply Centers and higher personnel costs. Income from operations decreased to $16.4 million for the six months ended June 30, 2000 as compared to $18.7 million for the same period in 1999 due primarily to the factors discussed above. AMERCABLE. AmerCable's net sales increased 51.7% to $30.7 million for the six months ended June 30, 2000 as compared to $20.2 million in the 1999 period due primarily to increased sales volume of industrial and mining cables. Gross profit as a percentage of sales increased to 18.8% for the six months ended June 30, 2000 as compared to 15.7% for the same period in 1999 as higher production volume resulted in improved fixed cost absorption. Selling, general and administrative expenses increased to $3.1 million due primarily to higher personnel costs, including incentive compensation. Income from operations increased $1.7 million to $2.7 million for the six months ended 2000 as compared to $1.0 million for the same period in 1999. OTHER. Net interest expense remained constant at $3.4 million for the six months ended June 30, 2000 and 1999 as increased interest income in the second quarter of 2000 was offset by higher interest expense during the first quarter of 2000 due to higher short-term borrowings. The Company recorded interest income of $199,000 for the six months ended June 30, 2000. LIQUIDITY AND CAPITAL RESOURCES At June 30, 2000 the Company had cash and cash equivalents of $18.7 million and available borrowing capacity of approximately $48.2 million under its existing credit facility. Outstanding letters of credit totaled $1.8 million securing various insurance letters of credit. Net cash provided by operations was $3.1 million in the six months ended June 30, 2000 compared with $8.0 million in the same period in 1999. The decrease in cash provided by operations for the 2000 period was due primarily to lower operating profits and higher inventory levels resulting from the opening of additional Supply Centers, the Freeport vinyl manufacturing facility and higher inventory costs attributable to higher vinyl resin costs. Capital expenditures totaled $6.9 million for the six months ended June 30, 2000 compared with $13.4 million during the same period in 1999. Expenditures in the 2000 period were used primarily to increase extrusion capacity for window profiles, fencing and siding products, improve window manufacturing efficiency and upgrade window information systems at Alside. Expenditures at AmerCable were used primarily to expand capacity and improve processing efficiencies. Capital expenditures for the six months ended June 30, 1999 included $8.2 million for the construction of a new vinyl siding manufacturing plant located in Freeport, Texas. The Company has guaranteed a $3.0 million note secured by Amercord's real property. Should the guarantee be exercised by Amercord's lender, the Company and Ivaco have the option to assume the loan. Ivaco has indemnified the Company for 50% of any loss under the guarantee. Under the terms of the indenture pursuant to which the Company issued its 9 1/4% subordinated notes, the Company is obligated to make an offer to repurchase these notes using the after tax net proceeds from the UltraCraft sale, to the extent the Company does not use these net proceeds within one year of the sale to repay senior indebtedness or to acquire assets used in, or other businesses similar to, the business currently conducted by the Company. The Company believes the future cash flows from operations and its borrowing capacity under its existing credit agreement will be sufficient to satisfy its obligations to pay principal and interest on its outstanding debt, maintain current operations, provide sufficient capital for presently anticipated capital expenditures and fund its stock repurchase program. However, there can be no assurances that the cash so generated by the Company will be sufficient for these purposes. -9- 12 EFFECTS OF INFLATION The Company believes that the effects of inflation on its operations have not been material during the past two years. Inflation could adversely affect the Company if inflation results in significantly higher interest rates or substantial weakness in economic conditions. Alside's principal raw material, vinyl resin, has been subject to rapid price changes. Alside has historically been able to pass on price increases to its customers. No assurances can be given that Alside will be able to pass on any price increases in the future. CERTAIN FORWARD-LOOKING STATEMENTS This report contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the beliefs of, and estimates and assumptions made by and information currently available to, the Company's management. When used in this report, the words "anticipate," "believe," "estimate," "expect," "intend," and similar words, as they relate to the Company or the Company's management, identify forward-looking statements. These statements reflect the current views of the Company's management regarding the operations and results of operations of the Company as well as its customers and suppliers, including as a result of the availability of consumer credit, interest rates, employment trends, changes in levels of consumer confidence, changes in consumer preferences, national and regional trends in new housing starts, raw material costs, pricing pressures, shifts in market demand and general economic conditions. These statements are subject to certain risks and uncertainties. Certain factors that might cause a difference are discussed in more detail in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. Should one or more of these risks or uncertainties occur, or should management's assumptions or estimates prove incorrect, actual results and events may vary materially from those discussed in the forward-looking statements. Item 3. Quantitative and Qualitative Disclosures About Market Risk The Company is subject to commodity price risk, interest rate risk and foreign currency exchange rate risk. The Company has experienced no significant changes in market risk during the quarter or six months ended June 30, 2000. The Company's market risk is described in more detail in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. -10- 13 Part II. Other Information Item 4. Submission of Matters to a Vote of Security Holders. The 2000 Annual Meeting of Stockholders of the Company was held on May 25, 2000. The following nominees for director were elected to serve as directors until the 2003 Annual Meeting of Stockholders:
For Against --------- ------- William W. Winspear 5,951,001 214,822 Donald L. Kaufman 5,951,751 214,072 Alan B. Lerner 6,112,373 53,450
The following directors continue in office as directors after the 2000 Annual Meeting for the terms expiring at the annual meeting in the year listed below:
Term Expires ------------ Richard I. Galland 2001 John T. Gray 2001 James F. Leary 2002 A. A. Meitz 2002
The stockholders also voted upon and ratified the appointment of Ernst & Young LLP as the independent auditors of the Company for the fiscal year 2000.
For Against Abstain ---------------- --------------- --------------- 6,158,069 2,000 5,754
Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 27 - Financial Data Schedule. (b) Reports on Form 8-K During the quarter ended June 30, 2000, Associated Materials Incorporated filed no Current Reports on Form 8-K. -11- 14 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. ASSOCIATED MATERIALS INCORPORATED --------------------------------- (Registrant) Date: August 10, 2000 By: /s/ Robert L. Winspear ----------------------- Robert L. Winspear Vice President and Chief Financial Officer Date: August 10, 2000 /s/ Robert L. Winspear ---------------------- Robert L. Winspear Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) -12- 15 INDEX TO EXHIBITS
Exhibit Number Description ------- ----------- 27 Financial Data Schedule.