8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

November 11, 2005
Date of Report (Date of earliest event reported)

ASSOCIATED MATERIALS INCORPORATED

(Exact Name of Registrant as Specified in Its Charter)

Delaware	000-24956	75-1872487
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3773 State Road
Cuyahoga Falls, Ohio 44223

(Address of Principal Executive Offices)

(330) 929-1811

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition
	Item 9.01 Financial Statements and Exhibits
SIGNATURE
EX-99.1 Press Release

Item 2.02. Results of Operations and Financial Condition

     On November 11, 2005, Associated Materials Incorporated (“AMI”) and AMH Holdings, Inc. (“AMH”), the indirect parent company of AMI, issued a press release announcing their financial results for the third quarter and nine months ended October 1, 2005. A copy of the press release is attached as Exhibit 99.1 hereto.

     The information furnished in this report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits

The following exhibit is not filed but is furnished as described above.

Exhibit Number	Description of Document
99.1	Press Release, dated November 11, 2005, issued by AMI and AMH.

SIGNATURE

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

	ASSOCIATED MATERIALS INCORPORATED
DATE: November 11, 2005	By:	/s/ D. Keith LaVanway
		D. Keith LaVanway
		Vice President – Finance, Chief Financial Officer, Treasurer and Secretary

EX-99.1

Exhibit 99.1

NEWS RELEASE

ASSOCIATED MATERIALS INCORPORATED AND AMH HOLDINGS, INC.
REPORT THIRD QUARTER RESULTS

CUYAHOGA FALLS, Ohio, November 11 — Associated Materials Incorporated (“AMI” or the “Company”) today announced third quarter 2005 net sales of $328.2 million, a 4.4% increase over net sales of $314.4 million for the same period in 2004. For the nine months ended October 1, 2005, net sales were $862.2 million or 5.1% higher than net sales of $820.3 million for the same period in 2004.

Net income for the third quarter of 2005 was $11.7 million. This compares to net income of $19.9 million for the same period in 2004. For the nine months ended October 1, 2005, net income was $12.1 million compared to net income of $27.5 million for the same period in 2004.

EBITDA (as defined below) for the third quarter of 2005 was $30.6 million. This compares to EBITDA of $43.7 million for the same period in 2004. Adjusted EBITDA (as defined below) for the third quarter of 2005 was $32.4 million compared to adjusted EBITDA of $43.7 million for the same period in 2004. Adjusted EBITDA for the quarter ended October 1, 2005 excludes one-time costs of $0.5 million associated with the closure of the Company’s Freeport, Texas manufacturing facility, $1.0 million of amortization related to prepaid management fees paid in connection with the December 2004 recapitalization transaction, and $0.3 million of foreign currency losses.

EBITDA was $56.6 million for the nine months ended October 1, 2005 compared to EBITDA of $79.1 million for the same period in 2004. For the nine months ended October 1, 2005, adjusted EBITDA was $64.5 million compared to adjusted EBITDA of $94.2 million for the same period in 2004. Adjusted EBITDA for the nine months ended October 1, 2005 excludes one-time costs of $4.0 million associated with the closure of the Company’s Freeport, Texas manufacturing facility, $3.0 million of amortization related to prepaid management fees paid in connection with the December 2004 recapitalization transaction, $0.6 million of foreign currency losses, and $0.3 million of non-cash stock compensation expense. Adjusted EBITDA for the nine months ended October 2, 2004 excludes a bonus paid to certain members of Company management and a director totaling approximately $14.5 million associated with the completion of the March 2004 dividend recapitalization and $0.6 million of foreign currency losses. A reconciliation of net income to EBITDA and to adjusted EBITDA is included below.

Mike Caporale, Chairman, President, and Chief Executive Officer, commented, “Our performance in the third quarter continued the trends we experienced in the first half of 2005 – the impact of increased selling prices was not enough to offset significantly higher commodity and fuel costs.”

Mr. Caporale continued, “In addition, commodity costs, particularly for vinyl resin and certain microingredients, have increased significantly in the fourth quarter of 2005 in the aftermath of Hurricanes Katrina and Rita. In October, we announced price increases to offset the impact of the cost increases; however, it is too soon to determine if these price increases will be sufficient to offset the cost increases. Although many of our suppliers, including our vinyl resin supplier, declared force majeure in response to the hurricanes, we have not experienced to date any interruption in the supply of our raw materials.”

Net sales increased 4.4%, or $13.8 million, during the third quarter of 2005 compared to the same period in 2004 driven primarily by price increases implemented during the first quarter of 2005 and during 2004 as well as increased sales volumes for windows. Gross profit in the third quarter of 2005 was $74.7 million, or 22.8% of net sales, compared to gross profit of $87.1 million, or 27.7% of net sales, in the third quarter of 2004. The decrease in gross profit margin percentage was primarily due to significantly increased costs in two of the Company’s key raw materials – vinyl resin and aluminum – which were partially offset by the impact of price increases. The Company estimates that commodity cost increases, net of price increases, negatively impacted gross profit for the third quarter of 2005 by approximately $2.3 million. Substantially higher freight costs, due primarily to fuel cost increases, and manufacturing inefficiencies which were incurred relating to the consolidation of the Freeport, Texas vinyl siding facility into the Ennis, Texas facility also had a negative impact on gross profit of approximately $2.6 million and $4.0 million, respectively, for the third quarter of 2005.

Selling, general and administrative expense was $48.6 million, or 14.8% of net sales, for the third quarter of 2005 versus $48.7 million, or 15.5% of net sales, for the same period in 2004. Excluding $1.0 million of amortization related to prepaid management fees paid in connection with the December 2004 recapitalization transaction, selling, general and administrative expenses decreased from the prior year as a result of decreased marketing expenses and lower bonus expense. These decreases were partially offset by increased expenses in the Company’s supply center network relating primarily to higher payroll costs and building and truck lease expenses, as well as expenses relating to new supply centers opened during the past twelve months. During the third quarter of 2005, the Company incurred additional facility closure costs of approximately $0.5 million relating to the closing of its Freeport, Texas manufacturing plant. Income from operations was $25.6 million for the third quarter of 2005 compared to $38.3 million for the same period in 2004.

Net sales increased by 5.1%, or $41.9 million, for the nine months ended October 1, 2005 compared to the same period in 2004 driven primarily by price increases along with increased sales volumes for vinyl windows. Gross profit for the nine months ended October 1, 2005 was $196.0 million, or 22.7% of net sales, compared to gross profit of $220.7 million, or 26.9% of net sales, for the same period in 2004. The decrease in gross profit margin percentage was primarily due to significantly increased costs of the Company’s key raw materials, partially offset by the impact of price increases, as well as increased freight costs and manufacturing inefficiencies which were incurred relating to the consolidation of the Freeport, Texas vinyl siding facility into the Ennis, Texas

facility. Selling, general and administrative expense increased to $150.2 million, or 17.4% of net sales, for the nine months ended October 1, 2005 versus $142.2 million, or 17.3% of net sales, for the same period in 2004, due primarily to increased expenses in the Company’s supply center network. Selling, general and administrative expense for the nine months ended October 1, 2005 includes $3.0 million of amortization related to prepaid management fees paid in connection with the December 2004 recapitalization transaction and non-cash stock compensation expense of $0.3 million. During the nine months ended October 1, 2005, the Company incurred facility closure costs of approximately $4.0 million relating to the closing of its Freeport, Texas manufacturing plant. During the nine months ended October 2, 2004, the Company paid $14.5 million of bonuses to certain members of senior management and a director in conjunction with the March 2004 dividend recapitalization. Income from operations was $41.9 million for the nine months ended October 1, 2005 compared to $64.1 million for the same period in 2004.

The attached consolidating financial information for the quarters and for the nine months ended October 1, 2005 and October 2, 2004 includes AMI and the Company’s indirect parent company, AMH Holdings, Inc. (“AMH”), which conducts all of its operating activities through AMI. Including AMH’s interest expense, which primarily consists of the accretion on AMH’s 11 1/4% senior discount notes, AMH’s consolidated net income was $5.4 million and $15.1 million for the third quarter of 2005 and 2004, respectively. For the nine months ended October 1, 2005, AMH incurred a consolidated net loss of $3.9 million compared to net income of $16.1 million for the same period in 2004.

In connection with the December 2004 recapitalization transaction, AMH’s parent AMH Holdings II, Inc. (“AMH II”) was formed, and AMH II subsequently issued $75 million of senior notes in December 2004. The AMH II senior notes, which had accreted to $77.1 million by October 1, 2005, are not guaranteed by either AMI or AMH. The senior notes accrue interest at 13 5/8%, of which 10% will be paid in cash and 3 5/8% currently accrues to the senior notes. As AMH II is a holding company with no operations, it must receive distributions, payments or loans from its subsidiaries to satisfy its obligations on its debt. Total AMH II debt, including that of its consolidated subsidiaries, was $723.6 million as of October 1, 2005.

* * *

Management will host its third quarter earnings conference call on Friday, November 11^th at 11 a.m. Eastern Time. The toll free dial-in number for the call is (800) 559-2403 and the conference call identification number is 12911663. A replay of the call will be available through November 18, 2005 by dialing (877) 213-9653 and entering the above conference call identification number. The conference call and replay will also be available via webcast, which along with this news release can be accessed via the Company’s web site at http://www.associatedmaterials.com.

* * *

Associated Materials Incorporated is a leading manufacturer of exterior residential building products, which are distributed through company-owned distribution centers and independent distributors across North America. AMI produces a broad range of vinyl windows, vinyl siding, aluminum trim coil, aluminum and steel siding and accessories, as well as vinyl fencing, decking and railing. AMI is a privately held, wholly-owned subsidiary of Associated Materials Holdings Inc., which is a wholly-owned subsidiary of AMH, which is a wholly-owned subsidiary of AMH II, which is controlled by affiliates of Investcorp S.A. and Harvest Partners, Inc. For more information, please visit the Company’s website at http://www.associatedmaterials.com.

Founded in 1982, Investcorp is a global investment group with offices in New York, London and Bahrain. The firm has four lines of business: corporate investment, real estate investment, asset management and technology investment. It has completed transactions with a total acquisition value of more than $25 billion. The firm now manages total investments in alternative assets of nearly $10 billion. For more information on Investcorp please visit its website at http://www.investcorp.com.

Harvest Partners is a private equity investment firm with a long track record of building value in businesses and generating attractive returns on investment. Founded in 1981, Harvest Partners has approximately $1 billion of invested capital under management. For more information on Harvest Partners please visit its website at http://www.harvpart.com.

     This press release contains certain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) relating to AMI and AMH that are based on the beliefs of AMI’s and AMH’s management. When used in this press release, the words “may,” “will,” “should,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “predict,” “potential” or “continue” or similar expressions identify forward-looking statements. These statements are subject to certain risks and uncertainties. Such statements reflect the current views of AMI’s and AMH’s management. The following factors, and others which are discussed in AMI’s and AMH’s filings with the Securities and Exchange Commission, are among those that may cause actual results to differ materially from the forward-looking statements: changes in the home building industry, general economic conditions, interest rates, foreign currency exchange rates, changes in the availability of consumer credit, employment trends, levels of consumer confidence, consumer preferences, changes in raw material costs and availability, market acceptance of price increases, changes in national and regional trends in new housing starts, changes in weather conditions, the Company’s ability to comply with certain financial covenants in loan documents governing its indebtedness, increases in levels of competition within its market, availability of alternative building products, increases in its level of indebtedness, increases in costs of environmental compliance, increase in capital expenditure requirements, potential conflict between Alside and Gentek distribution channels, achievement of anticipated synergies and operational efficiencies from the acquisition of Gentek and shifts in market demand. Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described herein as expected, intended, estimated, anticipated, believed or predicted. We undertake no obligation to

update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For further information, contact:

D. Keith LaVanway
Chief Financial Officer
(330) 922-2004

Cyndi Sobe
Vice President, Finance
(330) 922-7743

ASSOCIATED MATERIALS INCORPORATED
AMH HOLDINGS, INC.
Condensed Consolidating Statement of Operations
(Unaudited)
Quarter Ended October 1, 2005
(in thousands)

									AMH
	AMI		AMH			Eliminations			Consolidated
	Quarter Ended		Quarter Ended			Quarter Ended			Quarter Ended
	October 1,		October 1,			October 1,			October 1,
	2005		2005			2005			2005
Net sales	$	328,249	$	–		$	–		$	328,249
Gross profit		74,735		–			–			74,735
Selling, general and administrative expense		48,580		–			–			48,580
Facility closure costs		541		–			–			541
Income from operations		25,614		–			–			25,614
Interest expense, net		8,134		8,511			–			16,645
Foreign currency loss		267		–			–			267
Income (loss) before income taxes		17,213		(8,511	)		–			8,702
Income taxes (benefit)		5,512		(2,223	)		–			3,289
Income (loss) before equity income from subsidiaries		11,701		(6,288	)		–			5,413
Equity income from subsidiaries		–		11,701			(11,701	)		–
Net income	$	11,701	$	5,413		$	(11,701	)	$	5,413
Other Data:
EBITDA (a)	$	30,609
Adjusted EBITDA (a)		32,417

ASSOCIATED MATERIALS INCORPORATED
AMH HOLDINGS, INC.
Condensed Consolidating Statement of Operations
(Unaudited)
Quarter Ended October 2, 2004
(in thousands)

										AMH
	AMI			AMH			Eliminations			Consolidated
	Quarter Ended			Quarter Ended			Quarter Ended			Quarter Ended
	October 2,			October 2,			October 2,			October 2,
	2004			2004			2004			2004
Net sales	$	314,408		$	–		$	–		$	314,408
Gross profit		87,061			–			–			87,061
Selling, general and administrative expense		48,716			–			–			48,716
Income from operations		38,345			–			–			38,345
Interest expense, net		6,218			7,191			–			13,409
Foreign currency gain		(35	)		–			–			(35	)
Income (loss) before income taxes		32,162			(7,191	)		–			24,971
Income taxes (benefit)		12,297			(2,386	)		–			9,911
Income (loss) before equity income from subsidiaries		19,865			(4,805	)		–			15,060
Equity income from subsidiaries		–			19,865			(19,865	)		–
Net income	$	19,865		$	15,060		$	(19,865	)	$	15,060
Other Data:
EBITDA (a)	$	43,702
Adjusted EBITDA (a)		43,667

ASSOCIATED MATERIALS INCORPORATED
AMH HOLDINGS, INC.
Condensed Consolidating Statement of Operations
(Unaudited)
Nine Months Ended October 1, 2005
(in thousands)

									AMH
	AMI		AMH			Eliminations			Consolidated
	Nine Months		Nine Months			Nine Months			Nine Months
	Ended		Ended			Ended			Ended
	October 1,		October 1,			October 1,			October 1,
	2005		2005			2005			2005
Net sales	$	862,182	$	–		$	–		$	862,182
Gross profit		195,969		–			–			195,969
Selling, general and administrative expense		150,160		–			–			150,160
Facility closure costs		3,956		–			–			3,956
Income from operations		41,853		–			–			41,853
Interest expense, net		23,387		24,855			–			48,242
Foreign currency loss		556		–			–			556
Income (loss) before income taxes		17,910		(24,855	)		–			(6,945	)
Income taxes (benefit)		5,775		(8,773	)		–			(2,998	)
Income (loss) before equity income from subsidiaries		12,135		(16,082	)		–			(3,947	)
Equity income from subsidiaries		–		12,135			(12,135	)		–
Net income (loss)	$	12,135	$	(3,947	)	$	(12,135	)	$	(3,947	)
Other Data:
EBITDA (a)	$	56,636
Adjusted EBITDA (a)		64,467

ASSOCIATED MATERIALS INCORPORATED
AMH HOLDINGS, INC.
Condensed Consolidating Statement of Operations
(Unaudited)
Nine Months Ended October 2, 2004
(in thousands)

									AMH
	AMI		AMH			Eliminations			Consolidated
	Nine Months		Nine Months			Nine Months			Nine Months
	Ended		Ended			Ended			Ended
	October 2,		October 2,			October 2,			October 2,
	2004		2004			2004			2004
Net sales	$	820,331	$	–		$	–		$	820,331
Gross profit		220,741		–			–			220,741
Selling, general and administrative expense		142,150		–			–			142,150
Transaction costs – bonuses		14,498		–			–			14,498
Income from operations		64,093		–			–			64,093
Interest expense, net		18,484		17,131			–			35,615
Foreign currency loss		580		–			–			580
Income (loss) before income taxes		45,029		(17,131	)		–			27,898
Income taxes (benefit)		17,544		(5,747	)		–			11,797
Income (loss) before equity income from subsidiaries		27,485		(11,384	)		–			16,101
Equity income from subsidiaries		–		27,485			(27,485	)		–
Net income	$	27,485	$	16,101		$	(27,485	)	$	16,101
Other Data:
EBITDA (a)	$	79,078
Adjusted EBITDA (a)		94,156

Selected Balance Sheet Data (in thousands)	(Unaudited)
	October 1, 2005
					AMH
	AMI		AMH		Consolidated
Cash	$	3,811	$	–	$	3,811
Accounts receivable, net		178,827		–		178,827
Inventories		145,249		–		145,249
Accounts payable		121,817		–		121,817
Accrued liabilities		65,524		–		65,524
Total debt		339,563		306,926		646,489

	January 1, 2005
					AMH
	AMI		AMH		Consolidated
Cash (b)	$	58,054	$	–	$	58,054
Accounts receivable, net		128,302		–		128,302
Inventories		114,787		–		114,787
Accounts payable		75,139		–		75,139
Accrued liabilities		57,015		–		57,015
Total debt		340,000		282,856		622,856

Selected Cash Flow Data for AMI (Unaudited) (in thousands)	Nine Months			Nine Months
	Ended			Ended
	October 1, 2005			October 2, 2004
Net cash provided by (used in) operating activities	$	15,001		$	(325	)
Capital expenditures		18,961			16,970
Dividend paid to fund semi-annual interest payment on AMH II’s 13 5/8% senior notes		4,562			–
Cash paid for interest		16,575			13,249
Cash paid (received) for income taxes		(3,551	)		13,020

(a) EBITDA is calculated as net income plus interest, taxes, depreciation and amortization. Adjusted EBITDA excludes certain items. The Company considers adjusted EBITDA to be an important indicator of its operational strength and performance of its business. The Company has included adjusted EBITDA because it is a key financial measure used by management to (i) assess the Company’s ability to service its debt and / or incur debt and meet the Company’s capital expenditure requirements; (ii) internally measure the Company’s operating performance; and (iii) determine the Company’s incentive compensation programs. In addition, the Company’s credit facility has certain covenants that use ratios utilizing this measure of adjusted EBITDA. The definition of EBITDA under the indentures governing the notes also excludes certain items. Adjusted EBITDA has not been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Adjusted EBITDA as presented by the Company may not be comparable to similarly titled measures reported by other companies. Such supplementary adjustments to EBITDA may not be in accordance with current SEC practices or the rules and regulations adopted by the SEC that apply to periodic reports filed under the Securities Exchange Act of 1934. Accordingly, the SEC may require that adjusted EBITDA be presented differently in filings made with the SEC than as presented in this release, or not be presented at all. Adjusted EBITDA is not a measure determined in accordance with GAAP and should not be considered as an alternative to, or more meaningful than, net income (as determined in accordance with GAAP) as a measure of the Company’s operating results or cash flows from operations (as determined in accordance with GAAP) as a measure of the Company’s liquidity. The reconciliation of AMI’s net income to EBITDA and adjusted EBITDA is as follows (in thousands):

						Nine Months		Nine Months
	Quarter Ended		Quarter Ended			Ended		Ended
	October 1, 2005		October 2, 2004			October 1, 2005		October 2, 2004
Net income	$	11,701	$	19,865		$	12,135	$	27,485
Interest expense, net		8,134		6,218			23,387		18,484
Income taxes		5,512		12,297			5,775		17,544
Depreciation and amortization		5,262		5,322			15,339		15,565
EBITDA		30,609		43,702			56,636		79,078
Foreign currency (gain) loss		267		(35	)		556		580
Transaction costs – bonuses (c)		—		—			—		14,498
Amortization of management fee (d)		1,000		—			3,000		—
Stock compensation expense		—		—			319		—
Facility closure costs (e)		541		—			3,956		—
Adjusted EBITDA	$	32,417	$	43,667		$	64,467	$	94,156

(b) Cash balances as of January 1, 2005 included $46.0 million of cash on hand to be used to fund remaining payments related to the December 2004 recapitalization transaction, of which (i) $33.7 million was distributed in January 2005 as a loan from AMI, through its direct and indirect parent companies, to AMH II for which a dividend was then declared by AMI and its direct and indirect parent companies in forgiveness of the intercompany loan, (ii) $8.0 million was paid in January and February of 2005 to satisfy promissory notes made by AMI for management and a director bonus related to the December 2004 recapitalization transaction and (iii) $4.3 million was paid in the first quarter of 2005 for fees related to the December 2004 recapitalization transaction.

(c) Represents management and director bonuses paid in connection with the March 2004 dividend recapitalization.

(d) Represents amortization of a prepaid management fee paid in connection with the December 2004 recapitalization transaction.

(e) Represents one-time costs associated with the closure of the Freeport, Texas manufacturing facility consisting primarily of equipment relocation expenses. Total pre-tax expenses related to the Freeport closing were $8.5 million, including a $4.5 million pre-tax charge recorded in the fourth quarter of 2004.