10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 4, 2009

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number: 000-24956

Associated Materials, LLC

(Exact Name of Registrant as Specified in Its Charter)

Delaware	75-1872487
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
3773 State Rd. Cuyahoga Falls, Ohio	44223
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code (330) 929-1811

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Indicate by check mark 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 þ No o

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o No o

Indicate by check mark whether the 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 o	Accelerated filer o	Non-accelerated filer þ	Smaller reporting company o
		(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 o No þ

As of May 15, 2009, all of the Registrant’s membership interests outstanding were held by an affiliate of the Registrant.

ASSOCIATED MATERIALS, LLC
REPORT FOR THE QUARTER ENDED APRIL 4, 2009

	Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets April 4, 2009 (Unaudited) and January 3, 2009		1
Consolidated Statements of Operations (Unaudited) Quarters ended April 4, 2009 and March 29, 2008		2
Consolidated Statements of Cash Flows (Unaudited) Quarters ended April 4, 2009 and March 29, 2008		3
Notes to Consolidated Financial Statements (Unaudited)		4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3. Quantitative and Qualitative Disclosures About Market Risk		21
Item 4. Controls and Procedures		22
PART II. OTHER INFORMATION
Item 6. Exhibits		22
SIGNATURES		23
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ASSOCIATED MATERIALS, LLC

CONSOLIDATED BALANCE SHEETS

(In thousands)

	(Unaudited)
	April 4,		January 3,
	2009		2009
Assets
Current assets:
Cash and cash equivalents	$	6,375	$	6,709
Accounts receivable, net		107,758		116,878
Inventories		132,452		141,170
Deferred income taxes		12,183		12,183
Income taxes receivable		6,010		—
Prepaid expenses		9,458		10,486
Total current assets		274,236		287,426
Property, plant and equipment, net		111,432		115,156
Goodwill		231,365		231,358
Other intangible assets, net		98,364		99,131
Other assets		11,952		12,218
Total assets	$	727,349	$	745,289
Liabilities and Member’s Equity
Current liabilities:
Accounts payable	$	72,765	$	54,520
Payable to parent		9,326		9,326
Accrued liabilities		48,069		54,449
Income taxes payable		—		6,982
Total current liabilities		130,160		125,277
Deferred income taxes		46,561		46,427
Other liabilities		53,477		53,655
Long-term debt		217,500		221,000
Member’s equity		279,651		298,930
Total liabilities and member’s equity	$	727,349	$	745,289

See accompanying notes to consolidated financial statements.

1

ASSOCIATED MATERIALS, LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands)

	Quarters Ended
	April 4,			March 29,
	2009			2008
Net sales	$	172,332		$	200,878
Cost of sales		142,079			156,265
Gross profit		30,253			44,613
Selling, general and administrative expense		48,498			50,128
Manufacturing restructuring costs		—			845
Loss from operations		(18,245	)		(6,360	)
Interest expense, net		5,338			5,867
Foreign currency loss		52			78
Loss before income taxes		(23,635	)		(12,305	)
Income tax benefit		(9,170	)		(4,552	)
Net loss	$	(14,465	)	$	(7,753	)

See accompanying notes to consolidated financial statements.

2

ASSOCIATED MATERIALS, LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Quarters Ended
	April 4,			March 29,
	2009			2008
Operating Activities
Net loss	$	(14,465	)	$	(7,753	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		5,441			5,653
Amortization of deferred financing costs		511			524
Amortization of management fee		125			125
Non-cash portion of manufacturing restructuring costs		—			718
Loss on sale of assets		9			44
Changes in operating assets and liabilities:
Accounts receivable, net		9,012			16,008
Inventories		8,248			(19,114	)
Accounts payable and accrued liabilities		11,269			(20,166	)
Income taxes		(12,965	)		(13,843	)
Other		1,770			(56	)
Net cash provided by (used in) operating activities		8,955			(37,860	)
Investing Activities
Additions to property, plant and equipment		(1,348	)		(4,248	)
Proceeds from sale of assets		—			22
Net cash used in investing activities		(1,348	)		(4,226	)
Financing Activities
Net repayments under ABL Facility		(3,500	)		—
Net increase in revolving line of credit		—			29,368
Financing costs		(131	)		—
Dividends		(4,269	)		(4,118	)
Net cash provided by (used in) financing activities		(7,900	)		25,250
Effect of exchange rate changes on cash		(41	)		(433	)
Net decrease in cash		(334	)		(17,269	)
Cash at beginning of period		6,709			21,603
Cash at end of period	$	6,375		$	4,334
Supplemental information:
Cash paid for interest	$	668		$	1,219
Cash paid for income taxes	$	3,795		$	9,290

See accompanying notes to consolidated financial statements.

3

ASSOCIATED MATERIALS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE QUARTER ENDED APRIL 4, 2009

(Unaudited)

Note 1 — Basis of Presentation

Associated Materials, LLC (the “Company”) is a wholly owned subsidiary of Associated Materials Holdings, LLC (“Holdings”), which is a wholly owned subsidiary of AMH Holdings, LLC (“AMH”). AMH is a wholly owned subsidiary of AMH Holdings II, Inc. (“AMH II”) which is controlled by affiliates of Investcorp S.A. and Harvest Partners, Inc. Holdings, AMH and AMH II do not have material assets or operations other than a direct or indirect ownership of the membership interest of the Company.

The unaudited financial statements of the Company have been prepared in accordance with U.S. 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 U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, these interim consolidated financial statements contain all of the normal recurring accruals and adjustments considered necessary for a fair presentation of the unaudited results for the quarters ended April 4, 2009 and March 29, 2008. These financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended January 3, 2009. A detailed description of the Company’s significant accounting policies and management judgments is located in the audited financial statements for the year ended January 3, 2009, included in the Company’s Form 10-K filed with the Securities and Exchange Commission.

The Company is a leading, vertically integrated manufacturer and North American distributor of exterior residential building products. The Company’s core products are vinyl windows, vinyl siding, aluminum trim coil, and aluminum and steel siding and accessories. Because most of the Company’s building products are intended for exterior use, the Company’s sales and operating profits tend to be lower during periods of inclement weather. Therefore, the results of operations for any interim period are not necessarily indicative of the results of operations for a full year.

Certain prior period amounts within Note 8 have been reclassified to conform with the current period presentation.

Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations.” SFAS No. 141(R) requires the acquiring entity in a business combination to recognize the full fair value of the assets acquired and liabilities assumed in the transaction at the acquisition date, the immediate recognition of acquisition-related transaction costs and the recognition of contingent consideration arrangements at their acquisition date fair value. SFAS No. 141(R) is effective for acquisitions that occur on or after the beginning of the fiscal year commencing on or after December 15, 2008. SFAS No. 141(R) will impact the Company’s financial position and results of operations for any business combinations entered into after the date of adoption.

Note 2 — Inventories

Inventories are valued at the lower of cost (first in, first out) or market. Inventories consist of the following (in thousands):

	April 4,		January 3,
	2009		2009
Raw materials	$	26,624	$	25,779
Work-in-process		10,377		17,316
Finished goods and purchased stock		95,451		98,075
	$	132,452	$	141,170

4

Note 3 — Goodwill and Other Intangible Assets

Goodwill represents the purchase price in excess of the fair value of the tangible and intangible net assets acquired in a business combination. Goodwill of $231.4 million as of April 4, 2009 and January 3, 2009 consists of $194.8 million from the April 2002 merger transaction and $36.6 million from the acquisition of Gentek Holdings, Inc. (“Gentek”). None of the Company’s goodwill is deductible for income tax purposes. The Company’s other intangible assets consist of the following (in thousands):

	Average
	Amortization		April 4, 2009						January 3, 2009
	Period				Accumulated		Net Carrying				Accumulated		Net Carrying
	(In Years)		Cost		Amortization		Value		Cost		Amortization		Value
Trademarks and trade names		15	$	108,080	$	12,661	$	95,419	$	108,080	$	12,187	$	95,893
Patents		10		6,230		4,316		1,914		6,230		4,160		2,070
Customer base and other		7		4,813		3,782		1,031		4,836		3,668		1,168
Total other intangible assets			$	119,123	$	20,759	$	98,364	$	119,146	$	20,015	$	99,131

The Company has determined that trademarks and trade names totaling $80.0 million (included in the trademarks and trade names caption in the table above) consisting of the Alside^®, Revere^® and Gentek^® trade names have indefinite useful lives and are tested for impairment at least annually. Amortization expense related to other intangible assets was approximately $0.8 million for each of the quarters ended April 4, 2009 and March 29, 2008.

Note 4 — Long-Term Debt

Long-term debt consists of the following (in thousands):

	April 4,		January 3,
	2009		2009
9 3/4% notes	$	165,000	$	165,000
Borrowings under the ABL Facility		52,500		56,000
Total long-term debt	$	217,500	$	221,000

On October 3, 2008, the Company, Gentek Building Products, Inc. and Gentek Building Products Limited, as borrowers, entered into an asset-based credit facility with Wachovia Capital Markets, LLC and CIT Capital Securities LLC, as joint lead arrangers, Wachovia Bank, N.A., as agent and the lenders party to the facility (the “ABL Facility”). The ABL Facility provides for a senior secured asset-based revolving credit facility of up to $225.0 million, comprising a $165.0 million U.S. facility and a $60.0 million Canadian facility, in each case subject to borrowing base availability under the applicable facility. As of April 4, 2009, there was $52.5 million drawn under the ABL Facility and $73.1 million available for additional borrowing.

The ABL Facility does not require the Company to comply with any financial maintenance covenants, unless it has less than $28.1 million of aggregate excess availability at any time (or less than $20.6 million of excess availability under the U.S. facility or less than $7.5 million of excess availability under the Canadian facility), during which time the Company is subject to compliance with a fixed charge coverage ratio covenant of 1.1 to 1. As of April 4, 2009, the Company exceeded the minimum aggregate excess availability thresholds, and therefore, was not required to comply with this maintenance covenant.

The weighted average interest rate for borrowings under the ABL Facility and the Company’s prior credit facility were 3.9% and 5.6% for the quarter ended April 4, 2009 and the year ended January 3, 2009, respectively. As of April 4, 2009, the per annum interest rate applicable to borrowings under the ABL Facility was 4.2%. As of April 4, 2009, the Company had letters of credit outstanding of $6.8 million primarily securing deductibles of various insurance policies.

Under the ABL Facility restricted payments covenant, subject to specified exceptions, Holdings, the Company and its restricted subsidiaries cannot make restricted payments, such as dividends or distributions on equity, redemptions or repurchases of equity, or payments of certain management or advisory fees or other extraordinary forms of compensation, unless prior written notice is given and certain EBITDA and availability thresholds are met.

The Company has $165.0 million in aggregate principal amount of its 9 3/4% senior subordinated notes due 2012 outstanding. The 9 3/4% notes, which mature on April 15, 2012, pay interest semi-annually on April 15th and October 15th. The 9 3/4% notes are redeemable at the Company’s option, currently at a redemption price of 103.250% plus accrued and unpaid interest to the redemption date. This redemption price declines to 101.625% on April 15, 2009, and declines further to 100% on April 15, 2010 for the remaining life of the notes.

5

The indenture governing the 9 3/4% notes contains restrictive covenants that, among other things, limit the Company’s ability to incur additional indebtedness, make loans or advances to subsidiaries and other entities, invest in capital expenditures, sell its assets or declare dividends.

The fair value of the 9 3/4% notes was $132.0 million and $129.9 million at April 4, 2009 and January 3, 2009, respectively. In accordance with SFAS No. 157, the fair value of the 9 3/4% notes was measured using Level 1 inputs of quoted prices in active markets as of the respective measurement dates.

The Company’s indirect parent entities, AMH and AMH II, are holding companies with no independent operations. As of April 4, 2009, AMH had $446.0 million in aggregate principal amount of its 11 1/4% senior discount notes due 2014 outstanding. Interest accrued at a rate of 11 1/4% per annum on the notes in the form of an increase in the accreted value of the notes prior to March 1, 2009. Thereafter, cash interest of 11 1/4% per annum on the notes accrues and is payable semi-annually in arrears on March 1st and September 1st of each year, commencing on September 1, 2009. AMH II has outstanding $87.5 million in aggregate principal amount, including accreted interest, of its 13 5/8% notes due 2014. Through January 31, 2010, AMH II must pay a minimum of 10% interest on each semi-annual payment date in cash on the 13 5/8% notes, with the remaining 3 5/8% paid either in cash or by the issuance of additional 13 5/8% notes, at the election of AMH II. After January 31, 2010, the full 13 5/8% interest will be payable in cash. In addition, on January 31, 2010, AMH II is required to redeem a principal amount of approximately $15.0 million of notes in order to prevent the notes from being treated as having “significant original issue discount” for tax purposes. Total AMH II debt outstanding, including that of its consolidated subsidiaries, was approximately $751.0 million as of April 4, 2009.

AMH and AMH II have no independent operations, and as a result they are dependent upon distributions, payments and loans from the Company to service their indebtedness. In particular, AMH is dependent on the Company’s ability to pay dividends or otherwise upstream funds to it in order to service its obligations under the 11 1/4% notes, and AMH II is similarly dependent on AMH’s ability to further upstream payments in order to service its obligations under the 13 5/8% notes. The Company does not guarantee the 11 1/4% notes or the 13 5/8% notes and has no obligation to make any payments with respect thereto. The Company declared a dividend of approximately $4.3 million in January 2009 to fund AMH II’s scheduled interest payments.

Note 5 — Comprehensive Loss

Comprehensive loss differs from net loss due to the reclassification of actuarial gains or losses and prior service costs associated with the Company’s pension and other postretirement plans and foreign currency translation adjustments as follows (in thousands):

	Quarters Ended
	April 4,			March 29,
	2009			2008
Net loss as reported	$	(14,465	)	$	(7,753	)
Reclassification adjustments for actuarial gains or losses and prior service costs, net of tax		257			96
Foreign currency translation adjustments		(802	)		(2,799	)
Comprehensive loss	$	(15,010	)	$	(10,456	)

6

Note 6 — Retirement Plans

The Company’s Alside division sponsors a defined benefit pension plan which covers hourly workers at its plant in West Salem, Ohio and a defined benefit retirement plan covering salaried employees, which was frozen in 1998 and subsequently replaced with a defined contribution plan. The Company’s Gentek subsidiary sponsors a defined benefit pension plan for hourly union employees at its Woodbridge, New Jersey plant (together with the Alside sponsored defined benefit plans, the “Domestic Plans”) as well as a defined benefit pension plan covering Gentek Canadian salaried employees and hourly union employees at the Lambeth, Ontario plant, a defined benefit pension plan for the hourly union employees at its Burlington, Ontario plant and a defined benefit pension plan for the hourly union employees at its Pointe Claire, Quebec plant (the “Foreign Plans”). Accrued pension liabilities are included in accrued and other long-term liabilities in the accompanying balance sheets. The actuarial valuation measurement date for the defined benefit pension plans is December 31. Components of defined benefit pension plan costs are as follows (in thousands):

	Quarters Ended
	April 4,						March 29,
	2009						2008
	Domestic			Foreign			Domestic			Foreign
	Plans			Plans			Plans			Plans
Net periodic pension cost
Service cost	$	146		$	324		$	134		$	549
Interest cost		783			722			747			796
Expected return on assets		(674	)		(612	)		(875	)		(931	)
Amortization of prior service costs		8			7			7			8
Amortization of unrecognized net loss		375			13			150			26
Net periodic pension cost	$	638		$	454		$	163		$	448

The recent decline in current market conditions has resulted in decreased valuations of the Company’s pension plan assets. Based on actuarial valuations and current pension funding legislation, the Company does not currently anticipate significant changes to current cash contribution levels in 2009. However, the Company currently anticipates additional cash contributions will be required in 2010 to avoid certain funding-based benefit limitations as required under current pension law. Although a continued decline in market conditions, changes in current pension law and uncertainties regarding significant assumptions used in the actuarial valuations may have a material impact on future required contributions to the Company’s pension plans, the Company currently does not expect funding requirements to have a material adverse impact on current or future liquidity.

The actuarial valuations require significant estimates and assumptions to be made by management, primarily the funding interest rate, discount rate and expected long-term return on plan assets. These assumptions are all susceptible to changes in market conditions. The funding interest rate and discount rate are based on representative bond yield curves maintained and monitored by independent third parties. In determining the expected long-term rate of return on plan assets, the Company considers historical market and portfolio rates of return, asset allocations and expectations of future rates of return. As disclosed in the Company’s 2008 Annual Report on Form 10-K, the sensitivity of these estimates and assumptions are not expected to have a material impact on the Company’s 2009 pension expense and funding requirements.

Note 7 — Business Segments

The Company is in the single business of manufacturing and distributing exterior residential building products. The following table sets forth for the periods presented a summary of net sales by principal product offering (in thousands):

	Quarters Ended
	April 4,		March 29,
	2009		2008
Vinyl windows	$	61,057	$	69,688
Vinyl siding products		35,588		44,134
Metal products		28,983		39,344
Third party manufactured products		32,716		32,933
Other products and services		13,988		14,779
	$	172,332	$	200,878

7

Note 8 — Product Warranty Costs and Service Returns

Consistent with industry practice, the Company provides to homeowners limited warranties on certain products, primarily related to window and siding product categories. Warranties are of varying lengths of time from the date of purchase up to and including lifetime. Warranties cover product failures such as stress cracks and seal failures for windows and fading and peeling for siding products, as well as manufacturing defects. The Company has various options for remedying product warranty claims including repair, refinishing or replacement and directly incurs the cost of these remedies. Warranties also become reduced under certain conditions of time and change in ownership. Certain metal coating suppliers provide warranties on materials sold to the Company that mitigate the costs incurred by the Company. Reserves for future warranty costs are provided based on management’s estimates of such future costs using historical trends of claims experience, sales history of products to which such costs relate, and other factors. An independent actuary assists the Company in determining reserve amounts related to significant product failures. The provision for warranties is reported within cost of sales in the consolidated statements of operations.

A reconciliation of warranty reserve activity is as follows for the quarters ended April 4, 2009 and March 29, 2008 (in thousands):

	Quarters Ended
	April 4,			March 29,
	2009			2008
Balance at the beginning of the period	$	29,425		$	28,684
Provision for warranties issued		2,098			1,801
Claims paid		(1,493	)		(1,428	)
Foreign currency translation		54			189
Balance at the end of the period	$	30,084		$	29,246

Note 9 — Manufacturing Restructuring Costs

During 2008, the Company relocated a portion of its vinyl siding production from Ennis, Texas to its vinyl manufacturing facilities in West Salem, Ohio and Burlington, Ontario. In addition, during 2008, the Company transitioned the majority of distribution of its U.S. vinyl siding products to a center located in Ashtabula, Ohio and committed to a plan to discontinue use of its warehouse facility adjacent to its Ennis, Texas vinyl manufacturing facility. The Company incurred expense of $1.8 million for the fiscal year ended January 3, 2009 associated with these restructuring efforts, which was comprised of asset impairment costs of $0.7 million, costs incurred to relocate manufacturing equipment of $0.7 million and costs associated with the transition of distribution operations of $0.4 million. Additionally, the Company recorded $0.9 million of inventory markdown costs associated with these restructuring efforts within cost of goods sold for the fiscal year ended January 3, 2009. The Company did not incur any expense during the quarter ended April 4, 2009 and incurred expense of $0.8 million of asset impairment costs and manufacturing equipment relocation costs during the quarter ended March 29, 2008 associated with these restructuring efforts. The Company expects to discontinue using the warehouse facility adjacent to the Ennis manufacturing plant during the second quarter of 2009. At that time, the Company expects inventory levels in this warehouse facility to be depleted in order to facilitate an efficient consolidation, and the related lease costs associated with the discontinued use of the warehouse facility will be recorded as a final restructuring charge of approximately $6.8 million.

Note 10 — Subsidiary Guarantors

The Company’s payment obligations under the 9 3/4% notes are fully and unconditionally guaranteed, jointly and severally on a senior subordinated basis, by its domestic wholly-owned subsidiaries: Gentek Holdings LLC, Gentek Building Products Inc. and Alside, Inc. Alside, Inc. is a wholly owned subsidiary having no assets, liabilities or operations. Gentek Building Products Limited is a Canadian company and does not guarantee the Company’s 9 3/4% notes. In the opinion of management, separate financial statements of the respective Guarantor Subsidiaries would not provide additional material information, which would be useful in assessing the financial composition of the Guarantor Subsidiaries. None of the Guarantor Subsidiaries has any significant legal restrictions on the ability of investors or creditors to obtain access to its assets in event of default on the Subsidiary Guarantee other than its subordination to senior indebtedness.

8

ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
April 4, 2009
(In thousands)
(Unaudited)

			Guarantor		Non-Guarantor		Reclassification/
	Parent		Subsidiaries		Subsidiary		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	3,799	$	119	$	2,457	$	—		$	6,375
Accounts receivable, net		76,797		7,921		23,040		—			107,758
Intercompany receivables		—		65,723		4,154		(69,877	)		—
Inventories		95,899		6,168		30,385		—			132,452
Deferred income taxes		9,196		2,482		505		—			12,183
Income taxes receivable		2,618		—		4,074		(682	)		6,010
Prepaid expenses		6,917		1,134		1,407		—			9,458
Total current assets		195,226		83,547		66,022		(70,559	)		274,236
Property, plant and equipment, net		78,357		2,435		30,640		—			111,432
Goodwill		194,814		36,551		—		—			231,365
Other intangible assets, net		88,261		9,844		259		—			98,364
Investment in subsidiaries		164,576		62,609		—		(227,185	)		—
Other assets		10,053		—		1,899		—			11,952
Total assets	$	731,287	$	194,986	$	98,820	$	(297,744	)	$	727,349
Liabilities And Member’s Equity
Current liabilities:
Accounts payable	$	48,186	$	5,605	$	18,974	$	—		$	72,765
Intercompany payables		69,877		—		—		(69,877	)		—
Payable to parent		9,326		—		—		—			9,326
Accrued liabilities		35,431		5,046		7,592		—			48,069
Income taxes payable		—		682		—		(682	)		—
Total current liabilities		162,820		11,333		26,566		(70,559	)		130,160
Deferred income taxes		40,847		3,499		2,215		—			46,561
Other liabilities		30,469		15,578		7,430		—			53,477
Long-term debt		217,500		—		—		—			217,500
Member’s equity		279,651		164,576		62,609		(227,185	)		279,651
Total liabilities and member’s equity	$	731,287	$	194,986	$	98,820	$	(297,744	)	$	727,349

9

ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Quarter Ended April 4, 2009
(In thousands)
(Unaudited)

				Guarantor			Non-Guarantor			Reclassification/
	Parent			Subsidiaries			Subsidiary			Eliminations			Consolidated
Net sales	$	133,225		$	26,478		$	39,490		$	(26,861	)	$	172,332
Cost of sales		106,863			27,813			34,264			(26,861	)		142,079
Gross profit (loss)		26,362			(1,335	)		5,226			—			30,253
Selling, general and administrative expense		39,251			1,188			8,059			—			48,498
Loss from operations		(12,889	)		(2,523	)		(2,833	)		—			(18,245	)
Interest expense, net		5,120			—			218			—			5,338
Foreign currency loss		—			—			52			—			52
Loss before income taxes		(18,009	)		(2,523	)		(3,103	)		—			(23,635	)
Income tax benefit		(7,311	)		(863	)		(996	)		—			(9,170	)
Loss before equity income from subsidiaries		(10,698	)		(1,660	)		(2,107	)		—			(14,465	)
Equity income from subsidiaries		(3,767	)		(2,107	)		—			5,874			—
Net loss	$	(14,465	)	$	(3,767	)	$	(2,107	)	$	5,874		$	(14,465	)

ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Quarter Ended April 4, 2009
(In thousands)
(Unaudited)

				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiary			Consolidated
Net cash provided by (used in) operating activities	$	3,499		$	7,948		$	(2,492	)	$	8,955
Investing Activities
Additions to property, plant and equipment		(1,129	)		(6	)		(213	)		(1,348	)
Other		(383	)		383			—			—
Net cash provided by (used in) investing activities		(1,512	)		377			(213	)		(1,348	)
Financing Activities
Net repayments under ABL Facility		(3,500	)		—			—			(3,500	)
Financing costs		(95	)		—			(36	)		(131	)
Dividends		(4,269	)		—			—			(4,269	)
Intercompany transactions		4,712			(8,303	)		3,591			—
Net cash provided by (used in) financing activities		(3,152	)		(8,303	)		3,555			(7,900	)
Effect of exchange rate changes on cash		—			—			(41	)		(41	)
Net increase (decrease) in cash		(1,165	)		22			809			(334	)
Cash at beginning of period		4,964			97			1,648			6,709
Cash at end of period	$	3,799		$	119		$	2,457		$	6,375

10

ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
January 3, 2009
(In thousands)

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

11

ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Quarter Ended March 29, 2008
(In thousands)
(Unaudited)

				Guarantor			Non-Guarantor		Reclassification/
	Parent			Subsidiaries			Subsidiary		Eliminations			Consolidated
Net sales	$	139,884		$	43,819		$	54,331	$	(37,156	)	$	200,878
Cost of sales		109,102			42,362			41,957		(37,156	)		156,265
Gross profit		30,782			1,457			12,374		—			44,613
Selling, general and administrative expense		36,983			4,129			9,016		—			50,128
Manufacturing restructuring costs		751			—			94		—			845
Income (loss) from operations		(6,952	)		(2,672	)		3,264		—			(6,360	)
Interest expense (income), net		5,835			(7	)		39		—			5,867
Foreign currency loss		—			—			78		—			78
Income (loss) before income taxes		(12,787	)		(2,665	)		3,147		—			(12,305	)
Income taxes (benefit)		(4,756	)		(822	)		1,026		—			(4,552	)
Income (loss) before equity income from subsidiaries		(8,031	)		(1,843	)		2,121		—			(7,753	)
Equity income from subsidiaries		278			2,121			—		(2,399	)		—
Net income (loss)	$	(7,753	)	$	278		$	2,121	$	(2,399	)	$	(7,753	)

ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Quarter Ended March 29, 2008
(In thousands)
(Unaudited)

				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiary			Consolidated
Net cash used in operating activities	$	(21,456	)	$	(366	)	$	(16,038	)	$	(37,860	)
Investing Activities
Additions to property, plant and equipment		(2,364	)		(61	)		(1,823	)		(4,248	)
Proceeds from sale of assets		18			4			—			22
Net cash used in investing activities		(2,346	)		(57	)		(1,823	)		(4,226	)
Financing Activities
Net increase in revolving line of credit		27,200			—			2,168			29,368
Dividends		(4,118	)		—			—			(4,118	)
Intercompany transactions		(2,379	)		698			1,681			—
Net cash provided by financing activities		20,703			698			3,849			25,250
Effect of exchange rate changes on cash		—			—			(433	)		(433	)
Net increase (decrease) in cash		(3,099	)		275			(14,445	)		(17,269	)
Cash at beginning of period		6,407			371			14,825			21,603
Cash at end of period	$	3,308		$	646		$	380		$	4,334

12

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The Company is a leading, vertically integrated manufacturer and North American distributor of exterior residential building products. The Company’s core products are vinyl windows, vinyl siding, aluminum trim coil, and aluminum and steel siding and accessories. In addition, the Company distributes third party manufactured products primarily through its supply centers. During 2008, vinyl windows comprised approximately 34%, vinyl siding comprised approximately 22%, metal products, which includes aluminum and steel products, comprised approximately 19%, and third party manufactured products comprised approximately 19% of the Company’s total net sales. These products are generally marketed under the Alside^®, Revere^® and Gentek^® brand names and sold on a wholesale basis to more than 50,000 professional contractors engaged in home remodeling and new home construction principally through the Company’s network of 123 supply centers, as well as through approximately 250 independent distributors across the United States and Canada. Approximately 65% of the Company’s products are sold to contractors engaged in the home repair and remodeling market with approximately 35% sold to the new construction market. The supply centers provide “one-stop” shopping to the Company’s contractor customers, carrying products, accessories and tools necessary to complete a vinyl window or siding project. In addition, the supply centers provide high quality product literature, product samples and installation training to these customers.

Because its exterior residential building products are consumer durable goods, the Company’s sales are impacted by, among other things, the availability of consumer credit, consumer interest rates, employment trends, changes in levels of consumer confidence, national and regional trends in new housing starts and general economic conditions. The Company’s sales are also affected by changes in consumer preferences with respect to types of building products. Overall, the Company believes the long-term fundamentals for the building products industry remain strong as the population continues to age, homes continue to get older, household formation is expected to be strong and vinyl remains the optimal material for exterior cladding and window solutions, all of which the Company believes bodes well for the demand for its products in the future. In the short term, however, the Company believes the building products industry will continue to be negatively impacted by the weak housing market. Since 2006, sales of existing single-family homes have decreased from levels experienced over the past few years, the inventory of homes available for sale has increased, housing appreciation has deteriorated, and in many areas, home values have declined significantly. In addition, the pace of new home construction has slowed dramatically, as evidenced by declines in 2006 through 2009 in single-family housing starts and announcements from home builders of significant decreases in their orders. Increased delinquencies on sub-prime and other mortgages, increased foreclosure rates and tightening consumer credit markets have further hampered the housing market. The Company’s sales volumes are dependent on the strength in the housing market, including both residential remodeling and new residential construction activity. Continued reduced levels of existing homes sales and housing price depreciation will have a significant negative impact on the Company’s remodeling sales. In addition, a reduced number of new housing starts will have a negative impact on the Company’s new construction sales. In the event of a prolonged housing market downturn, competition in the building products market may intensify, which could result in lower sales volumes and reduced selling prices for the Company’s products and lower gross margins. In the event that the Company’s expectations regarding the outlook for the housing market result in a reduction in its forecasted sales and operating income, and related growth rates, the Company may be required to record an impairment of certain of its assets, including goodwill and intangible assets. Moreover, a prolonged downturn in the housing market and the general economy may have other consequences to the Company, including further accounts receivable write-offs due to financial distress of customers and lower of cost or market reserves related to the Company’s inventories.

The Company, along with the entire building products industry, has experienced significant inflation over the past three years in key raw material commodity costs — particularly for vinyl resin, aluminum and steel, as well as in other raw materials such as microingredients used in the Company’s vinyl products. In response, the Company announced price increases over the past several years on certain of its product offerings to offset the inflation of raw materials, and continually monitors market conditions for price changes as warranted. During the fourth quarter of 2008, there was a significant decline in the cost of aluminum and resin. As a result, this has caused downward pressure on the Company’s selling prices. The Company’s ability to maintain gross margin levels on its products during periods of rising raw material costs depends on the Company’s ability to obtain selling price increases. Furthermore, the results of operations for individual quarters can and have been negatively impacted by a delay between the timing of raw material cost increases and price increases on the Company’s products. There can be no assurance that the Company will be able to maintain the selling price increases already implemented or achieve any future price increases.

13

The Company operates with significant operating and financial leverage. Significant portions of the Company’s manufacturing, selling, general and administrative expenses are fixed costs that neither increase nor decrease proportionately with sales. In addition, a significant portion of the Company’s interest expense is fixed. There can be no assurance that the Company will be able to reduce its fixed costs in response to a decline in its net sales. As a result, a decline in the Company’s net sales could result in a higher percentage decline in its income from operations. Also, the Company’s gross margins and gross margin percentages may not be comparable to other companies as some companies include all of the costs of their distribution network in cost of sales whereas the Company includes the operating costs of its supply centers in selling, general and administrative expenses.

Because most of the Company’s building products are intended for exterior use, sales tend to be lower during periods of inclement weather. Weather conditions in the first quarter of each calendar year usually result in that quarter producing significantly less net sales and net cash flows from operations than in any other period of the year. Consequently, the Company has historically had small profits or losses in the first quarter and reduced profits from operations in the fourth quarter of each calendar year. To meet seasonal cash flow needs, during the periods of reduced sales and net cash flows from operations, the Company typically utilizes its ABL Facility and repays such borrowings in periods of higher cash flow. The Company typically generates the majority of its cash flow in the third and fourth quarters.

The Company seeks to distinguish itself from other suppliers of residential building products and to sustain its profitability through a business strategy focused on increasing sales at existing supply centers, selectively expanding its supply center network, increasing sales through independent specialty distributor customers, developing innovative new products, expanding sales of third party manufactured products through its supply center network, and driving operational excellence by reducing costs and increasing customer service levels. The Company continually analyzes new and existing markets for the selection of new supply center locations.

Results of Operations

The following table sets forth for the periods indicated the results of the Company’s operations (in thousands):

	Quarters Ended
	April 4,			March 29,
	2009			2008
Net sales	$	172,332		$	200,878
Cost of sales		142,079			156,265
Gross profit		30,253			44,613
Selling, general and administrative expense		48,498			50,128
Manufacturing restructuring costs		—			845
Loss from operations		(18,245	)		(6,360	)
Interest expense, net		5,338			5,867
Foreign currency loss		52			78
Loss before income taxes		(23,635	)		(12,305	)
Income tax benefit		(9,170	)		(4,552	)
Net loss	$	(14,465	)	$	(7,753	)
Other Data:
EBITDA (a)	$	(12,856	)	$	(785	)
Adjusted EBITDA (a)		(12,621	)		185

14

The following table sets forth for the periods presented a summary of net sales by principal product offering (in thousands):

	Quarters Ended
	April 4,		March 29,
	2009		2008
Vinyl windows	$	61,057	$	69,688
Vinyl siding products		35,588		44,134
Metal products		28,983		39,344
Third party manufactured products		32,716		32,933
Other products and services		13,988		14,779
	$	172,332	$	200,878

(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 ABL Facility has certain covenants that apply ratios utilizing this measure of adjusted EBITDA. EBITDA and adjusted EBITDA have not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Adjusted EBITDA as presented by the Company may not be comparable to similarly titled measures reported by other companies. EBITDA and adjusted EBITDA are not measures determined in accordance with GAAP and should not be considered as an alternative to, or more meaningful than, net income (as determined in accordance with GAAP) as a measure of the Company’s operating results or cash flows from operations (as determined in accordance with GAAP) as a measure of the Company’s liquidity.

The reconciliation of the Company’s net loss to EBITDA and adjusted EBITDA is as follows (in thousands):

	Quarters Ended
	April 4,			March 29,
	2009			2008
Net loss	$	(14,465	)	$	(7,753	)
Interest expense, net		5,338			5,867
Income tax benefit		(9,170	)		(4,552	)
Depreciation and amortization		5,441			5,653
EBITDA		(12,856	)		(785	)
Amortization of management fee (b)		125			125
Manufacturing restructuring costs (c)		—			845
Bank audit fees (d)		110			—
Adjusted EBITDA (e)	$	(12,621	)	$	185

(b)	Represents amortization of a prepaid management fee paid to Investcorp International Inc. in connection with the December 2004 recapitalization transaction.
(c)	During the quarter ended March 29, 2008, the Company committed to, and subsequently completed, relocating a portion of its vinyl siding production from Ennis, Texas to its vinyl manufacturing facilities in West Salem, Ohio and Burlington, Ontario. In addition, during 2008, the Company transitioned the majority of distribution of its U.S. vinyl siding products to a center located in Ashtabula, Ohio and committed to a plan to discontinue use of its warehouse facility adjacent to its Ennis, Texas vinyl manufacturing facility. For the quarter ended March 29, 2008, the amount represents asset impairment costs and costs incurred to relocate manufacturing equipment.
(d)	Represents bank audit fees incurred under the Company’s ABL Facility.
(e)	Prior year adjusted EBITDA amounts have been reclassified to conform to the current year’s presentation, which, in conformity with the computation of adjusted EBITDA under the Company’s current credit facility, excludes any adjustment for foreign currency (gain) loss.

15

Quarter Ended April 4, 2009 Compared to Quarter Ended March 29, 2008

Net sales decreased 14.2% to $172.3 million for the first quarter of 2009 compared to $200.9 million for the same period in 2008 primarily due to decreased unit volumes, principally in vinyl siding, vinyl windows and metal products. During the first quarter of 2009 compared to the same period in 2008, vinyl siding unit volumes decreased by 21%, while vinyl window unit volumes decreased by 10%.

Gross profit in the first quarter of 2009 was $30.3 million, or 17.6% of net sales, compared to gross profit of $44.6 million, or 22.2% of net sales, for the same period in 2008. The decrease in gross profit as a percentage of net sales was primarily a result of the impact of reduced leverage of manufacturing costs due to lower sales volumes.

Selling, general and administrative expense decreased to $48.5 million, or 28.1% of net sales, for the first quarter of 2009 versus $50.1 million, or 25.0% of net sales, for the same period in 2008. The decrease in selling, general and administrative expense was primarily due to the $2.0 million translation impact on Canadian expenses as a result of the weakening Canadian dollar at the end of 2008 and $1.1 million decrease in profit sharing and commission accruals as a result of reduced headcount and decreased sales, partially offset by $1.3 million increase in bad debt expense recorded during the first quarter of 2009 as a result of current economic conditions. The Company incurred a loss from operations of $18.2 million for the first quarter of 2009 compared to a loss from operations of $6.4 million for the same period in 2008.

During 2008, the Company relocated a portion of its vinyl siding production, transitioned the majority of distribution of its U.S. vinyl siding products and committed to a plan to discontinue use of its warehouse facility adjacent to its Ennis, Texas vinyl manufacturing facility. The Company incurred expense of $0.8 million of asset impairment costs and manufacturing equipment relocation costs during the quarter ended March 29, 2008 associated with these restructuring efforts. The Company expects to discontinue using the warehouse facility adjacent to the Ennis manufacturing plant during the second quarter of 2009. At that time, the Company expects to record the related lease costs associated with the discontinued use of the warehouse facility as a final restructuring charge.

Interest expense decreased $0.5 million for the first quarter of 2009 compared to the same period in 2008. The decrease in interest expense was primarily due to lower overall borrowings under the credit facilities and decreased interest rates during 2009.

The income tax provision for the first quarter of 2009 reflects an effective income tax rate of 38.8%, compared to an effective income tax rate of 37.0% for the same period in 2008. The increase in the effective income tax rate in 2009 is primarily due to a loss of certain manufacturing deductions available in previous years.

The Company reported a net loss of $14.5 million for the quarter ended April 4, 2009 compared to a net loss of $7.8 million for the same period in 2008.

EBITDA for the first quarter of 2009 was a loss of $12.9 million compared to a loss of $0.8 million for the same period in 2008. Adjusted EBITDA for the first quarter of 2009 was a loss of $12.6 million compared to adjusted EBITDA of $0.2 million for the same period in 2008. Adjusted EBITDA for the first quarter of 2009 excludes amortization related to prepaid management fees of $0.1 million and bank audit fees of $0.1 million. Adjusted EBITDA for the first quarter of 2008 excludes manufacturing restructuring costs of $0.8 million and amortization related to prepaid management fees of $0.1 million.

Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. SFAS No. 141(R) requires the acquiring entity in a business combination to recognize the full fair value of the assets acquired and liabilities assumed in the transaction at the acquisition date, the immediate recognition of acquisition-related transaction costs and the recognition of contingent consideration arrangements at their acquisition date fair value. SFAS No. 141(R) is effective for acquisitions that occur on or after the beginning of the fiscal year commencing on or after December 15, 2008. SFAS No. 141(R) will impact the Company’s financial position and results of operations for any business combinations entered into after the date of adoption.

16

Liquidity and Capital Resources

The following sets forth a summary of the Company’s cash flows for the quarters ended April 4, 2009 and March 29, 2008 (in thousands):

	Quarters Ended
	April 4,			March 29,
	2009			2008
Cash provided by (used in) operating activities	$	8,955		$	(37,860	)
Cash used in investing activities		(1,348	)		(4,226	)
Cash provided by (used in) financing activities		(7,900	)		25,250

Cash Flows

At April 4, 2009, the Company had cash and cash equivalents of $6.4 million and available borrowing capacity of approximately $73.1 million under its new asset-based credit facility. See “— Description of the Company’s Outstanding Indebtedness” for further details of the Company’s new credit facility. As of April 4, 2009, the Company had letters of credit outstanding of $6.8 million primarily securing deductibles of various insurance policies.

Cash Flows from Operating Activities

Net cash provided by operating activities was $9.0 million for the quarter ended April 4, 2009 compared to net cash used in operating activities of $37.9 million for the same period in 2008. The factors typically impacting cash flows from operating activities during the first three months of the year include the Company’s operating results, inventory levels, and use of cash related to payments for accrued liabilities including payments of incentive compensation and customer sales incentives. Accounts receivable was a source of cash of $9.0 million and $16.0 million for the quarters ended April 4, 2009 and March 29, 2008, respectively, resulting in a net decrease in cash flows of $7.0 million, which was primarily due to the decline in sales the past two quarters as compared to the same periods in prior years. Inventory was a source of cash of $8.2 million during the quarter ended April 4, 2009, compared to a use of cash of $19.1 million during the same period in 2008, resulting in a net increase of cash flows of $27.4 million, which was primarily due to reduced inventory levels and declining commodity costs. The high inventory levels at the end of the first quarter of 2008 were a result of rising commodity costs and building of inventory due to the Company’s transition of the majority of its distribution of U.S. vinyl siding products to a centralized distribution center. Accounts payable and accrued liabilities were a source of cash of $11.3 million for the quarter ended April 4, 2009, compared to a use of cash of $20.2 million for the same period in 2008, resulting in a net increase in cash flows of $31.4 million, which was primarily due to improved vendor terms and lower sales related accruals. Net cash flows provided by operating activities for the quarter ended April 4, 2009 reflects income tax payments of $3.8 million, while net cash used in operating activities for the same period in 2008 reflects $9.3 million of income tax payments.

Cash Flows from Investing Activities

During the quarter ended April 4, 2009, net cash used in investing activities included capital expenditures of $1.3 million. Capital expenditures in 2009 were primarily at supply centers for continued operations, openings and relocations, various projects at West Salem and several corporate IT projects. During the quarter ended March 29, 2008, net cash used in investing activities included capital expenditures of $4.2 million. Capital expenditures in 2008 were primarily to expand capacity at the Company’s Burlington and West Salem manufacturing facilities and improve capabilities at its window facilities.

Cash Flows from Financing Activities

Net cash used in financing activities for the quarter ended April 4, 2009 includes net repayments under the Company’s new ABL Facility of $3.5 million, payments for financings costs of $0.1 for the ABL Facility and dividend payments of $4.3 million. Net cash provided by financing activities for the quarter ended March 29, 2008 includes borrowings on the revolving loan portion of the Company’s credit facility of $29.4 million, partially offset by dividend payments of $4.1 million. The dividends were paid to the Company’s direct and indirect parent companies to fund AMH II’s scheduled interest payment on its 13 5/8% notes.

17

Description of the Company’s Outstanding Indebtedness

On October 3, 2008, the Company, Gentek Building Products, Inc. and Gentek Building Products Limited, as borrowers, entered into an asset-based credit facility with Wachovia Capital Markets, LLC and CIT Capital Securities LLC, as joint lead arrangers, Wachovia Bank, N.A., as agent and the lenders party to the facility (the “ABL Facility”). The ABL Facility provides for a senior secured asset-based revolving credit facility of up to $225.0 million, comprising a $165.0 million U.S. facility and a $60.0 million Canadian facility, in each case subject to borrowing base availability under the applicable facility. As of April 4, 2009, there was $52.5 million drawn under the ABL Facility.

As of April 4, 2009, the per annum interest rate applicable to borrowings under the ABL Facility was 4.2% and the weighted average interest rate for the quarter ended April 4, 2009 was 3.9%.

The Company’s borrowing base under the ABL Facility will fluctuate during the course of the year based on a variety of factors impacting the Company’s level of eligible accounts receivable and inventory, including seasonal builds in inventory immediately prior to and during the peak selling season and changes in the levels of accounts receivable, which tend to increase during the peak selling season and are at seasonal lows during the winter months. The Company’s peak selling season is typically May through October. As a result, the excess availability will fluctuate throughout the course of the year. As of April 4, 2009, the Company’s borrowing base was $132.4 million, which was based on the borrowing base calculation utilizing February month end account balances. The Company’s excess availability under the ABL Facility was $73.1 million as of April 4, 2009.

The ABL Facility does not require the Company to comply with any financial maintenance covenants, unless it has less than $28.1 million of aggregate excess availability at any time (or less than $20.6 million of excess availability under the U.S. facility or less than $7.5 million of excess availability under the Canadian facility), during which time the Company is subject to compliance with a fixed charge coverage ratio covenant of 1.1 to 1. As of April 4, 2009, the Company exceeded the minimum aggregate excess availability thresholds, and therefore, was not required to comply with this maintenance covenant.

Under the ABL Facility restricted payments covenant, subject to specified exceptions, Holdings, the Company and its restricted subsidiaries cannot make restricted payments, such as dividends or distributions on equity, redemptions or repurchases of equity, or payments of certain management or advisory fees or other extraordinary forms of compensation, unless prior written notice is given and certain EBITDA and availability thresholds are met. During the quarter ended April 4, 2009, Holdings and the Company were not prevented from making restricted payments by the ABL Facility’s restricted payments covenant.

The Company has $165.0 million in aggregate principal amount of its 9 3/4% senior subordinated notes due 2012 outstanding. The 9 3/4% notes, which mature on April 15, 2012, pay interest semi-annually on April 15th and October 15th. The 9 3/4% notes are general unsecured obligations of the Company, subordinated in right of payment to senior indebtedness (as defined in the indenture relating to the 9 3/4% notes) and senior in right of payment to any current or future indebtedness of the Company that is made subordinated to the 9 3/4% notes. The Company’s payment obligations under the 9 3/4% notes are fully and unconditionally guaranteed, jointly and severally on a senior subordinated basis, by its domestic wholly-owned subsidiaries: Gentek Holdings, LLC, Gentek Building Products Inc. and Alside, Inc. Gentek Building Products Limited is a Canadian company and does not guarantee the Company’s 9 3/4% notes. The 9 3/4% notes are redeemable at the Company’s option, currently at a redemption price of 103.250% plus accrued and unpaid interest to the redemption date. This redemption price declines to 101.625% on April 15, 2009, and declines further to 100% on April 15, 2010 for the remaining life of the notes.

The indenture governing the 9 3/4% notes contains covenants that, among other things and subject in each case to certain specified exceptions, limit the ability of the Company and of certain restricted subsidiaries: (i) to incur additional indebtedness unless the Company meets a 2 to 1 consolidated coverage ratio test, or as permitted under specified available baskets; (ii) to make restricted payments; (iii) to incur restrictions on subsidiaries’ ability to make distributions or transfer assets to the Company; (iv) to sell assets or stock of subsidiaries; (v) to enter into transactions with affiliates; and (vi) to merge or consolidate with, or sell all or substantially all assets to, a third party or undergo a change of control.

At April 4, 2009, the amount of the restricted payments basket under the 9 3/4% notes indenture, net of restricted payments made through that date, was approximately $77 million. The Company’s ability to make restricted payments under the 9 3/4% notes indenture is subject to compliance with the other conditions to making restricted payments provided for in the 9 3/4% notes indenture, to compliance with the restricted payments covenants in the ABL Facility, and to statutory limitations on the payment of dividends.

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The Company’s indirect parent entities AMH and AMH II are holding companies with no independent operations. As of April 4, 2009, AMH had $446.0 million in aggregate principal amount of its 11 1/4% senior discount notes due 2014 outstanding. Interest accrued at a rate of 11 1/4% per annum on the notes in the form of an increase in the accreted value of the notes prior to March 1, 2009. Thereafter, cash interest of 11 1/4% per annum on the notes accrues and is payable semi-annually in arrears on March 1st and September 1st of each year, commencing on September 1, 2009. AMH II has outstanding $87.5 million in aggregate principal amount, including accreted interest, of its 13 5/8% notes due 2014. Through January 31, 2010, AMH II must pay a minimum of 10% interest on each semi-annual payment date in cash on the 13 5/8% notes, with the remaining 3 5/8% paid either in cash or by the issuance of additional 13 5/8% notes, at the election of AMH II. After January 31, 2010, the full 13 5/8% interest will be payable in cash. In addition, on January 31, 2010, AMH II is required to redeem a principal amount of approximately $15.0 million of notes in order to prevent the notes from being treated as having “significant original issue discount” for tax purposes. Total AMH II debt outstanding, including that of its consolidated subsidiaries, was approximately $751.0 million as of April 4, 2009.

Because AMH and AMH II have no independent operations, they are dependent upon distributions, payments and loans from the Company to service their indebtedness. In particular, AMH is dependent on the Company’s ability to pay dividends or otherwise upstream funds to it in order to service its obligations under the 11 1/4% notes, and AMH II is similarly dependent on AMH’s ability to further upstream payments in order to service its obligations under the 13 5/8% notes. If the Company were unable to generate sufficient earnings, or were precluded from making restricted payments, either under its debt agreements or pursuant to statutory limitations on the payment of dividends, it would not be able to dividend or otherwise upstream sufficient funds to AMH to permit AMH to service its 11 1/4% notes. Similarly, if AMH did not have sufficient access to earnings of the Company, or were likewise precluded from making restricted payments, it would not be able to dividend or otherwise upstream sufficient funds to AMH II to allow AMH II to service its 13 5/8% notes. Under such scenarios, either or both of AMH or AMH II would have to find alternative sources of liquidity to meet their respective obligations under the 11 1/4% and 13 5/8% notes.

As discussed above, AMH is required to begin paying cash interest on its outstanding 11 1/4% notes on September 1, 2009, and AMH II is required to begin paying additional cash interest on and to redeem $15.0 million of principal of its 13 5/8% notes in 2010. The Company believes its cash flows from operations and its borrowing capacity under the ABL Facility will be sufficient to satisfy its obligations to pay principal and interest on its outstanding debt, maintain current operations and provide sufficient capital, as well as pay dividends or make other upstream payments sufficient for both AMH and AMH II to be able to service their respective debt obligations, throughout 2009. However, as discussed under “— Overview” above, the building products industry continues to be negatively impacted by a weak housing market, with a number of factors contributing to lower current demand for the Company’s products, including reduced numbers of existing home sales and new housing starts and depreciation in housing prices. If these trends continue, the Company’s ability to generate cash sufficient to meet its existing indebtedness obligations could be adversely affected, and the Company could be required either to find alternate sources of liquidity or to refinance its existing indebtedness in order to avoid defaulting on its debt obligations.

Beyond 2009, the ability of the Company to generate sufficient funds and have sufficient restricted payments capability both to service its own debt obligations and to allow the Company to pay dividends or make other upstream payments sufficient for both AMH and AMH II to be able to service their respective increased obligations will be dependant in large part on the impact of building products industry conditions on the Company’s business, profitability and cash flows and on the ability of the Company and/or its parent companies to refinance its and/or their indebtedness. There can be no assurance that the Company, AMH and/or AMH II would be able to obtain any necessary consents or waivers in the event any of them is unable to service or were to otherwise default under their debt obligations, or that any of them would be able to successfully refinance their indebtedness. The ability to refinance any indebtedness may be made more difficult to the extent that current building products industry and credit market conditions continue to persist. The inability of any of the Company, AMH and/or AMH II to service or refinance its indebtedness would likely have a material adverse effect on each of the Company, AMH and AMH II.

Effects of Inflation

The principal raw materials used by the Company are vinyl resin, aluminum, steel, resin stabilizers and pigments, glass, window hardware, and packaging materials, all of which are available from a number of suppliers. The Company, along with the entire building products industry, has experienced significant inflation over the past three years in key raw material commodity costs. In response, the Company announced price increases over the past several years on certain of its product offerings to offset the inflation of raw materials, and continually monitors market conditions for price changes as warranted. During the fourth quarter of 2008, there was a significant decline in the cost of aluminum and resin. As a result, this has caused downward pressure on the Company’s selling prices. The Company’s ability to maintain gross margin levels on its products during periods of rising raw material costs depends on the Company’s ability to obtain selling price increases. Furthermore, the results of operations for individual quarters can and have been negatively impacted by a delay between the timing of raw material cost increases and price increases on the Company’s products. There can be no assurance that the Company will be able to maintain the selling price increases already implemented or achieve any future price increases. At April 4, 2009, the Company had no raw material hedge contracts in place.

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Certain Forward-Looking Statements

All statements other than statements of historical facts included in this report regarding the prospects of the industry and the Company’s prospects, plans, financial position and business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “predict,” “potential” or “continue” or the negatives of these terms or variations of them or similar terminology. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it does not assure that these expectations will prove to be correct. Such statements reflect the current views of the Company’s management with respect to its operations, results of operations and future financial performance. The following factors are among those that may cause actual results to differ materially from the forward-looking statements:

• the Company’s operations and results of operations;

• changes in home building and remodeling industries, economic conditions, interest rates, foreign currency exchange rates and other conditions;

• changes in availability of consumer credit, employment trends, levels of consumer confidence and spending, and consumer preferences;

• changes in raw material costs and availability;

• market acceptance of price increases;

• changes in national and regional trends in new housing starts and home remodeling;

• changes in weather conditions;

• the Company’s ability to comply with certain financial covenants in its ABL Facility and indenture governing its 9 3/4% notes;

• the Company’s ability to make distributions, payments or loans to its parent companies to allow them to make required payments on their debt;

• the ability of the Company and its parent companies to refinance indebtedness when required;

• increases in competition from other manufacturers of vinyl and metal exterior residential building products as well as alternative building products;

• shifts in market demand;

• increases in the Company’s indebtedness;

• increases in costs of environmental compliance;

• increases in unanticipated warranty or product liability claims;

• increases in capital expenditure requirements;

• potential conflict between existing Alside and Gentek distribution channels; and

• the other factors discussed under Item 1A. “Risk Factors” as filed in the Company’s Annual Report on Form 10-K for the year ended January 3, 2009 and elsewhere in this report.

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All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements included in this report. These forward-looking statements speak only as of the date of this report. The Company does not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, unless the securities laws require it to do so.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

The Company has outstanding borrowings under its ABL Facility and may incur additional borrowings from time to time for general corporate purposes, including working capital and capital expenditures. The interest rate applicable to outstanding loans under the ABL Facility is, at the Company’s option, equal to either a United States or Canadian adjusted base rate plus an applicable margin ranging from 0.75% to 1.75%, or LIBOR plus an applicable margin ranging from 2.50% to 3.50%, with the applicable margin in each case depending on the Company’s quarterly average “excess availability” (as defined). At April 4, 2009, the Company had borrowings outstanding of $52.5 million under the ABL Facility. The effect of a 1.00% increase or decrease in interest rates would increase or decrease total annual interest expense by approximately $0.5 million.

The Company has $165.0 million of senior subordinated notes due 2012 that bear a fixed interest rate of 9 3/4%. The fair value of the Company’s 9 3/4% notes is sensitive to changes in interest rates. In addition, the fair value is affected by the Company’s overall credit rating, which could be impacted by changes in the Company’s future operating results. The fair value of the 9 3/4% notes at April 4, 2009 was $132.0 million based upon their quoted market price.

Foreign Currency Exchange Risk

The Company’s revenues are primarily from domestic customers and are realized in U.S. dollars. However, the Company realizes revenues from sales made through Gentek’s Canadian distribution centers in Canadian dollars. The Company’s Canadian manufacturing facilities acquire raw materials and supplies from U.S. vendors, which results in foreign currency transactional gains and losses upon settlement of the obligations. Payment terms among Canadian manufacturing facilities and these vendors are short-term in nature. The Company may, from time to time, enter into foreign exchange forward contracts with maturities of less than three months to reduce its exposure to fluctuations in the Canadian dollar. At April 4, 2009, the Company was a party to foreign exchange forward contracts for Canadian dollars. The value of these contracts at April 4, 2009 was immaterial.

Commodity Price Risk

See Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Effects of Inflation” for a discussion of the market risk related to the Company’s principal raw materials — vinyl resin, aluminum and steel.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

During the fiscal period covered by this report, the Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, completed an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Based upon this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the fiscal period covered by this report, the disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Changes in Internal Control over Financial Reporting

There have been no changes to the Company’s internal control over financial reporting during the quarter ended April 4, 2009 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 6. Exhibits

a) Exhibits

Exhibit
Number		Description
	31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Exchange Act, as adopted, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14 of the Exchange Act, as adopted, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
	32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

* This document is being furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release Nos. 33-8238 and 34-47986.

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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.

	ASSOCIATED MATERIALS, LLC (Registrant)
Date: May 19, 2009	By:	/s/ Thomas N. Chieffe
		Thomas N. Chieffe
		President and Chief Executive Officer (Principal Executive Officer)
Date: May 19, 2009	By:	/s/ Cynthia L. Sobe
		Cynthia L. Sobe
		Vice President — Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer)

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EXHIBIT INDEX

Exhibit
Number		Description
	31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Exchange Act, as adopted, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14 of the Exchange Act, as adopted, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
	32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

* This document is being furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release Nos. 33-8238 and 34-47986.

EX-31.1

Exhibit 31.1

Certification of the Principal Executive Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Thomas N. Chieffe, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Associated Materials, LLC;
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: May 19, 2009	By:	/s/ Thomas N. Chieffe
		Thomas N. Chieffe
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of the Principal Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Cynthia L. Sobe, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Associated Materials, LLC;
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: May 19, 2009	By:	/s/ Cynthia L. Sobe
		Cynthia L. Sobe
		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 Form 10-Q of Associated Materials, LLC (the “Company”) for the period ended April 4, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas N. Chieffe, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; 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: May 19, 2009	By:	/s/ Thomas N. Chieffe
		Thomas N. Chieffe
		President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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 Form 10-Q of Associated Materials, LLC (the “Company”) for the period ended April 4, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Cynthia L. Sobe, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; 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: May 19, 2009	By:	/s/ Cynthia L. Sobe
		Cynthia L. Sobe
		Vice President — Chief Financial Officer, Treasurer and Secretary

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.