UNITED STATES SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

(Mark One)

or

Commission file number: 333-115543

AMH Holdings, Inc.

Registrant’s Telephone Number, Including Area Code (800) 257-4335

     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 is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

     As of May 10, 2005, the Registrant had outstanding 500,000 shares of voting convertible preferred stock, 1,614,019 shares of non-voting convertible preferred stock and 500,000 shares of voting class B common stock and 1,234,190 shares of non-voting class B common stock.

AMH HOLDINGS, INC.
REPORT FOR THE QUARTER ENDED APRIL 2, 2005

Part I. Financial Information

AMH HOLDINGS, INC.

See accompanying footnotes.

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AMH HOLDINGS, INC.

See accompanying notes.

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AMH HOLDINGS, INC.

See accompanying notes.

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AMH HOLDINGS, INC.

Note 1 - Basis of Presentation

     AMH Holdings, Inc. (“AMH”) was incorporated in Delaware on February 19, 2004. AMH has no material assets or operations other than its 100% ownership of Associated Materials Holdings Inc. (“Holdings”), its direct subsidiary, which in turn has no material assets or operations other than its 100% ownership of Associated Materials Incorporated (“AMI”), collectively referred to as the “Company”. As part of a restructuring agreement dated as of March 4, 2004, stockholders and option holders of Holdings became stockholders and option holders of AMH and are no longer stockholders and option holders of Holdings.

     AMH is a wholly owned subsidiary of AMH Holdings II, Inc. (“AMH II”), which is controlled by affiliates of Investcorp S.A. (“Investcorp”) and Harvest Partners, Inc. (“Harvest Partners”). AMH and AMH II were incorporated in connection with the recapitalization transactions described in Note 2. AMH and AMH II do not have material assets or operations other than a direct or indirect ownership of the common stock of AMI.

     AMI was incorporated in Delaware in 1983 and 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, aluminum and steel siding and accessories, and vinyl fencing, decking and railing. 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. Weather conditions in the first quarter of each year historically result in that quarter producing significantly less sales revenue and profits than in any other period of the year. Therefore, the results of operations for any interim period are not necessarily indicative of the results of operations for a full year.

     The unaudited financial statements of AMH have been prepared in accordance with accounting principles generally accepted in the United States 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 accounting principles generally accepted in the United States 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 three month periods ended April 2, 2005 and April 3, 2004. These financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in its annual report on Form 10-K for the year ended January 1, 2005.

     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 1, 2005, included in the Company’s Form 10-K filed with the Securities and Exchange Commission.

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

New Accounting Pronouncements

     In November 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 151, “Inventory Costs, an amendment of ARB 43, Chapter 4.” SFAS No. 151 requires certain inventory costs to be recognized as current period expenses. This standard also provides guidance for the allocation of fixed production overhead costs. This standard is effective for inventory costs incurred during the fiscal years beginning after June 15, 2005. The Company will adopt this standard in fiscal 2006. The Company has not yet determined the impact, if any, this standard will have on the financial statements of the Company.

     In December 2004, the FASB issued SFAS No. 123 (Revised), “Share-Based Payment.” This standard revises SFAS No. 123, APB Opinion No. 25 and related accounting interpretations, and eliminates the use of the intrinsic value method. The Company currently uses the intrinsic value method under APB Opinion No. 25 to value stock options. SFAS No. 123 (Revised) requires the expensing of all stock-based compensation, including stock options, using a fair value based method. The standard is effective for fiscal 2006. The Company is in the process of determining the impact this standard will have on its financial statements.

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Note 2 - Recapitalization Transactions

     As part of a restructuring agreement dated as of March 4, 2004, stockholders and option holders of Holdings became stockholders and option holders of AMH and are no longer stockholders and option holders of Holdings. AMH has no material assets or operations other than its 100% ownership of Holdings, AMI’s direct parent company. On March 4, 2004, AMH completed an offering of $446 million aggregate principal at maturity of 11 1/4% senior discount notes (“11 1/4% notes”). The total gross proceeds were approximately $258.3 million. In connection with the note offering, certain options to acquire preferred and common shares were exercised and the proceeds from the note offering were used to redeem all of AMH’s preferred stock including accrued and unpaid dividends, pay a dividend to AMH’s common stockholders and pay a bonus to certain members of the Company’s senior management and a director. Through Holdings, AMH contributed $14.5 million to AMI to pay the bonus. The completion of the aforementioned transactions constituted the March 2004 dividend recapitalization.

     On December 22, 2004, AMH completed a recapitalization transaction in which the then outstanding capital stock of AMH was reclassified as a combination of voting and non-voting shares of Class B common stock and shares of voting and non-voting convertible preferred stock. All of the shares of the convertible preferred stock were immediately sold to affiliates of Investcorp for an aggregate purchase price of $150 million, which was distributed by the Company to the existing shareholders. As a result of this transaction, affiliates of Investcorp acquired a 50% equity interest in AMH and the existing shareholders, led by Harvest Partners, retained shares of Class B common stock representing a 50% equity interest in AMH, all on a fully diluted basis. Each of Investcorp and Harvest Partners, through their respective affiliates, have a 50% voting interest in AMH. Immediately following these transactions, pursuant to a restructuring agreement, the shareholders of AMH contributed their shares of the capital stock of AMH to AMH II, a Delaware corporation formed for the purpose of becoming the direct parent company of AMH, in exchange for shares of the capital stock of AMH II mirroring (in terms of type and class, voting rights, preferences and other rights) the shares of AMH capital stock contributed by such shareholders. In connection with this transaction, on December 22, 2004, the Company increased its senior credit facility by $42 million and AMH II issued $75 million of 13 5/8% senior notes due 2014 (“13 5/8% notes”). AMH II then declared and paid a dividend on shares of its Class B common stock in an aggregate amount of approximately $96.4 million, which included approximately $3.4 million in aggregate proceeds received by AMH II through AMH, upon the exercise of options to purchase AMH common stock. Of this $96.4 million dividend, approximately $62.7 million was paid in cash and approximately $33.7 million was paid in the form of promissory notes issued by AMH II to each of its Class B common shareholders. In December of 2004, AMH made a payment to AMH II for the proceeds received upon exercise of the options. In the first quarter of 2005, AMI made an intercompany loan of $33.7 million to AMH II through its direct and indirect parent companies. Subsequently, AMI and its direct and indirect parent companies declared a dividend in forgiveness of the intercompany loan.

     On December 22, 2004, in connection with such transactions, AMI paid a bonus in the aggregate amount of approximately $22.3 million to certain members of AMI’s management and a director. Approximately $14.3 million of the bonus, including payroll taxes, was paid in cash on December 22, 2004, with promissory notes issued by AMI for the remaining $8.0 million. These promissory notes were settled in cash during the first quarter of fiscal year 2005. AMI incurred transaction related costs of $28.4 million, which includes $16.3 million paid for investment banking and legal expenses, which have been classified as recapitalization transaction costs in the Company’s statements of operations, and $12.1 million for financing related costs which have been recorded in other assets on the Company’s balance sheet. AMI issued promissory notes of $3.6 million in December 2004 for the payment of a portion of these fees related to the transaction, which were settled in cash in the first quarter of 2005. AMI also recognized stock compensation expense of $30.8 million, including payroll taxes, related to stock options exercised in the transaction. The completion of the aforementioned transactions constituted the December 2004 recapitalization transaction.

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Note 3 - Inventories

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

Note 4 – Goodwill and Other Intangible Assets

     Goodwill represents the purchase price in excess of the fair value of the tangible and intangible net assets acquired and consists of $234.8 million including $198.3 million from the purchase price for the April 2002 merger transaction and $36.5 million from the acquisition of Gentek in 2003. None of the Company’s goodwill is deductible for income tax purposes. The Company’s other intangible assets consists of the following (in thousands):

     The Company has determined that trademarks and trade names totaling $81.1 million consisting primarily of the Alside^®, Revere^® and Gentek^® trade names have indefinite useful lives. Amortization expense related to other intangible assets was approximately $0.8 million for quarters ended April 2, 2005 and April 3, 2004.

Note 5 – Long-Term Debt

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

     Under the term loan facility AMI is required to make minimum quarterly principal amortization payments of 1% per year due beginning September 30, 2005, and on an annual basis beginning with the year ended December 31, 2005, AMI is required to make principal payments based on a percentage of excess cash flows as defined in the amended and restated credit facility. AMI records as a current liability term loan principal payments that are estimable to be due within twelve months, which includes excess cash flow principal repayments when the likelihood of those payments becomes probable.

     The credit facility and the indentures governing the 9 3/4% notes and 11 1/4% notes contain restrictive covenants that, among other things, limit AMI’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. In addition, under the credit facility AMI is required to achieve certain financial ratios relating to leverage, coverage of fixed charges and coverage of interest expense. AMI was in compliance with its covenants as of April 2, 2005.

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     In December 2004, AMH II completed an offering of 13 5/8% senior notes, which mature on December 1, 2014. The accreted value of the 13 5/8% notes as of April 2, 2005 was $75.8 million. The Company does not guarantee the 13 5/8% notes and has no obligation to make any payments with respect thereto. Total AMH II debt, including that of its consolidated subsidiaries, was approximately $750.0 million as of April 2, 2005.

     Because AMH and AMH II are holding companies with no operations, they must receive distributions, payments or loans from AMH’s subsidiaries to satisfy obligations on the 11 1/4% notes and 13 5/8% notes. None of AMH’s subsidiaries guarantee either the 11 1/4% notes or the 13 5/8% notes, or have any obligation to make any payments with respect thereto.

Note 6 – Stock Plans

     The Company measures stock-based compensation using the intrinsic value method in accordance with Accounting Principles Board Opinion No. 25 – “Accounting for Stock Issued to Employees.” The Company follows the disclosure provisions required under FASB SFAS No. 123 – “Accounting for Stock Based Compensation.” Pro forma information regarding net income is required by SFAS No. 123, and has been determined as if the Company had accounted for its stock options under the fair value method of that statement using a minimum value approach for companies with private equity. FASB SFAS No. 148 – “Accounting for Stock-Based Compensation” requires this information to be disclosed on a quarterly basis. The pro forma effect on net loss for the quarters ended April 2, 2005 and April 3, 2004 would have been (in thousands):

Note 7 – Income Taxes

     Due to the seasonal nature of the Company’s operating results, the Company has recorded an income tax benefit on the loss before income taxes for the quarters ended April 2, 2005 and April 3, 2004. The Company’s effective tax rate for the quarter ended April 2, 2005 reflects adjustments for a portion of the interest accretion on AMH’s 11 1/4% senior discount notes, which is not deductible for income tax purposes.

Note 8 – Comprehensive Loss

     Comprehensive loss differs from net loss due to foreign currency translation adjustments as follows (in thousands):

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Note 9 – 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 the 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 Canadian plant, a defined benefit pension plan for the hourly union employees at its Burlington, Ontario Canada plant and a defined benefit pension plan for the hourly union employees at its Pointe Claire, Quebec Canada plant (the “Foreign Plans”). Accrued pension liabilities are included in other 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):

     The Company anticipates making cash contributions of $0.5 million to the Domestic Plans and $2.6 million to the Foreign Plans during 2005.

Note 10 – Facility Closure

     During the fourth quarter of 2004, the Company committed to a plan to close its vinyl siding manufacturing plant located in Freeport, Texas. The Company recorded $2.6 million in pre-tax charges during the first quarter of 2005. The Company anticipates the total charge to be $7.5 million of which $7.1 million has been charged to expense as of April 2, 2005. The Company expects the remainder of the charge to be recorded in the second quarter of 2005. The plant was closed to rationalize production capacity and reduce fixed costs.

     The plant closure costs in the first quarter of 2005 of $2.6 million included relocation costs for certain equipment and employees, facility shut down costs and contract termination costs. As of April 2, 2005, approximately $0.2 million was included in accrued liabilities related to contract termination costs.

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Note 11 – Subsidiary Guarantors

     AMI’s payment obligations under the 9 3/4% notes are fully and unconditionally guaranteed, jointly and severally (collectively, the “Subsidiary Guarantees”) on a senior subordinated basis, by its domestic wholly owned subsidiaries: Gentek Holdings, Inc., Gentek Building Products Inc. and Alside, Inc. Alside, Inc. is a wholly owned subsidiary having no assets, liabilities or operations. Gentek Building Products Limited (the “Non-Guarantor Subsidiary”) 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.

ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
April 2, 2005
(In thousands)
(Unaudited)

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ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Quarter Ended April 2, 2005
(In thousands)

(Unaudited)

ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Quarter Ended April 2, 2005
(In thousands)
(Unaudited)

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ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
January 1, 2005
(In thousands)

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ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Quarter Ended April 3, 2004
(In thousands)
(Unaudited)

ASSOCIATED MATERIALS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Quarter Ended April 3, 2004
(In thousands)
(Unaudited)

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

Overview

     AMH Holdings, Inc. (“AMH”) was incorporated in Delaware on February 19, 2004. AMH has no material assets or operations other than its 100% ownership of Associated Materials Holdings Inc. (“Holdings”), its direct subsidiary, which in turn has no material assets or operations other than its 100% ownership of Associated Materials Incorporated (“AMI”), collectively referred to as the “Company”. As part of a restructuring agreement dated as of March 4, 2004, stockholders and option holders of Holdings became stockholders and option holders of AMH and are no longer stockholders and option holders of Holdings.

     AMH is a wholly owned subsidiary of AMH Holdings II, Inc. (“AMH II”) which is controlled by affiliates of Investcorp S.A. (“Investcorp”) and Harvest Partners, Inc. (“Harvest Partners”). AMH and AMH II were incorporated in connection with the recapitalization transactions described in Note 2 of the financial statements. AMH and AMH II do not have material assets or operations other than a direct or indirect ownership of the common stock of AMI.

     AMI 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, aluminum and steel siding and accessories, and vinyl fencing, decking and railing. Vinyl windows and vinyl siding together comprise approximately 60% of the Company’s total net sales. These products are 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 North American network of 126 supply centers. Approximately two-thirds of the Company’s products are sold to contractors engaged in the home repair and remodeling market with one-third 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 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. The Company believes it can sustain moderate short-term interest rate and mortgage rate increases without a significant negative impact on its net sales. While the Company believes the overall fundamentals for the building products industry remain strong, the Company does believe that certain industry dynamics have weakened in the first quarter of 2005 with mortgage interest rates increasing and consumer confidence trending lower. Additionally, after two strong months of single family housing starts, March 2005 single family housing starts decreased significantly.

     Due to the high price of oil and natural gas, as well as expected continued strong demand for these commodities, the Company, along with the entire building products industry, has experienced significant inflation in key raw material commodity costs. These costs are expected to remain at current high levels or even possibly continue to increase in 2005. To offset these increases, the Company announced price increases on certain of its product offerings in 2004 as well as the first quarter of 2005. The Company estimates that increases in raw material costs, net of price increases, resulted in a decrease in gross profit of approximately $1.9 million for the quarter ended April 2, 2005. The results of operations for individual quarters can and have been negatively impacted by a delay between the time of raw material cost increases and price increases on the Company’s products. The Company’s ability to maintain gross margin levels on its products depends on the Company’s ability to obtain its announced selling price increases.

     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.

     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

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makes borrowings under the revolving loan portion of its credit facility. The Company typically generates the majority of its cash flow in the fourth quarter.

     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, expanding its supply center network, increasing sales through independent specialty distributor customers, realizing synergies from the Gentek acquisition, developing innovative new products, and driving operational excellence by reducing costs and increasing customer service levels. The Company expects to recognize $6.7 million of synergies related to the Gentek acquisition during 2005.

Results of Operations

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

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(b)		Represents amortization of a prepaid management fee paid to Investcorp International Inc. in connection with the December 2004 recapitalization transaction.
(c)		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 are expected to be $7.5 million, which includes a $4.5 million pre-tax charge recorded in the fourth quarter of 2004.
(d)		Represents management and director bonuses paid in connection with the March 2004 dividend recapitalization.

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Quarter Ended April 2, 2005 Compared to Quarter Ended April 3, 2004

     Net sales increased 7.0%, or $14.2 million, during the first quarter of 2005 compared to the same period in 2004, driven primarily by price increases implemented during 2005 and 2004 as well as increased sales volumes for windows and third-party products. While the Company experienced unit volume percentage increases in the low single digits for windows and in the middle to high single digits for third-party manufactured products, the growth was at lower rates than in the first quarter of 2004. Siding units for the first quarter of 2005 were unchanged from the same period in the prior year, which compares to lower reported industry units during the first quarter of 2005. The Company also experienced overall sales weakness in the Midwest region of the U.S., which it believes is due in part to unfavorable weather conditions during the first quarter of 2005.

     Gross profit in the first quarter of 2005 was $49.0 million, or 22.4% of net sales, compared to gross profit of $50.4 million, or 24.6% of net sales, in the first quarter of 2004. The decrease in gross profit margin percentage is primarily due to significantly increased commodity costs of the Company’s key raw materials – aluminum, steel and vinyl resin, 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 first quarter of 2005 by approximately $1.9 million. In addition, the Company incurred substantially higher freight costs, due primarily to fuel cost increases, which had a negative impact on gross profit for the first quarter of 2005 compared to the prior year of approximately $1.5 million. Selling, general and administrative expense increased to $50.8 million, or 23.2% of net sales, for the first quarter of 2005 versus $45.4 million, or 22.2% of net sales, for the same period in 2004. The increase in selling, general and administrative expense was due primarily to increased expenses relating to the Company’s supply center network, including increased salaries and wages, medical costs, building and truck leases, and fuel costs, as well as expenses relating to new supply centers opened in the last twelve months. Selling, general and administrative expense for the first quarter of 2005 also includes $1.0 million of amortization of prepaid management fees paid to Investcorp International Inc. in December 2004 and non-cash stock compensation expense of $0.3 million. During the first quarter of 2005, the Company incurred facility closure costs of approximately $2.6 million relating to the closing of its Freeport, Texas manufacturing plant. During the first quarter of 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. The loss from operations was $4.3 million in the first quarter of 2005 compared to a loss of $9.5 million for the same period in 2004.

     Interest expense increased $6.9 million during the first quarter of 2005 compared to the same period in 2004. The increase in interest expense is due to a full quarter of debt accretion on the 11 1/4% notes in 2005, additional borrowings on the term loan as a result of the December 2004 recapitalization transaction and additional borrowings on the revolving loan portion of the credit facility to meet the seasonal working capital needs of the Company. Due to the seasonal nature of the Company’s operating results, the Company has recorded an income tax benefit on the loss before income taxes for the quarters ended April 2, 2005 and April 3, 2004 at an effective rate of 38.2% and 40.5%, respectively.

     The net loss increased to $12.1 million for the quarter ended April 2, 2005 compared to $10.7 million for the quarter ended April 3, 2004. The increase in the net loss is a result of higher expenses in 2005, including interest expense, selling, general and administrative expense and facility closure costs partially offset by higher expense in 2004 related to the $14.5 million management bonus paid in 2004.

     EBITDA for the first quarter of 2005 was $0.7 million compared to a loss of $4.4 million for the first quarter of 2004. Adjusted EBITDA for the first quarter of 2005 was $4.6 million compared to $10.1 million for the same period in 2004. As compared to EBITDA, adjusted EBITDA for the quarter ended April 2, 2005 excludes facility closure costs of $2.6 million, amortization of a prepaid management fee of $1.0 million and non-cash stock compensation expense of $0.3 million. For the quarter ended April 3, 2004 adjusted EBITDA excludes a bonus paid to certain members of Company management totaling approximately $14.5 million related to the completion of the March 2004 dividend recapitalization.

     The plant closure costs in the first quarter of 2005 of $2.6 million included relocation costs for certain equipment and employees, facility shut down costs and contract termination costs related to the closing of the Freeport, Texas vinyl siding manufacturing facility. The Company anticipates the total charge to be $7.5 million of which $7.1 million has been charged to expense as of April 2, 2005. The Company expects the remainder of the charge to be recorded in the second quarter of 2005. The plant was closed to rationalize production capacity and reduce fixed costs.

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Liquidity and Capital Resources

     The following sets forth a summary of the Company’s cash flows for the three months ended April 2, 2005 and April 3, 2004 (in thousands):

Cash Flows

     At April 2, 2005, the Company had cash and cash equivalents of $9.7 million and available borrowing capacity of approximately $30.4 million under the revolving portion of its credit facility. Outstanding letters of credit as of April 2, 2005 totaled $6.0 million securing various insurance letters of credit.

Cash Flows from Operating Activities

     Net cash used in operations was $37.4 million and $28.9 million for the quarters ended April 2, 2005 and April 3, 2004, respectively. The cash used in operations for both periods reflects the operating results for each quarter, the seasonal increase of inventory levels required for the summer selling season, as well as payments of accrued profit sharing and customer sales incentives.

Cash Flows from Investing Activities

     Capital expenditures totaled $9.1 million and $5.3 million for the quarters ended April 2, 2005 and April 3, 2004, respectively. Capital expenditures in 2005 were primarily to increase capacity at the Company’s Ennis, Texas siding facility and to purchase land and equipment for the new window plant to be leased in Yuma, Arizona, which is expected to begin window production in the third quarter of 2005. The plant is being built to meet growing product demand in the Company’s Western markets and to alleviate capacity constraints at the Company’s Bothell, Washington window plant. Capital expenditures in 2004 were primarily to increase extrusion capacity at the Company’s West Salem, Ohio manufacturing location and to increase capacity at two of the Company’s window manufacturing facilities. The Company’s estimate for total capital expenditures for 2005 is approximately $27 million. The Company plans to open between three to five stores during 2005.

Cash Flows from Financing Activities

     Cash flows from financing activities for the quarter ended April 2, 2005 include borrowings on the revolving loan portion of the Company’s credit facility of $43.6 million offset by dividend payments of $33.7 million and payments on promissory notes of $11.6 million. Cash flows from financing activities for the quarter ended April 3, 2004 include proceeds from the issuance of the 11 1/4% notes of $258.3 million, borrowings on the revolving portion of AMI’s credit facility of $22.3 million, proceeds from the exercise of stock options of $1.8 million, redemption of the Company’s then outstanding preferred stock of $177.8 million, common stock dividends of $57.7 million and financing costs of $10.1 million, consisting primarily of banking and legal fees paid in connection with the issuance of AMH’s 11 1/4% senior discount notes. The increase in borrowings on the revolver for the quarter ended April 2, 2005 of $21.3 million as compared to the same period in the prior year is primarily due to increased inventory dollars resulting from higher raw material costs and increased metal inventory levels.

Description of the Company’s Outstanding Indebtedness

     AMI’s 9 3/4% notes pay interest semi-annually in April and October. AMI’s credit facility as of April 2, 2005 includes $175 million of outstanding term loans due through 2010 that bear interest at the London Interbank Offered Rate (LIBOR) plus 2.25% payable quarterly at the end of each calendar quarter, and up to $80 million of available borrowings provided by the revolving loans (including a Canadian subfacility of $20 million), which expire in 2009 and bear interest at LIBOR plus a margin of 3.00%, which can decline to as low as 2.25% based on AMI’s leverage ratio, as defined in the credit facility. Outstanding borrowings on the revolving loan portion of AMI’s credit facility totaled $43.6 million at April 2, 2005.

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     The credit facility and the indenture governing the 9 3/4% notes contain restrictive covenants that, among other things, limit AMI’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. In addition, under the credit facility AMI is required to achieve certain financial ratios relating to leverage, coverage of fixed charges and coverage of interest expense. AMI was in compliance with its covenants as of April 2, 2005. Under the term loan facility AMI is required to make minimum quarterly principal amortization payments of 1% per year due beginning September 30, 2005, and on an annual basis beginning with the year ended December 31, 2005, AMI is required to make principal payments based on a percentage of excess cash flows as defined in the amended and restated credit facility. AMI records as a current liability term loan principal payments that are estimable to be due within twelve months, which includes excess cash flow principal repayments when the likelihood of those payments becomes probable. The Company may need to refinance all or a portion of its indebtedness on or before their respective maturity dates. There can be no assurance that the Company will be able to refinance any of its indebtedness on commercially reasonable terms or at all.

     The indenture governing the 11 1/4% notes contain restrictive covenants that, among other things, limit AMH’s ability, and the ability of its subsidiaries, to incur additional indebtedness, make certain restricted payments, pay dividends or make other distributions, make investments, sell assets, incur liens (except with respect to its subsidiaries), issue capital stock of restricted subsidiaries, enter into agreements restricting its subsidiaries’ ability to pay dividends, enter into sale/leaseback transactions, enter into transactions with affiliates, and consolidate, merge or sell all or substantially all of its assets. The notes are structurally subordinated to all existing and future debt and other liabilities of AMH’s existing and future subsidiaries, including AMI and Holdings. Because AMH is a holding company with no operations, it must receive distributions, payments or loans from subsidiaries to satisfy obligations on the 11 1/4% notes. None of AMH’s subsidiaries guarantee the 11 1/4% notes or have any obligation to make any payments with respect thereto.

     In December 2004, AMH II completed an offering of 13 5/8% senior notes (“13 5/8% notes”), which mature on December 1, 2014. The accreted value of the 13 5/8% notes as of April 2, 2005 was $75.8 million. Because AMH II is a holding company with no operations, it must receive distributions, payments or loans from subsidiaries to satisfy obligations on the 13 5/8% notes. The Company does not guarantee the 13 5/8% notes and has no obligation to make any payments with respect thereto. Total AMH II debt, including that of its consolidated subsidiaries, was approximately $750.0 million as of April 2, 2005.

     The Company believes that for the foreseeable future cash flows from operations and its borrowing capacity under its credit facility will be sufficient to satisfy its obligations to pay principal and interest on its outstanding debt, maintain current operations, and provide sufficient capital for presently anticipated capital expenditures. There can be no assurances, however, that the cash generated by the Company will be sufficient for these purposes.

Effects of Inflation

     The Company’s principal raw materials, vinyl resin, aluminum, and steel have historically been subject to significant price changes. Raw material pricing on the Company’s key commodities continued to increase for the quarter ended April 2, 2005. All of the Company’s key raw material commodities, vinyl resin, aluminum and steel, are at their highest levels in several years and the Company expects that raw material prices will remain at the current high levels and may possibly continue to increase in 2005. The Company estimates that increases in raw material costs, net of price increases, resulted in a decrease in gross profit of approximately $1.9 million for the quarter ended April 2, 2005. The Company announced price increases on certain of its products in the first quarter of 2005 and throughout 2004, which partially offset the raw material inflation. There can be no assurances that the Company will be able to achieve any future price increases including the announced price increases; in addition, there may be a delay from quarter to quarter. At April 2, 2005, the Company had no raw material hedge contracts in place.

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. 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 industry, economic conditions, interest rates, foreign currency exchange rates and other conditions;

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	•	changes in availability of consumer credit, employment trends, levels of consumer confidence 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;
	•	changes in weather conditions;
	•	the Company’s ability to comply with certain financial covenants in the loan documents governing its indebtedness;
	•	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 capital expenditure requirements;
	•	potential conflict between existing Alside and Gentek distribution channels;
	•	the achievement of anticipated synergies and operational efficiencies from the Gentek acquisition; and
	•	the other factors discussed under the heading “Risk Factors” in the Company’s annual report on Form 10-K for the year ended January 1, 2005 and elsewhere in this report.

     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 these statements unless the securities laws require it to do so.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

     AMI has outstanding borrowings under the term loan and revolving loan portions of its credit facility and may borrow under the revolving credit facility from time to time for general corporate purposes, including working capital and capital

expenditures. Interest under the credit facility is based on the variable London Interbank Offered Rate (LIBOR). At April 2, 2005, AMI had borrowings of $175.0 million under the term loan and $43.6 million under the revolver. The effect of a 1/8% increase or decrease in interest rates would increase or decrease total interest expense for the quarter ended April 2, 2005 by approximately $0.1 million.

     AMH has $290.6 million of senior discount notes due 2014 that bear an interest rate of 11 1/4%. Interest accrues at a rate of 11 1/4% 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% on the notes accrues and is payable semi-annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2009. AMI 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 11 1/4% notes and 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.

Foreign Currency Exchange Risk

     The Company’s revenues are primarily from domestic customers and are realized in U.S. dollars. However the Company does realize 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. However, payment terms among Canadian manufacturing facilities and these vendors are short-term in nature. Accordingly, the Company believes its direct foreign currency exchange risk is not material. At April 2, 2005, the Company had no currency hedges in place.

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.

Item 4. Controls and Procedures

     The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on their evaluation as of the Evaluation Date, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are 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 required time periods.

     There have been no changes to the Company’s internal control over financial reporting during the quarter ended April 2, 2005 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     The Company is involved from time to time in litigation arising in the ordinary course of business, none of which, after giving effect to the Company’s existing insurance coverage, is expected to have a material adverse effect on the Company.

     From time to time, the Company is involved in a number of proceedings and potential proceedings relating to environmental and product liability matters. The Company handles these claims in the ordinary course of business and maintains product liability insurance covering certain types of claims. Although it is difficult to estimate the Company’s potential exposure to these matters, the Company believes that the resolution of these matters will not have a material adverse effect on the Company’s financial position, results of operations or liquidity.

Item 6. Exhibits

(a) Exhibits

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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.

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EXHIBIT INDEX

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