Back to GetFilings.com

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

Commission file number 333-05978

EURAMAX INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code 770-449-7066

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

ý    Yes    o        No

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Rule 12b-2).

o    Yes    ý        No

        As of November 10, 2003, Registrant had outstanding 492,495.79 shares of Class A common stock and no shares of Class B common stock.

Part I—Financial Information

Item 1. Financial Statements

Euramax International, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(Thousands of U.S. Dollars)
(Unaudited)

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

Euramax International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Thousands of U.S. Dollars)
(Unaudited)

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Euramax International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Thousands of U.S. Dollars)
(Unaudited)

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Euramax International, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Thousands of U.S. Dollars)
(Unaudited)

1.     Basis of Presentation:

        For purposes of this report the "Company" refers to Euramax International, Inc. ("Euramax") and Subsidiaries, collectively.

        The Condensed Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the rules and regulations of the Securities and Exchange Commission (the "SEC"). 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 the management of the Company, these statements include all adjustments necessary for a fair presentation of the results of all interim periods reported herein. All adjustments are of a normal recurring nature, except for the 2003 Stock Transaction described in Note 2, unless otherwise disclosed. Management believes that the disclosures made are adequate for a fair presentation of results of operations, financial position and cash flows. These Condensed Consolidated Financial Statements should be read in conjunction with the year-end Consolidated Financial Statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 27, 2002. The Company's sales are somewhat seasonal, with the second and third quarters typically accounting for the highest sales volumes. Operating results for the period ended September 26, 2003, are not necessarily indicative of future results that may be expected for the year ending December 26, 2003.

        Per share data has not been presented since such data provides no useful information, as the shares of the Company are closely held.

        Certain 2002 amounts have been reclassified to conform to current year presentation.

2.     2003 Stock Transaction

        On April 15, 2003, Citigroup Venture Capital Equity Partners, L.P. ("CVCEP") and Citigroup Venture Capital Ltd. ("CVC"), entered into a definitive purchase agreement with CVC European Equity Partners, L.P. and CVC European Equity Partners (Jersey), L.P. (collectively "CVC Europe"), BNP Paribas, independent directors and certain members of management to purchase, for approximately $106.0 million, all of the shares of the Company held by CVC Europe and BNP Paribas, and a portion of the shares held by independent directors and management ("2003 Stock Transaction"). The 2003 Stock Transaction was completed on June 12, 2003, with CVCEP purchasing 265,762.48 shares of the Company's Class A Common Stock. After the completion of this transaction CVCEP and CVC collectively owned approximately 88.5% of the issued and outstanding shares of the Company, with management of CVCEP and directors and management of the Company holding the remaining shares. Prior to the 2003 Stock Transaction, CVC owned approximately 34.5% of the issued and outstanding shares of the Company. CVCEP is ultimately controlled by Citigroup, Inc. through limited and general partnership interests owned by its subsidiaries. CVC Europe is a group of limited partnerships in which Citigroup, Inc. owns a minority interest, but does not have management rights or control rights. This substantial change in ownership arising from CVCEP's acquisition of the Company's stock, together with the Company's subsequent issuance of senior subordinated notes (see Note 13), required that the purchase price paid in excess of the book value of the Company's equity acquired be allocated under the purchase method of accounting to the assets and liabilities of the Company based upon a percentage of their fair values proportional to the percentage of the ownership change. The allocation was based upon preliminary estimates by management of the fair market values of identifiable assets and liabilities, with the remainder allocated to goodwill. The liabilities assumed

5

included approximately $3.4 million of fees related to the transaction, which were paid by the Company on behalf of its shareholders. The Company is currently completing valuations of its assets and pension liabilities. The final allocation of the purchase price, which is subject to revision when valuations are completed, may materially differ from the preliminary estimates. The goodwill generated from this transaction is not deductible for income tax purposes. The purchase price has been allocated as follows:

        The following unaudited pro-forma information presents the results of operations of the Company as if the 2003 Stock Transaction had occurred as of the beginning of the period presented. The pro-forma information is not necessarily indicative of what would have occurred had the 2003 Stock Transaction been completed at that time, nor is it indicative of future results of operations. The pro-forma amounts give effect to appropriate adjustments for the fair value of the assets acquired, liabilities assumed, amortization of property, plant and equipment, intangibles and restricted stock, incurrence of the advisory fees owed to CVC Management and income taxes.

3.     Summary of Significant Accounting Policies:

        For information regarding significant accounting policies, see Note 2 to the Consolidated Financial Statements of the Company for the year ended December 27, 2002, set forth in the Company's Annual Report on Form 10-K.

Goodwill

        Goodwill increased $47.3 million from December 27, 2002 to September 26, 2003 as a result of applying the purchase method of accounting to the 2003 Stock Transaction, as described in Note 2, partially offset by the reversal of goodwill related to the resolution of a tax contingency. The remaining change in goodwill is a result of the change in foreign exchange rates used in converting the local currency goodwill balance into U.S. Dollars.

6

Stock Based Compensation

        As permitted by SFAS No. 123, "Accounting for Stock-Based Compensation", the Company has elected to apply APB No. 25, "Accounting for Stock Issued to Employees" and related interpretations in accounting for stock options issued under its equity compensation plan (see Note 11). Had compensation expense related to these stock options been determined based upon the fair value method under SFAS No. 123, net income would have been impacted as follows:

        The fair value of each option is estimated using the Black-Scholes option-pricing model using a risk free interest rate of 3.20%, an expected option life of 5 years, no volatility and no dividends.

Recent Accounting Pronouncements

        In April 2002, the FASB issued Statement No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections" ("SFAS No. 145"). Among other items, SFAS No. 145 updates and clarifies existing accounting pronouncements related to reporting gains and losses from the extinguishment of debt and certain lease modifications that have economic effects similar to sale-leaseback transactions. SFAS No. 145 became effective for the Company on the first day of fiscal year 2003.

        The Company recorded interest expense and other expense, net of tax, of approximately $0.3 million and $0.9 million, respectively, and expects to record an additional $1.0 million of interest expense in the fourth quarter of 2003. These items represent unamortized deferred financing fees and the amount paid in excess of the carrying value of the retired debt related to the senior subordinated notes purchased or redeemed as described in Note 13. Prior to the adoption of SFAS No. 145 the Company would have recognized this amount as an extraordinary loss, net of tax.

        In December 2002, the FASB issued Statement No. 148, "Accounting for Stock-Based Compensation, Transition and Disclosure" ("SFAS No. 148"). SFAS No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. SFAS No. 148 also amends the disclosure requirements of SFAS No. 123 to require prominent disclosure in both annual and interim financial statements about the method of accounting for stock-based compensation and the pro forma effect on net income had the fair value of the options been expensed. The disclosure requirements of SFAS No. 148 became effective at its issuance. The adoption of SFAS No. 148 did not have a material impact on the Company's financial position or results of operations in fiscal year 2003.

        In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"), which addresses consolidation of variable interest entities. FIN 46 requires a

7

variable interest entity to be consolidated by a parent company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both. A variable interest entity is a corporation, partnership, trust or any other legal structure used for business purposes that either does not have equity investors with voting rights or has equity investors that do not provide sufficient financial resources for the entity to support its activities. The consolidation requirements of FIN 46 apply immediately to variable interest entities created after January 31, 2003. For older entities, these requirements will begin to apply in the first fiscal year or interim period beginning after December 15, 2003. The Company is currently evaluating FIN 46, but the adoption of FIN 46 is not expected to have a material impact on the Company's financial position or results of operations in fiscal year 2003.

        In April 2003, the FASB issued Statement No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" ("SFAS No. 149"). SFAS No. 149 clarifies under what circumstances a contract with an initial net investment meets the characteristics of a derivative, amends the definition of an underlying contract and clarifies when a derivative contains a financing component in order to increase the comparability of accounting practices under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003, and for hedging relationships designated after June 30, 2003. The adoption of SFAS No. 149 is not expected to have a material impact on the Company's financial position or results of operations in fiscal year 2003.

4.     Inventories:

        Inventories were comprised of:

        Inventories are net of related reserves totaling $3.8 million at December 27, 2002 and $4.0 million at September 26, 2003.

5.     Long-Term Obligations:

        Long-term obligations consisted of the following:

        As of September 26, 2003, $110.0 million was available under the revolving credit facility.

        On July 10, 2003, the Company commenced an offer to purchase and solicitation of consents for the outstanding $135.0 million 11.25% senior subordinated notes due 2006 (the "11.25% Notes"),

8

subject to the receipt of a consent from the holders of a majority of the principal amount thereof. On August 6, 2003, the Company issued $200.0 million 8.5% senior subordinated notes due 2011 (the "Old Notes"). The Company's proceeds from the issuance of the Old Notes, net of debt issuance costs, were approximately $191.3 million. On August 8, 2003, the Company used the proceeds of the Old Notes to purchase approximately $112.9 million of the 11.25% Notes that had been validly tendered, for approximately $120.4 million, including premium and accrued and unpaid interest. Following the purchase of the 11.25% Notes accepted in the tender offer, approximately $22.1 million in aggregate principal amount of the 11.25% Notes remained outstanding.

        Euramax International, Inc. and Euramax International Holdings, B.V., a newly acquired Netherlands holding company, are each co-obligors on the Old Notes. Each of Euramax International, Inc.'s U.S. subsidiaries are guarantors of the Old Notes. Interest on the Old Notes is payable semi-annually in arrears on February 15 and August 15 of each year. The Old Notes may be redeemed at the option of the Company, in whole or in part, under the conditions as specified in the indenture plus accrued and unpaid interest to the redemption date, at the following redemption prices if redeemed during the 12-month period beginning August 15 of the years indicated:

        Additionally, at any time on or before August 15, 2006, the issuers may redeem up to 35% of the aggregate principal amount of the Old Notes with the proceeds of qualified equity offerings at a redemption price equal to 108.5% of the principal amount plus accrued and unpaid interest. Upon a change of control, the Company may be required to offer to purchase the Old Notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest.

        Under a registration rights agreement executed as part of the offering of the Old Notes, the Company is required to exchange the Old Notes for new notes ("New Notes"), with terms substantially identical to the Old Notes, except the New Notes will be registered under the Securities Act of 1933 and the transfer restrictions and registration rights applicable to the Old Notes will not apply to the New Notes.

6.     Financial Instruments:

        On August 8, 2003, the Company used the proceeds from the issuance of the Old Notes to repay a portion of the outstanding 11.25% Notes and a portion of the revolving credit facility. As a result of this repayment the Company's Pound Sterling Swap and Interest Rate Swap (both as described in the Company's Annual Report on Form 10-K for the year ended December 27, 2002) became ineffective hedges and no longer qualified for hedge accounting. The balance on the Interest Rate Swap of $0.1 million remaining in other comprehensive income on the date it became ineffective will be amortized into earnings over the original term of the agreement as other income. There was no balance on the Pound Sterling Swap remaining in other comprehensive income at the time it became an ineffective hedge. Changes in fair market value on the Interest Rate Swap and Pound Sterling Swap subsequent to the hedges becoming ineffective are recognized in current earnings during the period of change. During the three months ended September 26, 2003, the Company recognized other expense, net of taxes, of $0.5 million as a result of the ineffectiveness of the Interest Rate Swap and Pound Sterling Swap. As of September 26, 2003, the Company had recorded a liability for the fair value of the Interest Rate Swap and Pound Sterling Swap of $0.5 million and $4.4 million, respectively.

9

7.     Commitments and Contingencies:

Litigation

        The Company is subject to legal proceedings and claims that have arisen in the ordinary course of business. Although occasional adverse decisions or settlements may occur, it is the opinion of the Company's management, based upon information available at this time, that the expected outcome of these matters, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company and its subsidiaries taken as a whole.

Environmental Matters

        The Company's operations are subject to federal, state, local and European environmental laws and regulations concerning the management of pollution and hazardous substances. The Company has been named as a potentially responsible party in state and Federal administrative and judicial proceedings seeking contribution for costs associated with the investigation, analysis, correction and remediation of environmental conditions at various hazardous waste disposal sites. The Company continues to monitor these actions and proceedings and to vigorously defend both its own interests as well as the interests of its affiliates. The Company's ultimate liability in connection with present and future environmental claims will depend on many factors, including its volumetric share of the waste at a given site, the remedial action required, the total cost of remediation, and the financial viability and participation of the other entities that also sent waste to the site. Once it becomes probable that the Company will incur costs in connection with remediation of a site and such costs can be reasonably estimated, the Company establishes or adjusts its reserve for its projected share of these costs. Based upon current law and information known to the Company concerning the size of the sites known to it, anticipated costs, their years of operations and the number of other potentially responsible parties, management believes that the Company's potential share of the estimated aggregate liability for the costs of remedial actions and related costs and expenses are not material. In addition, the Company establishes reserves for remedial measures required from time to time at its own facilities. Management believes that the reasonably probable outcomes of these matters will not materially exceed established reserves and will not have a material impact on the future financial position, net earnings or cash flows of the Company. The Company's reserves, expenditures and expenses for all environmental exposures were not significant for any of the dates or periods presented.

        In connection with the acquisition of the Company from Alumax Inc. (which has since been acquired by Aluminum Company of America in May 1998, and hereafter referred to as "Alumax") on September 25, 1996, the Company was indemnified by Alumax for substantially all of its costs, if any, related to specifically identified environmental matters arising prior to the closing date of the acquisition during the period of time it was owned directly or indirectly by Alumax. Such indemnification includes costs that may ultimately be incurred to contribute to the remediation of certain specified existing National Priorities List ("NPL") sites for which the Company had been named a potentially responsible party under the federal Comprehensive Environmental Response, Compensation, and Liability Information System ("CERCLA") as of the closing date of the acquisition, as well as certain potential costs for sites listed on state hazardous cleanup lists. The Company does not believe that it has any significant probable liability for environmental claims. Further, the Company believes it to be unlikely that the Company would be required to bear environmental costs in excess of its pro rata share of such costs as a potentially responsible party at any site.

Product Warranties

        The Company provides warranties on certain products. The warranty periods differ depending on the product, but generally range from one year to limited lifetime warranties. The Company provides

10

accruals for warranties based on historical experience and expectations of future occurrence. A summary of the changes in the product warranty accrual follows:

11

8.     Comprehensive Income:

9.     Income Taxes:

        The income tax provision for the four months ended September 26, 2003, five months ended May 23, 2003 and the nine months ended September 27, 2002 is computed at the effective rate expected to be applicable in each respective full year using the statutory rates on a country by country basis.

10.   Segment Information:

        For detailed information regarding the Company's reportable segments, see Note 14 to the Consolidated Financial Statements of the Company for the year ended December 27, 2002, set forth in the Company's Annual Report on Form 10-K.

12

        Information about reported segments and a reconciliation of total segment sales to total consolidated sales, total segment EBITDA to total consolidated earnings before income taxes and total segment assets to total assets for the periods indicated, is as follows:

13

        The following table reflects revenues from external customers by groups of similar products for the periods indicated:

11.   Shareholders' Equity

Common Stock

        In connection with the 2003 Stock Transaction, the Company converted 44,346.8 shares of Class B Common Stock into Class A Common Stock. Additionally, the Company issued 883.75 shares of Class A Common Stock to CVCEP from shares held in treasury as described in Note 12 and issued 9,569.6 shares of restricted Class A Common Stock.

Stock Plans

        On June 12, 2003, the Company established an equity compensation program, the Euramax International, Inc. 2003 Equity Compensation Plan ("2003 Equity Plan"), for the purpose of attracting and retaining valued employees. Under the 2003 Equity Plan, the Company has granted restricted shares of Class A Common Stock and granted options to purchase shares of Euramax International

14

Class A Common Stock to selected officers and other key employees. The Company has reserved 35,719.6 shares of Class A Common Stock for issuance under the 2003 Equity Plan.

        The 2003 Equity Plan is to be administered by a committee designated by the board of directors. The committee will have full authority to act in selecting the eligible employees to whom awards of options or restricted stock may be granted. The committee will determine the times at which such awards of restricted stock or options may be granted, the terms and conditions of awards that may be granted under the 2003 Equity Plan and the terms of agreements which will be entered into with employees designated to participate in the 2003 Equity Plan. However, in no event may the exercise price of any non-qualified options granted under the 2003 Equity Plan be less than the fair market value of the underlying shares on the date of grant.

        The 2003 Equity Plan permits the committee to grant both incentive stock options and non-qualified stock options, with all 25,750 options granted in connection with the 2003 Stock Transaction being non-qualified stock options. The committee may determine the number of options granted to each participant, the exercise price of each option, the duration of options (not to exceed 10 years), vesting provisions and all other terms and conditions of such options in individual option agreements. The non-qualified stock option grant agreements in effect on the date hereof provide that each participant will vest in 20% of the shares subject to the option grant on each anniversary of the date of grant, until becoming 100% vested after 5 years. Non-qualified stock option grant agreements under the 2003 Equity Plan provide that upon termination of employment with the Company, the exercise period for vested options will generally be limited, except that vested options will be canceled immediately upon a termination for cause. The non-qualified stock option grant agreements provide for the cancellation of all unvested options upon termination of employment with the Company. Under the 2003 Equity Plan, if any option shares subject to an outstanding option grant are forfeited or if the option grant otherwise terminates without exercise, any of these forfeited or terminated option grant shares may be reissued at the discretion of the committee. In connection with the 2003 Stock Transaction the Company issued 25,750 options to purchase shares of Class A Common Stock with an exercise price of $400.00 per share.

15

        Information with respect to option activity under the 2003 Equity Plan is set forth below:

        The 2003 Equity Plan also permits the Company to grant participants restricted shares of Class A Common Stock. The committee will determine the number of shares of restricted stock granted to each participant, the period the restricted stock is unvested and subject to forfeiture and all other terms and conditions applicable to such restricted stock in individual restricted stock agreements. The restricted stock agreements in effect on the date hereof provide that the participant will vest in 100% of the restricted shares five years from the date of grant. If an employee voluntarily terminates his or her employment, the employee will forfeit any unvested shares of restricted stock. If employment is terminated for any reason other than voluntary termination, all unvested shares of the restricted stock shall be accelerated as of the date of non-voluntary termination. All shares of restricted stock granted, and all shares acquired upon exercise of options granted, under the 2003 Equity Plan will be subject to the stockholders agreement described in Note 12. In connection with the 2003 Stock Transaction, the Company granted 9,569.6 shares of restricted Class A Common Stock with a fair value of $400.00 per share.

        The 2003 Equity Plan provides that upon a change in control of the Company, all restricted stock awards shall become fully vested, and each unexercised and outstanding option shall become immediately and fully vested and exercisable. All restricted stock awards shall also become fully vested in the event of an initial public offering of the Company's common stock. Each option that is exercisable immediately prior to the change in control may be canceled in exchange for a payment in cash of an amount equal to the excess of the fair market value of the common stock underlying the option as of the date of the change in control over the exercise price. The committee may also decide that such options be terminated immediately prior to the change in control, provided that the participant fails to exercise the option within a specified period (of at least seven days) following receipt of written notice of the change in control and of the Company's intention to terminate the option prior to such change in control. Alternatively, the committee may determine that in the event of a change in control, such options shall be assumed by the successor corporation, and shall be substituted with options involving the common stock of the successor corporation with equivalent value and with the terms and conditions of the substituted options being no less favorable that the options granted by the Company.

12.   Related Party Transactions:

2003 Stock Transaction

        The Company entered into a stock purchase agreement on April 15, 2003, with CVCEP, certain affiliates of CVCEP, CVC Europe, BNP Paribas and certain other stockholders. Pursuant to the stock purchase agreement, on June 12, 2003, CVCEP and its affiliates acquired from the Company's former stockholders CVC Europe and BNP Paribas and certain members of management, 265,762.48 shares of common stock, or 54% of the Company's common stock ("2003 Stock Transaction"). In connection with the 2003 Stock Transaction, we sold 883.75 shares of common stock directly to CVCEP for

16

$353,500.00. The Company also agreed to pay the out of pocket fees and expenses of CVCEP and CVC Europe, which in aggregate were approximately $3.4 million, and gave certain customary indemnities in favor of CVCEP under the stock purchase agreement. CVCEP is an affiliate of Citigroup Venture Capital, Ltd., which owned about 34.5% of the Company's common stock at the time of the 2003 Stock Transaction. Citigroup Venture Capital, Ltd. has subsequently transferred these shares to Court Square Capital, Ltd., or Court Square, which, like Citigroup Venture Capital, Ltd., is an indirect wholly-owned subsidiary of Citigroup, Inc.

Stockholders Agreement

        In connection with the 2003 Stock Transaction, the Company entered into a stockholders agreement with CVCEP and certain of its affiliates, Court Square, and certain other stockholders consisting of members of the Company's management and members of CVCEP's management ("Minority Stockholders"). The stockholders agreement provides that the Company's Chief Executive Officer will be a member of the Company's board of directors. CVCEP will initially be entitled to designate three additional members of the Company's board of directors and Court Square will initially be entitled to designate two additional members of the Company's board of directors (these designation rights to be adjusted from time to time to reflect certain changes in the common stock ownership of CVCEP and Court Square).

        Under the stockholders agreement, certain corporate actions require the written consent of stockholders holding at least 70% of the Company's outstanding stock held by all stockholders party to the stockholders agreement. Initially, this will require the written consent of both CVCEP and Court Square. These corporate actions include changes to or issuances of the Company's equity securities, amendments of organizational documents, payment of dividends, or certain merger or recapitalization transactions. In addition, each action of the board of directors will require the approval of at least one director designated by each of CVCEP and Court Square.

        The stockholders agreement generally restricts the transfer of shares of the Company's common stock. Exceptions to this restriction include transfers to affiliates, transfers to the Company, transfers for estate planning purposes and transfers to family members. In each case, so long as any transferee agrees to be bound by the terms of the stockholders agreement. After an initial public offering, additional exceptions to the transfer restrictions will include sales pursuant to certain registration rights of the stockholders.

Registration Rights Agreement

        In connection with their entry into the stockholders agreement, CVCEP, Court Square and the Minority Stockholders have entered into an amended and restated registration rights agreement with the Company. Pursuant to this registration rights agreement, upon the written request of CVCEP or Court Square, the Company has agreed (subject to customary exceptions), on up to three occasions for CVCEP and up to two occasions for Court Square, to prepare and file a registration statement with the SEC concerning the distribution of all or part of the shares held by CVCEP or Court Square, as the case may be, and use its best efforts to cause the registration statement to become effective. If the Company is eligible to use a "short form" registration statement on Form S-2, Form S-3 or any similar form, CVCEP and Court Square may each make unlimited requests for registration for their shares of the Company's common stock. If at any time the Company files a registration statement for its common stock (other than pursuant to a demand registration by CVCEP or Court Square, a registration statement on Form S-8, Form S-4 or any similar form, or in connection with certain other registrations), it will use its best efforts to allow other parties to the registration rights agreement to have their shares of the Company's common stock (or a portion of their shares under specified circumstances) included in the offering if the registration form proposed to be used may be used to register the shares. Registration expenses of the selling stockholders (other than underwriting fees,

17

brokerage fees and transfer taxes applicable to the shares sold by such stockholders or the fees and expenses of any accountants or other representatives retained by a selling stockholder) will be paid by the Company. The Company has agreed to indemnify the stockholders against certain customary liabilities in connection with any registration.

Advisory Agreement

        In connection with the 2003 Stock Transaction, the Company entered into an advisory agreement with CVC Management LLC ("CVC Management"), pursuant to which CVC Management may provide financial, advisory and consulting services to the Company. In exchange for these services, CVC Management will be entitled to an annual advisory fee. CVC Management's annual advisory fee will be the greater of $0.6 million per year or 1% of the Company's consolidated EBITDA (as defined in the advisory agreement), plus out-of-pocket expenses. Annual advisory fees in excess of $1.0 million are subject to the consent of the Company's lenders under the credit facility. As of September 26, 2003, the Company has accrued $0.6 million related to the annual advisory fee. The Company has also agreed to pay CVC Management a transaction fee in connection with the consummation of each acquisition, divestiture or financing, including any refinancing, by the Company or any of its subsidiaries, in an amount equal to 1% of the value of the transaction, plus reasonable out-of-pocket expenses. Pursuant to the advisory agreement, the Company paid CVC Management a $1.0 million transaction fee in July 2003 in connection with services provided in connection with the 2003 Stock Transaction, and a $2.0 million transaction fee in August 2003 in connection with the issuance and sale of the 8.5% senior subordinated notes due 2011. This advisory agreement has an initial term of ten years following the close of the 2003 Stock Transaction, subject to automatic one year extensions thereafter unless terminated by either party upon written notice 90 days prior to the expiration of the initial term or any extension thereof. The advisory agreement automatically terminates on a change of control or an initial public offering of the Company's common stock. There are no minimum levels of service required to be provided pursuant to the advisory agreement. The advisory agreement includes customary indemnification provisions in favor of CVC Management.

13.   Subsequent Events:

        On October 1, 2003, the remaining $22.1 million in aggregate principal amount of the 11.25% notes was redeemed for approximately $23.8 million, including premium and accrued and unpaid interest.

        On October 10, 2003, the Company entered into a definitive agreement with Berger Holdings, Ltd. for the acquisition of all of the outstanding shares of Berger for $3.90 per share, or a total purchase price (including debt assumed) of approximately $41.0 million. Berger manufactures metal roof drainage products and roofing accessories as well as residential and commercial snow guards and will be included in the U.S. Fabrication segment.

        On October 9, 2003, the Company amended and restated its senior secured credit agreement. As amended and restated, the credit agreement includes a $110.0 million revolving credit facility and a $35.0 million term loan. The Company borrowed $35.0 million under the term loan on October 31, 2003. The interest rates applicable to the loans under the amended and restated credit agreement are based upon a Base Rate or Eurocurrency Rate (both as defined in the amended and restated credit agreement), plus their respective margins. The amended and restated credit agreement provides for variable rate margins, determined quarterly, based upon the Company's ratio of EBITDA (as defined in the amended and restated credit agreement) to total debt. The maximum and minimum Base Rate margins are 2.00% and 1.00%, respectively, on the revolving credit facility, and 2.25% and 1.25%, respectively, on the term loan. The maximum and minimum Eurocurrency Rate margins are 3.00% and 2.00%, respectively, on the revolving credit facility, and 3.25% and 2.25%, respectively, on the term loan. The Company is subject to a commitment fee of 0.375% of the unused portion of the revolving

18

credit facility. The amended and restated credit agreement contains certain covenants and restrictions, including certain restrictions on the payment of cash dividends. In addition, the amended and restated credit agreement requires the Company to meet certain financial tests, including a minimum fixed charge coverage ratio, minimum interest coverage ratio, maximum leverage ratio and maximum amounts of capital expenditures. The amended and restated credit agreement permits the Berger acquisition, subject to certain limitations and also permits the Company to pay a dividend to its stockholders or to repurchase some of the outstanding stock, in either case in an amount of up to $70.0 million, subject to compliance with certain covenants. CVC Management was paid a $1.45 million transaction fee in connection with the amendment and restatement of the credit agreement.

14.   Supplemental Condensed Consolidating Financial Statements:

        On July 10, 2003, the Company commenced an offer to purchase and a solicitation of consents for any and all of its outstanding 11.25% senior subordinated notes due 2006. On August 6, 2003, Euramax International, Inc. and Euramax International Holdings, B.V. (each a "Co-Obligor") issued $200.0 million of senior subordinated notes due 2011 to repay a portion of its existing debt, including the outstanding 11.25% senior subordinated notes due 2006.

        Each of the domestic restricted subsidiaries, as defined in the related bond indenture (the "Guarantor Subsidiaries"), fully and unconditionally guarantee the obligations of the Co-Obligors. The following supplemental condensed consolidating financial statements as of December 27, 2002 and September 26, 2003, and for the three months and nine months ended September 27, 2002, five months ended May 23, 2003 and three months and four months ended September 26, 2003, reflect the financial position, results of operations, and cash flows of each of the Co-Obligors, and such combined information of the Guarantor Subsidiaries and the non-guarantor subsidiaries (the "Non-Guarantor Subsidiaries"), as if the guarantor structure of the $200.0 million of senior subordinated notes due 2011 had been outstanding for each period. Euramax International Holdings B.V. had no account balances as of December 27, 2002, and for the three and nine months ended September 27, 2002 and five months ended May 23, 2003, as it was not acquired until July 17, 2003 and had no operations and had no assets or liabilities until August 6, 2003.

19

20