ASSOCIATED MATERIALS, LLC - FORM 10-K

Attached files

file	filename
EX-32.2 - EXHIBIT 32.2 - ASSOCIATED MATERIALS, LLC	side-1216xex322.htm
EX-31.1 - EXHIBIT 31.1 - ASSOCIATED MATERIALS, LLC	side-1216xex311.htm
EX-12.1 - EXHIBIT 12.1 - ASSOCIATED MATERIALS, LLC	side-1216xex121.htm
EX-32.1 - EXHIBIT 32.1 - ASSOCIATED MATERIALS, LLC	side-1216xex321.htm
EX-10.34 - EXHIBIT 10.34 - ASSOCIATED MATERIALS, LLC	side-1216xex1034.htm
EX-10.35 - EXHIBIT 10.35 - ASSOCIATED MATERIALS, LLC	side-1216xex1035.htm
EX-10.36 - EXHIBIT 10.36 - ASSOCIATED MATERIALS, LLC	side-1216xex1036.htm
EX-31.2 - EXHIBIT 31.2 - ASSOCIATED MATERIALS, LLC	side-1216xex312.htm

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K



ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 2, 2016



¨	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 ROAD

CUYAHOGA FALLS, OHIO 44223

(Address of principal executive offices)

(330) 929-1811

(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ý No ¨

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, as amended (“the Exchange Act”), 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 ¨ No ý Although the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act for the period commencing January 3, 2016 the registrant has filed all Exchange Act reports for the preceding 12 months.

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 ý No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

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	¨		Accelerated filer	¨
Non-accelerated filer	x	(Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No ý

No public trading market exists for the membership interests of the registrant. The aggregate market value of the membership interests held by non-affiliates of the registrant was zero as of July 4, 2015, the last business day of the registrant’s most recently completed second fiscal quarter. The membership interest of the registrant is held by Associated Materials Incorporated, a wholly-owned subsidiary of Associated Materials Group, Inc. As of March 22, 2016, there was one (1) outstanding membership interest of the registrant.

Table of Contents

ASSOCIATED MATERIALS, LLC

Table of Contents



PART I.
Item 1.	Business	1
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	17
Item 2.	Properties	18
Item 3.	Legal Proceedings	18
Item 4.	Mine Safety Disclosures	19

PART II.
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	20
Item 6.	Selected Financial Data	21
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 8.	Financial Statements and Supplementary Data	43
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	84
Item 9A.	Controls and Procedures	84
Item 9B.	Other Information	84

PART III.
Item 10.	Directors, Executive Officers and Corporate Governance	85
Item 11.	Executive Compensation	88
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	103
Item 13.	Certain Relationships and Related Transactions, and Director Independence	105
Item 14.	Principal Accounting Fees and Services	107

PART IV.
Item 15.	Exhibits, Financial Statement Schedules	108

SIGNATURES

Table of Contents

PART I

ITEM 1. BUSINESS

OVERVIEW

Associated Materials, LLC (the “Company”) is a leading, vertically integrated manufacturer and distributor of exterior residential building products in the United States and Canada. The Company was founded in 1947 when it first introduced residential aluminum siding under the Alside^® name. We provide a comprehensive offering of exterior building products, including vinyl windows, vinyl siding, vinyl railing and fencing, aluminum trim coil, aluminum and steel siding and related accessories, which we produce at our 11 manufacturing facilities. We also sell complementary products that we source from a network of manufacturers, such as roofing materials, cladding materials, insulation, exterior doors, equipment and tools. We also provide installation services. We distribute our products through our extensive dual-distribution network to over 50,000 professional exterior contractors, builders and dealers, whom we refer to as our “contractor customers.” This dual-distribution network consists of 122 company-operated supply centers, through which we sell directly to our contractor customers, and our direct sales channel, through which we sell to more than 260 independent distributors, dealers and national account customers.

The products we sell are primarily marketed under our brand names, including Alside^®, Revere^®, Gentek^®, Preservation^®and Alpine^®. Our product sales of vinyl windows, vinyl siding, metal products and third-party manufactured products comprised approximately 35%, 17%, 13% and 24%, respectively, of our net sales for the year ended January 2, 2016. For the year ended January 2, 2016, we had net sales of $1,185.0 million, Adjusted EBITDA of $90.3 million and a net loss of $50.1 million. For the definition of Adjusted EBITDA and a presentation of net loss calculated in accordance with generally accepted accounting principles (“GAAP”), and reconciliation of net loss to Adjusted EBITDA, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations.” Adjusted EBITDA is a non-GAAP financial measure and should not be considered as a substitute for other measures of liquidity or financial performance reported in accordance with GAAP.

Our company-operated supply centers provide our contractor customers the products, accessories and tools necessary to complete their projects. For each of the years ended January 2, 2016 and January 3, 2015, approximately 74% of our net sales were generated through our network of supply centers. In addition, our supply centers provide value-added services, including marketing support, installation support, technical support and warranty services that become a part of our contractor customers’ workflows, and these services form a critical component of the contractors’ offering to end consumers. Many of our supply centers also offer full-service product installation of our window, siding and third-party products through our Installed Sales Solutions^™ (“ISS”) group. Our ISS group provides a turn-key solution for remodeling dealers and builders who benefit from purchasing bundled products and installation from a single source.

We also distribute products through our direct sales channel, which consists of more than 260 independent distributors, dealers and national account customers. For each of the years ended January 2, 2016 and January 3, 2015, we generated approximately 26% of our net sales through our direct sales channel. We sell to distributors and dealers both in markets where we have existing supply centers and in markets where we may not have a supply center presence, and we utilize our manufacturing and marketing capabilities to help these direct customers grow their businesses. Our distributor and dealer customers in this channel are selected based on their ability to drive sales of our products, deliver high customer service levels and meet other performance factors. This sales channel also allows us to service larger regional and national account customers with a broader geographic scope, which drives additional volume. In addition, in many cases we are able to leverage our vertical integration in support of our distributor and dealer customers by selling and shipping our products directly to their contractor customers.

We estimate that, for the year ended January 2, 2016, approximately 70% of our net sales were generated in the residential repair and remodeling market and approximately 30% of our net sales were generated in the residential new construction market. We believe that the strength of our products and distribution network has created strong brand loyalty and longstanding relationships with our contractor customers and has enabled us to develop and maintain a leading position in the markets that we serve. In addition, we believe that our focus on the repair and remodeling market provides us with a more attractive market due to the relative stability in demand, superior competitive dynamics and higher profit margins compared to the residential new construction market.

On October 13, 2010, AMH Holdings II, Inc. (“AMH II”), the then indirect parent company of Associated Materials, LLC, completed its merger (the “Acquisition Merger”) with Carey Acquisition Corp. (“Merger Sub”), pursuant to the terms of the Agreement and Plan of Merger, dated as of September 8, 2010 (“Merger Agreement”), among Carey Investment Holdings Corp. (now known as Associated Materials Group, Inc.) (“Parent”), Carey Intermediate Holdings Corp. (now known as Associated Materials Incorporated), a wholly-owned direct subsidiary of Parent (“Holdings”), Merger Sub, a wholly-owned

Table of Contents

direct subsidiary of Holdings, and AMH II, with AMH II surviving such merger as a wholly-owned direct subsidiary of Holdings. After a series of additional mergers (together with the Acquisition Merger, the “Merger”), AMH II merged with and into Associated Materials, LLC, with Associated Materials, LLC surviving such merger as a wholly-owned direct subsidiary of Holdings. As a result of the Merger, Associated Materials, LLC is now an indirect wholly-owned subsidiary of Parent. Holdings and Parent do not have material assets or operations other than their direct and indirect ownership, respectively, of the membership interest of Associated Materials, LLC. Approximately 96% of the capital stock of Parent is owned by investment funds affiliated with Hellman & Friedman LLC (such investment funds, the “H&F Investors”). Unless the context otherwise requires, references in this Annual Report on Form 10-K to “we,” “our,” “us” and “our Company” refer to Associated Materials, LLC and its consolidated subsidiaries.

DESCRIPTION OF BUSINESS

Competitive Strengths

We believe we are well-positioned in the industry, and we expect to utilize our strengths to capture additional market share from our competitors. Our key competitive strengths include:

Leading Market Position

We are one of the largest exterior building products companies focused exclusively in the U.S. and Canadian markets. We believe, based on industry data and our estimates, that we hold leading market positions within the North American exterior residential building products market in the vinyl windows and vinyl siding segments, based on sales, and that our market position is strong within the repair and remodeling market in the geographies we serve. We believe that we are able to utilize our scale to service larger regional and national accounts that many of our competitors either cannot cover or can only do so by relying on a series of multiple independent distributors. We believe these capabilities make us a “go-to” provider of exterior building products for our customers.

Differentiated Dual-Distribution Network

Our distribution strategy combines a network of company-operated supply centers with a complementary network of independent distributors and dealers. We believe we are the only major vinyl window and siding manufacturer that primarily markets products to contractors through company-operated supply centers. This dual-distribution strategy, which we have operated since 1952, is part of our corporate legacy. We believe there are significant barriers that make it difficult for our competitors to replicate this strategy, namely the capital costs of building a network of company-operated supply centers and the complexity of maintaining existing relationships with independent distributors and dealers while simultaneously operating a supply center network.

•

Company-Operated Supply Centers. We believe that our network of 122 U.S. and Canadian company-operated supply centers offers a superior distribution channel compared to the traditional network of third-party distributors and dealers used by our major competitors. We have built dedicated longstanding relationships directly with our contractor customers through our supply centers. In addition, we believe that distributing our products through our vertically integrated network of company-operated supply centers provides a compelling value proposition for our contractor customers through (1) comprehensive service offerings (including marketing and sales support, after-market service and private label and customized offerings), (2) integrated logistics between our manufacturing and distribution facilities (driving product availability and fulfillment), and (3) a broad product offering. In addition, we believe that our supply centers facilitate innovation by allowing us to directly monitor developments in local customer preferences and to bring products to market faster.

•

Direct Sales Channel. We believe that our strength in selling to independent distributors and dealers provides us with operational flexibility because it allows us to further penetrate markets and expand our geographic reach without requiring us to deploy the resources to establish a company-operated supply center. By offering different brands within a given market through our direct sales channel, we are able to augment our market position in areas that are also served by our company-operated supply centers. This reach also allows us to service larger customers with a broader geographic scope, many of whom cannot be serviced by local and regional competitors that lack geographic coverage. In addition, in many cases we are able to leverage our vertical integration to support our distributor and dealer customers by selling and shipping our products directly to their contractor customers, as evidenced by our approximate 1,000 ship-to locations. We believe that this enhances our value proposition to larger regional and national customers and differentiates us from our major competitors who in many cases must fulfill orders through a network of independent distributors.

Table of Contents

Entrenched Customer Relationships

We believe that we are a deeply integrated partner to our customers. Contractors typically work with a limited number of manufacturers and distributors in order to streamline their processes of selling residential exterior building products and installation services to the end customer. We believe we are a critical part of this sales process and are integrated with our customers’ work flow given the services we provide, including marketing support, sales training, fulfillment, lead generation and, for certain larger customers, private label marketing services. We are able to serve as a single point of contact to our customers for their essential marketing needs because of the depth of our value-added marketing and service offerings. We believe our customer integration has led to longstanding relationships and strong customer retention. Additionally, we have high levels of retention of the larger customers in our supply centers. For our top 100 U.S. supply center customers, the average length of the relationship is eight years.

Comprehensive Product and Service Offering

We believe that our broad product offering is a key advantage relative to competitors who focus on a limited number of products. Our contractor customers often install more than one product type and prefer to purchase multiple products from a single source, and we aim to offer a one-stop solution for these customers. In total, we sell more than 2,000 products, and we believe our longstanding commitment to product innovation will help us continue to drive the expansion of our product offering. We manufacture a diverse mix of vinyl windows, vinyl siding, vinyl railing and fencing, aluminum trim coil, aluminum and steel siding and related accessories. Furthermore, we offer broad product lines, ranging from entry-level economy products to premium products, including many products that have earned the highest ENERGY STAR^® rating. All of our windows for the repair and remodeling market are made to order and are custom-manufactured to customer specifications and dimensions. We launched significant enhancements to our window platform in 2014, which we believe results in increased energy efficiency, enhanced aesthetics and additional features and benefits. We utilize our supply center distribution base to sell products that complement our core window and siding product offerings, such as roofing and insulation products.

We believe our brands are known for quality and durability in the residential building products industry and that these brands are a distinguishing factor for our customers. We sell our products under several brand names, including Alside^®, Revere^®, Gentek^®, Preservation^® and Alpine^®. This portfolio allows us to offer various brands to contractors within a local market, which in turn allows local contractors to differentiate themselves to end consumers.

We combine this strong product and brand portfolio with outstanding service offerings, which we believe differentiates us and helps us strengthen our customer relationships. Our contractor customers require significant support in order to effectively sell and install products. Whether through lead generation, marketing materials, product delivery or installation support, our service offerings allow our contractor customers to generate new business, differentiate themselves to end consumers and efficiently manage their installation resources. Our ISS offering, through which we provide full-service product installation services for our vinyl siding, vinyl window and third-party products, and our private label program, are two examples of offerings that we believe differentiate us from our competitors.

Superior, Vertically Integrated Operating Model

Our operations, from manufacturing our own vinyl extrusions and assembling our insulated glass units, to distributing our products through our network of 122 company-operated supply centers, provide us with a level of vertical integration that we believe differentiates us within the building products industry. We believe our vertically integrated platform offers us intimate knowledge of our customer base, enables us to meet their evolving product needs and facilitates superior service and quality control. In particular, we believe that our ability to service larger regional and national accounts through an integrated manufacturing, sales and delivery platform differentiates us from our competitors. Furthermore, we believe our vertically integrated operations provide us with a cost advantage over our non-vertically integrated competitors, given that we can retain the profit margins that would otherwise be earned by third-party suppliers or distributors.

Attractive Financial Model

We run a capital efficient business, requiring relatively modest annual capital investment and resulting in strong returns on the tangible capital employed in our operations. In addition, our base of company-operated supply centers and manufacturing facilities provides a strong platform for growth, resulting in attractive incremental profit margins. We believe these dynamics, combined with a diverse customer base, a geographically diverse set of operations and a focus on the repair and remodeling market, result in sustainable earnings and attractive returns on capital.

We believe that we have multiple levers that will continue to drive our growth beyond the continued recovery in the residential new construction and repair and remodeling markets. We believe that our implementation of lean principles throughout the organization, coupled with our continued focus on operational efficiency and quality, provide us with the

Table of Contents

opportunity for further margin expansion. In addition, we believe that we have an ability to drive our sales growth over and above the growth of the market by increasing our penetration of existing customers, expanding our base of company-operated supply centers and introducing new products to the market.

Experienced Management Team

We have added a highly experienced executive management team with a track record of operational excellence and extensive industry experience. Members of our senior leadership team bring operational experience from Henry Company, A.M. Castle, Goodman Global, Inc., Honeywell International Inc., Hilti Inc. and Pernod Ricard SA, among other companies. We are leveraging the experiences of these executives to drive enhanced performance across both our manufacturing and distribution operations. The new additions to our management team during both 2015 and 2014 complement a team of experienced executives in the building products industry and Company veterans who bring extensive domain knowledge and customer intimacy. We believe this combination positions us to deliver on our strategic imperatives of driving profitable growth, maximizing our customers’ experience and optimizing the efficiency of our capital deployed.

Strategy

We are committed to maximizing our customers’ experience by providing high quality products and excellent service, while profitably growing our business. We believe that our longstanding customer relationships are among our most critical assets. Our objective is to grow these existing relationships and to build new relationships in targeted markets. By providing customized sales solutions through a dedicated sales, service and fulfillment platform, we seek to enable our customers to continue to grow their market share. Our leadership team is committed to delivering sustainable growth while maintaining a focus on improving profitability.

Drive Incremental Growth from Existing Stores

We believe that we can grow our business by expanding sales to our existing customers and attracting new customers with our high quality products and services. Our differentiated delivery model, outstanding service offering and high quality products provide the foundations for this growth. These elements in particular manifest themselves in our ability to differentially service larger regional and national customers versus our competitors. As many of these larger customers are regional and national homebuilders, these elements are an important driver of our ability to take advantage of the recovery in residential new construction. Our growth is further enhanced by our demonstrated ability to increase the number of products that we sell to each customer; for example, by selling siding to customers who previously only purchased windows. We plan to continue expanding our ISS offering, which allows our customers to expand their geographic presence without increasing their installer base. We believe our product and service offerings, coupled with our efforts to drive sales and operating excellence, as well as invest in new sales representatives, will enable us to expand our customer base and increase our market share.

Expand Our Distribution Network

We believe that we can expand our geographic coverage and intend to grow our network of company-operated supply centers through the creation and acquisition of new supply centers. We have opened new supply centers in eight of the last ten years, including two company-operated supply centers in 2015. We maintain disciplined selection criteria for new supply centers that include target investment return thresholds. We believe our ability to add company-operated supply centers while effectively maintaining our relationship with third-party distributors differentiates us from our competitors. In addition, in areas in which we believe an opportunity for expansion exists but where we do not intend to open new company-operated supply centers, we will selectively pursue additional independent distributor and dealer relationships to drive additional sales.

Innovate and Expand Our Product Portfolio

We intend to expand our product portfolio through product innovation. We plan to capitalize on our vinyl window and siding manufacturing expertise by continuing to develop innovative and complementary new products that offer long-term performance, cost, aesthetic and other competitive advantages. We believe that our vertically integrated operating model and strong customer relationships provide us with valuable insights into the latest product attributes that appeal to customers. We recently developed a new window platform designed not only to increase the energy efficiency of our product line but also to increase our range of window products that we offer. The new window platform was launched on the East Coast in early 2014 and on the West Coast throughout 2015. We believe that our re-designed dual-pane window offering, Mezzo^®, which meets ENERGY STAR^® Version 6.0 standards in a cost effective manner, is a key differentiator versus our competitors.

Table of Contents

Capitalize on Residential Recovery and Secular Trends

We expect the continued recovery of the residential building products market to drive increases in our revenue and profitability. In addition, we believe that the market for vinyl-related building products, specifically windows and siding, remains strong and poised for continued growth. We expect this growth will be driven by favorable long-term demand drivers, a cyclical recovery in demand within the repair and remodeling and new residential construction markets from historically low levels, a demand for energy efficient products and the ongoing conversion to vinyl as a material of choice, particularly in windows.

•

Favorable Long-Term Demand Drivers. We expect population growth, an aging housing stock and general economic growth to drive underlying demand for building products. Population growth and household formation are important drivers for both new home construction and repair and remodeling spending, requiring the construction of new homes and the alteration and expansion of existing homes. According to the American Housing Survey by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, more than 67% of the current U.S. housing stock was built before 1980 and the median estimated home age has increased from 23 years in 1985 to 38 years in 2013.

•

Recovery in Our End Markets. We believe we are well positioned to benefit from recovery in both new residential construction and repair and remodeling spending. In fiscal year 2015, approximately 70% of our revenues were generated from the repair and remodeling market, whereas 30% of our revenues were generated from new residential construction market. We believe the new residential construction market will continue to grow rapidly over the next several years as housing starts improve to rates that are more consistent with historical levels. According to the U.S. Census Bureau, seasonally adjusted single- and multi-family housing starts in 2015 were 1.1 million compared to a 50-year average of 1.4 million.

•

Energy Efficiency. We believe that there is strong and growing demand for energy efficient, “green” building products. Recent surveys demonstrate that consumers are willing to invest in energy efficient products that provide measurable savings over time. We expect to benefit from this increasing demand for energy efficient building products, as many of our products meet energy efficiency standards, including many of our window product lines that have earned the ENERGY STAR^® rating.

•

Advantages of Vinyl Products. We believe our focus on vinyl products will further drive our market share in the residential building products market. Vinyl has greater durability, requires less maintenance and provides greater energy efficiency than many competing materials. In addition, we believe vinyl products have a price advantage over other material types. As a result, vinyl products have gained a substantial share of the residential building products market over the last decade and are expected to be the continued material of choice, particularly in windows, going forward.

Products

Our core products include vinyl windows, vinyl siding, aluminum trim coil, aluminum and steel siding and related accessories. For the year ended January 2, 2016, vinyl window and vinyl siding products together comprised approximately 52% of net sales, while aluminum and steel products comprised approximately 13%. We also sell complementary products that we source from a network of manufacturers, such as roofing materials, cladding materials, insulation, exterior doors, and equipment and tools. For further information about our net sales by principal product offering, please see Note 18 to the consolidated financial statements in Item 8. “Financial Statements and Supplementary Data.”

We manufacture and distribute vinyl windows in the premium and standard categories, primarily under the Alside^®, Revere^®, Gentek^®, Preservation^® and Alpine^®brand names. Our vinyl windows are available in a broad range of models, including fixed, double- and single-hung, horizontal sliding, casement, awning and decorative bay, bow and garden, as well as specialty shapes and patio doors. All of our windows for the repair and remodeling market are made to order and are custom-manufactured to customer specifications and dimensions. Additional features include frames that do not require painting, tilt-in sashes for easy cleaning and high-energy efficiency glass packages. Most models offer multiple finish and glazing options and substantially all are accompanied by a limited lifetime warranty. Key offerings include Performance Series^™, a new construction product with superior strength and stability; Sheffield^® and UltraMaxx®, a premium window complete with higher-end options. Preservation^® is a high-end siding and window bundled program available to specific dealers on an exclusive basis. In 2014, we introduced the Mezzo^® series, which includes a variety of aesthetic and performance attributes, including the ability to meet ENERGY STAR^® Version 6.0 standards. In addition, we introduced Fusion^™, an economy-positioned window platform designed to provide our customers with an entry-level, fully-welded window option. Most replacement window lines feature the FrameWorks^® colors palette with seven interior woodgrains (White, Soft Maple, Rich Maple, Light Oak, Dark Oak, Foxwood and Cherry) and seven special exterior finishes (Architectural Bronze, English Red,

Table of Contents

Desert Clay, Hudson Khaki, Forest Green, American Terra and Castle Gray) along with solid colors of White, Beige and Almond/Clay.

We also manufacture and distribute vinyl siding and related accessories in the premium, standard and economy categories, primarily under the Alside^®, Revere^®, Gentek^® and Preservation^® brand names. Vinyl siding features and price vary across categories and are generally based on rigidity, thickness, impact resistance, insulation benefits, color selection, ease of installation, as well as other factors. Our vinyl siding is textured to simulate wood lap siding or shingles, and is available in clapboard, dutch lap and board-and-batten styles. Products are available in a wide palette of colors to satisfy individual aesthetic tastes. We also offer specialty siding products, such as shakes and scallops, beaded siding, insulated siding, extended length siding and variegated siding. Our product line is complemented by a broad array of color and style-matched accessories, including soffit, fascia and other components, which enable easy installation and provide numerous appearance options. All of our siding products are accompanied by limited 50-year to lifetime warranties. Key offerings include Charter Oak^®, a premium product whose differentiated TriBeam^® design system provides superior rigidity; Prodigy^®, a premium product that includes an attached insulating underlayment with a surface texture of finely milled cedar lumber; and Coventry^®, an easy-to-install product designed for maximum visual appeal.

Our metal offerings include aluminum trim coil and flatstock, aluminum gutter coil, aluminum and steel siding and related accessories. These products are available in a broad assortment of colors, styles and textures and are color-matched to vinyl and other metal product lines with special features including multi-colored paint applications, which replicate the light and dark tones of the grain in natural wood. We offer steel siding in a full complement of profiles including 8”, vertical and Dutch lap. In 2014 we introduced Satinwood^® Select, a new steel siding product featuring Kynar^® PDVF technology to our U.S. contractor customers. We manufacture aluminum siding and accessories in economy, standard and premium grades in a broad range of profiles to appeal to various geographic and contractor preferences. All aluminum soffit colors match or complement our core vinyl siding colors, as well as those of several of our competitors.

We manufacture a broad range of painted and vinyl coated aluminum trim coil and flatstock for application in siding projects. Our innovative Color Clear Through^® and ColorConnect^® programs match core colors across our vinyl, aluminum and steel product lines, as well as those of other siding manufacturers. Trim coil and flatstock products are installed in most siding projects, whether vinyl, brick, wood, stucco or metal, and are used to seal and finish exterior corners, fenestration and other areas. These products are typically formed on site by professional installers to fit such surfaces. As a result, due to its superior pliability, aluminum remains the preferred material for these products and is rarely substituted by other materials. Trim coil and flatstock represent a majority of our metal product sales.

We generally market our products under our brand names, including Alside^®, Revere^®, Gentek^®, Preservation^®and Alpine^®, and offer extensive product, sales and marketing support. A summary of our key window and siding product offerings is presented in the table below according to our product line classification:



Product Line	Window	Vinyl Siding/Soffit	Steel Siding	Aluminum Siding/Soffit

Premium	8000 Series Preservation Regency Sequoia Select Sheffield Sovereign UltraMaxx Westbridge Platinum	Board and Batten Berkshire Beaded Centennial Beaded Charter Oak Charter Oak Soffit Cypress Creek EnFusion Greenbriar Soffit Northern Forest Elite Oxford Premium Soffit Preservation Prodigy Sequoia Select Sequoia Select Soffit Sovereign Select Sovereign Select Soffit SuperSpan Soffit Trilogy Williamsport Beaded	Cedarwood Driftwood	Aluminum HT Soffit Cedarwood Deluxe

Table of Contents



Product Line	Window	Vinyl Siding/Soffit	Steel Siding	Aluminum Siding/Soffit

Standard	Alpine 80 Series Berkshire Elite Fairfield 80 Series Mezzo Sierra Signature Elite Westbridge Elite	Advantage III Alliance Soffit Amherst Berkshire Classic Concord Coventry Fair Oaks Odyssey Plus Signature Supreme	PermaFinish Satinwood Satinwood Select SuperGard SteelTek SteelTek Supreme SteelSide Universal

Economy	Alpine 70 Series Amherst Plus Blue Print Series Builder Series Performance Series Concord Plus Fairfield 70 Series Fusion	Aurora Conquest Driftwood Fairweather		Aluminum Econ Soffit Woodgrain 2000 Series

To complete our line of exterior residential building products, we also distribute building products manufactured by other companies. The third-party manufactured products that we distribute complement our exterior building product offerings and include such products as roofing materials, cladding materials, insulation, exterior doors, vinyl and polypropylene siding in shake and scallop designs, shutters and accents, and installation equipment and tools. Third-party manufactured products comprised approximately 24% of our net sales for the year ended January 2, 2016.

Marketing and Distribution

We market exterior residential building products to approximately 50,000 professional exterior contractors, builders and dealers, whom we refer to as our contractor customers, engaged in home remodeling and new home construction. Primary distribution consists of our 122 company-operated supply centers, through which we sell directly to our contractor customers, and our direct sales channel, through which we sell to more than 260 independent distributors, dealers and national account customers. For the year ended January 2, 2016, approximately 74% of our net sales were generated through our company-operated supply centers.

Our company-operated supply centers provide our contractor customers the products, accessories and tools necessary to complete their projects. In addition, our supply centers provide value-added services, including marketing support, installation support, technical support and warranty services that become a part of our contractor customers’ workflows, and these services form a critical component of the contractors’ offering to end consumers.

Our contractor customers look to their local supply center to provide a broad range of specialty product offerings in order to maximize their ability to attract remodeling and home building customers. Many have established longstanding relationships with their local supply center based on individualized service and credit terms, quality products, timely delivery, breadth of product offerings, strong sales and promotional programs and competitive prices. We support our contractor customer base with marketing and promotional programs that include a wide range of product samples, sales literature, presentation materials, visualization software, lead generation, job measurement applications and other sales and promotional materials. Professional contractors use these materials to sell remodeling construction services to prospective consumers. The consumer generally relies on the professional contractor to specify the brand of window or siding to be purchased, subject to the consumer’s price, color and quality requirements. Our daily contact with our contractor customers also enables us to closely monitor activity in each of the remodeling and new construction markets in which we compete. This direct presence in the marketplace permits us to obtain current local market information, which helps us recognize trends in the marketplace earlier and adapt our product offerings on a location-by-location basis.

We believe that our strategic approach to provide a comprehensive product offering is a key competitive advantage relative to competitors who focus on a limited number of products. We also believe that our supply centers meet the specialized needs of our contractor customers by distributing more than 2,000 building and remodeling products, including a broad range of company-manufactured vinyl windows, vinyl siding, aluminum trim coil, aluminum and steel siding and related accessories, and vinyl fencing and railing, as well as products manufactured by third parties. We believe that our supply centers have strong appeal to contractor customers and that the ability to provide a broad range of products is a key competitive advantage because it allows our contractor customers, who often install more than one product type, to acquire multiple products from a single source. In addition, we have historically achieved economies of scale in sales and marketing by deploying integrated, multiple product programs on a national, regional and local level. Many of our supply centers also offer full-service product installation

Table of Contents

of our window, siding and third-party products through our ISS group. This service, which helps differentiate us from our competitors, provides a turn-key solution for remodeling dealers and builders who benefit from purchasing bundled products and installation from a single source.

We also sell the products we manufacture directly to independent distributors, dealers and national account customers in the U.S., many of which operate in multiple locations. Independent distributors comprise the industry’s primary market channel for the types of products that we manufacture and, as such, remain a key focus of our marketing activities. With our multi-brand offering, we can often provide these customers with distinct brands and differentiated product, as well as sales and marketing support. Our distribution partners are carefully selected based on their ability to drive sales of our products, deliver high customer service levels and meet other performance factors. We believe that our strength in independent distribution provides us with a high level of operational flexibility because it allows us to penetrate key markets and expand our geographic reach without deploying the necessary capital to establish a company-operated supply center. This reach also allows us to service larger customers with a broader geographic scope, which we believe results in additional sales. For the year ended January 2, 2016, sales to independent distributors and direct dealers accounted for approximately 26% of our net sales.

Manufacturing

We produce our core products at our 11 manufacturing facilities. We fabricate vinyl windows at our facilities in Cuyahoga Falls, Ohio; Bothell, Washington; Cedar Rapids, Iowa; Kinston, North Carolina; Yuma, Arizona and London, Ontario. We operate vinyl extrusion facilities in West Salem, Ohio; Ennis, Texas and Burlington, Ontario. We also have two metal manufacturing facilities located in Woodbridge, New Jersey, and Pointe Claire, Quebec.

Our window fabrication plants in Cuyahoga Falls, Ohio; Kinston, North Carolina; Cedar Rapids, Iowa and London, Ontario each use vinyl extrusions manufactured by the West Salem, Ohio extrusion facility for a portion of their production requirements and utilize high-speed welding and cleaning equipment for their welded window products. By internally producing a large portion of our vinyl extrusions, we believe we achieve higher product quality and improved delivery compared to only purchasing these materials from third-party suppliers. Our Bothell, Washington and Yuma, Arizona facilities also have short-term contracts to purchase a portion of their vinyl extrusions from a third-party supplier, which we typically renew on an annual basis.

Our window plants, which have the capacity to operate on a three-shift basis, generally operate on a two-shift basis. Our vinyl extrusion plants generally operate on a three-shift basis to optimize equipment productivity and utilize additional equipment to increase capacity to meet higher seasonal needs.

We estimate that, in 2015, we spent approximately $55 million on fixed costs, which represent the costs of operating a plant regardless of the volumes that we produce and includes, but is not limited to, plant management personnel and support expense, depreciation of plant fixed assets, rent expense and taxes, all of which are included in cost of sales.

Raw Materials

The principal raw materials used by us 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. Raw material pricing on certain of our key commodities has fluctuated significantly over the past several years. In response, we have announced price increases over the past several years on certain of our product offerings to offset inflation in raw material pricing and we continually monitor market conditions and price changes. We have a contract with our resin supplier through December 2018 to supply substantially all of our vinyl resin requirements. We believe that other suppliers could meet our requirements for vinyl resin in the event of supply disruptions or upon the expiration of the contract with our current resin supplier.

FINANCIAL INFORMATION ABOUT OUR SEGMENT AND GEOGRAPHIC AREAS

Our business is comprised of one reportable segment, which consists of the single business of manufacturing and distributing exterior residential building products in the United States and Canada. For financial information about the geographic areas where we conduct business and long-lived assets by country, please see Note 18 to the consolidated financial statements in Item 8. “Financial Statements and Supplementary Data.” We are exposed to risks inherent in any foreign operation, including foreign exchange rate fluctuations. For further information on foreign currency exchange risk, see Item 7A. “Quantitative and Qualitative Disclosures About Market Risk — Foreign Currency Exchange Rate Risk.”

Table of Contents

COMPETITION

The market for our products and services is highly competitive. We compete with numerous small and large manufacturers of exterior residential building products, as well as numerous large and small distributors of building products in our capacity as a distributor of these products. We focus primarily on the market for professional contractor customers and on the vinyl market within windows and siding. We also face competition from alternative materials: wood and aluminum in the window market and wood, masonry and fiber cement in the siding market. We believe, based on industry data and our estimates, that we hold leading market positions within the North American exterior residential building products market in the vinyl windows and vinyl siding segments, based on sales, and that our market position is stronger within the repair and remodeling market in the geographies we serve. We believe that we have one of the broadest manufacturing and distribution footprints in North America in our industry, which allows us to service larger regional and national accounts that many of our competitors either cannot cover or can only do so by relying on a series of multiple independent distributors.

Exterior building products manufacturers and distributors generally compete on product performance and reliability, service levels, sales and marketing support, and price. Some of our competitors are larger in size and have greater financial resources than we do.

SEASONALITY

Because most of our building products are intended for exterior use, our sales and operating profits 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, we have historically had losses or small profits in the first quarter and lower 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, we have typically utilized our revolving credit facilities and repay such borrowings in periods of higher cash flow. We typically generate the majority of our cash flow in the third and fourth quarters.

BACKLOG

Our backlog of orders is not considered material to, or a significant factor in, evaluating and understanding our business. Typical lead time for orders is ranged from immediate spot-buys at our company-owned supply centers to two to three weeks for normal repair and remodeling orders. Our backlog is subject to fluctuation due to various factors, including the size and timing of orders and seasonality for our products, and is not necessarily indicative of the level of future sales. We did not have a significant manufacturing backlog at January 2, 2016.

TRADEMARKS AND OTHER INTANGIBLE ASSETS

We rely on trademark and other intellectual property law and protective measures to protect our proprietary rights. We have registered and common law rights in trade names and trademarks covering the principal brand names and product lines under which our products are marketed. Although we employ a variety of intellectual property in our business, we believe that none of that intellectual property is individually critical to our current operations.

GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS

Our operations are subject to various U.S. and Canadian environmental statutes and regulations, including those relating to materials used in our products and operations; discharge of pollutants into the air, water and soil; treatment, transport, storage and disposal of solid and hazardous wastes; and remediation of soil and groundwater contamination. Such laws and regulations may also impact the cost and availability of materials used in manufacturing our products. Our facilities are subject to inspections by governmental regulators, which occur from time to time. While our management does not currently expect the costs of compliance with environmental requirements to increase materially, future expenditures may increase as compliance standards and technology change and as we expand our geographic coverage and grow our network of company-operated supply centers.

For information regarding pending proceedings relating to environmental matters, see Item 3. “Legal Proceedings.”

EMPLOYEES

Our employment needs vary seasonally with sales and production levels. As of January 2, 2016, we had approximately 3,000 full-time employees, including approximately 2,100 hourly workers. At the end of fiscal 2015, collective bargaining agreements at unionized facilities covered approximately 220 employees in the United States and approximately 250 employees in Canada.

Table of Contents

We utilize leased employees to supplement our own workforce at our manufacturing facilities. As of January 2, 2016, the aggregate number of leased employees in our manufacturing facilities on a full-time equivalency basis was approximately 900 workers.

AVAILABLE INFORMATION

We make available our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, along with any related amendments and supplements on our website as soon as reasonably practicable after we electronically file or furnish such materials with or to the Securities and Exchange Commission (“SEC”). These reports are available, free of charge, at www.associatedmaterials.com. We use our website as a channel of distribution for Company information and financial and other material information regarding us is routinely posted and accessible thereon. Our website and the information contained in it and connected to it do not constitute part of this annual report or any other report we file with or furnish to the SEC.

MARKET SHARE AND SIMILAR INFORMATION

The market share and other information contained in this report is based on our own estimates, independent industry publications, reports by market research firms, or other published and unpublished independent sources. In each case, we believe that they are reasonable estimates, although we have not independently verified market and industry data provided by third parties. Market share information is subject to change, however, and cannot always be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data-gathering process and other limitations and uncertainties inherent in any statistical survey of market share. In addition, customer preferences can and do change and the definition of the relevant market is a matter of judgment and analysis. As a result, you should be aware that market share and other similar information set forth in this report and estimates and beliefs based on such data are subject to change and may not be reliable.

ITEM 1A. RISK FACTORS

You should carefully consider the following risk factors, as well as other information in this Annual Report on Form 10-K, in connection with evaluating our business and prospects. The occurrence of any of the events described below could harm our business, financial condition, results of operations and growth prospects.

Conditions in the housing market, consumer credit market and economic conditions generally could adversely affect demand for our products.

Our business is largely dependent on home improvement (including repair and remodeling) and new home construction activity levels in the United States and Canada. Adverse conditions in, or sustained uncertainty about, our industry or the overall economy (including inflation, deflation, interest rates, availability and cost of capital, consumer spending rates, energy availability and costs, and the effects of governmental initiatives to manage economic conditions) could adversely impact consumer confidence, causing our customers to delay purchasing or determine not to purchase home improvement products and services. High unemployment, low consumer confidence, declining home prices, increased mortgage rates and tightened credit markets may limit the ability of consumers to purchase homes or to finance home improvements and may negatively affect investments in existing homes in the form of renovations and home improvements. These industry conditions and general economic conditions may have an adverse impact on our business, financial condition and results of operations.

Our focus within the building products industry amplifies the risks inherent in a general economic downturn. The impact of this weakness on our net sales, net income and margins will be determined by many factors, including industry capacity, industry pricing and our ability to implement our business plan.

Our substantial level of indebtedness could adversely affect our financial condition.

We have a substantial amount of indebtedness, which requires significant interest payments. As of January 2, 2016, we had $925.5 million of indebtedness, and interest expense for the year ended January 2, 2016 was $83.5 million. On February 19, 2016, we entered into a first lien promissory note with an affiliate of Hellman & Friedman LLC in an aggregate amount of $27.5 million (the “Sponsor Secured Note”).

Table of Contents

Our substantial level of indebtedness could have important consequences, including the following:

•

We must use a substantial portion of our cash flow from operations to pay interest and principal on our senior secured asset-based revolving credit facilities (“ABL facilities”), our 9.125% Senior Secured Notes due 2017 (the “9.125% notes”), the Sponsor Secured Note and other indebtedness, which reduces funds available to us for other purposes, such as working capital, capital expenditures, other general corporate purposes and potential acquisitions;


•	our ability to refinance such indebtedness or to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impacted;


•	we are exposed to fluctuations in interest rates because the ABL facilities have a variable rate of interest;


•	our leverage may be greater than that of some of our competitors, which may put us at a competitive disadvantage and reduce our flexibility in responding to current and changing industry and financial market conditions;


•	we may be more vulnerable to economic downturns and adverse developments in our business; and

•

we may be unable to comply with financial and other restrictive covenants in the ABL facilities, the indenture governing the 9.125% notes (the “Indenture”), the Sponsor Secured Note and other debt instruments, some of which require the obligor to maintain specified financial ratios and limit our ability to incur additional debt and sell assets, which could result in an event of default that, if not cured or waived, would have an adverse effect on our business and prospects and could result in bankruptcy.

Our ability to access funding under the ABL facilities depends upon, among other things, the absence of a default under the ABL facilities, including any default arising from a failure to comply with the related covenants. If we are unable to comply with our covenants under the ABL facilities, our liquidity may be adversely affected.

Our ability to meet expenses, to remain in compliance with our covenants under our debt instruments and to make future principal and interest payments in respect of our debt depends on, among other things, our operating performance, competitive developments and financial market conditions, all of which are significantly affected by financial, business, economic and other factors. We are not able to control many of these factors. If industry and economic conditions deteriorate, our cash flow may not be sufficient to allow us to pay principal and interest on our debt and meet our other obligations.

The Indenture, the ABL facilities and the Sponsor Secured Note impose significant operating and financial restrictions on us.

The Indenture, ABL facilities and the Sponsor Secured Note, as applicable, impose, and the terms of any future debt may impose, significant operating and financial restrictions on us. These restrictions, among other things, limit our ability and that of our subsidiaries to:


•	pay dividends or distributions, repurchase equity, prepay junior debt and make certain investments;


•	incur additional debt or issue certain disqualified stock and preferred stock;


•	sell or otherwise dispose of assets, including capital stock of subsidiaries;


•	incur liens on assets;


•	merge or consolidate with another company or sell all or substantially all assets;


•	enter into transactions with affiliates; and


•	enter into agreements that would restrict our subsidiaries from paying dividends or making other payments to us.

In addition, as discussed under Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Description of Our Outstanding Indebtedness,” if our borrowing availability under the ABL facilities is below specified levels, we will be subject to compliance with a fixed charge coverage ratio. We were in compliance with our debt covenants as of January 2, 2016.

All of these covenants may adversely affect our ability to finance our operations, meet or otherwise address our capital needs, pursue business opportunities, react to market conditions or otherwise restrict activities or business plans. A breach of any of these covenants could result in a default in respect of the related indebtedness. If a default occurs, the relevant lenders could elect to declare the indebtedness, together with accrued interest and other fees, to be immediately due and payable and proceed against any collateral securing that indebtedness. If repayment of our indebtedness is accelerated as a result of such default, we cannot provide any assurance that we would have sufficient assets or access to credit to repay such indebtedness.

We may not be able to generate sufficient cash, or access capital resources, to service all of our debt obligations, working capital needs and planned capital expenditures and may be forced to take actions, which could have a material adverse effect on our operations and liquidity.

Our ability to make scheduled payments on our debt obligations, fund working capital needs and make planned capital expenditures depends on our financial condition and operating performance, which are subject to seasonal fluctuations and general economic, financial, competitive, legislative and other factors beyond our control. We cannot assure you that our

Table of Contents

business will generate sufficient cash flow from operations in an amount sufficient to satisfy our debt obligations, working capital needs and capital expenditures. If our cash flows and capital resources are insufficient to fund such obligations, we could face substantial liquidity problems and be forced to pursue one or more alternative strategies, including reducing or delaying investments and capital expenditures, selling assets, seeking additional capital or restructuring or refinancing our indebtedness. These alternative measures may not be successful and could cause us to not meet our scheduled debt service obligations. Our ABL facilities also require us to satisfy specified covenants, which, if triggered, could result in the acceleration of the amounts due thereunder or force us to seek a waiver or amendment with the lenders under our ABL facilities. No assurance can be given that we would be able to obtain any necessary waivers or amendments on satisfactory terms. In addition, our access to, and the availability of, financing on acceptable terms and conditions in the future is dependent on many factors, such as our financial performance, our credit ratings, general economic conditions, including the housing market, and the liquidity of overall debt markets. If we are not able to access to the debt markets on terms acceptable to us, our business, future growth prospects and liquidity could be adversely affected.

Disruption in the financial markets could negatively affect us as well as our customers and suppliers, and the inability to access financing on terms and at a time acceptable to us for any reason could have a material adverse effect on our financial condition, results of operations and liquidity.

Along with our customers and suppliers, we rely on stable and efficient financial markets. Availability of financing depends on the lending practices of financial institutions, financial and credit markets, government policies and economic conditions, all of which are beyond our control. Adverse economic conditions and disrupted financial markets, characterized by persistently high unemployment rates, weakness in many real estate markets, global economic turmoil, limitations on credit availability and growing debt loads for many governments, could compromise the financial condition of our customers and suppliers. In such case, customers may not be able to pay, or may delay payment of, accounts receivable due to liquidity and financial performance issues or concerns affecting them or due to their inability to secure financing. Suppliers may modify, delay or cancel projects and reduce their levels of business with us. In addition, weak credit markets may also impact the ability of the end consumer to obtain any needed financing to purchase our products, resulting in a reduction in overall demand, and consequently negatively impact our sales levels. Further volatility and disruption in the financial markets could adversely affect our ability to refinance indebtedness when required and have a material adverse effect on our financial condition, results of operations and liquidity.

Our industry is highly competitive, and competitive pressures could have an adverse effect on us.

The markets for our products and services are highly competitive. We seek to distinguish ourselves from other suppliers of residential building products and to sustain our profitability through a business strategy focused on increasing sales at existing supply centers, selectively expanding our supply center network, increasing sales through independent specialty distributor customers, developing innovative new products, expanding sales of third-party manufactured products through our supply center network and driving operational excellence by reducing costs and increasing customer service levels. We believe that competition in the industry is based on product and service quality, customer service, price and product features. Sustained increases in competitive pressures could have an adverse effect on results of operations and negatively impact sales and margins.

We have substantial fixed costs and, as a result, operating income is sensitive to changes in net sales.

We operate with significant operating and financial leverage. Significant portions of our manufacturing, selling, general and administrative expenses are fixed costs that neither increase nor decrease proportionately with sales. In addition, a significant portion of our interest expense is fixed. There can be no assurance that we would be able to further reduce our fixed costs in response to a decline in net sales. As a result, a decline in our net sales could result in a higher percentage decline in our income from operations.

We may not successfully develop new products or improve existing products, and we may experience delays in the development of new products.

Our success depends on meeting customer needs, and one of the ways in which we meet customer needs is through new product development. We aim to introduce products and new or improved production processes proactively to offset obsolescence and decreases in sales of existing products. As materials technology for exterior residential building products advances, we will be expected to upgrade and adapt our existing products and production processes and introduce new products in order to continue to provide products incorporating the latest commercial innovations and meet customer expectations.

While we devote significant attention to the development of new products, we may not be successful in new product development, and our new products may not meet customer expectations or be commercially successful. To the extent we are not able to successfully develop new products, our future sales could be harmed. In addition, interruptions or delays in the

Table of Contents

development of new products and new or improved production processes could have an adverse effect on our business, financial condition and results of operations.

Increases in raw material costs and interruptions in the availability of raw materials and finished goods could adversely affect our profit margins.

The principal raw materials used by us are vinyl resin, aluminum, steel, resin stabilizers and pigments, glass, window hardware, and packaging materials, all of which have historically been subject to price changes. Raw material pricing on certain of our key commodities has fluctuated significantly over the past several years, but has generally increased. In response, we have announced price increases over the past several years on certain of our product offerings to offset inflation in raw materials and continually monitor market conditions for price changes as warranted. Our ability to maintain gross margin levels on our products during periods of rising raw material costs depends on our ability to obtain increases in the selling price of our products. 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 our products. There can be no assurance that we will be able to maintain the selling price increases already implemented or achieve any future price increases.

Additionally, we rely on our suppliers for deliveries of raw materials and finished goods. If any of our suppliers were unable to deliver raw materials or finished goods to us for an extended period of time, we may not be able to procure the required raw materials or finished goods through other suppliers without incurring an adverse impact on our operations. Even if acceptable alternatives were found, the process of locating and securing such alternatives might be disruptive to our business, and any such alternatives could result in increased costs for us. Extended unavailability of necessary raw materials or finished goods could cause us to cease manufacturing or distributing one or more of our products for an extended period of time.

Consolidation of our customers could adversely affect our business, financial condition and results of operations.

Though larger customers can offer efficiencies and unique product opportunities, consolidation increases their size and importance to our business. These larger customers can make significant changes in their volume of purchases and seek price reductions. Consolidation could adversely affect our margins and profitability, particularly if we were to lose a significant customer. Sales to one customer and its licensees represented approximately 14% of net sales in each of 2015 and 2014 and approximately 13% of total net sales for 2013. The loss of a substantial portion of sales to this customer could have a material adverse effect on our business, financial condition and results of operations.

We are subject to foreign exchange risk as a result of exposures to changes in currency exchange rates between the United States and Canada.

We are exposed to exchange rate fluctuations between the Canadian dollar and U.S. dollar. We realize revenues from sales made through our Canadian distribution centers in Canadian dollars. The exchange rate of the Canadian dollar to the U.S. dollar has fluctuated in recent years. In the event that the Canadian dollar weakens in comparison to the U.S. dollar, earnings generated from Canadian operations will translate into reduced earnings in our Consolidated Statements of Comprehensive Loss reported in U.S. dollars. In addition, our Canadian subsidiary also records certain accounts receivable and accounts payable, which are denominated in U.S. dollars. Foreign currency transactional gains and losses are realized upon settlement of these assets and obligations. For more information, please see Item 7A. “Quantitative and Qualitative Disclosures About Market Risk — Foreign Currency Exchange Rate Risk.”

Increases in union organizing activity and work stoppages at our facilities or the facilities of our suppliers could delay or impede our production, reduce sales of our products and increase our costs.

Our financial performance is affected by the cost of labor. As of January 2, 2016, excluding leased employees, approximately 15% of our employees were represented by labor unions. We are subject to the risk that strikes or other types of conflicts with personnel may arise or that we may become a subject of union organizing activity. Furthermore, some of our direct and indirect suppliers have unionized work forces. Strikes, work stoppages or slowdowns experienced by these suppliers could result in slowdowns or closures of facilities where components of our products are manufactured. Any interruption in the production or delivery of our products could reduce sales of our products and increase our costs.

Our business is seasonal and can be affected by inclement weather conditions, which could affect the timing of the demand for our products and cause reduced profit margins and adversely affect our financial condition when such conditions exist.

Table of Contents

have historically had losses or small profits in the first quarter and lower 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, we have typically utilized our revolving credit facilities and repay such borrowings in periods of higher cash flow. We typically generate the majority of our cash flow in the third and fourth quarters. Our inability to meet our seasonal cash flow needs because of inclement weather conditions or any other reason could have a material adverse effect on our financial condition and results of operations.

We have a history of operating losses and may not maintain profitability in the future.

We have not been consistently profitable on a quarterly or annual basis. We experienced net losses of $50.1 million, $293.7 million and $33.5 million during the years ended January 2, 2016, January 3, 2015 and December 28, 2013, respectively. As of January 2, 2016, our accumulated deficit was 683.5 million. We may not be able to sustain or increase our growth or profitability in the future. We may incur significant losses in the future for a number of reasons, including the other risks and uncertainties described in this Annual Report. Additionally, we may encounter unforeseen operating expenses, difficulties, complications, delays and other unknown factors that may result in losses in future periods. If these losses exceed our expectations or our growth expectations are not met in future periods, our financial performance will be affected adversely.

Our failure to attract and retain qualified personnel could adversely affect our business.

Our success depends in part on the efforts and abilities of our senior management and key employees. Their motivation, skills, experience and industry contacts significantly benefit our operations and administration. The failure to attract, motivate and retain members of our senior management and key employees could have a negative effect on our results of operations. In particular, the departure of members of our senior management could cause us to lose customers and reduce our net sales, lead to employee morale problems and the loss of key employees, or cause production disruptions.

The obligations under the Indenture, the ABL facilities and the Sponsor Secured Note are secured by substantially all of the assets of our operating subsidiaries, including a pledge of the capital stock of such subsidiaries.

The obligations of our operating subsidiaries under the Indenture, ABL facilities, and the Sponsor Secured Note are secured by a security interest in substantially all of the present and future property and assets of such subsidiaries, including a security interest in the capital stock of such subsidiaries. If we were in default under the Indenture, the ABL facilities or the Sponsor Secured Note, the holders of the 9.125% notes, or the lenders under the ABL facilities or the lender under the Sponsor Secured Note may foreclose on their collateral security under the Indenture, the ABL facilities and the Sponsor Secured Note, including substantially all of the assets of our operating subsidiaries as well as the capital stock of such operating subsidiaries. In any such event, it is possible that there would be no or limited assets remaining. See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Description of Our Outstanding Indebtedness” for more information.

We have significant goodwill and other intangible assets, which if impaired, could require us to incur significant charges.

As of January 2, 2016, we had $302.9 million of goodwill and $398.0 million of other intangible assets. The value of these assets is dependent, among other things, upon our future expected operating results. We are required to test for impairment of these assets annually or when factors indicating impairment are present, which could result in a write down of all or a significant portion of these assets. Any future write down of goodwill and other intangible assets could have an adverse effect on our financial condition and on the results of operations for the period in which the impairment charge is incurred.

Failure of certain of our information technology system could disrupt our operations and adversely affect our financial condition.

We rely on certain information technology systems to process, transmit, store, and protect electronic information. Furthermore, communications between our personnel, customers, and suppliers is largely dependent on information technology. Our information technology systems could be interrupted as a result of events that may be beyond our control, including, but not limited to, natural disasters, terrorist attacks, cyber attacks, telecommunications failures, additional security issues, and other technological failures. Our technology and information security processes and disaster recovery plans may not be adequate, or implemented properly, to ensure that our operations are not disrupted. In addition, while our information technology systems are current, underinvestment in our technology solutions as technology advances could result in disruptions in our business.

Table of Contents

The future recognition of our deferred tax assets is uncertain, and assumptions used to determine the amount of our deferred tax asset valuation allowance are subject to revision based on changes in tax laws and variances between future expected operating performance and actual results.

Our inability to realize deferred tax assets may have an adverse effect on our consolidated results of operations and financial condition. We recognize deferred tax assets and liabilities for the future tax consequences related to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We evaluate our deferred tax assets for recoverability based on available evidence, including assumptions about future profitability.

Our valuation allowance is estimated based on the uncertainty of the future realization of deferred tax assets. This reflects our assessment that a portion of our deferred tax assets could expire unused if we are unable to generate taxable income in the future sufficient to utilize them or we enter into one or more transactions that limit our ability to realize all of our deferred tax assets. The assumptions used to make this determination are subject to revision based on changes in tax laws or variances between our future expected operating performance and actual results. As a result, significant judgment is required in assessing the possible need for a deferred tax asset valuation allowance. If we determine that we would not be able to realize an additional portion of the deferred tax assets in the future, we would further reduce our deferred tax asset through a charge to earnings in the period in which the determination was made. Any such net charge could have an adverse effect on our consolidated results of operations and financial condition.

We are controlled by investment funds affiliated with Hellman & Friedman LLC, whose interests may be different than the interests of other holders of our securities.

By reason of their majority ownership interest in Parent, which is our indirect parent company, the H&F Investors have the ability to designate a majority of the members of our board of directors (the “Board of Directors”). The H&F Investors are able to control actions to be taken by us, including future issuances of our securities, the payment of dividends, if any, on our securities, amendments to our organizational documents and the approval of significant corporate transactions, including mergers, sales of substantially all of our assets, distributions of our assets, the incurrence of indebtedness and any incurrence of liens on our assets. The interests of the H&F Investors may be materially different than the interests of our other stakeholders. In addition, the H&F Investors may have an interest in pursuing acquisitions, divestitures and other transactions that, in their judgment, could enhance their investment, even though such transactions might involve risks to our other stakeholders. For example, the H&F Investors may cause us to take actions or pursue strategies that could impact our ability to make payments under the Indenture, the ABL facilities and the Sponsor Secured Note or that cause a change of control. In addition, to the extent permitted by the Indenture and the ABL facilities, the H&F Investors may cause us to pay dividends rather than make capital expenditures or repay debt. The H&F Investors are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. The H&F Investors also may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. So long as the H&F Investors continue to own a significant amount of the combined voting power of Parent, even if such amount is less than 50%, they will continue to be able to strongly influence or effectively control our decisions and, so long as the H&F Investors continue to own shares of Parent’s outstanding common stock, designate individuals to Parent’s board of directors pursuant to a stockholders agreement (the “Stockholders Agreement”) entered into in connection with the Merger on October 13, 2010, by and among Parent, Holdings, us, the H&F Investors and each member of our management and Board of Directors that held shares of common stock or options of Parent at that date. The members of our Board of Directors have been determined by action of Holdings, our sole member and a 100% owned subsidiary of Parent. Parent has designated the members of its board of directors to also be the members of each of Holdings’ and our board of directors. In addition, the H&F Investors will be able to determine the outcome of all matters requiring stockholder approval and will be able to cause or prevent a change of control of our company or a change in the composition of our board of directors and could preclude any unsolicited acquisition of our company. For a discussion regarding the Stockholders Agreement, please refer to Item 13. “Certain Relationships, Related Transactions and Director Independence — Stockholders Agreement.”

We could face potential product liability claims relating to products we manufacture or distribute.

We face a business risk of exposure to product liability claims in the event that the use of our products is alleged to have resulted in injury or other adverse effects. We currently maintain product liability insurance coverage, but we may not be able to obtain such insurance on acceptable terms in the future, if at all, or any such insurance may not provide adequate coverage against potential claims. Product liability claims can be expensive to defend and can divert management and other personnel for months or years regardless of the ultimate outcome. An unsuccessful product liability defense could have an adverse effect on our business, financial condition, results of operations or business prospects or ability to make payments on our indebtedness when due.

Table of Contents

We rely on a variety of intellectual property rights. Any threat to, or impairment of, these rights could cause us to incur costs to defend these rights.

As a company that manufactures and markets branded products, we rely heavily on trademark and service mark protection to protect our brands. We also have issued patents and rely on trade secret and copyright protection for certain of our technologies. These protections may not adequately safeguard our intellectual property, and we may incur significant costs to defend our intellectual property rights, which may harm our operating results. There is a risk that third parties, including our current competitors, will infringe on our intellectual property rights, in which case we would have to defend these rights. There is also a risk that third parties, including our current competitors, will claim that our products infringe on their intellectual property rights. These third parties may bring infringement claims against us or our customers, which may harm our operating results.

Increases in freight costs could cause our cost of products sold to increase and net income to decrease.

Increases in freight costs can negatively impact our cost to deliver our products to our company-operated supply centers and customers and thus increase our cost of products sold. Freight costs are strongly correlated to oil prices, and increases in fuel prices, surcharges and other factors have increased freight costs and may continue to increase freight costs in the future. As we incur substantial freight costs to transport materials and components from our suppliers and to deliver finished products to our company-operated supply centers and customers, an increase in freight costs could increase our operating costs, which we may be unable to pass to our customers. If we are unable to increase the selling price of our products to our customers to cover any increases in freight costs, our net income may be adversely affected.

We may incur significant, unanticipated warranty claims.

Consistent with industry practice, we provide to homeowners limited warranties on certain products. Warranties are provided for varying lengths of time, from the date of purchase up to and including lifetime. Warranties cover product failures such as seal failures for windows and fading and peeling for siding products, as well as manufacturing defects. Warranty reserves are established annually based on management’s estimates of future warranty costs, which are primarily based on a third-party actuarial review of historical trends and sales of products to which such costs relate. To the extent that our estimates are inaccurate and we do not have adequate warranty reserves, our liability for warranty payments could have a material impact on our financial condition and results of operations.

Potential liabilities and costs from litigation could adversely affect our business, financial condition and results of operations.

We are, from time to time, involved in various claims, litigation matters and regulatory proceedings that arise in the ordinary course of our business and that could have a material adverse effect on us. These matters may include contract disputes, personal injury claims, warranty disputes, environmental claims or proceedings, other tort claims, employment and tax matters and other proceedings and litigation, including class actions.

Increasingly, home builders, including our customers, are subject to construction defect and home warranty claims in the ordinary course of their business. Our contractual arrangements with these customers typically include an agreement to indemnify them against liability for the performance of our products or services or the performance of other products that we install. These claims, often asserted several years after completion of construction, frequently result in lawsuits against the home builders and many of their subcontractors and suppliers, including us, requiring us to incur defense costs even when our products or services may not be the principal basis for the claims.

Although we intend to defend all claims and litigation matters vigorously, given the inherently unpredictable nature of claims and litigation, we cannot predict with certainty the outcome or effect of any claim or litigation matter, and there can be no assurance as to the ultimate outcome of any such matter.

We maintain insurance against some, but not all, of these risks of loss resulting from claims and litigation. We may elect not to obtain insurance if we believe the cost of available insurance is excessive relative to the risks presented. The levels of insurance we maintain may not be adequate to fully cover any and all losses or liabilities. If any significant accident, judgment, claim or other event is not fully insured or indemnified against, it could have a material adverse impact on our business, financial condition and results of operations.

We are subject to various environmental statutes and regulations, which may result in significant costs and liabilities.

Our operations are subject to various U.S. and Canadian environmental statutes and regulations, including those relating to: materials used in our products and operations; discharge of pollutants into the air, water and soil; treatment, transport,

Table of Contents

storage and disposal of solid and hazardous wastes; and remediation of soil and groundwater contamination. Such laws and regulations may also impact the cost and availability of materials used in manufacturing our products. Our facilities are subject to investigations by governmental regulators, which occur from time to time. While our management does not currently expect the costs of compliance with environmental requirements to increase materially, future expenditures may increase as compliance standards and technology change.

Also, we cannot be certain that we have identified all environmental matters giving rise to potential liability. Our past use of hazardous materials, releases of hazardous substances at or from currently or formerly owned or operated properties, newly discovered contamination at any of our current or formerly-owned or operated properties or at off-site locations such as waste treatment or disposal facilities, more stringent future environmental requirements (or stricter enforcement of existing requirements) or our inability to enforce indemnification agreements could result in increased expenditures or liabilities, which could have an adverse effect on our business and financial condition. For further details regarding environmental matters giving rise to potential liability, see Item 3. “Legal Proceedings.”

Legislative or regulatory initiatives related to global warming / climate change concerns may negatively impact our business.

In recent years, there has been an increasing focus on global climate change, including increased attention from regulatory agencies and legislative bodies. This increased focus may lead to new initiatives directed at regulating an unspecified array of environmental matters. Legislative, regulatory or other efforts in the United States to combat climate change could result in future increases in taxes and the cost of raw materials, transportation and utilities for us and our suppliers, which would result in higher operating costs for us. However, our management is unable to predict at this time the potential effects, if any, that any future environmental initiatives may have on our business.

Additionally, the recent legislative and regulatory responses related to climate change could create financial risk. Many governing bodies have been considering various forms of legislation related to greenhouse gas emissions. Increased public awareness and concern may result in more laws and regulations requiring reductions in or mitigation of the emission of greenhouse gases. Our facilities may be subject to regulation under climate change policies introduced within the next few years. There is a possibility that, when and if enacted, the final form of such legislation could increase our costs of compliance with environmental laws. If we are unable to recover all costs related to complying with climate change regulatory requirements, it could have a material adverse effect on our results of operations.

Declining returns in the investment portfolio of our defined benefit pension plans and changes in actuarial assumptions could increase the volatility in our pension expense and require us to increase cash contributions to the plans.

We sponsor a number of defined benefit pension plans for our employees in the United States and Canada. Pension expense for the defined benefit pension plans sponsored by us is determined based upon a number of actuarial assumptions, including expected long-term rates of return on assets and discount rates. The use of these assumptions makes our pension expense and cash contributions subject to year-to-year volatility. Declines in market conditions, changes in pension law and uncertainties regarding significant assumptions used in the actuarial valuations can have a material impact on future required contributions to our pension plans and could result in additional charges to equity and an increase in future pension expense and cash contributions.

We may not be able to consummate and effectively integrate future acquisitions, if any.

We may from time to time engage in strategic acquisitions if we determine that they will provide future financial and operational benefits. Successful completion of any strategic transaction depends on a number of factors that are not entirely within our control, including our ability to negotiate acceptable terms, conclude satisfactory agreements and obtain all necessary regulatory approvals. In addition, our ability to effectively integrate any potential acquisitions into our existing business and culture may not be successful, which could jeopardize future operational performance for the combined businesses.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

Table of Contents

ITEM 2. PROPERTIES

Management believes that our facilities are generally in good operating condition and are adequate to meet anticipated requirements in the near future. Our operations include both owned and leased facilities as described below:



Location	Principal Use	Square Feet

Cuyahoga Falls, Ohio	Corporate Headquarters	63,000
Cuyahoga Falls, Ohio	Vinyl Windows	563,000
Bothell, Washington	Vinyl Windows	159,000	(1)
Yuma, Arizona	Vinyl Windows	223,000	(1) (4)
Cedar Rapids, Iowa	Vinyl Windows	259,000	(1)
Kinston, North Carolina	Vinyl Windows	319,000	(1)
London, Ontario	Vinyl Windows	60,000
Burlington, Ontario	Vinyl Siding Products	387,000	(2)
Ennis, Texas	Vinyl Siding Products	538,000	(3)
West Salem, Ohio	Vinyl Window Extrusions, Vinyl Fencing and Railing	173,000
Pointe Claire, Quebec	Metal Products	278,000
Woodbridge, New Jersey	Metal Products	318,000	(1)
Ashtabula, Ohio	Distribution Center	297,000	(1)


(1)	Leased facilities.


(2)	Includes 151,000 square foot warehouse space, which is leased.


(3)	Includes 237,000 square foot warehouse space along with the land under the warehouse, which is leased.


(4)	The land for this facility is owned by us, but we lease the use of the building.

Management believes that our facilities are generally in good operating condition and are adequate to meet anticipated requirements in the near future.

During 2015 we exercised the five-year renewal option for the leases at our Kinston and Yuma locations, which extends the lease terms to 2018 and 2020, respectively. The aforementioned leases are renewable at our option for two additional five-year periods for our Kinston location and one additional five-year period for our Yuma location. The leases for our Bothell, Woodbridge and Cedar Rapids locations expire in 2018, 2019 and 2020, respectively.

The lease for our warehouse at Burlington expires in 2024 and is renewable at our option for two additional five-year periods. The leases for the warehouses at our Ashtabula and Ennis locations expire in 2017 and 2020, respectively.

We also operate 122 supply centers in major metropolitan areas throughout the United States and Canada. Except for one owned location in Akron, Ohio, we lease our supply centers for terms generally ranging from three to ten years with renewal options. The supply centers range in size from 9,000 square feet to 106,300 square feet depending on sales volume and the breadth and type of products offered at each location.

ITEM 3. LEGAL PROCEEDINGS

We are involved from time to time in litigation arising in the ordinary course of business, none of which, individually or in the aggregate, after giving effect to existing insurance coverage, is expected to have a material adverse effect on our financial position, results of operations or liquidity. From time to time, we are also involved in proceedings and potential proceedings relating to environmental and product liability matters.

Environmental Claims

The Woodbridge, New Jersey facility is currently the subject of an investigation and/or remediation before the New Jersey Department of Environmental Protection (the “NJDEP”) under ISRA Case No. E20030110 for our wholly-owned subsidiary, Gentek Building Products, Inc. (“Gentek”). The facility is currently leased by Gentek. Previous operations at the facility resulted in soil and groundwater contamination in certain areas of the property. In 1999, the property owner and Gentek signed a remediation agreement with the NJDEP, pursuant to which the property owner and Gentek agreed to continue an investigation/remediation that had been commenced pursuant to a Memorandum of Agreement with the NJDEP. Under the remediation agreement, the NJDEP required posting of a remediation funding source of $0.1 million, which is currently

Table of Contents

satisfied by a $0.3 million standby letter of credit that was provided by Gentek to the NJDEP. During 2014, the delineation studies were completed and in early 2015 we were presented with several remedial plans. Based on the alternatives presented, we identified what we believed to be the most likely option and recorded the minimum liability for that option, which totaled $1.0 million as of January 3, 2015, the balance of which remains unchanged as of January 2, 2016. We believe this matter will not have a material adverse effect on our financial position, results of operations or liquidity.

Environmental claims, product liability claims and other claims are administered by us in the ordinary course of business, and we maintain pollution and remediation and product liability insurance covering certain types of claims. Although it is difficult to estimate our potential exposure to these matters, we believe that the resolution of these matters will not have a material adverse effect on our financial position, results of operations or liquidity.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

Table of Contents

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

MARKET INFORMATION

There is no established public trading market for our membership interests.

HOLDERS

As of March 22, 2016, Associated Materials Incorporated is the sole record holder of our membership interest.

DIVIDENDS

Our asset-based revolving credit facilities (“ABL facilities”) and the Indenture governing our 9.125% Senior Secured Notes due 2017 (the “9.125% notes”), as well as the first lien promissory note we entered into with an affiliate of Hellman & Friedman LLC (the “Sponsor Secured Note”) restrict dividend payments by us. See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Description of Our Outstanding Indebtedness” for further details of our ABL facilities, 9.125% notes and the Sponsor Secured Note.

We presently do not plan to pay future cash dividends.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

We have no outstanding equity compensation plans under which our securities are authorized for issuance. Equity compensation plans are maintained by Associated Materials Group, Inc., our indirect parent company.

RECENT SALES OF UNREGISTERED SECURITIES

None.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

None.

Table of Contents

ITEM 6. SELECTED FINANCIAL DATA

The selected financial data set forth below for the five-year period ended January 2, 2016 was derived from our audited consolidated financial statements. The data should be read in conjunction with Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8. “Financial Statements and Supplementary Data” included elsewhere in this Annual Report.



	Years Ended
(in thousands)	January 2, 2016			January 3, 2015			December 28, 2013			December 29, 2012			December 31, 2011
Income Statement Data:
Net sales	$	1,184,969		$	1,186,973		$	1,169,598		$	1,142,521		$	1,159,515
Cost of sales	908,775			943,419			887,798			859,617			894,333
Gross profit	276,194			243,554			281,800			282,904			265,182
Selling, general and administrative expenses	239,790			247,614			232,281			240,027			247,506
Impairment of goodwill	—			144,159			—			—			84,253
Impairment of other intangible assets	—			89,687			—			—			79,894
Restructuring costs	1,837			(331		)	—			—			—
Merger costs	—			—			—			—			585
Income (loss) from operations	34,567			(237,575		)	49,519			42,877			(147,056		)
Interest expense	83,494			82,527			79,751			75,520			75,729
Foreign currency loss	1,878			788			754			119			438
Loss before income taxes	(50,805		)	(320,890		)	(30,986		)	(32,762		)	(223,223		)
Income tax (benefit) expense	(693		)	(27,201		)	2,507			5,605			(20,434		)
Net loss	$	(50,112	)	$	(293,689	)	$	(33,493	)	$	(38,367	)	$	(202,789	)



(in thousands)	January 2, 2016			January 3, 2015			December 28, 2013		December 29, 2012		December 31, 2011
Balance Sheet Data:
Cash and cash equivalents	$	9,394		$	5,963		$	20,815	$	9,594	$	11,374
Working capital	101,423			115,482			116,130		110,367		104,046
Total assets	1,082,013			1,162,177			1,456,619		1,482,284		1,521,168
Total debt	925,484			903,404			835,230		808,205		804,000
Member’s (deficit) equity	(214,361		)	(138,149		)	197,790		231,055		270,464

Table of Contents

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

We are a leading, vertically integrated manufacturer and distributor of exterior residential building products in the United States and Canada. We were founded in 1947 when we first introduced residential aluminum siding under the Alside^® name. We produce a comprehensive offering of exterior building products, including vinyl windows, vinyl siding, vinyl railing and fencing, aluminum trim coil, aluminum and steel siding and related accessories, which we produce at our 11 manufacturing facilities. We also sell complementary products that we source from a network of manufacturers, such as roofing materials, cladding materials, insulation, exterior doors and equipment and tools. We also provide installation services. We distribute these products through our extensive dual-distribution network to over 50,000 professional exterior contractors, builders and dealers, whom we refer to as our “contractor customers.” This dual-distribution network consists of 122 company-operated supply centers, through which we sell directly to our contractor customers, and our direct sales channel. Through our direct sales channel we sell to more than 260 independent distributors, dealers and national account customers. The products we sell are generally marketed under our brand names, such as Alside^®, Revere^®, Gentek^®, Preservation^® and Alpine^®.

Because our exterior residential building products are consumer durable goods, our sales are impacted by, among other things, the availability of consumer credit, consumer interest rates, employment trends, changes in levels of consumer confidence and national and regional trends in the housing market. Our sales are also affected by changes in consumer preferences with respect to types of building products. Overall, we believe the long-term fundamentals for the building products industry remain strong, as homes continue to get older, pent-up demand in the residential repair and remodeling market normalizes, household formation is expected to be strong, demand for energy-efficient products continues and vinyl remains an optimal material for exterior window and siding solutions, all of which we believe bodes well for the demand for our products in the future.

Management operates the business with the aim of achieving profitable growth and makes operating decisions and assesses the performance of the business based on financial and other measures that it believes provide important data regarding the business. Management primarily uses Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”), a non-GAAP financial measure, along with generally accepted accounting principles (“GAAP”) measures of profitability, including gross profit, income from operations and net income, to measure operating performance. See the tabular presentation in the “—Results of Operations.”

We operate on a 52/53 week fiscal year that ends on the Saturday closest to December 31st. Our 2015 and 2013 fiscal years ended on January 2, 2016 and December 28, 2013, respectively, and included 52 weeks of operations. Our 2014 fiscal year that ended January 3, 2015 included 53 weeks of operations, with the additional week recorded in the fourth quarter of fiscal 2014. Our results for the year ended January 2, 2016 were significantly impacted by a weaker Canadian dollar, compared to the prior year. Foreign currency translation negatively impacted net sales, gross profit and operating income by approximately $34 million, $28 million and $20 million, respectively.

Our net sales for the year ended January 2, 2016 were $1,185.0 million, representing a decrease of $2.0 million, or 0.2%, compared to $1,187.0 million for the year ended January 3, 2015. The decline in net sales was primarily driven due to lower volumes in our vinyl siding, third-party manufactured products and metal product sales. The overall decrease was partially offset by an increase in our vinyl window sales and growth in our Installed Sales Solutions (“ISS”) business compared to the prior year. Both our windows and ISS businesses have benefited from increased demand in the new construction market. Additionally, we see continued improvement in our window product mix since the launch of our new window platform in early 2014. On a constant currency basis compared to year ended January 3, 2015, our net sales for the year ended January 2, 2016 were higher by $31.8 million, or 2.7%. Approximately 20 percent of the Company’s sales in fiscal 2014 and 2015 were in

Table of Contents

Canada, and the foreign exchange rate declined in fiscal 2015 compared to fiscal 2014 by approximately 14.1% on an annual basis. The additional week of operations in 2014 contributed approximately $10 million of additional net sales compared to the current year. Vinyl windows, vinyl siding, metal products and third-party manufactured products comprised approximately 35%, 17%, 13% and 24%, respectively, of our net sales for the year ended January 2, 2016, compared to approximately 34%, 18%, 13% and 25%, respectively, of our net sales for the year ended January 3, 2015.

Our gross profit for the year ended January 2, 2016 was $276.2 million, or 23.3% of net sales, compared to $243.6 million, or 20.5% of net sales, for the year ended January 3, 2015. Compared to the prior year, we achieved an approximate 280 basis point increase in gross profit as a percent of net sales, due to our continued focus on driving profitability through our integrated product offerings. The increase in gross profit was predominantly attributable to the continued improvement in our windows business, including better operational execution, compared to the prior year. Furthermore, we also incurred fewer costs related to the continued roll out of our new window platform on the West Coast in the current year, compared to the launch on the East Coast in the prior year.

Our selling, general and administrative (“SG&A”) expenses were $239.8 million, or 20.2% of net sales, for the year ended January 2, 2016, compared to $247.6 million, or 20.9% of net sales, for the year ended January 3, 2015. The $7.8 million, or 3.2% net decrease was a result of reductions in marketing-related costs, professional fees, executive officer separation and hiring costs, partially offset by increases in employee compensation expense and incentive compensation. SG&A expenses were also favorably impacted by both the weaker Canadian dollar in 2015 compared to 2014, as well as the fact that 2014 included one additional week of operations.

During the quarter ended October 3, 2015, in an effort to improve overall profitability, we announced a restructuring plan focused primarily on realigning certain costs within our U.S. distribution business and select corporate functions. The restructuring plan includes the closure of four underperforming company-operated supply centers in the United States and the elimination of our roofing product offering in eleven U.S. supply centers. Overall, we eliminated 65 employees, or approximately 5%, of our U.S. distribution and corporate workforce. We expect that these actions will yield annualized cost savings and EBITDA improvement in 2016 of $7.5 million and $5.7 million, respectively. The costs associated with the 2015 restructuring plan totaled $4.5 million and are comprised of fixed asset impairment costs and charges related to early lease termination and reduction of our workforce of $2.3 million and a non-cash charge for the write-down of inventory of $2.2 million, reflected within cost of sales for the year. Restructuring costs of $1.8 million recorded during the year ended January 2, 2016 included costs associated with the aforementioned restructuring plan as well as an adjustment to the liability recorded in 2009 for manufacturing restructuring efforts initiated during the fiscal year then ended.

Income from operations was $34.6 million for the year ended January 2, 2016, an increase of $272.2 million, compared to the prior year loss from operations of $237.6 million. The 2014 operating loss included goodwill and other intangible asset impairments totaling approximately $234 million, caused primarily by the continued decline in our operating results for the year.

THE MERGER

On October 13, 2010, AMH Holdings II, Inc. (“AMH II”), our then indirect parent company, completed its merger (the “Acquisition Merger”) with Carey Acquisition Corp. (“Merger Sub”), pursuant to the terms of the Agreement and Plan of Merger, dated as of September 8, 2010 (“Merger Agreement”), among Carey Investment Holdings Corp. (now known as Associated Materials Group, Inc.) (“Parent”), Carey Intermediate Holdings Corp. (now known as Associated Materials Incorporated), a wholly-owned direct subsidiary of Parent (“Holdings”), Merger Sub, a wholly-owned direct subsidiary of Holdings, and AMH II, with AMH II surviving such merger as a wholly-owned direct subsidiary of Holdings. After a series of additional mergers (together with the Acquisition Merger, the “Merger”), AMH II merged with and into our Company, with our Company surviving such merger as a wholly-owned direct subsidiary of Holdings. As a result of the Merger, our Company is now an indirect wholly-owned subsidiary of Parent. Holdings and Parent do not have material assets or operations other than their direct and indirect ownership, respectively, of the membership interest of the Company. Approximately 96% of Parent’s capital stock is owned by investment funds affiliated with Hellman & Friedman (such investment funds, the “H&F Investors”).

Table of Contents

RESULTS OF OPERATIONS

The following table sets forth, for the years indicated, our results of operations (dollars in thousands):



	Years Ended
	January 2, 2016			% of Net Sales		January 3, 2015			% of Net Sales		December 28, 2013			% of Net Sales
Net sales (1)	$	1,184,969		100.0	%	$	1,186,973		100.0	%	$	1,169,598		100.0	%
Gross profit	276,194			23.3	%	243,554			20.5	%	281,800			24.1	%
Selling, general and administrative expenses	239,790			20.2	%	247,614			20.9	%	232,281			19.9	%
Impairment of goodwill	—			—	%	144,159			12.1	%	—			—	%
Impairment of other intangible assets	—			—	%	89,687			7.6	%	—			—	%
Restructuring costs	1,837			0.2	%	(331		)	—	%	—			—	%
Income (loss) from operations	34,567			2.9	%	(237,575		)	(20.0	)%	49,519			4.2	%
Interest expense	83,494					82,527					79,751
Foreign currency loss	1,878					788					754
Loss before income taxes	(50,805		)			(320,890		)			(30,986		)
Income tax (benefit) expense	(693		)			(27,201		)			2,507
Net loss	$	(50,112	)			$	(293,689	)			$	(33,493	)
Other Data:
EBITDA (2)	$	72,568				(195,619		)			91,806
Adjusted EBITDA (2)	90,261					58,622					109,397
Depreciation and amortization	39,879					42,744					43,041
Capital expenditures	(16,573		)			(12,852		)			(11,702		)

(1) The following table presents a summary of net sales by principal product offering as a percentage of net sales (dollars in thousands):



	Years Ended
	January 2, 2016		% of Net Sales		January 3, 2015		% of Net Sales		December 28, 2013		% of Net Sales
Vinyl windows	$	419,885	35.0	%	$	401,550	34.0	%	$	369,869	32.0	%
Vinyl siding products	200,518		17.0	%	213,949		18.0	%	216,872		19.0	%
Metal products	148,747		13.0	%	155,464		13.0	%	166,602		14.0	%
Third-party manufactured products	286,173		24.0	%	296,927		25.0	%	314,408		27.0	%
Other products and services	129,646		11.0	%	119,083		10.0	%	101,847		8.0	%
	$	1,184,969	100.0	%	$	1,186,973	100.0	%	$	1,169,598	100.0	%

(2)

EBITDA is calculated as net loss plus interest, taxes, depreciation, and amortization. Adjusted EBITDA is defined as EBITDA adjusted to reflect certain adjustments that are used in calculating covenant compliance under the Amended and Restated Revolving Credit Agreement governing our senior secured ABL facilities and the indenture governing our 9.125% Senior Secured Notes due November 1, 2017 (the “Indenture”) and the Sponsor Secured Note. We consider EBITDA and Adjusted EBITDA to be important indicators of the operational strength and performance of our business. We have included Adjusted EBITDA because it is a key financial measure used by our management to (i) assess our ability to service our debt or incur debt and meet our capital expenditure requirements; (ii) internally measure our operating performance; and (iii) determine our incentive compensation programs. EBITDA and Adjusted EBITDA have not been prepared in accordance with GAAP. Adjusted EBITDA as presented by us 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 our operating results or net cash provided by operating activities (as determined in accordance with GAAP) as a measure of our liquidity.

Table of Contents

The reconciliation of our net loss to EBITDA and Adjusted EBITDA is as follows (in thousands):



	Years Ended
	January 2, 2016			January 3, 2015			December 28, 2013
Net loss	$	(50,112	)	$	(293,689	)	$	(33,493	)
Interest expense	83,494			82,527			79,751
Income tax (benefit) expense	(693		)	(27,201		)	2,507
Depreciation and amortization	39,879			42,744			43,041
EBITDA	72,568			(195,619		)	91,806
Impairment of goodwill and other intangible assets (a)	—			233,846			—
Purchase accounting related adjustments (b)	(3,456		)	(3,736		)	(3,851		)
Restructuring costs (c)	4,085			(331		)	—
(Gain) loss on disposal or write-offs of assets	(37		)	(42		)	130
Executive officer separation and hiring costs (d)	952			3,809			1,383
Stock-based compensation expense (e)	184			457			155
Non-cash benefit adjustments (f)	—			(1,435		)	(2,612		)
Other normalizing and unusual items (g)	9,146			15,023			10,692
Foreign currency loss (h)	1,878			788			754
Run-rate cost savings (i)	4,941			5,862			10,940
Adjusted EBITDA	$	90,261		$	58,622		$	109,397

(a)

We review goodwill and other intangible assets for impairment on an annual basis at the beginning of the fourth quarter, or an interim basis if there are indicators of potential impairment. Due to a continued decline in operating results during 2014, management determined that an indicator of potential impairment for indefinite-lived intangible assets existed and performed interim impairment testing as of August 31, 2014, which resulted in an impairment loss of $89.7 million and $144.2 million for certain non-amortized trade names and goodwill, respectively.


(b)	Represents the elimination of the impact of purchase accounting adjustments recorded as a result of the Merger, and includes the following (in thousands):



	Years Ended
	January 2, 2016			January 3, 2015			December 28, 2013
Pension expense adjustment	$	(2,510	)	$	(2,610	)	$	(2,661	)
Amortization related to fair value adjustment of leased facilities	(237		)	(403		)	(459		)
Amortization related to warranty liabilities	(709		)	(723		)	(731		)
Purchase accounting related adjustments (b)	$	(3,456	)	$	(3,736	)	$	(3,851	)

(c)

Represents expenses of $4.5 million recorded as a result of the 2015 restructuring plan, offset by a favorable adjustment of $0.5 million related to the liability recorded in 2009 for manufacturing restructuring efforts initiated during the fiscal year then ended. Costs associated with the 2015 restructuring plan are comprised primarily of fixed asset impairment costs and the write-down of inventory, as well as charges related to early lease termination and the reduction of our workforce.


(d)	Represents separation and hiring costs, including payroll taxes and certain benefits and professional fees as follows:


(i)	During the year ended January 2, 2016, $1.0 million was incurred primarily attributable to payments made in connection with the resignation of former executives and costs incurred in connection with the hiring of their replacements.

(ii)

During the year ended January 3, 2015, $3.8 million was incurred primarily related to (1) the hirings of Mr. Strauss, our President and Chief Executive Officer and a director of the Company, effective in May 2014; Mr. Stephens, our Executive Vice President and Chief Financial Officer, effective in October 2014; and Mr. Topper, our Executive Vice President, Operations, in July 2014; and (2) the resignations of Mr. Burris, our former President and Chief Executive Officer and a former director of the Company in January 2014; Mr. Nagle, our former Chief Operations Officer, AMI Distribution and Services, in January 2014; Mr. Gaydos, our former Senior Vice President, Operations, in July 2014; and Mr. Morrisroe, our former Senior Vice President

Table of Contents

and Chief Financial Officer in October 2014. The amount also included the costs of appointing Mr. Snyder as Interim Chief Executive Officer from January 17, 2014 to May 5, 2014.

(iii)

During the year ended December 28, 2013, $1.4 million was incurred primarily related to make-whole payments to Mr. Burris, our former President and Chief Executive Officer, and Mr. Morrisroe, our former Senior Vice President and Chief Financial Officer. Pursuant to their respective employment agreements, these payments provided compensation to offset losses recognized on the sale of their respective residences in connection with relocating near our corporate headquarters.


(e)	Represents equity-based compensation related to restricted shares or deferred stock units issued to certain of our directors and officers.


(f)	Represents the non-cash expense related to warranty claims paid in excess of the warranty provision.


(g)	Represents the following (in thousands):



	Years Ended
	January 2, 2016		January 3, 2015		December 28, 2013
Professional fees and other costs (i)	$	6,951	$	11,711	$	8,558
Accretion on lease liability (ii)	434		495		516
Excess severance costs (iii)	158		529		600
Expenses due to theft, flood, and fire damage (iv)	100		149		—
Disputed insurance claim recovery (v)	—		—		(200		)
Excess legal expense (vi)	1,350		113		212
Environmental liability (vii)	—		701		340
Pension settlement loss (viii)	—		117		599
Payroll costs due to change of employment classification (ix)	—		1,079		—
Bank audit fees (x)	153		129		67
	$	9,146	$	15,023	$	10,692

(i)

Represents management’s estimate of unusual consulting and advisory fees and other costs associated with corporate strategic initiatives. For the years ended January 2, 2016 and January 3, 2015, we incurred costs of $1.4 million and $8.8 million, respectively, related to the launch of our new window platform on the West Coast in 2015 and on the East Coast in 2014. We also incurred $3.2 million related to special discretionary bonus awards for the year ended January 2, 2016. The fees for the year ended December 31, 2013 included costs of $2.3 million related to the proposed initial public offering (“IPO”) of Parent.


(ii)	Represents accretion on the liability recorded at present value for future lease costs in connection with the warehouse facility adjacent to our Ennis manufacturing plant, which we discontinued using during 2009.


(iii)	Represents management’s estimates for excess severance expense, primarily due to resignation of certain members of the Company’s non-executive management team.


(iv)	Represents expenses incurred related to theft at our Point Claire facility in August 2015, flood damage at our corporate headquarters building in May 2014, and fire damage at one of our supply centers in July 2014.


(v)	Represents the recovery of an unusual insurance claim paid by us in 2012 and subsequently disputed with our insurance carrier.


(vi)	Represents excess legal expense incurred primarily in connection with the defense of actions filed by plaintiffs. The majority of the expense for the year ended January 2, 2016 represents legal costs we incurred for a lawsuit that was settled in the third quarter of 2015.


(vii)	Represents the environmental liability associated with the remediation of soil and groundwater contamination at our Woodbridge, New Jersey facility. See Item 3. “Legal Proceedings” and Note 17 to the consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data” for further information.


(viii)	Represents settlement losses recorded during the years ended January 3, 2015 and December 28, 2013 for the defined benefit pension plan for our Pointe Claire, Quebec plant. The lump sum payments made to members of this plan upon termination and retirement totaled more than the sum of the service and interest cost, which resulted in recognition of a settlement loss for the years then ended.

Table of Contents


(ix)	Represents additional payroll costs that were incurred in relation to a change in employment classification from exempt to non-exempt for certain non-managerial U.S. supply center-based employees.


(x)	Represents bank audit fees incurred under our ABL facilities.


(h)	Represents foreign currency loss recognized in the Consolidated Statements of Comprehensive Loss, including (gain) loss on foreign currency exchange hedging agreements.

(i)

Represents our estimate of run-rate cost savings related to actions taken or to be taken within 12 months after the consummation of any acquisition, amalgamation, merger or operational change and prior to or during such period, calculated on a pro forma basis as though such cost savings had been realized on the first day of the period for which Adjusted EBITDA is being calculated, net of the amount of actual benefits realized during such period from such actions and net of the further adjustments required by the ABL facilities and the Indenture, as described below.

Run-rate cost savings include actions around operational and engineering improvements, procurement savings and reductions in SG&A expenses. The run-rate cost savings were estimated to be approximately $10 million, $12 million and $13 million for the years ended January 2, 2016, January 3, 2015, and December 28, 2013, respectively. Our ABL facilities, the Indenture and the Sponsored Secured Note permit us to include run-rate cost savings in our calculation of Adjusted EBITDA in an amount, taken together with the amount of certain restructuring costs, up to 10% of Consolidated EBITDA, as defined in such debt instruments. As such, only $4.9 million of the approximate $10 million of run-rate cost savings for 2015, $5.9 million of the approximate $12 million of run-rate cost savings for 2014 and $10.9 million of the approximate $13 million of run-rate cost savings for 2013 have been included in the calculation of Adjusted EBITDA under the ABL facilities and the Indenture.

Year Ended January 2, 2016 Compared to Year Ended January 3, 2015

Net sales were $1,185.0 million for the year ended January 2, 2016, a decrease of $2.0 million, or 0.2%, compared to net sales of $1,187.0 million for the year ended January 3, 2015. The decrease in net sales was primarily driven by a $13.4 million, or 6.3%, decrease in vinyl siding sales, a $10.7 million, or 3.6%, decrease in third-party manufactured product sales, primarily roofing, and a $6.8 million, or 4.4%, decrease in our metal product sales mainly attributable to lower volume in our distribution business. The unfavorable impact of the weaker Canadian dollar in 2015 significantly impacted our net sales, particularly in our vinyl and metal product lines. Beyond the negative impact of foreign currency translation, the decline in metal product sales was also a result of reduced volume from our distributor customers. We achieved a $18.3 million, or 4.6%, increase in our vinyl window sales, and a $11.3 million, or 10.1%, increase in our ISS business compared to the prior year. Although window unit volume increased only 1% in 2015, we achieved year-over-year improvements in product mix and overall selling price. Net sales in 2015 were unfavorably impacted by the weaker Canadian dollar in 2015 and the additional week of operations in 2014, circumstances that resulted in lower sales of $34.0 million and approximately $10 million, respectively.

Gross profit for the year ended January 2, 2016 was $276.2 million, or 23.3% of net sales, compared to gross profit of $243.6 million, or 20.5% of net sales, for the year ended January 3, 2015. The $32.6 million, or 13.4%, increase was largely due to our continued focus on driving profitability through our integrated products, particularly in our windows business. The improvement in gross profit was primarily due to favorable sales mix and higher overall price levels of $35.0 million and increased sales volume of $1.3 million compared to the prior year. In addition, compared to the same period in 2014, we achieved operational efficiencies of approximately $11.8 million, primarily in our window plants, and incurred $5.9 million fewer costs related to the roll out of our new window platform. Lower material costs of $5.7 million also contributed to the increase in gross profit compared to the prior year. Increases in gross profit were partially offset by the negative impact of foreign currency fluctuation of $27.8 million due to a weaker Canadian dollar in 2015 compared to the prior year. Also, the additional week of operations in 2014 versus 2015 generated approximately $2 million of additional gross profit, further contributing to the year-over-year decrease. Gross profit for the year was unfavorably impacted by a $2.2 million non-cash charge related to the write-down of inventory, recorded as a result of the restructuring plan announced during 2015.

SG&A expenses were $239.8 million, or 20.2% of net sales, for the year ended January 2, 2016 compared to $247.6 million, or 20.9% of net sales, for the year ended January 3, 2015. The year-over-year decrease of $7.8 million, or 3.2%, was primarily attributable to a $2.9 million reduction in executive officer separation and hiring costs, $2.5 million reduction in marketing expenses related to the launch of the new Mezzo line, and a $2.5 million reduction in professional fees. In addition, compared to 2014, we experienced cost savings of $1.6 million and $1.3 million in insurance and sales incentive expense, respectively, as well as decreases in bad debt expense and depreciation and amortization of $1.1 million and $1.0 million, respectively. These decreases were partially offset by a $4.1 million increase in costs associated with the performance-based incentive program resulting from improved operating results in 2015. We also experienced increases in employee compensation expense of $2.6 million, primarily attributable to the continued expansion of the ISS business. SG&A expenses in 2015 were favorably impacted by both the additional week of operations in 2014, as well as the weakened Canadian dollar in 2015

Table of Contents

compared to the prior year, which consequently resulted in lower current year SG&A expense of approximately $5 million and $7.5 million, respectively.

Income from operations was $34.6 million for the year ended January 2, 2016 compared to loss of $237.6 million for the year ended January 3, 2015. The increase of $272.2 million reflects the impact of the goodwill and other intangible asset impairment losses recorded in prior year totaling $233.9 million, caused primarily by a continued decline in our operating results for the year.

During the third quarter of 2015, we announced a restructuring plan focused on realigning certain costs within our U.S. distribution and select corporate functions. The restructuring plan includes the closure of four underperforming company-operated supply centers in the United States. and the elimination of our roofing product offering in eleven U.S. supply centers. The costs associated with the aforementioned restructuring plan totaled $4.5 million, which reflects a $2.2 million cash charge, the majority of which relates to lease termination costs to be paid through 2020, in accordance with each supply center’s lease payment schedule, and a $2.3 million non-cash charge primarily related to the write-down of inventory, which is reflected within cost of sales. The $1.8 million reflected in restructuring costs represents a $2.3 million charge associated with the aforementioned restructuring plan as well as a favorable adjustment of $0.5 million related to the liability recorded in 2009 for manufacturing restructuring efforts initiated during the fiscal year then ended.

Interest expense was $83.5 million and $82.5 million for the years ended January 2, 2016 and January 3, 2015, respectively. The $1.0 million increase in interest expense in the year ended January 2, 2016 was primarily attributable to borrowings under the ABL facilities.

Income tax benefit for the year ended January 2, 2016 was $0.7 million reflecting a negative effective income tax rate of 1.4%, compared to an income tax benefit for the year ended January 3, 2015 of $27.2 million, which reflected a negative effective income tax rate of 8.5%. The change in the effective tax rate between years was primarily the result of the impact of the impairment charges recorded in the year ended January 3, 2015 for the goodwill and indefinite-lived intangible assets, with no comparative charges in the current year period, as well as changes in the valuation allowance between years.

Net loss for the year ended January 2, 2016 was $50.1 million, compared to a net loss of $293.7 million for the year ended January 3, 2015.

EBITDA and Adjusted EBITDA was $72.6 million and $90.3 million, respectively, for the year ended January 2, 2016. EBITDA was a loss of $195.6 million and adjusted EBITDA was $58.6 million for the year ended January 3, 2015. For a reconciliation of our net loss to EBITDA and Adjusted EBITDA and additional details of the EBITDA adjustments, see the table presented above.

Year Ended January 3, 2015 Compared to Year Ended December 28, 2013

Net sales were $1,187.0 million for the year ended January 3, 2015, an increase of $17.4 million, or 1.5%, compared to net sales of $1,169.6 million for the year ended December 28, 2013. The improvement in net sales was primarily driven by a $31.7 million, or 8.6%, increase in our vinyl window sales, mainly from unit sales volume growth of approximately 8%, and a $17.1 million, or 18.1%, increase in our ISS business compared to the prior year. Both our windows and ISS businesses have benefited from increased demand in the new construction market. Additionally, we see continued improvement in our window product mix since the launch of our new window platform in early 2014. Partially offsetting these increases were declines in third-party manufactured product sales of $17.5 million, or 5.6%, an $11.1 million, or 6.7%, decrease in our metal product sales, and a $3.0 million, or 1.4%, decrease in vinyl siding sales. During 2014, we de-emphasized and withdrew our roofing product offering in selected markets as we continue to focus on driving profitability through our higher margin, integrated product offerings, which impacted our sales for the third-party manufactured product. The decline in metal product sales was primarily a result of reduced volume from our distributor customers. The additional week of operations in 2014 contributed approximately $10 million of additional net sales compared to the prior year, while the weaker Canadian dollar in 2014 negatively impacted our net sales by $14.6 million.

Gross profit for the year ended January 3, 2015 was $243.6 million, or 20.5% of net sales, compared to gross profit of $281.8 million, or 24.1% of net sales, for the year ended December 28, 2013. The $38.2 million, or 13.6%, decrease was largely due to incremental costs of $4.5 million directly associated with the launch of our new window platform in early 2014, as well as manufacturing inefficiencies of approximately $10 million in our window plants primarily as a result of the launch. We also experienced higher costs for certain materials of $12.1 million, and an approximate $4 million increase in costs primarily related to improvements in product packaging, maintenance and safety programs compared to the prior year. The remainder of the decrease in gross profit was due to an increase in freight and rework costs of $3.6 million and $2.0 million, respectively. The decline in gross profit was partially offset by favorable volume impacts of $1.7 million primarily due to the increase in vinyl window sales, partially offset by the decline in third-party manufactured and metal products sales compared to

Table of Contents

the prior year. The additional week of operations in 2014 generated approximately $2 million of additional gross profit; however, the weaker Canadian dollar negatively impacted our 2014 gross margin by $10.7 million, compared to the prior year.

SG&A expenses were $247.3 million, or 20.8% of net sales, for the year ended January 3, 2015 compared to $232.3 million, or 19.9% of net sales, for the year ended December 28, 2013. The $15.0 million increase was due to an approximately $8 million increase in employee compensation expense mainly attributable to higher supply center headcount that was added in 2014 to support the growth of our ISS business and supply center operations, a $2.4 million increase in executive officer separation and hiring costs, and $1.1 million additional payroll costs related to a change of employment classification from exempt to non-exempt for certain non-managerial U.S. supply center-based employees. We also incurred a $2.7 million increase in marketing-related costs mainly to support the launch of our new window platform, a $2.0 million increase in costs primarily related to product liability and workers compensation, and higher bad debt expense of $1.0 million, compared to the prior year. These increases were partially offset by prior year costs of $2.2 million associated with the proposed IPO of Parent, which did not recur in 2014, and a $1.7 million decrease in pension expenses. The additional week of operations in 2014 resulted in approximately $5 million of additional SG&A expenses compared to the prior year; however, they were favorably impacted by $3.2 million due to a weaker Canadian dollar in 2014.

During the third quarter of 2014, due to the continued decline in operating results, management believed an indicator of potential impairment existed for indefinite-lived intangible assets and performed interim impairment testing as of August 31, 2014, which resulted in an impairment loss for certain non-amortized trade names of $89.7 million and an estimated impairment charge for goodwill of $148.5 million. During the fourth quarter, we finalized step two of the impairment analysis and reduced the goodwill impairment charge by $4.3 million, thereby resulting in a final impairment charge, including goodwill and indefinite-lived intangible assets, of $233.9 million for 2014. See Note 6 to the consolidated financial statements in Item 8. “Financial Statements and Supplementary Data.”

Loss from operations was $237.6 million for the year ended January 3, 2015 compared to income of $49.5 million for the year ended December 28, 2013.

Interest expense was $82.5 million and $79.8 million for the years ended January 3, 2015 and December 28, 2013, respectively. The $2.7 million increase in interest expense in the year ended January 3, 2015 primarily relates to a full year of interest on the additional $100 million of the 9.125% Notes issued on May 1, 2013.

The income tax benefit for the year ended January 3, 2015 was $27.2 million reflecting a negative effective income tax rate of 8.5%, whereas the income tax expense for the year ended December 28, 2013 of $2.5 million, reflected an effective income tax rate of 8.1%. The change in the effective tax rate between years was primarily the result of the impact of the goodwill impairment charges recorded in the year ended January 3, 2015 with no comparative charge in the prior year, as well as changes in the valuation allowance between periods.

Net loss for the year ended January 3, 2015 was $293.7 million, compared to a net loss of $33.5 million for the year ended December 28, 2013.

EBITDA was a loss of $195.6 million and Adjusted EBITDA was $58.6 million for the year ended January 3, 2015. EBITDA and Adjusted EBITDA were $91.8 million and $109.4 million, respectively, for the year ended December 28, 2013. For a reconciliation of our net loss to EBITDA and Adjusted EBITDA and additional details of the EBITDA adjustments, see the table presented above.

QUARTERLY FINANCIAL DATA (UNAUDITED)

Table of Contents

Unaudited quarterly financial data for 2015 and 2014 are shown in the tables below (in thousands):



	Quarters Ended
2015	April 4			July 4			October 3			January 2
Net sales	$	220,366		$	331,249		$	339,787		$	293,567
Gross profit	41,903			81,015			81,704			71,572
(Loss) income from operations	(16,567		)	18,849			18,526			13,759
Net loss	(38,322		)	(5,138		)	(5,204		)	(1,448		)

During the third quarter of 2015, we announced a restructuring plan focused on realigning certain costs within our U.S. distribution business and select corporate functions. The restructuring plan included the closure of four underperforming company-operated U.S. supply centers and the elimination of our roofing product offering in eleven U.S. supply centers. As a result, we recorded restructuring charge of $4.5 million, primarily related to early lease termination costs, severance for workforce reductions and the write-down of roofing inventory in certain markets.



	Quarters Ended
2014	March 29			June 28			September 27			January 3
Net sales	$	196,589		$	319,875		$	353,742		$	316,767
Gross profit	34,415			72,013			74,611			62,515
(Loss) income from operations	(24,250		)	11,747			(225,834		)	762
Net loss	(46,349		)	(10,608		)	(219,176		)	(17,556		)

LIQUIDITY AND CAPITAL RESOURCES

As of January 2, 2016, we had $8.5 million of cash and cash equivalents in the United States and $0.9 million in Canada. As of January 3, 2015, we had $5.9 million of cash and cash equivalents in the United States and an immaterial amount in Canada. We had available borrowing capacity of $55.8 million as of January 2, 2016 under our ABL facilities, after giving effect to outstanding letters of credit and borrowing base limitations. We believe that our borrowing capacity under the ABL facilities and current cash and cash equivalents provide adequate liquidity to maintain our operations and capital expenditure requirements and service our debt obligations for the next 12 months.

Cash Flows

The following sets forth a summary of our cash flows (in thousands):



	Years Ended
	January 2, 2016			January 3, 2015			December 28, 2013
Net cash (used in) provided by operating activities	$	(3,423	)	$	(70,965	)	$	253
Net cash used in investing activities	(16,421		)	(12,833		)	(11,990		)
Net cash provided by financing activities	23,378			69,412			23,193

Cash Flows From Operating Activities

Net cash used in operating activities was $3.4 million for the year ended January 2, 2016, compared to $71.0 million for the year ended January 3, 2015. The $67.6 million increase in cash in 2015 was primarily driven by improved operating results of $37.8 million and improvement in working capital of $29.7 million. Net cash used in operating activities for the year ended January 3, 2015 decreased $71.3 million compared to a source of cash of $0.3 million for the year ended December 28, 2013, primarily as a result of lower operating results of $56.0 million and net cash used in operating assets and liabilities of $15.3 million.

Table of Contents

Change in accounts receivable was a use of cash of $7.2 million in 2015, compared to $4.9 million in 2014 and $7.1 million in 2013. The year-over-year fluctuations in cash flows from accounts receivable were primarily due to timing of collections from our customers. The net increase in cash flow of $2.2 million in 2014 reflects more cash collected due to the year-end cut off as of January 3, 2015 compared to December 28, 2013, partially offset by the impact of an increase in sales volume in the fourth quarter of 2014 compared to the same period in 2013.

Change in inventory was a source of cash of $14.2 million for the year ended January 2, 2016, compared to a use of cash of $15.3 million for the year ended January 3, 2015 and a use of cash of $17.7 million for the year ended December 28, 2013. The $29.5 million improvement in cash flow from the change in inventory for the year ended January 2, 2016 was primarily driven by working capital initiatives during 2015 and the timing of inventory builds for seasonal demands for the second half of the year. During 2014, we increased inventory at our supply centers to ensure that we had a variety of products to better service our contractor customers, which led to higher inventory levels at the end of 2014, the consequence of which was a relatively lower use of cash for the year ended January 2, 2016, compared to the year ended January 3, 2015.

Change in accounts payable and accrued liabilities was a source of cash of $3.6 million for the year ended January 2, 2016, compared to $5.1 million for the year ended January 3, 2015 and $27.8 million for the year ended December 28, 2013. The decrease in cash flows from accounts payable and accrued liabilities in 2015 compared to 2014 was primarily due to the timing of inventory purchases. The decrease in cash flows from accounts payable and accrued liabilities in 2014 compared to 2013 was primarily attributable to an increase in the volume of inventory purchases in 2013.

Change in income taxes receivable/payable was a use of cash of $2.9 million for the year ended January 2, 2016, compared to a source of cash of $0.6 million for the year ended January 3, 2015 and a use of cash of $1.7 million for the year ended December 28, 2013. Cash flows (used in) provided by operating activities for the years ended January 2, 2016, January 3, 2015, and December 28, 2013 included net income tax payments of $4.3 million, $3.2 million and $4.7 million, respectively.

Cash Flows From Investing Activities

Investing activities used $16.4 million of cash in the year ended January 2, 2016, compared to $12.8 million in the year ended January 3, 2015 and $12.0 million in the year ended December 31, 2013. The use of cash in the years ended January 2, 2016 and January 3, 2015 consisted of capital expenditures of $16.6 million and $12.9 million, respectively. The use of cash in 2013 consisted of capital expenditures of $11.7 million and a supply center acquisition of $0.3 million. The capital expenditures for the current year related primarily to investments at our window manufacturing facilities to improve efficiency, quality and production capacity. The increase in capital expenditures in 2014 compared to 2013 was primarily due to investments in our new window platform that was launched in early 2014.

Cash Flows from Financing Activities

Net cash provided by financing activities was $23.4 million, $69.4 million and $23.2 million for the years ended January 2, 2016, January 3, 2015 and December 28, 2013, respectively. Net cash provided by financing activities in 2015 included borrowings of $187.3 million under our ABL facilities offset by repayments of $164.0 million. Net cash provided by financing activities in 2014 included borrowings of $240.2 million under our ABL facilities offset by repayments of $170.8 million. Net cash provided by financing activities in 2013 included proceeds of $106.0 million from the May 1, 2013 issuance of the additional 9.125% Senior Secured Notes due 2017, borrowings of $148.9 million under our ABL facilities, and an equity contribution from Parent of $0.7 million. These inflows were partially offset by repayments of $226.9 million under our ABL facilities and $5.5 million of financing costs related to the issuance of the additional 9.125% Senior Secured Notes due 2017 and amendment of our ABL facilities during the second quarter of 2013.

For 2016, cash requirements for working capital, capital expenditures, and interest and tax payments will continue to impact the timing and amount of borrowings on our ABL facilities.

Description of Our Outstanding Indebtedness

9.125% Senior Secured Notes due 2017

In October 2010, our Company and our wholly-owned subsidiary, AMH New Finance, Inc. (“AMHNF” and collectively, the “Issuers”) issued and sold $730.0 million of 9.125% Senior Secured Notes due November 1, 2017 (the “existing notes”). The existing notes bear interest at a rate of 9.125% per annum, payable May 1 and November 1 of each year.

Table of Contents

repay the outstanding borrowings under our ABL facilities and for other general corporate purposes. The new notes were issued as additional notes under the same indenture, dated as of October 13, 2010, governing the existing notes, as supplemented by a supplemental indenture (the “Indenture”). On October 31, 2013, all of the new notes were exchanged for 9.125% Senior Secured Notes due 2017, which have been registered under the Securities Act of 1933, as amended. The new notes are consolidated with and form a single class with the existing notes and have the same terms as to status, redemption, collateral and otherwise (other than issue date, issue price and first interest payment date) as the existing notes. The debt premium related to the issuance of the new notes is being amortized into interest expense over the life of the new notes. The unamortized premium of $2.7 million is included in the long-term debt balance for the 9.125% notes. The effective interest rate of the new notes, including the premium, is 7.5% as of January 2, 2016.

The 9.125% notes, at par value of $830.0 million, have an estimated fair value, classified as a Level 1 measurement, of $576.4 million and $652.8 million based on quoted market prices as of January 2, 2016 and January 3, 2015 , respectively.

We may from time to time, in our sole discretion, purchase, redeem or retire the 9.125% notes in privately negotiated or open market transactions, by tender offer or otherwise. On April 15, 2014, Parent filed a request with the SEC to withdraw the Registration Statement on Form S-1 filed by Parent on July 15, 2013 for a proposed IPO of its common stock. The registration statement was withdrawn because a determination has been made not to proceed with an IPO of Parent’s common stock at the time.

Guarantees. The 9.125% notes are unconditionally guaranteed, jointly and severally, by each of the Issuers’ 100% owned direct and indirect domestic subsidiaries (“guarantors”) that guarantee our obligations under the ABL facilities.

Collateral. The 9.125% notes and the guarantees are secured by a first-priority lien on substantially all of the Issuers’ and the guarantors’ present and future assets located in the United States (other than the ABL collateral, in which the 9.125% notes and the guarantees have a second-priority lien, and certain other excluded assets), including equipment, owned real property valued at $5.0 million or more and all present and future shares of capital stock of each of the Issuers’ and each guarantor’s material directly 100% owned domestic subsidiaries and 65% of the present and future shares of capital stock, of each of the Issuers’ and each guarantor’s directly owned foreign restricted subsidiaries (other than Canadian subsidiaries), in each case subject to the Rule 3-16 exclusion described below, certain other exceptions and customary permitted liens. In addition, the 9.125% notes and the guarantees are secured by a second-priority lien on substantially all of the Issuers’ and the guarantors’ present and future assets, which assets also secure the Issuers’ obligations under the ABL facilities, including accounts receivable, inventory, related general intangibles, certain other related assets and the proceeds thereof.

The capital stock and other securities of any subsidiary will be excluded from the collateral securing the 9.125% notes and the guarantees to the extent that the pledge of such capital stock and other securities would result in the Company being required to file separate financial statements of such subsidiary with the SEC pursuant to Rule 3-16 or Rule 3-10 of Regulation S-X under the Securities Act of 1933, as amended. Rule 3-16 of Regulation S-X requires the presentation of a company’s standalone, audited financial statements if that company’s capital stock or other securities are pledged to secure the securities of another issuer, and the greatest of the principal amount, par value, book value and market value of the pledged stock or securities equals or exceeds 20% of the principal amount of the securities secured by such pledge. Accordingly, the collateral securing the 9.125% notes and the guarantees may in the future exclude the capital stock and securities of the Company’s subsidiaries, in each case to the extent necessary to not be subject to such requirement.

Optional Redemption. The Issuers have the option to redeem the 9.125% notes, in whole or in part, at any time on or after November 1, 2013 at redemption prices (expressed as percentages of principal amount of the 9.125% notes to be redeemed) of 106.844%, 104.563%, 102.281% and 100.000% during the 12-month periods commencing on November 1, 2013, 2014, 2015 and 2016, respectively, plus accrued and unpaid interest thereon, if any, to, but excluding, the applicable redemption date.

Change of Control. Upon the occurrence of a change of control, as defined in the Indenture, the Issuers must give holders of notes the opportunity to sell the Issuers their 9.125% notes at 101% of their face amount, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.

Covenants. The Indenture contains covenants limiting the Issuers’ ability and the ability of their restricted subsidiaries to, among other things: pay dividends or distributions, repurchase equity, prepay junior debt and make certain investments; incur additional debt or issue certain disqualified stock and preferred stock; incur liens on assets; merge or consolidate with another company or sell all or substantially all assets; enter into transactions with affiliates; and enter into agreements that would restrict our subsidiaries to pay dividends or make other payments to us. These covenants are subject to important exceptions and qualifications as described in the Indenture. Most of these covenants will cease to apply for so long as the 9.125% notes have investment grade ratings from both Moody’s Investors Service, Inc. and Standard & Poor’s.

Table of Contents

ABL Facilities

In October 2010, we and certain of our subsidiaries (as “U.S. borrowers” and “Canadian borrowers” and, collectively, the “borrowers”) entered into the ABL facilities in the amount of $225.0 million (comprised of a $150.0 million U.S. facility and a $75.0 million Canadian facility) pursuant to a revolving credit agreement dated October 13, 2010, which was subsequently amended and restated on April 18, 2013 (the “Amended and Restated Revolving Credit Agreement”) to, among other things, extend the maturity date of the revolving credit agreement from October 13, 2015 to the earlier of (i) April 18, 2018 and (ii) 90 days prior to the maturity date of the existing notes. Subsequently, we terminated the tranche B revolving credit commitments of $12.0 million and wrote off $0.5 million of deferred financing fees related to the ABL facilities.

Interest Rate and Fees. At our option, the U.S. and Canadian tranche A revolving credit loans under the Amended and Restated Revolving Credit Agreement governing the ABL facilities bear interest at the rate equal to (1) the London Interbank Offered Rate (“LIBOR”) (for eurodollar loans under the U.S. facility) or the Canadian Dealer Offered Rate (“CDOR”) (for loans under the Canadian facility), plus an applicable margin of 2.00% as of January 2, 2016, or (2) the alternate base rate (for alternate base rate loans under the U.S. facility, which is the highest of a prime rate, the Federal Funds Effective Rate plus 0.50% and a one-month LIBOR rate plus 1.0% per annum) or the alternate Canadian base rate (for loans under the Canadian facility, which is the higher of a Canadian prime rate and the 30-day CDOR Rate plus 1.0%), plus an applicable margin of 1.00% as of January 2, 2016, in each case, which interest rate margin may vary in 25 basis point increments between three pricing levels determined by reference to the average excess availability in respect of the U.S. and Canadian tranche A revolving credit loans. In addition to paying interest on outstanding principal under the ABL facilities, we are required to pay a commitment fee in respect of the U.S. and Canadian tranche A revolving credit loans, payable quarterly in arrears, of 0.375%.

Borrowing Base. Availability under the U.S. and Canadian facilities are subject to a borrowing base, which is based on eligible accounts receivable and inventory of certain of our U.S. subsidiaries and eligible accounts receivable, inventory and, with respect to the Canadian tranche A revolving credit loans, equipment and real property, of certain of our Canadian subsidiaries, after adjusting for customary reserves established or modified from time to time by and at the permitted discretion of the administrative agent thereunder. To the extent that eligible accounts receivable, inventory, equipment and real property decline, our borrowing base will decrease and the availability under the ABL facilities may decrease below $213.0 million. In addition, if the amount of outstanding borrowings and letters of credit under the U.S. and Canadian facilities exceeds the borrowing base or the aggregate revolving credit commitments, we are required to prepay borrowings to eliminate the excess.

Guarantors. All obligations under the U.S. facility are guaranteed by each existing and subsequently acquired direct and indirect wholly-owned material U.S. restricted subsidiary of us and by our direct parent, other than certain excluded subsidiaries (“U.S. guarantors”). All obligations under the Canadian facility are guaranteed by each existing and subsequently acquired direct and indirect wholly-owned material Canadian restricted subsidiary of us, other than certain excluded subsidiaries (“Canadian guarantors” and, together with U.S. guarantors, “ABL guarantors”) and the U.S. guarantors.

Security. The U.S. security agreement provides that all obligations of the U.S. borrowers and the U.S. guarantors are secured by a security interest in substantially all of our present and future property and assets, including a first-priority security interest in our capital stock and a second-priority security interest in the capital stock of each of our direct, material wholly-owned restricted subsidiaries. The Canadian security agreement provides that all obligations of the Canadian borrowers and the Canadian guarantors are secured by the U.S. ABL collateral and a security interest in substantially all of our Canadian assets, including a first-priority security interest in the capital stock of the Canadian borrowers and each direct, material wholly-owned restricted subsidiary of the Canadian borrowers and Canadian guarantors.

Covenants, Representations and Warranties. The Amended and Restated Revolving Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, with respect to negative covenants, among other things, restrictions on indebtedness, liens, investments, fundamental changes, asset sales, dividends and other distributions, prepayments or redemption of junior debt, transactions with affiliates and negative pledge clauses. There are no financial covenants included in the Amended and Restated Revolving Credit Agreement, other than a springing fixed charge coverage ratio of at least 1.00 to 1.00, which will be tested only when excess availability is less than the greater of (i) 10.0% of the sum of (x) the lesser of (A) the U.S. tranche A borrowing base and (B) the U.S. tranche A revolving credit commitments and (y) the lesser of (A) the Canadian tranche A borrowing base and (B) the Canadian tranche A revolving credit commitments and (ii) $20.0 million for a period of five consecutive business days until the 30th consecutive day when excess availability exceeds the above threshold.

On March 23, 2015, we further amended the Amended and Restated Revolving Credit Agreement by entering into Amendment One to Amended and Restated Revolving Credit Agreement (“Amendment No.1”). Pursuant to Amendment No.1, the Company was permitted, among other things, for the period commencing on and including April 3, 2015 through and including June 5, 2015, for the fixed charge coverage ratio to be tested or for a cash dominion period to commence, only if

Table of Contents

excess availability was less than $15.0 million for a period of five consecutive business days. In addition, Amendment No.1 included a provision for weekly borrowing base certificate reporting for the period commencing on and including April 12, 2015 through and including June 10, 2015 in lieu of delivery of a borrowing base certificate after each fiscal month.

On December 7, 2015, we entered into Amendment No. 2 to the Amended and Restated Revolving Credit Agreement, (“Amendment No. 2”) which permitted, among other things, for the period commencing on and including February 5, 2016 through March 4, 2016, for the fixed charge coverage ratio to be tested or for a cash dominion period to commence, only if excess availability is less than $15.0 million for a period of five consecutive business days. Further, for the period commencing on and including March 5, 2016 through June 3, 2016, Amendment No. 2 permitted for the fixed charge coverage ratio to be tested or for a cash dominion period to commence, only if excess availability is less than $10.0 million for a period of five consecutive business days. In addition, Amendment No. 2 includes a provision for weekly borrowing base certificate reporting for the period commencing on and including February 7, 2016 through and including May 29, 2016 in lieu of delivery of a borrowing base certificate after each fiscal month.

On February 19, 2016, we entered into Amendment No. 3 to Amended and Restated Revolving Credit Agreement (“Amendment No. 3”), which permitted, among other things:


•	for the period commencing on and including February 19, 2016 through April 21, 2016, for the (1) a cash dominion period to commence, only if (a) excess availability is less than $10.0 million for the fixed charge coverage ratio to be tested or for a cash dominion period to commence, only if excess availability is less than $10.0 million for a period of five consecutive business days, and


•	for the period commencing on and including April 22, 2016 through and including May 19, 2016, for the (1) a cash dominion period to commence, only if (a) excess availability is less than $7.5 million for the fixed charge coverage ratio to be tested or for a cash dominion period to commence, only if excess availability is less than $7.5 million for a period of five consecutive business days, and


•	for the period commencing on and including May 20, 2016 through and including June 3, 2016, for the (1) a cash dominion period to commence, only if (a) excess availability is less than $10.0 million for the fixed charge coverage ratio to be tested or for a cash dominion period to commence, only if excess availability is less than $10.0 million for a period of five consecutive business days.

In addition, Amendment No. 3 includes a provision which reduces excess availability in certain circumstances by adding an availability block for the period commencing on and including February 19, 2016 through April 21, 2016 in the amount $10.0 million, commencing on and including April 22, 2016 through and including May 19, 2016 in the amount of $7.5 million, and commencing on and including May 20, 2016 through April 18, 2018 in the amount of $10.0 million. In addition, in the event all or any portion of the principal of the Sponsor Secured Note (as defined below) is repaid prior to the Amended and Restated Revolving Credit Agreement maturity date, the availability block increases to $20.0 million.

The fixed charge coverage ratio was 0.87:1.00 for the four consecutive fiscal quarter test period ended January 2, 2016. We have not triggered such fixed charge coverage ratio covenant as of January 2, 2016, as excess availability of $35.8 million as of such date was in excess of the covenant trigger threshold. Based on current projections, we expect that the excess availability will be reduced in the first half of 2016 due to the seasonality of its business. Currently we do not expect to trigger such covenant for 2016. Should the current economic conditions or other factors described herein cause our results of

operations to deteriorate beyond our expectations, we may trigger such covenant and, if so triggered, may not be able to satisfy such covenant and be forced to refinance such debt or seek a waiver. Even if new financing is available, it may not be available on terms that are acceptable to us. If we are required to seek a waiver, we may be required to pay significant amounts to the lenders under our ABL facilities to obtain such a waiver.

As of January 2, 2016, there was $92.8 million drawn under the Amended and Restated Revolving Credit Agreement and $55.8 million available for additional borrowings. The weighted average per annum interest rate applicable to borrowings under the U.S. portion and the Canadian portion of the revolving credit commitment was 2.7% and 4.5%, respectively, as of January 2, 2016. We had letters of credit outstanding of $13.1 million as of January 2, 2016 primarily securing insurance policy deductibles, certain lease facilities and our purchasing card program.

In addition to the financial covenant described above, certain incurrences of debt and investments require compliance with financial covenants under the Amended and Restated Revolving Credit Agreement and the Indenture. The breach of any of these covenants could result in a default under the Amended and Restated Revolving Credit Agreement and the Indenture, and the lenders or note holders, as applicable, could elect to declare all amounts borrowed due and payable. See Item 1A. “Risk Factors.” We were in compliance with such financial covenants as of January 2, 2016.

Table of Contents

EBITDA is calculated by reference to net income plus interest and amortization of other financing costs, provision for income taxes, depreciation and amortization. Consolidated EBITDA, as defined in the Amended and Restated Revolving Credit Agreement and the Indenture, is calculated by adjusting EBITDA to reflect adjustments permitted in calculating covenant compliance under these agreements. Consolidated EBITDA will be referred to as Adjusted EBITDA herein. We believe that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA are appropriate to provide additional information to investors to demonstrate our ability to comply with our financial covenant.

First Lien Promissory Note

On February 19, 2016, we, the other borrowers, AMHNF, Holdings, and H&F Finco LLC (“H&F Finco”), an affiliate of the Hellman & Friedman LLC, entered into a first lien promissory note in an aggregate principal amount of $27.5 million (the “Sponsor Secured Note”), $20.0 million of such aggregate principal amount the U.S. borrowers, AMHNF and Holdings are the obligors and $7.5 million of such aggregate principal the Canadian borrowers are the obligors. The Sponsor Secured Note bears interest at the LIBOR rate plus 4.25%, with a LIBOR floor of 1%, and matures at the earlier of (i) June 18, 2018 and (ii) 30 days prior to the maturity date of our 9.125% notes. Prepayment of the Sponsor Secured Note is required if (i) excess availability on the date of such payment (prior to giving effect thereto) is no less than $60.0 million and (ii) excess availability on the date of such payment (immediately after giving effect thereto) and the projected daily average excess availability for the thirty-day period immediately following the date of such payment is, in each case, no less than $32.5 million. The Sponsor Secured Note is subject to the same covenants and events of default contained in the Amended and Restated Revolving Credit Agreement.

The Sponsor Secured Note is guaranteed by the same guarantors and to the same extent as such guarantors guarantee the obligations under our Amended and Restated Revolving Credit Agreement. Our obligations, including those of AMHNF, Holdings and the guarantors under the Sponsor Secured Note are secured on a pari passu basis to the liens and assets securing the obligations under the Amended and Restated Revolving Credit Agreement (the “ABL Shared Collateral”), subject to the applicable intercreditor agreement. Concurrently with entering into the Sponsor Secured Note, we, the other borrowers, AMHNF, Holdings and the guarantors under the Sponsor Secured Note entered into a revolving loan intercreditor agreement with H&F Finco, as the subordinated debt representative and UBS AG, Stamford Branch and UBS AG Canada Branch, as the senior representatives which subordinates the lien of H&F Finco to the lien of the senior representative and the senior lenders under the Amended and Restated Revolving Credit Agreement in respect of any right of payment from the proceeds of any sale or disposition of ABL Shared Collateral.

CONTRACTUAL OBLIGATIONS

The following table presents our contractual obligations as of January 2, 2016.



	Payments Due by Fiscal Year
(in thousands)	Total		2016		2017		2018		2019		2020		After 2020
Long-term debt (1)	$	922,800	$	—	$	922,800	$	—	$	—	$	—	$	—
Interest payments on 9.125% notes	138,853		75,738		63,115		—		—		—		—
Operating leases (2)	142,188		36,893		32,442		26,243		20,016		11,492		15,102
Expected pension contributions (3)	22,367		1,326		3,990		5,489		5,754		5,808		—
Total	$	1,226,208	$	113,957	$	1,022,347	$	31,732	$	25,770	$	17,300	$	15,102

(1)

Represents principal amounts only. As of January 2, 2016, our long-term debt consists of $830.0 million aggregate principal amount of 9.125% notes and we have $92.8 million in borrowings outstanding under our ABL facilities. The stated maturity date of our 9.125% notes is November 1, 2017. We are not able to reasonably estimate the cash payments for interest associated with the ABL facilities due to the significant estimation required related to both market rates as well as projected principal payments. See Note 11 to the consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data” for further information. The amounts presented in this table do not include the Sponsor Secured Note entered into on February 19, 2016.


(2)	For additional information on our operating leases, see Note 16 to the consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.”

(3)

Although subject to change, the amounts set forth in the table above represent the estimated minimum funding requirements under current law. Due to uncertainties regarding significant assumptions involved in estimating future required contributions to our pension plans, including: (i) interest rate levels, (ii) the amount and timing of asset returns, and (iii) what, if any, changes may occur in pension funding legislation, the estimates in the table may differ materially from actual future payments. We cannot reasonably estimate payments beyond 2020.

Table of Contents

Net long-term deferred income tax liabilities as of January 2, 2016 were $82.1 million. This amount is excluded from the contractual obligations table because we believe this presentation would not be meaningful. Deferred income tax liabilities are calculated based on temporary differences between the tax bases of assets and liabilities and their respective book bases, which will result in taxable amounts in future years when the liabilities are settled at their reported financial statement amounts. The results of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods. As a result, we believe scheduling deferred income tax liabilities as payments due by period could be misleading, because this scheduling would not relate to liquidity needs. At January 2, 2016, we had unrecognized tax benefits of $0.6 million relating to uncertain tax positions. Due to our federal net operating loss position, the settlement of such tax positions would be offset by the net operating losses, resulting in no outlay of cash.

Consistent with industry practice, we provide homeowners with limited warranties on certain products, primarily related to window and siding product categories. We have recorded reserves of $85.1 million at January 2, 2016 related to warranties issued to homeowners. We estimate that $8.5 million will be paid in 2016 to satisfy warranty obligations; however, we cannot reasonably estimate payments by year for 2017 and thereafter due to the nature of the obligations under these warranties.

OFF-BALANCE SHEET ARRANGEMENTS

We have no special purpose entities or off-balance sheet debt, other than operating leases in the ordinary course of business, which are disclosed in Note 16 to the consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.”

At January 2, 2016, we had stand-by letters of credit of $13.1 million with no amounts drawn under the stand-by letters of credit. These letters of credit reduce the availability under the ABL facilities. Letters of credit are purchased guarantees that ensure our performance or payment to third parties in accordance with specified terms and conditions.

Under certain agreements, indemnification provisions may require us to make payments to third parties. In connection with certain facility leases, we may be required to indemnify the lessors for certain claims. Also, we may be required to indemnify our directors, officers, employees and agents to the maximum extent permitted under the laws of the State of Delaware. The duration of these indemnity provisions under the terms of each agreement varies. The majority of indemnities do not provide for any limitation of the maximum potential future payments we could be obligated to make. In 2015, we did not make any payments under any of these indemnification provisions or guarantees, and we have not recorded any liability for these indemnities in the accompanying consolidated balance sheets.

EFFECTS OF INFLATION

The principal raw materials used by us are vinyl resin, aluminum, steel, resin stabilizers and pigments, glass, window hardware, and packaging materials, as well as diesel fuel, all of which have historically been subject to price changes. Raw material pricing on our key commodities has fluctuated significantly over the past several years. Our freight costs may also fluctuate based on changes in gasoline and diesel fuel costs related to our trucking fleet. Our ability to maintain gross margin levels on our products during periods of rising raw material costs and freight costs depends on our 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 our products. There can be no assurance that we will be able to maintain the selling price increases already implemented or achieve any future price increases. At January 2, 2016, we had no raw material hedge contracts in place.

RECENT ACCOUNTING PRONOUNCEMENTS

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (“ASU 2016-02”). The core principal of ASU 2016-02 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from the previous guidance within Accounting Standards Codification Topic 840, Leases. For operating leases, a lessee is required to do the following: (1) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position, (2) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis and (3) classify all cash payments within operating activities in the statement of cash flows. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. It is effective for public entities for fiscal years and interim periods within those years, beginning after December 15, 2018, with early

Table of Contents

adoption permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, which includes a number of optional practical expedients that entities may elect to apply. We are currently assessing the potential impact of the new requirements under the standard.

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”). ASU 2015-17 simplifies the presentation of deferred income taxes by requiring that all deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. ASU 2015-17 applies to all entities that present a classified statement of financial position and may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. It is effective for public entities for fiscal years and interim periods within those years, beginning after December 15, 2016, with early adoption permitted. We do not believe that the adoption of the provisions of ASU 2015-17 will have a material impact on its consolidated financial position, results of operations or cash flows.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory (“ASU 2015-11”). ASU 2015-11 simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value (“NRV”). The new guidance eliminates the need to determine replacement cost and evaluate whether it is above the ceiling (NRV) or below the floor (NRV less a normal profit margin) under the current lower of cost or market guidance. ASU 2015-11 applies only to inventories for which cost is determined by methods other than last-in first-out and the retail inventory method. It is effective for public entities for fiscal years and interim periods within those years, beginning after December 15, 2016. We do not believe that the adoption of the provisions of ASU 2015-11 will have a material impact on our consolidated financial position, results of operations or cash flows.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). ASU 2015-03 requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability rather than an asset, consistent with the presentation of debt discounts. The recognition and measurement of debt issuance costs are not affected by the new guidance. ASU 2015-03 is effective for public entities for fiscal years and interim periods within those years, beginning after December 15, 2015. An entity is required to apply ASU 2015-03 on a retrospective basis and comply with the applicable disclosures, which include the nature of and reason for the change in accounting principle, the transition method, a description of the prior-period information that has been retrospectively adjusted, and the effect of the change on the financial statement line items (that is, the debt issuance cost asset and the debt liability). In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (“ASU 2015-15”). ASU 2015-15 provides that, given the absence of authoritative guidance in ASU 2015-03 with respect to presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements, an entity is permitted to defer and present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. We do not believe that the adoption of the provisions of either ASU 2015-03 or ASU 2015-15 will have a material impact on our consolidated financial position, results of operations or cash flows.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 requires management to evaluate, in connection with preparing financial statements for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued and to provide certain disclosures if it concludes that substantial doubt exists. ASU 2014-15 is effective for all entities for the annual period ending after December 15, 2016, and for annual and interim periods thereafter, with early adoption permitted. We do not believe that the adoption of the provisions of ASU 2014-15 will have a material impact on our consolidated financial position, results of operations or cash flows.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The comprehensive new revenue recognition standard supersedes all existing revenue guidance under GAAP and international financial reporting standards. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard establishes the following five steps that require companies to exercise judgment when considering the terms of any contract, including all relevant facts and circumstances:

Step 1: Identify the contract(s) with the customer,

Step 2: Identify the separate performance obligations in the contract,

Step 3: Determine the transaction price,

Step 4: Allocate the transaction price to the separate performance obligations, and

Step 5: Recognize revenue when each performance obligation is satisfied.

Table of Contents

years, beginning after December 15, 2016. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”), which deferred the effective date of the new revenue standard for all entities by one year. We are currently assessing the potential impact of the new requirements under the standard.

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates, including those related to recoverability of intangibles and other long-lived assets, customer programs and incentives, allowance for doubtful accounts, inventories, warranties, valuation allowances for deferred tax assets, pensions and postretirement benefits and various other allowances and accruals. We base our estimates on historical experience, and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies are more fully described in Note 1 to the consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.”

We believe the following critical accounting policies contain some of the more significant judgments and estimates we use in the preparation of our consolidated financial statements.

Revenue Recognition. We primarily sell and distribute our products through two channels: direct sales from our manufacturing facilities to independent distributors and dealers and sales to contractors through our company-operated supply centers. Direct sales revenue is recognized when our manufacturing facility ships the product and title and risk of loss passes to the customer or when services have been rendered. Sales to contractors are recognized either when the contractor receives product directly from the supply center or when the supply center delivers the product to the contractor’s job site. For both direct sales to independent distributors and sales generated through our supply centers, revenue is not recognized until collectability is reasonably assured. A substantial portion of our sales is in the repair and remodel segment of the exterior residential building products industry. Therefore, vinyl windows are manufactured to specific measurement requirements received from our customers.

Revenues are recorded net of estimated returns, customer incentive programs and other incentive offerings including special pricing agreements, promotions and other volume-based incentives. Revisions to these estimates are charged to income in the period in which the facts that give rise to the revision become known. We collect sales, use, and value-added taxes that are imposed by governmental authorities on and concurrent with sales to our customers. Revenues are presented net of these taxes as the obligation is included in accrued liabilities until the taxes are remitted to the appropriate taxing authorities. For contracts involving installation, revenue recognition is dependent on the type of contract under which we are performing. For single-family residential contracts, revenue is recognized when the installation is complete. For multi-family residential or commercial contracts, revenue is recognized based on the percentage of completion method, in accordance with ASC Topic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. We measure percentage of completion by the percentage of labor costs incurred to date for each contract to the estimated total labor costs for such contract. Due to uncertainties inherent in the estimation process, contract costs incurred to date and expected completion costs are continuously monitored throughout the duration of the contract. If circumstances arise such as changes in job performance, job condition or anticipated contract settlement and it becomes necessary to revise completion cost, such revisions are recognized in the period in which they are determined. Provisions for the entirety of estimated losses of uncompleted contracts, if applicable, are made in the period in which such losses are determined. These factors influence management’s assessment of total contract value and the expected completion costs for the underlying contracts, thereby impacting the ultimate recognition of revenue. For each of the years ended January 2, 2016, January 3, 2015 and December 28, 2013, approximately 1% of our revenue was driven by multi-family residential or commercial contracts utilizing percentage of completion revenue recognition.

We offer certain sales incentives to customers who become eligible based on the volume of purchases made during the calendar year. The sales incentives programs are considered customer volume rebates, which are typically computed as a percentage of customer sales, and in certain instances the rebate percentage may increase as customers achieve sales hurdles. Volume rebates are recorded throughout the year based on management estimates of customers’ annual sales volumes and the expected annual rebate percentage achieved. For these programs, we do not receive an identifiable benefit in exchange for the consideration, and therefore, we characterize the volume rebate to the customer as a reduction of revenue in our Consolidated Statements of Comprehensive Loss.

Accounts Receivable. We record accounts receivable at selling prices which are fixed based on purchase orders or contractual arrangements. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of

Table of Contents

our customers to make required payments. The allowance for doubtful accounts is based on a review of the overall condition of accounts receivable balances and a review of significant past due accounts. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Account balances are charged off against the allowance for doubtful accounts after all means of collection have been exhausted and the recoverability is considered remote. Accounts receivable which are not expected to be collected within one year are reclassified as long-term accounts receivable. Long-term accounts receivable balances, net of the related allowance for doubtful accounts are included in “Other assets” in the Consolidated Balance Sheets.

Inventories. We value our inventories at the lower of cost (first-in, first-out) or market value. We write down our inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. Market value is estimated based on the inventories’ current replacement costs by purchase or production; however, market value shall not exceed net realizable value or be lower than net realizable value less normal profit margins. The market and net realizable values of inventory require estimates and judgments based on our historical write-down experience, anticipated write-downs based on future merchandising plans and consumer demand, seasonal considerations, current market conditions and expected industry trends. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. Our estimates of market value generally are not sensitive to management assumptions. Replacement costs and net realizable values are based on actual recent purchases and selling prices, respectively. We believe that our average days of inventory on hand indicate that market value declines are not a significant risk and that we do not maintain excess levels of inventory.

Goodwill and Other Intangible Assets. In accordance with FASB ASC Topic 350, Intangibles — Goodwill and Other, we evaluate the carrying value of our goodwill and other indefinite-lived intangible assets for potential impairment on an annual basis or an interim basis if there are indicators of potential impairment. As the consolidated entity represents the only component that constitutes a business for which discrete financial information is reviewed by our chief operating decision maker for the purpose of making decisions about resources to be allocated and assessing performance, we conclude that we have one reporting unit, which is the same as our single operating segment, and we perform our goodwill impairment assessment for our Company as a whole. The impairment test is conducted by management with the assistance of an independent valuation firm using an income approach. As we do not have a market for our equity, management performs the annual impairment analysis utilizing a discounted cash flow approach incorporating current estimates regarding performance and macroeconomic factors discounted at a weighted average cost of capital. We conduct our impairment test of goodwill and other indefinite-lived intangible assets annually, at the beginning of the fourth quarter of each year, or as indicators of potential impairment arise. The resulting fair value measures used in such impairment tests incorporate significant unobservable inputs, and as such, are considered Level 3 fair value measurements.

Assumptions used in our impairment evaluation, such as long-term sales growth rates, forecasted operating margins and our discount rate are based on the best available market information and are consistent with our internal forecasts and operating plans. Changes in these estimates or a decline in general economic condition could change our conclusion regarding an impairment of goodwill and potentially result in a non-cash impairment loss in a future period. We utilize a cash flow model in estimating the fair value of our reporting unit for the income approach, where the discount rate reflects a weighted average cost of capital rate. The cash flow model used to derive fair value is most sensitive to the discount rate, long-term sales growth rate and forecasted operating margin assumptions used. Our 2015 Step 1 impairment test indicated that the fair value of our enterprise exceeded carrying value by approximately 38% as of October 4, 2015. Consequently, no impairment charges were required as a result of the annual impairment test of goodwill. As of January 2, 2016, goodwill and intangible assets were $302.9 million and $398.0 million, respectively, and were associated with the Merger. Given the significant amount of goodwill and intangible assets that remain, any future impairment could have an adverse effect on our results of operations and financial position.

Income Taxes. We account for income taxes in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”). Income tax expense includes both current and deferred taxes. Deferred tax assets and liabilities may be recognized for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. ASC 740 requires deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. We review the recoverability of any tax assets recorded on the balance sheet and provide any necessary allowances as required. When an uncertain tax position meets the more-likely-than-not recognition threshold, the position is measured to determine the amount of expense and benefit to be recognized in our financial statements. No tax benefit is recognized in our financial statements for tax positions that do not meet the more-likely-than-not threshold. We recognize interest and penalties related to income taxes and uncertain tax positions within income tax expense. The effect of a change to the deferred tax assets or liabilities as a result of new tax law, including tax rate changes, is recognized in the period that the tax law is enacted.

Table of Contents

Product Warranty Costs. Consistent with industry practice, we provide homeowners with 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 seal failures for windows and fading and peeling for siding products, as well as manufacturing defects. We have various options for remedying product warranty claims including repair, refinishing or replacement of the defective product, the cost of which is directly absorbed by us. Warranties also become reduced under certain conditions of time and/or change in home ownership. Certain metal coating suppliers provide warranties on materials sold to us that mitigate the costs incurred by us. Reserves for future warranty costs are provided based on management’s estimates utilizing an actuarial calculation performed by an independent valuation firm that projects future remedy costs using historical data trends of claims incurred, claim payments, sales history of products to which such costs relate and other factors.

As a result of the Merger and the application of purchase accounting, we adjusted our warranty reserves to represent an estimate of the fair value of the liability as of the closing date of the Merger, which was based on an actuarial calculation performed by an independent valuation firm. The fair value of the expected future remedy costs related to products sold prior to the Merger was based on the actuarially determined estimates of expected future remedy costs and other factors and assumptions we believe market participants would use in valuing the warranty reserves. These other factors and assumptions included inputs for claims administration costs, confidence adjustments for uncertainty in the estimates of expected future remedy costs and a discount factor to arrive at the liability at the date of the Merger. The excess of the estimated fair value over the expected future remedy costs of $9.5 million, which was included in our warranty reserve at the date of the Merger, is being amortized as a reduction of warranty expense over the expected term such warranty claims will be satisfied. The remaining unamortized amount at January 2, 2016 is $5.5 million. The provision for warranties is reported within “Cost of sales” in the Consolidated Statements of Comprehensive Loss.

Pension and other postretirement benefit plans. The costs for these plans are determined from actuarial valuations. Inherent in these valuations are key assumptions including discount rates and expected return on plan assets. In selecting these assumptions, management considers current market conditions, including changes in interest rates and market returns on plan assets.

We used weighted average discount rates of 4.02% and 4.00% for the year ended January 2, 2016 to determine the net periodic pension costs for the domestic and foreign pension plans, respectively. A 100 basis point increase in the discount rate would increase 2016 net periodic pension costs for the domestic pension plans by $0.1 million and decrease net periodic pension costs for the foreign pension plans by $0.3 million. A 100 basis point decrease in the discount rate would increase 2016 net periodic pension costs by $0.8 million and $0.4 million for domestic and foreign plans, respectively.

We used weighted average long-term rate of return on assets of 6.70% and 5.60% for the year ended January 2, 2016 to determine the net periodic pension costs for the domestic and foreign pension plans, respectively. A 100 basis point increase in the long-term rate of return would decrease 2016 net periodic pension costs by $0.6 million and $0.7 million for the domestic and foreign pension plans, respectively. A 100 basis point decrease in the long-term rate of return would increase 2016 net periodic pension costs by $0.6 million and $0.7 million for the domestic and foreign pension plans, respectively.

Changes in the related pension benefit costs may occur in the future due to changes in assumptions.

FORWARD-LOOKING STATEMENTS

All statements (other than statements of historical facts) included in this report regarding the prospects of the industry and our 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 we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot provide any assurance that these expectations will prove to be correct. Such statements reflect the current views of our management with respect to our 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:


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


•	our substantial level of indebtedness;


•	our ability to comply with certain financial covenants in debt instruments and the restrictions such covenants impose on our ability to operate our business;

Table of Contents


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


•	our ability to generate sufficient cash, or access capital resources, to service all our debt obligations, working capital needs and planned capital expenditures;


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


•	our substantial fixed costs;


•	delays in the development of new or improved products or our inability to successfully develop new or improved products;


•	changes in raw material costs and availability of raw materials and finished goods;


•	consolidation of our customers;


•	increases in union organizing activity;


•	changes in weather conditions;


•	our history of operating losses;


•	our ability to attract and retain qualified personnel;


•	in the event of default under our debt instruments, the ability of creditors under our debt instruments to foreclose on our collateral;


•	any impairment of goodwill or other intangible assets;


•	future recognition of our deferred tax assets;


•	increases in mortgage rates, changes in mortgage interest deductions and the reduced availability of financing;


•	our exposure to foreign currency exchange risk;


•	our control by the H&F Investors; and


•	the other factors discussed under Part I, Item 1A. “Risk Factors” and elsewhere in this report.

The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. The forward-looking statements are based on our beliefs, assumptions and expectations of future performance, taking into account the information currently available to us. These statements are only predictions based upon our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Other sections of this report may include additional factors that could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time and it is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. The occurrence of the events described under the caption Item 1A. “Risk Factors” and elsewhere in this report could have a material adverse effect on our business, results of operations and financial condition.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this prospectus to conform these statements to actual results or to changes in our expectations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

From time to time, we may have outstanding borrowings under our ABL facilities and may incur additional borrowings for general corporate purposes, including working capital and capital expenditures. As of January 2, 2016, we had $92.8 million of borrowings outstanding under our ABL facilities. The effect of a 1.00% increase or decrease in interest rates would increase or decrease total interest expense by $0.9 million.

As of January 2, 2016, the interest rate applicable to outstanding loans under the U.S. and Canadian tranche A revolving facilities would be, at our option, equal to either a U.S. or Canadian adjusted base rate plus an applicable margin ranging from 0.75% to 1.25%, or LIBOR plus an applicable margin ranging from 1.75% to 2.25%, with the applicable margin in each case depending on our quarterly average “excess availability” as defined in the credit facilities.

We have $830.0 million aggregate principal amount of 9.125% notes outstanding as of January 2, 2016 that bear a fixed interest rate of 9.125% and mature in 2017. The fair value of our 9.125% notes is sensitive to changes in interest rates. In addition, the fair value is affected by our overall credit rating, which could be impacted by changes in our future operating

Table of Contents

results. These 9.125% notes have an estimated fair value of $576.4 million based on quoted market prices as of January 2, 2016.

FOREIGN CURRENCY EXCHANGE RATE RISK

Our revenues are generated primarily from domestic customers and are realized in U.S. dollars. However, we realize revenues from sales made through our Canadian distribution centers in Canadian dollars. Our 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. We may, from time to time, enter into foreign exchange forward contracts with maturities of less than three months to reduce our exposure to fluctuations in the Canadian dollar. We were a party to foreign exchange forward contracts for Canadian dollars, the value of which was immaterial at January 2, 2016.

We experienced foreign currency translation loss of $31.2 million, net of tax, for the year ended January 2, 2016, which was included within “Accumulated other comprehensive loss” in the Consolidated Balance Sheets. A 10% strengthening or weakening from the levels experienced during 2015 of the U.S. dollar relative to the Canadian dollar would have resulted in an approximate $10 million decrease or increase, respectively, in net loss for the year ended January 2, 2016.

COMMODITY PRICE RISK

See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Effects of Inflation” for a discussion of the market risk related to our principal raw materials (vinyl resin, aluminum, steel, resin stabilizers and pigments, glass, window hardware and packaging materials) and diesel fuel.

Table of Contents

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ASSOCIATED MATERIALS, LLC

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



	Page

Report of Independent Registered Public Accounting Firm	44

Consolidated Balance Sheets	45

As of January 2, 2016 and January 3, 2015

Consolidated Statements of Comprehensive Loss	46

Years Ended January 2, 2016, January 3, 2015 and December 28, 2013

Consolidated Statements of Member’s Equity (Deficit)	47

Years Ended January 2, 2016, January 3, 2015 and December 28, 2013

Consolidated Statements of Cash Flows	48

Years Ended January 2, 2016, January 3, 2015 and December 28, 2013

Notes to Consolidated Financial Statements	49

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of

Associated Materials, LLC

We have audited the accompanying consolidated balance sheets of Associated Materials, LLC and subsidiaries (the “Company”) as of January 2, 2016 and January 3, 2015, and the related consolidated statements of comprehensive loss, member’s equity (deficit), and cash flows for each of the three years in the period ended January 2, 2016. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 2, 2016 and January 3, 2015, and the results of its operations and its cash flows for each of the three years in the period ended January 2, 2016, in conformity with accounting principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP

Cleveland, Ohio

March 22, 2016

Table of Contents

ASSOCIATED MATERIALS, LLC

CONSOLIDATED BALANCE SHEETS

(In thousands)



	January 2, 2016			January 3, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	9,394		$	5,963
Accounts receivable, net	127,043			125,121
Inventories	123,374			145,532
Income taxes receivable	1,612			144
Deferred income taxes	1,502			2,439
Prepaid expenses and other current assets	14,163			15,859
Total current assets	277,088			295,058
Property, plant and equipment, net	90,794			93,900
Goodwill	302,908			317,257
Other intangible assets, net	397,953			437,300
Other assets	13,270			18,662
Total assets	$	1,082,013		$	1,162,177

LIABILITIES AND MEMBER’S DEFICIT
Current liabilities:
Accounts payable	$	91,563		$	94,768
Accrued liabilities	83,630			81,734
Deferred income taxes	436			1,292
Income taxes payable	36			1,782
Total current liabilities	175,665			179,576
Deferred income taxes	82,102			88,330
Other liabilities	113,123			129,016
Long-term debt	925,484			903,404
Commitments and contingencies
Member’s deficit:
Membership interest	556,011			555,827
Accumulated other comprehensive loss	(86,907		)	(60,623		)
Accumulated deficit	(683,465		)	(633,353		)
Total member’s deficit	(214,361		)	(138,149		)
Total liabilities and member’s deficit	$	1,082,013		$	1,162,177

See accompanying notes to consolidated financial statements.

Table of Contents

ASSOCIATED MATERIALS, LLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)



	Years Ended
	January 2, 2016			January 3, 2015			December 28, 2013
Net sales	$	1,184,969		$	1,186,973		$	1,169,598
Cost of sales	908,775			943,419			887,798
Gross profit	276,194			243,554			281,800
Selling, general and administrative expenses	239,790			247,614			232,281
Impairment of goodwill	—			144,159			—
Impairment of other intangible assets	—			89,687			—
Restructuring costs	1,837			(331		)	—
Income (loss) from operations	34,567			(237,575		)	49,519
Interest expense	83,494			82,527			79,751
Foreign currency loss	1,878			788			754
Loss before income taxes	(50,805		)	(320,890		)	(30,986		)
Income tax (benefit) expense	(693		)	(27,201		)	2,507
Net loss	$	(50,112	)	$	(293,689	)	$	(33,493	)
Other comprehensive income (loss):
Pension and other postretirement benefit adjustments, net of tax	4,880			(20,268		)	19,774
Foreign currency translation adjustments, net of tax	(31,164		)	(22,439		)	(20,443		)
Total comprehensive loss	$	(76,396	)	$	(336,396	)	$	(34,162	)

See accompanying notes to consolidated financial statements.

Table of Contents

ASSOCIATED MATERIALS, LLC

CONSOLIDATED STATEMENTS OF MEMBER’S EQUITY (DEFICIT)

(In thousands)



	Membership Interest		Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Member’s Equity (Deficit)
Balance at December 29, 2012	$	554,473	$	(17,247	)	$	(306,171	)	$	231,055
Net loss	—		—			(33,493		)	(33,493		)
Other comprehensive loss	—		(669		)	—			(669		)
Equity contribution from parent	742		—			—			742
Stock-based compensation expense	155		—			—			155
Balance at December 28, 2013	555,370		(17,916		)	(339,664		)	197,790
Net loss	—		—			(293,689		)	(293,689		)
Other comprehensive loss	—		(42,707		)	—			(42,707		)
Stock-based compensation expense	457		—			—			457
Balance at January 3, 2015	555,827		(60,623		)	(633,353		)	(138,149		)
Net loss	—		—			(50,112		)	(50,112		)
Other comprehensive loss	—		(26,284		)	—			(26,284		)
Stock-based compensation expense	184		—			—			184
Balance at January 2, 2016	$	556,011	$	(86,907	)	$	(683,465	)	$	(214,361	)

See accompanying notes to consolidated financial statements.

Table of Contents

ASSOCIATED MATERIALS, LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



	Years Ended
	January 2, 2016			January 3, 2015			December 28, 2013
OPERATING ACTIVITIES
Net loss	$	(50,112	)	$	(293,689	)	$	(33,493	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	39,879			42,744			43,041
Deferred income taxes	(2,231		)	(31,201		)	(1,503		)
Impairment of goodwill and other intangible assets	—			233,846			—
Non-cash portion of restructuring costs	3,513			—			—
Provision for losses on accounts receivable	1,008			2,138			1,122
(Gain) loss on sale or disposal of assets	(37		)	(42		)	130
Amortization of deferred financing costs and premium on senior notes	3,575			3,719			4,451
Stock-based compensation expense and other non-cash charges	184			457			161
Changes in operating assets and liabilities:
Accounts receivable	(7,200		)	(4,863		)	(7,142		)
Inventories	14,168			(15,309		)	(17,696		)
Prepaid expenses	1,483			(5,184		)	(2,307		)
Accounts payable	1,430			731			24,262
Accrued liabilities	2,166			4,406			3,529
Income taxes receivable/payable	(2,866		)	555			(1,716		)
Other assets	298			1,025			(2,185		)
Other liabilities	(8,681		)	(10,298		)	(10,401		)
Net cash (used in) provided by operating activities	(3,423		)	(70,965		)	253
INVESTING ACTIVITIES
Capital expenditures	(16,573		)	(12,852		)	(11,702		)
Proceeds from the sale of assets	152			19			60
Supply center acquisition	—			—			(348		)
Net cash used in investing activities	(16,421		)	(12,833		)	(11,990		)
FINANCING ACTIVITIES
Borrowings under ABL facilities	187,331			240,222			148,861
Payments under ABL facilities	(163,953		)	(170,810		)	(226,861		)
Equity contribution from parent	—			—			742
Issuance of senior secured notes	—			—			106,000
Financing costs	—			—			(5,549		)
Net cash provided by financing activities	23,378			69,412			23,193
Effect of exchange rate changes on cash and cash equivalents	(103		)	(466		)	(235		)
Increase (decrease) in cash and cash equivalents	3,431			(14,852		)	11,221
Cash and cash equivalents at beginning of the year	5,963			20,815			9,594
Cash and cash equivalents at end of the year	$	9,394		$	5,963		$	20,815

Supplemental Information:
Cash paid for interest	$	80,023		$	78,322		$	74,043
Cash paid for income taxes	$	4,408		$	4,224		$	4,685

See accompanying notes to consolidated financial statements.

Table of Contents

ASSOCIATED MATERIALS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES

NATURE OF OPERATIONS

Associated Materials, LLC (the “Company”) was founded in 1947 when it first introduced residential aluminum siding under the Alside^® name. The Company today is a leading, vertically integrated manufacturer and distributor of exterior residential building products in the United States (“U.S.”) and Canada. The Company provides a comprehensive offering of exterior building products, including vinyl windows, vinyl siding, vinyl railing and fencing, aluminum trim coil, aluminum and steel siding and related accessories, which are produced at the Company’s 11 manufacturing facilities. The Company also sells complementary products that it sources from a network of manufacturers, such as roofing materials, cladding materials, insulation, exterior doors, equipment and tools. The Company also provides installation services. The Company distributes these products through its extensive dual-distribution network to over 50,000 professional exterior contractors, builders and dealers, whom the Company refers to as its “contractor customers.” This dual-distribution network consists of 122 company-operated supply centers, through which the Company sells directly to its contractor customers, and its direct sales channel, through which the Company sells to more than 260 independent distributors, dealers and national account customers.

BASIS OF PRESENTATION

On October 13, 2010, AMH Holdings II, Inc. (“AMH II”), the then indirect parent company of the Company, completed its merger (the “Acquisition Merger”) with Carey Acquisition Corp. (“Merger Sub”), pursuant to the terms of the Agreement and Plan of Merger, dated as of September 8, 2010 (“Merger Agreement”), among Carey Investment Holdings Corp. (now known as Associated Materials Group, Inc.) (“Parent”), Carey Intermediate Holdings Corp. (now known as Associated Materials Incorporated), a 100% owned direct subsidiary of Parent (“Holdings”), Merger Sub, a wholly-owned direct subsidiary of Holdings, and AMH II, with AMH II surviving such merger as a wholly-owned direct subsidiary of Holdings. After a series of additional mergers (together with the Acquisition Merger, the “Merger”), AMH II merged with and into the Company, with the Company surviving such merger as a wholly-owned direct subsidiary of Holdings. As a result of the Merger, the Company is now an indirect wholly-owned subsidiary of Parent. Holdings and Parent do not have material assets or operations other than their direct and indirect ownership, respectively, of the membership interest of the Company. Approximately 96% of the capital stock of Parent is owned by investment funds affiliated with Hellman & Friedman LLC (such investment funds, the “H&F Investors”).

The Company operates on a 52/53 week fiscal year that ends on the Saturday closest to December 31st. Its 2015 and 2013 fiscal years ended on January 2, 2016 and December 28, 2013, respectively, and included 52 weeks of operations. Its 2014 fiscal year ended on January 3, 2015 and included 53 weeks of operations, with the additional week recorded in the fourth quarter of fiscal 2014.

Certain items previously reported in specific financial statement captions have been reclassified to conform to the fiscal 2015 presentation.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances are eliminated in consolidation.

USE OF ESTIMATES

The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, the Company evaluates its estimates, including those related to recoverability of intangibles and other long-lived assets, customer programs and incentives, allowance for doubtful accounts, inventories, warranties, valuation allowances for deferred tax assets, pensions and postretirement benefits and various other allowances and accruals. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

REVENUE RECOGNITION

Table of Contents

The Company primarily sells and distributes its products through two channels: direct sales from its manufacturing facilities to independent distributors and dealers and sales to contractors through its company-operated supply centers. Direct sales revenue is recognized when the Company’s manufacturing facility ships the product and title and risk of loss passes to the customer or when services have been rendered. Sales to contractors are recognized either when the contractor receives product directly from the supply center or when the supply center delivers the product to the contractor’s job site. For both direct sales to independent distributors and dealers and sales generated from the Company’s supply centers, revenue is not recognized until collectability is reasonably assured. A substantial portion of the Company’s sales is in the repair and remodel segment of the exterior residential building products industry. Therefore, vinyl windows are manufactured to specific measurement requirements received from the Company’s customers. Sales to one customer and its licensees represented approximately 14% of net sales in each of 2015 and 2014 and approximately 13% of total net sales in 2013.

Revenues are recorded net of estimated returns, customer incentive programs and other incentive offerings including special pricing agreements, promotions and other volume-based incentives. Revisions to these estimates are charged to income in the period in which the facts that give rise to the revision become known. The Company collects sales, use, and value-added taxes that are imposed by governmental authorities on and concurrent with sales to the Company’s customers. Revenues are presented net of these taxes as the obligation is included in accrued liabilities until the taxes are remitted to the appropriate taxing authorities. For contracts involving installation, revenue recognition is dependent on the type of contract under which the Company is performing. For single-family residential contracts, revenue is recognized when the installation is complete. For multi-family residential or commercial contracts, revenue is recognized based on the percentage of completion method, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The Company measures percentage-of-completion by the percentage of labor costs incurred to date for each contract to the estimated total labor costs for such contract. Due to uncertainties inherent in the estimation process, contract costs incurred to date and expected completion costs are continuously monitored throughout the duration of the contract. If circumstances arise such as changes in job performance, job condition or anticipated contract settlement and it becomes necessary to revise completion cost, such revisions are recognized in the period in which they are determined. Provisions for the entirety of estimated losses of uncompleted contracts, if applicable, are made in the period in which such losses are determined. These factors influence management’s assessment of total contract value and the expected completion costs for the underlying contracts, thereby impacting the Company’s ultimate recognition of revenue.

The Company offers certain sales incentives to customers who become eligible based on the volume of purchases made during the calendar year. The sales incentive programs are considered customer volume rebates, which are typically computed as a percentage of customer sales, and in certain instances the rebate percentage may increase as customers achieve sales hurdles. Volume rebates are accrued throughout the year based on management estimates of customers’ annual sales volumes and the expected annual rebate percentage achieved. For these programs, the Company does not receive an identifiable benefit in exchange for the consideration, and therefore, the Company characterizes the volume rebate to the customer as a reduction of revenue in the Company’s Consolidated Statements of Comprehensive Loss.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

ACCOUNTS RECEIVABLE

The Company records accounts receivable at selling prices which are fixed based on purchase orders or contractual arrangements. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The allowance for doubtful accounts is based on a review of the overall condition of accounts receivable balances and a review of significant past due accounts. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Account balances are charged off against the allowance for doubtful accounts after all means of collection have been exhausted and the recoverability is considered remote. Accounts receivable that are not expected to be collected within one year are reclassified as long-term accounts receivable. Long-term accounts receivable balances, net of the related allowance for doubtful accounts are included in “Other assets” in the Consolidated Balance Sheets. See Note 3 for further information.

INVENTORIES

Inventories are valued at the lower of cost (first-in, first-out) or market. The Company writes down its inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. Fixed manufacturing overhead is allocated based on normal production capacity and abnormal manufacturing costs are recognized as period costs. See Note 4 for further information.

Table of Contents

PROPERTY, PLANT AND EQUIPMENT

Additions to property, plant and equipment are stated at cost. The costs of maintenance and repairs to property, plant and equipment are charged to operations in the period incurred. Depreciation is computed by the straight-line method over the estimated useful lives of the assets. The estimated useful lives are approximately 20 to 30 years for buildings and improvements and 3 to 15 years for machinery and equipment. Leasehold improvements are amortized over the lesser of the lease term or the estimated life of the leasehold improvement.

Property, plant and equipment are reviewed for impairment in accordance with FASB ASC Topic 360, Property, Plant, and Equipment. The Company also reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to undiscounted future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. In the event that assets are held for sale, depreciation is discontinued and such assets are reported at the lower of the carrying amount or fair value, less costs to sell. See Note 5 for further information.

GOODWILL AND OTHER INTANGIBLE ASSETS WITH INDEFINITE LIVES

In accordance with FASB ASC Topic 350, Intangibles — Goodwill and Other, the Company evaluates the carrying value of its goodwill and other indefinite-lived intangible assets for potential impairment on an annual basis or an interim basis if there are indicators of potential impairment. As the consolidated entity represents the only component that constitutes a business for which discrete financial information is reviewed by the Company’s chief operating decision maker for the purpose of making decisions about resources to be allocated and assessing performance, the Company concludes that it has one reporting unit, which is the same as its single operating segment, and the Company performs its goodwill impairment assessment for the Company as a whole. The impairment test is conducted by management with the assistance of an independent valuation firm using an income approach. As the Company does not have a market for its equity, management performs the annual impairment analysis utilizing a discounted cash flow approach incorporating current estimates regarding performance and macroeconomic factors discounted at a weighted average cost of capital. The Company conducts its impairment test of its goodwill and other indefinite-lived intangible assets annually, at the beginning of the fourth quarter of each year, or as indicators of potential impairment arise. The resulting fair value measures used in such impairment tests incorporate significant unobservable inputs, and as such, are considered Level 3 fair value measurements. See Note 6 for further information.

PRODUCT WARRANTY COSTS

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 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 of the defective product, the cost of which is directly absorbed by the Company. Warranties also become reduced under certain conditions of time and/or change in home 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 utilizing an actuarial calculation performed by an independent valuation firm that projects future remedy costs using historical data trends of claims incurred, claim payments, sales history of products to which such costs relate and other factors. See Note 9 for further information.

INCOME TAXES

The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes (“ASC 740”). Income tax expense includes both current and deferred taxes. Deferred tax assets and liabilities may be recognized for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. ASC 740 requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company reviews the recoverability of any tax assets recorded on the balance sheet and provides any necessary allowances as required. When an uncertain tax position meets the more-likely-than-not recognition threshold, the position is measured to determine the amount of expense and benefit to be recognized in the financial statements. No tax benefit is recognized in the financial statements for tax positions that do not meet the more-likely-than-not threshold. The Company recognizes interest and penalties related to income taxes and uncertain tax positions within income tax expense. The effect of a change to the deferred tax assets or liabilities as a result of new tax law, including tax rate changes, is recognized in the period that the tax law is enacted. See Note 12 for further information.

Table of Contents

DERIVATIVES AND HEDGING ACTIVITIES

In accordance with FASB ASC Topic 815, Derivatives and Hedging, all of the Company’s derivative instruments are recognized on the balance sheet at their fair value. The Company uses techniques designed to mitigate the short-term effect of exchange rate fluctuations of the Canadian dollar on its operations by entering into foreign exchange forward contracts. The Company does not speculate in foreign currencies or derivative financial instruments. Gains or losses on foreign exchange forward contracts are recorded within foreign currency (gain) loss in the accompanying Consolidated Statements of Comprehensive Loss. At January 2, 2016, the Company was a party to foreign exchange forward contracts for Canadian dollars, the value of which was immaterial at such date.

STOCK PLANS

The Company accounts for equity-based payments to employees and directors, including grants of restricted stock and restricted stock unit awards, in accordance with FASB ASC Topic 718, Compensation — Stock Compensation (“ASC 718”), which requires that equity-based payments (to the extent they are compensatory) be measured and recognized in the Company’s Consolidated Statements of Comprehensive Loss using a fair value method. See Note 14 for further information.

PENSIONS

Pension costs are developed from actuarial valuations. Inherent in these valuations are key assumptions including discount rates and expected return on plan assets. In selecting these assumptions, management considers current market conditions, including changes in interest rates and market returns on plan assets. Changes in the related pension benefit costs may occur in the future due to changes in assumptions. See Note 15 for further information.

LEASE OBLIGATIONS

Lease expense for operating leases that have escalating rentals over the term of the lease is recorded on a straight-line basis over the life of the lease, which commences on the date the Company has the right to control the property. The cumulative expense recognized on a straight-line basis in excess of the cumulative payments is included in “Accrued liabilities” and “Other liabilities” in the Consolidated Balance Sheets. Capital improvements that may be required to make a building suitable for the Company’s use are incurred by the landlords and are made prior to the Company having control of the property (lease commencement date) and are therefore incorporated into the determination of the lease rental rate. See Note 16 for further information.

In connection with the Merger and the application of purchase accounting, the Company evaluated its operating leases and recorded adjustments to reflect the fair market values of its operating leases. As a result, a favorable lease asset of $0.8 million and an unfavorable lease liability of $5.0 million were recorded based on the then current market analysis. The favorable lease asset and unfavorable lease liability are being amortized over the related remaining lease terms and are reported within cost of sales and selling, general and administrative expenses (“SG&A”) in the Consolidated Statements of Comprehensive Loss beginning October 13, 2010. The unamortized balances as of January 2, 2016 for the lease asset and lease liability were $0.1 million and $2.2 million, respectively.

LITIGATION EXPENSES

The Company is involved in certain legal proceedings. The Company recognizes litigation related expenses in the period in which the litigation services are provided. See Note 17 for further information.

COST OF SALES AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

For products manufactured by the Company, cost of sales includes the cost of purchasing raw materials, net of vendor rebates, payroll and benefit costs for direct and indirect labor incurred at the Company’s manufacturing locations including purchasing, receiving and inspection, inbound freight charges, freight charges to deliver product to the Company’s supply centers, and freight charges to deliver product to the Company’s independent distributor and dealer customers. It also includes all variable and fixed costs incurred to operate and maintain the manufacturing locations and machinery and equipment, such as lease costs, repairs and maintenance, utilities and depreciation. For third-party manufactured products, which are sold through the Company’s supply centers, cost of sales includes the cost to purchase product, net of vendor rebates, as well as inbound freight charges.

SG&A expenses include payroll and benefit costs including incentives and commissions of its supply center employees, corporate employees and sales representatives, building lease costs of its supply centers, delivery vehicle costs and other delivery charges incurred to deliver product from its supply centers to its contractor customers, sales vehicle costs, marketing

Table of Contents

costs, customer sales rewards, other administrative expenses such as supplies, legal, accounting, consulting, travel and entertainment as well as all other costs to operate its supply centers and corporate office. The customer sales rewards programs offer customers the ability to earn points based on purchases, which can be redeemed for products or services procured through independent third-party suppliers. The costs of the rewards programs are recorded as earned throughout the year based on estimated payouts under the program. Total customer rewards costs reported as a component of SG&A expense totaled $2.5 million, $3.9 million and $3.8 million for the years ended January 2, 2016, January 3, 2015 and December 28, 2013, respectively. Shipping and handling costs included in SG&A expense totaled $31.1 million, $31.6 million and $30.8 million for the years ended January 2, 2016, January 3, 2015 and December 28, 2013, respectively.

Research and development activities are principally related to new product development and are reported within cost of sales and SG&A expenses in the Consolidated Statements of Comprehensive Loss. For the year ended December 28, 2013, the Company incurred expenses of $4.0 million for research and development activities related to the new window platform that was launched in January 2014. Costs related to research and development were immaterial for the years ended January 2, 2016 and January 3, 2015.

MARKETING AND ADVERTISING

Marketing and advertising costs are generally expensed as incurred. Marketing and advertising expense was $9.0 million, $11.6 million and $8.8 million for the years ended January 2, 2016, January 3, 2015 and December 28, 2013, respectively.

FOREIGN CURRENCY TRANSLATION

The financial position and results of operations of the Company’s Canadian subsidiary are measured using Canadian dollars as the functional currency. Assets and liabilities of the subsidiary are translated into U.S. dollars at the exchange rate in effect at each reporting period end. Income statement and cash flow amounts are translated into U.S. dollars at the average exchange rates prevailing during the year. Translation adjustments arising from the use of different exchange rates from period to period are reflected as a component of member’s deficit within accumulated other comprehensive loss. Gains and losses arising from transactions denominated in a currency other than Canadian dollars occurring in the Company’s Canadian subsidiary are included in “Foreign currency gain (loss)” in the Company’s Consolidated Statements of Comprehensive Loss.

RECENT ACCOUNTING PRONOUNCEMENTS

In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). The core principal of ASU 2016-02 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from the previous guidance within Accounting Standards Codification Topic 840, Leases. For operating leases, a lessee is required to do the following: (1) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position, (2) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis and (3) classify all cash payments within operating activities in the statement of cash flows. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. It is effective for public entities for fiscal years and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, which includes a number of optional practical expedients that entities may elect to apply. The Company is currently assessing the potential impact of the new requirements under the standard.

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”). ASU 2015-17 simplifies the presentation of deferred income taxes by requiring that all deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. ASU 2015-17 applies to all entities that present a classified statement of financial position and may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. It is effective for public entities for fiscal years and interim periods within those years, beginning after December 15, 2016, with early adoption permitted. The Company does not believe that the adoption of the provisions of ASU 2015-17 will have a material impact on its consolidated financial position, results of operations or cash flows.

Table of Contents

guidance. ASU 2015-11 applies only to inventories for which cost is determined by methods other than last-in first-out and the retail inventory method. It is effective for public entities for fiscal years and interim periods within those years, beginning after December 15, 2016. The Company does not believe that the adoption of the provisions of ASU 2015-11 will have a material impact on its consolidated financial position, results of operations or cash flows.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability rather than an asset, consistent with the presentation of debt discounts. The recognition and measurement of debt issuance costs are not affected by the new guidance. ASU 2015-03 is effective for public entities for fiscal years and interim periods within those years, beginning after December 15, 2015. An entity is required to apply ASU 2015-03 on a retrospective basis and comply with the applicable disclosures, which include the nature of and reason for the change in accounting principle, the transition method, a description of the prior-period information that has been retrospectively adjusted, and the effect of the change on the financial statement line items (that is, the debt issuance cost asset and the debt liability). In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (“ASU 2015-15”). ASU 2015-15 provides that, given the absence of authoritative guidance in ASU 2015-03 with respect to presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements, an entity is permitted to defer and present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company does not believe that the adoption of the provisions of either ASU 2015-03 or ASU 2015-15 will have a material impact on its consolidated financial position, results of operations or cash flows.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 requires management to evaluate, in connection with preparing financial statements for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued and to provide certain disclosures if it concludes that substantial doubt exists. ASU 2014-15 is effective for all entities for the annual period ending after December 15, 2016, and for annual and interim periods thereafter, with early adoption permitted. The Company does not believe that the adoption of the provisions of ASU 2014-15 will have a material impact on its consolidated financial position, results of operations or cash flows.

Step 1: Identify the contract(s) with the customer,

Step 2: Identify the separate performance obligations in the contract,

Step 3: Determine the transaction price,

Step 4: Allocate the transaction price to the separate performance obligations, and

Step 5: Recognize revenue when each performance obligation is satisfied.

The new standard also requires significantly more interim and annual disclosures. The new standard allows for either full retrospective or modified retrospective adoption. ASU 2014-09 is effective for fiscal years and interim periods within those years, beginning after December 15, 2016. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of the new revenue standard for all entities by one year. The Company is currently assessing the potential impact of the new requirements under the standard.

2. RELATED PARTIES

HUB International

The Company incurred costs of $0.1 million in each of the years ended January 2, 2016 and January 3, 2015, in connection with consulting services provided by HUB International Midwest Limited, a portfolio company of H&F Investors, for placement and/or servicing of certain portions of the Company’s insurance coverage, costs of which are included in SG&A for each of the years then ended.

Relocation Arrangements with Certain Executive Officers

Table of Contents

During the year ended December 28, 2013, pursuant to the employment and relocation agreements with Jerry W. Burris, the Company’s former Chief Executive Officer and President, and Paul Morrisroe, the Company’s former Chief Financial Officer, the Company paid Mr. Burris and Mr. Morrisroe make-whole payments of $0.8 million and $0.1 million, respectively, to compensate each executive for the loss recognized on the sale of their respective residences.

3. ALLOWANCE FOR DOUBTFUL ACCOUNTS

Changes in the allowance for doubtful accounts on accounts receivable are as follows (in thousands):



	January 2, 2016			January 3, 2015			December 28, 2013
Balance at beginning of year	$	8,091		$	8,692		$	9,171
Provision for losses	1,008			2,138			1,122
Losses sustained (net of recoveries)	(1,494		)	(2,739		)	(1,601		)
Balance at end of year	$	7,605		$	8,091		$	8,692

Allowance for doubtful accounts on accounts receivable consists of (in thousands):



	January 2, 2016		January 3, 2015
Allowance for doubtful accounts, current	$	3,204	$	3,542
Allowance for doubtful accounts, non-current	4,401		4,549
	$	7,605	$	8,091

4. INVENTORIES

Inventories consist of (in thousands):



	January 2, 2016		January 3, 2015
Raw materials	$	31,024	$	29,300
Work in process	10,900		16,442
Finished goods	81,450		99,790
	$	123,374	$	145,532

5. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of (in thousands):



	January 2, 2016		January 3, 2015
Land	$	11,951	$	13,461
Buildings	38,928		39,674
Machinery and equipment	134,294		120,945
Construction in progress	1,322		3,934
	186,495		178,014
Less accumulated depreciation	95,701		84,114
	$	90,794	$	93,900

Depreciation expense was $14.9 million, $17.1 million and $17.0 million for the years ended January 2, 2016, January 3, 2015 and December 28, 2013, respectively.

During 2015, the Company acquired assets totaling $0.5 million that remain unpaid as of January 2, 2016. During 2014, the Company acquired assets totaling $0.7 million that remain unpaid as of January 3, 2015. Consequently, these amounts are reflected as non-cash investing activities on the Consolidated Statements of Cash Flows. Construction in progress as of January 2, 2016 consisted of a variety of capital improvement projects initiated primarily at the Company’s window plants, whereas the balance at January 3, 2015 represented the remainder of the investment in the new window platform, which was first launched on the East Coast in early 2014, and continued to be rolled out on the West Coast for the duration of year.

Table of Contents

6. GOODWILL AND OTHER INTANGIBLE ASSETS

In accordance with FASB ASC 350, the Company is required to evaluate the carrying value of its goodwill for potential impairment on an annual basis at the beginning of the fourth quarter, or on an interim basis if there are indicators of potential impairment. The impairment test is conducted with the assistance of an independent valuation firm using an income approach. As there is currently no market for the Company’s equity, management performs the impairment analysis utilizing a discounted cash flow approach that incorporates current estimates regarding performance and macroeconomic factors, discounted at a weighted average cost of capital. During 2015 the Company completed the annual impairment test as of the beginning of the fourth quarter, and based on the results of the testing, no impairment charges were recorded.

During the first half of 2014, the Company experienced a decline in operating results primarily due to unfavorable weather conditions, weaker growth in the repair and remodeling market and incremental costs associated with the launch of its new window platform. Management initially believed that the impact of some of these conditions could be quickly remedied. However, since lower-than-expected operating results continued throughout the third quarter, the Company determined that an indicator of potential impairment existed and it was more likely than not that its indefinite-lived intangible assets were impaired. It therefore, performed interim impairment testing as of August 31, 2014.

The Company completed step one of its goodwill impairment testing with the assistance of an independent valuation firm and determined that the fair value of its single reporting unit was lower than its carrying value. This required the Company to proceed to step two of its impairment analysis. Based on preliminary calculations, the Company recorded an estimated goodwill impairment loss of $148.5 million during the quarter ended September 27, 2014. During the fourth quarter, the Company finalized step two of the impairment analysis and reduced the impairment charge by $4.3 million, for a final impairment charge of $144.2 million. The goodwill impairment charge is a non-cash item and does not affect the calculation of the borrowing base or financial covenants in the Company’s credit agreement. There is no tax benefit associated with this non-cash charge.

In addition to the interim impairment testing of goodwill, the Company conducted its annual impairment testing as of beginning of the fourth quarter of 2014. No impairment charges were recorded as the fair value of its reporting unit was higher than its carrying value.

The changes in the carrying amount of goodwill are as follows (in thousands):



	Goodwill
Balance at December 28, 2013	$	471,791
Impairment	(144,159		)
Foreign currency translation	(10,375		)
Balance at January 3, 2015	317,257
Foreign currency translation	(14,349		)
Balance at January 2, 2016	$	302,908

At January 2, 2016 and January 3, 2015 accumulated goodwill impairment losses were $228.5 million exclusive of foreign currency translation.

The Company’s other intangible assets consist of the following (in thousands):



	January 2, 2016						January 3, 2015
	Cost		Accumulated Amortization		Net Carrying Value		Cost		Accumulated Amortization		Net Carrying Value
Amortized customer bases	$	313,821	$	128,230	$	185,591	$	321,836	$	106,655	$	215,181
Amortized non-compete agreements	20		19		1		20		16		4
Total amortized intangible assets	313,841		128,249		185,592		321,856		106,671		215,185
Non-amortized trade names (1)	212,361		—		212,361		222,115		—		222,115
Total intangible assets	$	526,202	$	128,249	$	397,953	$	543,971	$	106,671	$	437,300


(1)	Balances at January 2, 2016 and January 3, 2015 include impairment charges of $169.6 million, of which $89.7 million were recorded in 2014 and $79.9 million were recorded in 2011, respectively.

The Company’s non-amortized intangible assets consist of the Alside^®, Revere^®, Gentek^®, Preservation^® and Alpine^® trade names and are subject to testing for impairment on an annual basis at the beginning of the fourth quarter, or an interim

Table of Contents

basis if indicators of potential impairment are present. During 2015, the Company completed the annual impairment test of intangible assets with indefinite lives as of the beginning of the fourth quarter and based on the results of the testing, no impairment charges were recorded.

During 2014, as noted above, management determined that an indicator of potential impairment existed for the non-amortized trade names as of August 31, 2014 and completed an interim test of the fair value with the assistance of an independent valuation firm. Using the income approach, the Company determined that the fair value of certain non-amortized trade names was lower than the carrying value, and consequently, the Company recorded an impairment charge of $89.7 million during the quarter ended September 27, 2014. In addition to the interim impairment testing of other intangible assets, the Company completed the annual impairment at the beginning of the fourth quarter of 2014 and based on the results of the testing, no additional impairment charges were recorded.

Finite lived intangible assets, which consist of customer bases and non-compete agreements, are amortized on a straight-line basis over their estimated useful lives. The estimated average amortization period for customer bases and non-compete agreements is 13 years and 3 years, respectively. Amortization expense related to other intangible assets was $25.0 million, $25.7 million and $26.0 million for the years ended January 2, 2016, January 3, 2015 and December 28, 2013, respectively. Amortization expense is estimated to be approximately $25 million per year for fiscal years 2016, 2017, 2018, 2019 and 2020.

7. ACCRUED AND OTHER LIABILITIES

Accrued liabilities consist of (in thousands):



	January 2, 2016		January 3, 2015
Employee compensation	$	16,473	$	11,355
Sales promotions and incentives	21,512		25,786
Warranty reserves	9,239		9,312
Employee benefits	8,037		8,828
Interest	13,286		13,393
Taxes other than income taxes	2,885		3,220
Other	12,198		9,840
	$	83,630	$	81,734

Other liabilities consist of (in thousands):



	January 2, 2016		January 3, 2015
Pensions and other postretirement plans	$	29,262	$	40,138
Warranty reserves	75,873		80,628
Other	7,988		8,250
	$	113,123	$	129,016

8. RESTRUCTURING COSTS

U.S. Distribution and Corporate Functions

During the third quarter of 2015, the Company announced a restructuring plan focused on realigning certain costs within its U.S. distribution business and select corporate functions. The restructuring plan included the closure of four underperforming company-operated supply centers in the U.S. and the elimination of its roofing product offering in eleven U.S. supply centers. As a result, the Company recorded restructuring costs of $4.5 million, which reflects a cash charge of $2.2 million and a non-cash charge of $2.3 million. The cash charge relates to early lease termination costs and severance for workforce reductions of $1.4 million and $0.5 million, respectively. Of the total non-cash charge of $2.3 million, $2.2 million is related to the write-down of roofing inventory in certain markets. Approximately $0.6 million of cash payments will be made in 2016 in connection with the restructuring plan, primarily related to equipment lease termination fees and employee severance. In the Condensed Consolidated Statements of Comprehensive Loss, the portion of the restructuring charge related to the $2.2 million write-down of roofing inventory is included in “Cost of sales,” while the remaining portion is included in “Restructuring costs.”

Table of Contents

Manufacturing

The Company discontinued its use of the warehouse facility adjacent to the Ennis manufacturing plant during the second quarter of 2009 and recorded a restructuring liability related to the discontinued use of the warehouse facility. During 2015, the Company re-measured its restructuring liability due to a change in the expected amount of sublease income to be collected over the remaining lease term. A similar re-measurement occurred during 2014 due to a change in the amount and timing of cash flows related to taxes and insurance over the lease term. Consequently, the Company decreased the restructuring liability and recognized a benefit of $0.4 million and $0.3 million, for the years ended January 2, 2016 and January 3, 2015, respectively, which is included within “Restructuring costs” in the Consolidated Statements of Comprehensive Loss.

Changes in the restructuring liability for the years ended January 2, 2016, January 3, 2015 and December 28, 2013 are as follows (in thousands):



	January 2, 2016
	Distribution			Manufacturing			Total
Balance at beginning of year	—			$	1,960		$	1,960
Increase (decrease)	2,227			(442		)	1,785
Accretion of related lease obligations	—			434			434
Payments	(573		)	(805		)	(1,378		)
Balance at end of year	$	1,654		$	1,147		$	2,801



	January 3, 2015
	Distribution		Manufacturing			Total
Balance at beginning of year	$	—	$	2,772		$	2,772
Decrease	—		(331		)	(331		)
Accretion of related lease obligations	—		495			495
Payments	—		(976		)	(976		)
Balance at end of year	$	—	$	1,960		$	1,960



	December 28, 2013
	Distribution		Manufacturing			Total
Balance at beginning of year	$	—	$	3,387		$	3,387
Accretion of related lease obligations	—		516			516
Payments	—		(1,131		)	(1,131		)
Balance at end of year	$	—	$	2,772		$	2,772

The restructuring liability is included in “Accrued liabilities” and “Other liabilities” in the Consolidated Balance Sheets and will continue to be paid until April 2020 and July 2020, the lease expiration dates for the Ennis warehouse facility and the last of the supply center closures, respectively.

Table of Contents

9. PRODUCT WARRANTY COSTS

Consistent with industry practice, the Company provides homeowners with limited warranties on certain products, primarily related to its window and siding product categories.

Changes in the warranty reserve are as follows (in thousands):



	January 2, 2016			January 3, 2015			December 28, 2013
Balance at beginning of year	$	89,940		$	93,207		$	97,471
Provision for warranties issued and changes in estimates for pre-existing warranties	3,287			4,658			4,040
Claims paid	(6,502		)	(6,816		)	(7,383		)
Foreign currency translation	(1,613		)	(1,109		)	(921		)
Balance at end of year	$	85,112		$	89,940		$	93,207

As a result of the Merger and the application of purchase accounting, the Company adjusted its warranty reserves to represent an estimate of the fair value of the liability as of the closing date of the Merger, which was based on an actuarial calculation performed by an independent valuation firm that projected future remedy costs using historical data trends of claims incurred, claims payments and sales history of products to which such costs relate. The excess of the estimated fair value over the expected future remedy costs of $9.5 million, which was included in the Company’s warranty reserve at the date of the Merger, is being amortized as a reduction of warranty expense over the expected term such warranty claims will be satisfied. The remaining unamortized amount at January 2, 2016 was $5.5 million. The provision for warranties was reported within “Cost of sales” in the Consolidated Statements of Comprehensive Loss.

On February 13, 2013, the Company entered into a Settlement Agreement and Release of Claims (the “Settlement”) for a class action lawsuit filed by plaintiffs and a putative nationwide class of homeowners regarding certain warranty-related claims for steel and aluminum siding, which became effective on September 2, 2013. The Company expects to incur additional warranty costs associated with the Settlement; however, the Company does not believe the incremental costs, which currently cannot be estimated for recognition purposes, have been or will be material.

10. EXECUTIVE OFFICERS’ SEPARATION AND HIRING COSTS

The Company recorded $1.0 million, $3.8 million and $1.4 million for the years ended January 2, 2016, January 3, 2015 and December 28, 2013, respectively, for separation and hiring costs related to the Company’s executive officers. These costs include payroll taxes, certain benefits and related professional fees, all of which are recorded as a component of SG&A expenses in the Consolidated Statements of Comprehensive Loss.

For the year ended January 2, 2016, separation and hiring costs were primarily attributable to payments made in connection with the resignation of former executives and costs incurred in connection with the hiring of their replacements.

Separation and hiring costs in 2014 primarily related to changes in the Company’s management during the year then ended, which included the resignations of Jerry W. Burris, former President and Chief Executive Officer, David S. Nagle, the former Chief Operations Officer, AMI Distribution and Services, Robert C. Gaydos, former Senior Vice President, Operations and Paul Morrisroe, former Senior Vice President and Chief Financial Officer. Separation and hiring costs for for the year ended January 3, 2015 also included costs incurred for hiring Dana R. Snyder, Interim Chief Executive Officer and the appointment of Brian C. Strauss, President and Chief Executive Officer, as well as the hiring of William Topper, Executive Vice President, Operations, and Scott F. Stephens, Executive Vice President and Chief Financial Officer of the Company.

The separation and hiring costs in 2013 were primarily related to make-whole payments to Mr. Burris, our former President and Chief Executive Officer and Mr. Morrisroe, our former Senior Vice President and Chief Financial Officer. Pursuant to their respective employment agreements, these payments provided compensation to offset losses recognized on the sale of their respective residences in connection with relocating near our corporate headquarters. See Note 2 for further information.

As of January 2, 2016, the remaining balance payable to the Company’s former executives for separation costs was $0.3 million, which will be paid at various dates throughout 2016.

Table of Contents

11. LONG-TERM DEBT

Long-term debt consists of (in thousands):



	January 2, 2016		January 3, 2015
9.125% Senior Secured Notes	$	832,684	$	834,004
Borrowings under the ABL facilities	92,800		69,400
	$	925,484	$	903,404

9.125% Senior Secured Notes due 2017

In October 2010, the Company and its wholly-owned subsidiary, AMH New Finance, Inc. (“AMHNF” and, collectively, the “Issuers”) issued and sold $730.0 million of 9.125% Senior Secured Notes due November 1, 2017 (the “existing notes”). The existing notes bear interest at a rate of 9.125% per annum, payable May 1 and November 1 of each year.

On May 1, 2013, the Issuers issued and sold an additional $100.0 million in aggregate principal amount of 9.125% Senior Secured Notes due November 1, 2017 (the “new notes” and, together with the existing notes, the “9.125% notes”) at an issue price of 106.00% of the principal amount of the new notes in a private placement. The Company used the net proceeds of the offering to repay the outstanding borrowings under its asset-based revolving credit facilities (“ABL facilities”) and for other general corporate purposes. The new notes were issued as additional notes under the same indenture, dated as of October 13, 2010, governing the existing notes, as supplemented by a supplemental indenture (collectively, the “Indenture”). On October 31, 2013, all of the new notes were exchanged for 9.125% Senior Secured Notes due 2017, which have been registered under the Securities Act of 1933, as amended. The new notes are consolidated with and form a single class with the existing notes and have the same terms as to status, redemption, collateral and otherwise (other than issue date, issue price and first interest payment date) as the existing notes. The debt premium related to the issuance of the new notes is being amortized into interest expense over the life of the new notes. The unamortized premium of $2.7 million is included in the long-term debt balance for the 9.125% notes. The effective interest rate of the new notes, including the premium, is 7.5% as of January 2, 2016.

The Company may from time to time, in its sole discretion, purchase, redeem or retire the 9.125% notes in privately negotiated or open market transactions, by tender offer or otherwise. On April 15, 2014, Parent filed a request with the SEC to withdraw the Registration Statement on Form S-1 filed by Parent on July 15, 2013 for a proposed IPO of its common stock. The registration statement was withdrawn because a determination has been made not to proceed with an IPO of Parent’s common stock at the time.

Collateral. The 9.125% notes and the guarantees are secured by a first-priority lien on substantially all of the Issuers’ and the guarantors’ present and future assets located in the United States (other than the ABL collateral, in which the 9.125% notes and the guarantees have a second-priority lien, and certain other excluded assets), including equipment, owned real property valued at $5.0 million or more and all present and future shares of capital stock of each of the Issuers’ and each guarantor’s material directly 100% owned domestic subsidiaries and 65% of the present and future shares of capital stock, of each of the Issuers’ and each guarantor’s directly owned foreign restricted subsidiaries (other than Canadian subsidiaries), in each case subject to the Rule 3-16 exclusion described below, certain exceptions and customary permitted liens. In addition, the 9.125% notes and the guarantees are secured by a second-priority lien on substantially all of the Issuers’ and the guarantors’ present and future assets, which assets also secure the Issuers’ obligations under the ABL facilities, including accounts receivable, inventory, related general intangibles, certain other related assets and the proceeds thereof.

Table of Contents

Optional Redemption. The Issuers have the option to redeem the 9.125% notes, in whole or in part, at any time on or after November 1, 2013 at redemption prices (expressed as percentages of principal amount of the 9.125% notes to be redeemed) of 106.844% and 104.563%, 102.281% and 100.000% during the 12-month periods commencing on November 1, 2013, 2014, 2015 and 2016, respectively, plus accrued and unpaid interest thereon, if any, to, but excluding, the applicable redemption date.

Covenants. The Indenture contains covenants limiting the Issuers’ ability and the ability of their restricted subsidiaries to, among other things: pay dividends or distributions, repurchase equity, prepay junior debt and make certain investments; incur additional debt or issue certain disqualified stock and preferred stock; incur liens on assets; merge or consolidate with another company or sell all or substantially all assets; enter into transactions with affiliates; and enter into agreements that would restrict the ability of our subsidiaries to pay dividends or make other payments to us. These covenants are subject to important exceptions and qualifications as described in the Indenture. Most of these covenants will cease to apply for so long as the 9.125% notes have investment grade ratings from both Moody’s Investors Service, Inc. and Standard & Poor’s.

ABL Facilities

In October 2010, the Company and certain of its subsidiaries (as “U.S. borrowers” and “Canadian borrowers” and, collectively the “borrowers”) entered into the ABL facilities in the amount of $225.0 million (comprised of a $150.0 million U.S. facility and a $75.0 million Canadian facility) pursuant to a revolving credit agreement dated October 13, 2010, which was subsequently amended and restated on April 18, 2013 (the “Amended and Restated Revolving Credit Agreement”), to, among other things, extend the maturity date of the Revolving Credit Agreement from October 13, 2015 to the earlier of (i) April 18, 2018 and (ii) 90 days prior to the maturity date of the existing notes. Subsequently, the Company terminated the tranche B revolving credit commitments of $12.0 million and wrote off $0.5 million of deferred financing fees related to the ABL facilities.

Interest Rate and Fees. At the Company’s option, the U.S. and Canadian tranche A revolving credit loans under the Amended and Restated Revolving Credit Agreement governing the ABL facilities bear interest at the rate equal to (1) the London Interbank Offered Rate (“LIBOR”) (for eurodollar loans under the U.S. facility) or the Canadian Dealer Offered Rate (“CDOR”) (for loans under the Canadian facility), plus an applicable margin of 2.00% as of January 2, 2016, or (2) the alternate base rate (for alternate base rate loans under the U.S. facility, which is the highest of a prime rate, the Federal Funds Effective Rate plus 0.50% and a one-month LIBOR rate plus 1.0% per annum) or the alternate Canadian base rate (for loans under the Canadian facility, which is the higher of a Canadian prime rate and the 30-day CDOR Rate plus 1.0%), plus an applicable margin of 1.00% as of January 2, 2016, in each case, which interest rate margin may vary in 25 basis point increments between three pricing levels determined by reference to the average excess availability in respect of the U.S. and Canadian tranche A revolving credit loans. In addition to paying interest on outstanding principal under the ABL facilities, the Company is required to pay a commitment fee in respect of the U.S. and Canadian tranche A revolving credit loans, payable quarterly in arrears, of 0.375%.

Borrowing Base. Availability under the U.S. and Canadian facilities are subject to a borrowing base, which is based on eligible accounts receivable and inventory of certain of the Company’s U.S. subsidiaries and eligible accounts receivable, inventory and, with respect to the Canadian tranche A revolving credit loans, equipment and real property, of certain of the Company’s Canadian subsidiaries, after adjusting for customary reserves established or modified from time to time by and at the permitted discretion of the administrative agent thereunder. To the extent that eligible accounts receivable, inventory, equipment and real property decline, the Company’s borrowing base will decrease and the availability under the ABL facilities may decrease below $213.0 million. In addition, if the amount of outstanding borrowings and letters of credit under the U.S. and Canadian facilities exceeds the borrowing base or the aggregate revolving credit commitments, the Company is required to prepay borrowings to eliminate the excess.

Guarantors. All obligations under the U.S. facility are guaranteed by each existing and subsequently acquired direct and indirect wholly-owned material U.S. restricted subsidiary of the Company and by the direct parent of the Company, other than certain excluded subsidiaries (“U.S. guarantors”). All obligations under the Canadian facility are guaranteed by each existing and subsequently acquired direct and indirect wholly-owned material Canadian restricted subsidiary of the Company, other than certain excluded subsidiaries (“Canadian guarantors” and, together with U.S. guarantors, “ABL guarantors”) and the U.S. guarantors.

Security. The U.S. security agreement provides that all obligations of the U.S. borrowers and the U.S. guarantors are secured by a security interest in substantially all of the present and future property and assets of the Company, including a first-priority security interest in the capital stock of the Company and a second-priority security interest in the capital stock of each

Table of Contents

direct, material wholly-owned restricted subsidiary of the Company. The Canadian security agreement provides that all obligations of the Canadian borrowers and the Canadian guarantors are secured by the U.S. ABL collateral and a security interest in substantially all of the Company’s Canadian assets, including a first-priority security interest in the capital stock of the Canadian borrowers and each direct, material wholly-owned restricted subsidiary of the Canadian borrowers and Canadian guarantors.

Covenants, Representations and Warranties. The Amended and Restated Revolving Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, with respect to negative covenants, among other things, restrictions on indebtedness, liens, investments, fundamental changes, asset sales, dividends and other distributions, prepayments or redemption of junior debt, transactions with affiliates and negative pledge clauses. There are no financial covenants included in the Amended and Restated Revolving Credit Agreement, other than a springing fixed charge coverage ratio of at least 1.00 to 1.00, which will be tested only when excess availability is less than the greater of (i) 10.0% of the sum of (x) the lesser of (A) the U.S. tranche A borrowing base and (B) the U.S tranche A revolving credit commitments and (y) the lesser of (A) the Canadian tranche A borrowing base and (B) the Canadian tranche A revolving credit commitments and (ii) $20.0 million for a period of five consecutive business days until the 30th consecutive day when excess availability exceeds the above threshold.

On March 23, 2015, the Company further amended the Amended and Restated Revolving Credit Agreement by entering into Amendment No. 1 to Amended and Restated Revolving Credit Agreement (“Amendment No.1”). Pursuant to Amendment No. 1, the Company was permitted, among other things, for the period commencing on and including April 3, 2015 through and including June 5, 2015, for the fixed charge coverage ratio to be tested or for a cash dominion period to commence, only if excess availability was less than $15.0 million for a period of five consecutive business days. In addition, Amendment No. 1 included a provision for weekly borrowing base certificate reporting for the period commencing on and including April 12, 2015 through and including June 10, 2015 in lieu of delivery of a borrowing base certificate after each fiscal month.

On December 7, 2015, the Company entered into Amendment No. 2 to the Amended and Restated Revolving Credit Agreement, (“Amendment No. 2”) which permitted, among other things, for the period commencing on and including February 5, 2016 through March 4, 2016, for the fixed charge coverage ratio to be tested or for a cash dominion period to commence, only if excess availability is less than $15.0 million for a period of five consecutive business days. Further, for the period commencing on and including March 5, 2016 through June 3, 2016, Amendment No. 2 permitted for the fixed charge coverage ratio to be tested or for a cash dominion period to commence, only if excess availability is less than $10.0 million for a period of five consecutive business days. In addition, Amendment No. 2 includes a provision for weekly borrowing base certificate reporting for the period commencing on and including February 7, 2016 through and including May 29, 2016 in lieu of delivery of a borrowing base certificate after each fiscal month.

On February 19, 2016, the Company entered into Amendment No. 3 to Amended and Restated Revolving Credit Agreement (“Amendment No. 3”), which permitted, among other things:


•	for the period commencing on and including February 19, 2016 through April 21, 2016, for the (1) a cash dominion period to commence, only if (a) excess availability is less than $10.0 million for the fixed charge coverage ratio to be tested or for a cash dominion period to commence, only if excess availability is less than $10.0 million for a period of five consecutive business days, and


•	for the period commencing on and including April 22, 2016 through and including May 19, 2016, for the (1) a cash dominion period to commence, only if (a) excess availability is less than $7.5 million for the fixed charge coverage ratio to be tested or for a cash dominion period to commence, only if excess availability is less than $7.5 million for a period of five consecutive business days, and


•	for the period commencing on and including May 20, 2016 through and including June 3, 2016, for the (1) a cash dominion period to commence, only if (a) excess availability is less than $10.0 million for the fixed charge coverage ratio to be tested or for a cash dominion period to commence, only if excess availability is less than $10.0 million for a period of five consecutive business days.

The fixed charge coverage ratio was 0.87:1.00 for the four consecutive fiscal quarter test period ended January 2, 2016. The Company has not triggered such fixed charge coverage ratio covenant as of January 2, 2016, as excess availability of $35.8

Table of Contents

million as of such date was in excess of the covenant trigger threshold. Based on current projections, the Company expects that the excess availability will be reduced in the first half of 2016 due to the seasonality of its business. The Company currently does not expect to trigger the fixed charge coverage ratio test for 2016.

As of January 2, 2016, there was $92.8 million drawn under the Company’s Amended and Restated Revolving Credit Agreement and $55.8 million available for additional borrowings. The weighted average per annum interest rate applicable to borrowings under the U.S. portion and the Canadian portion of the revolving credit commitment was 2.7% and 4.5%, respectively, as of January 2, 2016. The Company had letters of credit outstanding of $13.1 million as of January 2, 2016 primarily securing insurance policy deductibles, certain lease facilities and the Company’s purchasing card program.

First Lien Promissory Note

On February 19, 2016, the Company, the other borrowers, AMHNF and Holdings, and H&F Finco LLC (“H&F Finco”), an affiliate of the Hellman & Friedman LLC, entered into a first lien promissory note in an aggregate principal amount of $27.5 million (the “Sponsor Secured Note”), $20.0 million of such aggregate principal amount the U.S. borrowers, AMHNF and Holdings are the obligors and $7.5 million of such aggregate principal the Canadian borrowers are the obligors. The Sponsor Secured Note bears interest at the LIBOR rate plus 4.25%, with a LIBOR floor of 1%, and matures at the earlier of (i) June 18, 2018 and (ii) 30 days prior to the maturity date of the Company’s 9.125% notes. Prepayment of the Sponsor Secured Note is permitted if (i) excess availability on the date of such payment (prior to giving effect thereto) is no less than $60.0 million and (ii) excess availability on the date of such payment (immediately after giving effect thereto) and the projected daily average excess availability for the thirty-day period immediately following the date of such payment is, in each case, no less than $32.5 million. The Sponsor Secured Note is subject to the same covenants and events of default contained in the Amended and Restated Revolving Credit Agreement.

The Sponsor Secured Note is guaranteed by the same guarantors and to the same extent as such guarantors guarantee the obligations of the Company under the Amended and Restated Revolving Credit Agreement. The obligations of the Company, AMHNF, Holdings and the guarantors under the Sponsor Secured Note are secured on a pari passu basis to the liens and assets securing the obligations under the Amended and Restated Revolving Credit Agreement (the “ABL Shared Collateral”), subject to the applicable intercreditor agreement. Concurrently with entering into the Sponsor Secured Note, the Company, the other borrowers, AMHNF, Holdings and the guarantors under the Sponsor Secured Note entered into a revolving loan intercreditor agreement with H&F Finco, as the subordinated debt representative and UBS AG, Stamford Branch and UBS AG Canada Branch, as the senior representatives which subordinates the lien of H&F Finco to the lien of the senior representative and the senior lenders under the Amended and Restated Revolving Credit Agreement in respect of any right of payment from the proceeds of any sale or disposition of ABL Shared Collateral.

12. INCOME TAXES

Loss before income taxes is as follows (in thousands):



	Years Ended
	January 2, 2016			January 3, 2015			December 28, 2013
U.S.	$	(50,683	)	$	(268,991	)	$	(37,150	)
Canada	(122		)	(51,899		)	6,164
	$	(50,805	)	$	(320,890	)	$	(30,986	)

Table of Contents

Income tax (benefit) expense for the periods presented consists of (in thousands):



	Years Ended
	January 2, 2016			January 3, 2015			December 28, 2013
Current:
Federal	$	—		$	(14	)	$	(802	)
State	209			16			657
Foreign	1,329			3,998			4,155
	1,538			4,000			4,010
Deferred:
Federal	305			(20,844		)	397
State	(1,390		)	(3,084		)	(467		)
Foreign	(1,146		)	(7,273		)	(1,433		)
	(2,231		)	(31,201		)	(1,503		)
Income tax (benefit) expense	$	(693	)	$	(27,201	)	$	2,507

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of the Company’s deferred income taxes are as follows (in thousands):



	January 2, 2016			January 3, 2015
Deferred income tax assets:
Medical benefits	$	1,104		$	1,708
Allowance for doubtful accounts	3,048			3,278
Pension and other postretirement plans	9,188			12,430
Inventory costs	2,854			1,592
Warranty costs	31,769			33,819
Net operating loss carryforwards	166,202			162,925
Foreign tax credit carryforwards	4,455			4,455
Accrued expenses and other	10,237			11,437
Total deferred income tax assets	228,857			231,644
Valuation allowance	(131,501		)	(111,888		)
Net deferred income tax assets	97,356			119,756
Deferred income tax liabilities:
Depreciation	13,816			15,815
Intangible assets	143,078			157,546
Tax liability on unremitted foreign earnings	4,225			10,496
Gain on debt extinguishment	13,306			17,933
Other	3,967			5,149
Total deferred income tax liabilities	178,392			206,939
Net deferred income tax liabilities	$	(81,036	)	$	(87,183	)

As of January 2, 2016, the Company had U.S. federal net operating loss (“NOL”) carryforwards of $417.3 million and foreign tax credit carryforwards of $4.5 million. The U.S. NOL carryforwards expire in years 2032 through 2035 and the foreign tax credit carryforward expires in year 2017. In addition, the Company has tax benefits related to state NOL carryforwards of $21.1 million, which expire in the years 2016 through 2035.

As of January 2, 2016, the Company had total federal, state, and foreign deferred tax assets before valuation allowances of $199.6 million, $24.5 million, and $4.7 million, respectively. ASC 740 requires that a valuation allowance be recorded against deferred tax assets when it is more likely than not that some or all of a company’s deferred tax assets will not be realized based on available positive and negative evidence. To the extent the reversal of deferred tax liabilities is relied upon in the Company’s assessment of the realizability of deferred tax assets, the Company has determined that they will reverse in the

Table of Contents

same period and jurisdiction as the temporary differences giving rise to the deferred tax assets. Deferred tax liabilities related to non-amortizable intangibles or otherwise not reversing, were not offset against deferred tax assets. The Company has not identified any significant U.S. tax planning strategies to support the utilization of deferred tax assets. After reviewing all available positive and negative evidence as of January 2, 2016 and January 3, 2015, the Company recorded a full valuation allowance against its U.S. net federal deferred tax assets since the Company is in a three-year cumulative loss position in the U.S. and it was unable to identify any strong positive evidence, other than the reversal of the appropriate deferred tax liabilities. Therefore, as of January 2, 2016, $97.4 million of the total deferred tax assets of $228.9 million was considered more-likely-than-not to be realized, resulting in a valuation allowance of $131.5 million. Of this amount, $115.1 million relates to U.S. federal and $16.4 million relates to state jurisdictions. The net valuation allowance provided against these U.S. net deferred tax assets during 2015 increased by $19.6 million. Of this amount, $19.9 million was recorded as an increase in 2015 provision for income taxes with the remainder being reflected through other comprehensive income. The Company reviews its valuation allowance related to deferred tax assets and will reverse this valuation allowance, partially or totally, when, and if, appropriate under ASC 740. The Company is in a net deferred tax liability position in Canada. The future reversal of existing Canadian deferred tax liabilities are of the appropriate character and timing such that all of its Canadian deferred tax assets are considered more likely than not realizable.

The reconciliation of the statutory rate to the Company’s effective income tax rate for the periods presented is as follows:



	Years Ended
	January 2, 2016		January 3, 2015		December 28, 2013
Statutory rate	(35.0	)%	(35.0	)%	(35.0	)%
State income tax, net of federal income tax benefit	(4.7	)%	0.5	%	(2.8	)%
Tax liability on remitted and unremitted foreign earnings	(2.5	)%	2.4	%	16.9	%
Goodwill impairment	—	%	15.7	%	—	%
Foreign rate differential	—	%	0.4	%	(1.8	)%
Valuation allowance	39.2	%	7.8	%	28.6	%
Foreign tax credit and withholding taxes	(0.4	)%	0.3	%	0.8	%
Prior year assessments	0.6	%	0.1	%	2.8	%
Other	1.4	%	(0.7	)%	(1.4	)%
Effective rate	(1.4	)%	(8.5	)%	8.1	%

It is the Company’s intent to remit all earnings from its foreign subsidiary and as of January 2, 2016, the Company had reflected all U.S. tax costs of remittance of such earnings in its financial statements.

A reconciliation of the unrecognized tax benefits for the periods presented is as follows (in thousands):



	Years Ended
	January 2, 2016			January 3, 2015			December 28, 2013
Unrecognized tax benefits at beginning of year	$	1,014		$	7,040		$	7,146
Foreign currency translation adjustment	(143		)	(110		)	(79		)
Gross increases for tax positions of the current year	—			107			147
Gross decreases for tax positions of prior years	(297		)	(6,023		)	(174		)
Unrecognized tax benefits at end of year	$	574		$	1,014		$	7,040

The accrued interest related to uncertain tax positions is immaterial as of January 2, 2016 and January 3, 2015.

As of January 2, 2016, the Company is subject to U.S. federal income tax examinations for the tax years 2012 through 2014 and to non-U.S. income tax examinations for the tax years of 2011 through 2014. In addition, the Company is subject to state and local income tax examinations for the tax years 2010 through 2014. The Company had unrecognized tax benefits and accrued interest that would affect the Company’s effective tax rate if recognized of approximately $0.7 million and $1.0 million as of January 2, 2016 and January 3, 2015, respectively. The Company is currently undergoing examinations of certain state income tax returns. The final outcome of these examinations are not yet determinable; however, management anticipates that adjustments to unrecognized tax benefits, if any, would not result in a material change to the results of operations, financial condition, or liquidity.

The Company and its U.S. subsidiaries are included in the consolidated income tax returns filed by Associated Materials Group, Inc., its indirect parent company. The Company and each of its subsidiaries entered into a tax sharing agreement under

Table of Contents

which federal income taxes are computed by the Company and each of its subsidiaries on a separate return basis. As of January 2, 2016 and January 3, 2015, there were no amounts due to or payable from Associated Materials Group, Inc. related to the tax sharing agreement.

13. ACCUMULATED OTHER COMPREHENSIVE LOSS

Changes in accumulated other comprehensive loss by component, net of tax, are as follows (in thousands):



	Pension and other Postretirement benefit Liability			Foreign Currency Translation			Accumulated Other Comprehensive Loss
Balance at December 28, 2013	$	(3,513	)	$	(14,403	)	$	(17,916	)
Other comprehensive loss before reclassifications, net of tax of $2,108	(20,241		)	(22,439		)	(42,680		)
Amounts reclassified from accumulated other comprehensive loss, net of tax of $21	(27		)	—			(27		)
Balance at January 3, 2015	$	(23,781	)	$	(36,842	)	$	(60,623	)
Other comprehensive income (loss) before reclassifications, net of tax of $6	4,464			(31,164		)	(26,700		)
Amounts reclassified from accumulated other comprehensive loss, net of tax of $67	416			—			416
Balance at January 2, 2016	$	(18,901	)	$	(68,006	)	$	(86,907	)

Reclassifications out of accumulated other comprehensive loss consists of the following (in thousands):



	Years Ended
	January 2, 2016		January 3, 2015
Defined Benefit Pension and Other Postretirement Plans:
Amortization of unrecognized prior service cost	$	24	$	28
Amortization of unrecognized cumulative actuarial net loss (gain)	459		(34		)
Total before tax	483		(6		)
Tax expense	67		21
Net of tax	$	416	$	(27	)

Amortization of prior unrecognized service cost and actuarial loss (gain) is included in the computation of net periodic benefit cost for the Company’s pension and other postretirement benefit plans. See Note 15 for further information.

14. STOCK PLANS

2010 Stock Incentive Plan

In October 2010, Parent’s board of directors adopted the Associated Materials Group, Inc. 2010 Stock Incentive Plan (“2010 Plan”). The 2010 Plan is an incentive compensation plan that permits grants of equity-based compensation awards to employees, directors and consultants of Parent and its subsidiaries. Awards under the 2010 Plan may be in the form of stock options (either incentive stock options “ISO’s” or non-qualified stock options) or other stock-based awards, including restricted stock awards, restricted stock unit awards and stock appreciation rights.

The maximum number of shares originally reserved for the grant or settlement of awards under the 2010 Plan was 6,150,076 shares of Parent common stock, subject to adjustment in the event of any share dividend or split, reorganization, recapitalization, merger, consolidation, spinoff, combination, or any extraordinary dividend or other similar corporate transaction. In November 2014, Parent’s board of directors and Parent’s stockholders approved an amendment and restatement to the 2010 Plan to increase the maximum number of shares of common stock which may be issued under the 2010 Plan by 1,400,000 shares, from 6,150,076 to 7,550,076 and in April 2015 further increased the maximum number of shares by 1,500,000 from 7,550,076 to 9,050,076 shares of Parent common stock. Any shares subject to awards which terminate or lapse without payment of consideration may be granted again under the 2010 Plan. In the event of a change in control, Parent’s compensation committee may, at its discretion, accelerate the vesting or cause any restrictions to lapse with respect to outstanding awards, or may cancel such awards for fair value, or may provide for the issuance of substitute awards.

Table of Contents

Stock Options

Options granted under the 2010 Plan were awarded at exercise prices at or above the fair market value of such stock on the date of grant. Each option holder was granted awards with time-based vesting and/or performance-based vesting provisions. Subject to the option holders’ continued employment on each vesting date, the time-based options vest with respect to 20% of the shares on each anniversary of the grant date, with accelerated vesting of all unvested shares in the event of a change in control, as defined in the 2010 Plan. Subject to the option holders’ continued employment on each vesting date, the performance-based options vest based on the achievement of Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”) targets as established by Parent’s board of directors annually with respect to 20% of the shares per year over a five-year period, or if the target for a given year is not achieved, the option may vest if the applicable Adjusted EBITDA target is achieved in the next succeeding year. In addition, the performance-based options also provide that in the event of a change in control, that portion of the option that was scheduled to vest in the year in which the change in control occurs and in any subsequent years shall vest immediately prior to such change in control. If a liquidity event occurs (defined as the first to occur of either a change in control or an initial public offering (“IPO”) of Parent’s common stock), any portion of the performance-based option that did not vest in any prior year because the applicable Adjusted EBITDA target was not met will vest if and only if the H&F Investors receive a three times return on their initial cash investment in Parent. Each option award has a contractual life of ten years.

The stock underlying the options awarded under the 2010 Plan is governed by the stockholders agreement of Parent. Stock purchased as a result of the exercise of options is subject to a call right by Parent, and as a result, other than in limited circumstances, stock issued upon the exercise of the option may be repurchased at the right of Parent. This repurchase feature results in no compensation expense recognized in connection with options granted by Parent, until such time as the exercise of the options could occur without repurchase of the shares by Parent, which is only likely to occur upon a liquidity event, change in control or the completion of an IPO offering of shares of Parent’s common stock. Upon such liquidity event, change in control or IPO, the repurchase feature, with respect to outstanding option awards, is removed and compensation expense related to all option awards, to the extent vested, is recognized immediately.

For the year ended January 2, 2016, Parent granted time-based options and performance-based options to purchase 1.2 million and 0.3 million shares of Parent’s common stock, respectively. None of the 2015, 2014 and 2013 tranches of performance-based awards granted were vested as of January 2, 2016 since the targets for these fiscal years were not achieved.

Stock option activity during the year ended January 2, 2016 is summarized below:



	Shares		Weighted Average Exercise Price		Remaining Contractual Term(years)
Options outstanding January 3, 2015	5,502,560		$	9.77
Granted	1,523,560		1.88
Exercised	—		—
Forfeited	(856,978	)	8.84
Options outstanding January 2, 2016	6,169,142		$	4.69	8.1
Options exercisable January 2, 2016	1,571,618		$	7.95	6.7

The fair value of the options granted during 2015, 2014 and 2013 was estimated at the date of the grant using the Black-Scholes model. The weighted average assumptions and fair value of the options were as follows:



	Years Ended
	January 2, 2016			January 3, 2015			December 28, 2013
Dividend yield	—		%	—		%	—		%
Annual risk-free rate	2.02		%	2.26		%	1.99		%
Expected life of options (years)	7.25			8.17			7.19
Volatility	26.9		%	42.2		%	52.3		%
Weighted average fair value of options granted per share	$	0.17		$	1.95		$	2.58

The expected dividend yield is based on Parent’s historical and expected future dividend policy. The annual risk-free interest rate is based on zero coupon treasury bond rates corresponding to the expected life of the awards. The expected lives of the awards are based on the contractual term, the vesting period and the expected lives used by a peer group with similar option terms. Due to the fact that the shares of common stock of Parent have not and do not trade publicly, the expected volatility

Table of Contents

assumption was derived by referring to changes in the common stock prices of several peer companies (with respect to industry, size and leverage) over the same timeframe as the expected life of the awards.

In June 2015, Parent’s board of directors modified certain time-based and performance-based options held by eligible participants to reduce the exercise price of such options. The number of options repriced was 4.5 million to 17 employees under the senior leadership team, with a weighted average exercise price prior to repricing of $9.23 and an average remaining contractual life of 8.8 years. The compensation cost related to this repricing resulted in additional unrecognized non-cash expense of $0.3 million that may be recognized over the remaining life of the options, subject to vesting conditions.

Restricted Stock and Restricted Stock Units Awards

Grants of restricted stock and restricted stock units have been awarded to certain officers and board members under the 2010 Plan. The awards vest at various dates with vesting periods up to five years. The weighted average fair value of restricted stock and restricted stock unit awards was $0.55 for 2015, $5.61 for 2014 and $4.25 for 2013, and was calculated using the estimated market value of the shares on the date of grant.

The following table summarizes the Company’s restricted stock and restricted stock unit award activity for the year ended January 2, 2016:



	Shares		Weighted Average Fair Value Per Share
Nonvested at January 3, 2015	52,200		$	4.25
Granted	508,764		0.55
Vested	(194,971	)	0.99
Forfeited	(10,800	)	—
Nonvested at January 2, 2016	355,193		$	0.87

As of January 2, 2016, there was $11.9 million of unrecognized compensation cost related to Parent’s stock-based awards granted under the 2010 Plan and this cost is expected to be recognized at the time of a liquidity event or IPO. Compensation cost of $0.2 million, $0.5 million and $0.2 million was incurred related to Parent’s equity-based compensation plans recorded during 2015, 2014 and 2013, respectively, which was primarily included in SG&A expenses in the Consolidated Statements of Comprehensive Loss. The Company did not receive any cash as a result of vesting and exercise of equity-based compensation awards for the year ended January 2, 2016.

15. RETIREMENT PLANS

The Company sponsors defined benefit pension plans which cover hourly workers at its West Salem, Ohio plant, and hourly union employees at its Woodbridge, New Jersey plant as well as a defined benefit retirement plan covering U.S. salaried employees, which was frozen in 1998 and subsequently replaced with a defined contribution plan (the “Domestic Plans”). In 2013, the pension plan for West Salem was amended to reflect an increase in the pension multiplier. Employees who were covered by the pension plan prior to the amendment were provided an opportunity to irrevocably freeze their pension, along with any vested benefits associated with the plan, and elect to participate in a defined contribution plan. In addition, the amendment effectively closed the plan to any new employees hired after November 4, 2013.

The Company also sponsors a defined benefit pension plan covering the 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”). In 2014, the pension plans for Pointe Claire and Burlington were amended to reflect an increase in benefits, effective November 15, 2015 and September 1, 2016, respectively. Also, lump sum payments made to members of the Pointe Claire plan in 2014 and 2013 upon termination and retirement, totaled more than the sum of the service cost and interest costs and as a result, the Company recorded settlement losses of $0.1 million and $0.6 million in 2014 and 2013, respectively. The Company did not incur this type of loss in 2015 and does not expect to in future years, due to a prior year amendment disallowing the lump sum payment feature that triggered the settlement losses in each respective year.

The Company also provides postretirement benefits other than pension (“OPEB Plans”) including health care or life insurance benefits to certain U.S. and Canadian retirees and in some cases, their spouses and dependents. The Company’s OPEB Plans in the U.S. include an unfunded health care plan for hourly workers at the Company’s former steel siding plant in Cuyahoga Falls, Ohio. With the closure of this facility in 1991, no additional employees are eligible to participate in this plan. There are three other U.S. unfunded OPEB Plans covering either life insurance or health care benefits for small frozen groups of retirees. The Company’s foreign OPEB Plan provides life insurance benefits to active members at its Pointe Claire, Quebec

Table of Contents

plant and a closed group of Canadian salaried retirees. The actuarial valuation measurement date for the defined pension and OPEB plans is December 31.

The Company sponsors defined contribution plans, which are qualified as tax-exempt plans. The plans cover all full-time, non-union employees with matching contributions of up to 3.5% of eligible compensation in both the U.S. and Canada, depending on length of service and levels of contributions. The Company’s pre-tax contributions to its defined contribution plans were $2.9 million, $2.7 million and $2.6 million for the years ended January 2, 2016, January 3, 2015 and December 28, 2013, respectively.

The change in benefit obligation and plan assets for the Company’s defined benefit pension and OPEB Plans are as follows (in thousands):



	January 2, 2016									January 3, 2015
	Domestic Plans			Foreign Plans			OPEB Plans			Domestic Plans			Foreign Plans			OPEB Plans
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	81,993		$	82,712		$	4,948		$	67,162		$	76,961		$	4,856
Service cost	1,191			2,496			12			1,233			2,373			11
Interest cost	3,225			3,082			142			3,189			3,616			186
Plan amendments	—			—			—			—			133			—
Actuarial (gain) loss	(4,596		)	(557		)	(1,458		)	14,218			11,442			343
Settlements	—			—			—			—			(688		)	—
Participant contributions	—			273			25			—			333			17
Benefits paid	(3,992		)	(2,750		)	(395		)	(3,809		)	(3,610		)	(474		)
Retiree drug subsidy reimbursement	—			—			38			—			—			43
Effect of foreign exchange	—			(12,449		)	(53		)	—			(7,848		)	(34		)
Projected benefit obligation at end of year	77,821			72,807			3,259			81,993			82,712			4,948
Change in plan assets:
Fair value of assets at beginning of year	58,631			70,422			—			54,502			67,964			—
Actual return on plan assets	2,294			3,091			—			4,297			7,191			—
Settlements	—			—			—			—			(688		)	—
Employer contributions	2,705			4,506			370			3,641			5,998			457
Participant contributions	—			273			25			—			333			17
Benefits paid	(3,992		)	(2,750		)	(395		)	(3,809		)	(3,610		)	(474		)
Effect of foreign exchange	—			(10,802		)	—			—			(6,766		)	—
Fair value of assets at end of year	59,638			64,740			—			58,631			70,422			—
Funded status	$	(18,183	)	$	(8,067	)	$	(3,259	)	$	(23,362	)	$	(12,290	)	$	(4,948	)

Accumulated Benefit Obligation	$	77,821		$	67,273		$	3,259		$	81,993		$	76,472		$	4,948

Table of Contents

The amounts recognized in consolidated balance sheets and other comprehensive loss for the Company’s defined benefit pension and OPEB Plans are as follows (in thousands):



	January 2, 2016									January 3, 2015
	Domestic Plans			Foreign Plans			OPEB Plans			Domestic Plans			Foreign Plans			OPEB Plans
Balance sheets:
Other assets	$	—		$	59		$	—		$	—		$	—		$	—
Accrued liabilities	—			—			(306		)	—			—			(462		)
Other liabilities	(18,183		)	(8,126		)	(2,953		)	(23,362		)	(12,290		)	(4,486		)
Total recognized	$	(18,183	)	$	(8,067	)	$	(3,259	)	$	(23,362	)	$	(12,290	)	$	(4,948	)
Accumulated other comprehensive loss:
Net actuarial loss (gain)	$	8,433		$	12,511		$	(1,567	)	$	11,839		$	12,735		$	(280	)
Net prior service cost (credit)	96			457			(35		)	106			479			(43		)
Total recognized	$	8,529		$	12,968		$	(1,602	)	$	11,945		$	13,214		$	(323	)

For the defined benefit pension plans, the estimated net actuarial loss and prior service cost to be amortized from accumulated other comprehensive loss into periodic benefit cost over the next fiscal year is $0.3 million. For the OPEB Plans, the estimated actuarial gain and prior service credit to be amortized from accumulated other comprehensive income into periodic benefit cost over the next fiscal year is $0.2 million.

The components of net periodic benefit cost for the Company’s pension benefit plans are as follows (in thousands):



	Years Ended
	January 2, 2016						January 3, 2015						December 28, 2013
	Domestic Plans			Foreign Plans			Domestic Plans			Foreign Plans			Domestic Plans			Foreign Plans
Service cost	$	1,191		$	2,496		$	1,233		$	2,373		$	1,033		$	2,785
Interest cost	3,225			3,082			3,189			3,616			2,902			3,769
Expected return on assets	(3,883		)	(3,655		)	(4,055		)	(4,275		)	(3,548		)	(3,900		)
Loss recognized due to settlements	—			—			—			117			—			599
Amortization of prior service cost	10			22			10			26			1			20
Amortization of net actuarial loss	399			231			—			54			240			508
Net periodic benefit cost	$	942		$	2,176		$	377		$	1,911		$	628		$	3,781

The components of other comprehensive (income) loss for the Company’s pension benefit plans are as follows (in thousands):



	Years Ended
	January 2, 2016						January 3, 2015						December 28, 2013
	Domestic Plans			Foreign Plans			Domestic Plans			Foreign Plans			Domestic Plans			Foreign Plans
Net actuarial (gain) loss	$	(3,007	)	$	7		$	13,976		$	8,023		$	(11,228	)	$	(9,121	)
Prior service cost	—			—			—			125			112			—
Loss recognized due to settlements	—			—			—			(117		)	—			(599		)
Amortization of prior service cost	(10		)	(22		)	(10		)	(26		)	(1		)	(20		)
Amortization of net actuarial loss	(399		)	(231		)	—			(54		)	(240		)	(508		)
Total recognized	$	(3,416	)	$	(246	)	$	13,966		$	7,951		$	(11,357	)	$	(10,248	)

Table of Contents

The components of net periodic benefit cost for the Company’s OPEB Plans are as follows (in thousands):



	Years Ended
	January 2, 2016			January 3, 2015			December 28, 2013
Service cost	$	12		$	11		$	12
Interest cost	142			186			185
Amortization of prior service credit	(8		)	(8		)	—
Amortization of net actuarial gain	(171		)	(88		)	(8		)
Net periodic benefit cost	$	(25	)	$	101		$	189

The components of other comprehensive (income) loss for the Company’s OPEB Plans are as follows (in thousands):



	Years Ended
	January 2, 2016			January 3, 2015		December 28, 2013
Net actuarial (gain) loss	$	(1,458	)	$	342	(817	)
Prior service credit	—			—		(51	)
Amortization of prior service credit	8			8		—
Amortization of net actuarial gain	171			88		8
Total recognized	$	(1,279	)	$	438	(860	)

The weighted average assumptions used to determine projected benefit obligation for the Company’s pension and OPEB Plans are:



	January 2, 2016		January 3, 2015
Discount rate:
Domestic plans	4.35	%	4.02	%
Foreign plans	4.02	%	4.00	%
OPEB plans	4.03	%	3.69	%
Compensation increases:
Domestic plans	—	%	—	%
Foreign plans	3.50	%	3.50	%

The weighted average assumptions used to determine projected net periodic benefit cost for the Company’s pension and OPEB Plans are:



	Years Ended
	January 2, 2016		January 3, 2015		December 28, 2013
Discount rate:
Domestic plans	4.02	%	4.81	%	3.97	%
Foreign plans	4.00	%	4.78	%	4.48	%
OPEB plans	3.69	%	4.25	%	3.43	%
Long-term rate of return on assets:
Domestic plans	6.70	%	7.50	%	7.50	%
Foreign plans	5.60	%	6.30	%	6.25	%
Compensation increases:
Domestic plans	—	%	—	%	—	%
Foreign plans	3.50	%	3.50	%	3.50	%

Table of Contents

The following table presents health care cost trend rates used to determine net periodic benefit cost for the Company’s OPEB Plans, as well as information regarding the ultimate cost trend and the year in which their ultimate rate is reached:



	Years Ended
	January 2, 2016		January 3, 2015		December 28, 2013
Assumed health care cost trend rate medical claims	7.0	%	6.8	%	7.0	%
Ultimate health care cost trend	4.5	%	5.0	%	5.0	%
Ultimate year health care cost trend rate is achieved	2023		2023		2022

A one-percentage-point increase (decrease) in the assumed health care cost trend rates has the following effects on postretirement obligations at January 2, 2016 (in thousands):



	1% Increase		1% Decrease
Increase (decrease) in accumulated postretirement benefit obligation	$	174	$	(152	)
Increase (decrease) in aggregate service and interest cost	8		(7		)

The discount rates used for the Company’s domestic plans were set on a plan by plan basis and reflect the market rate for high-quality fixed-income U.S. debt instruments that are rated AA or higher by a recognized ratings agency as of the annual measurement date. The discount rate is subject to change each year. In selecting the assumed discount rate, the Company considered current available rates of return expected to be available during the period to maturity of the pension and other postretirement benefit obligations. The discount rate for the Company’s foreign plans was selected on the same basis as described above for the domestic plans, except that the discount rate was evaluated using the spot rates generated by a Canadian corporate AA bond yield curve.

The Company’s financial objectives with respect to its pension plan assets are to provide growth, income from plan assets and benefits to its plan participants. The investment portfolio is designed to maximize investment returns within reasonable and prudent levels of risk, and to maintain sufficient liquidity to meet benefit obligations on a timely basis. The expected return on plan assets takes into consideration expected long-term inflation, historical returns and estimated future long-term returns based on capital market assumptions applied to the asset allocation strategy. The expected return on plan assets assumption considers asset returns over a full market cycle. For Domestic Plans, allocations were previously targeted at 60% equities, 35% fixed income and 5% cash and cash equivalents. During 2015, the Company voted and approved to establish target allocations of 60% equities and 40% fixed income. For Foreign Plans, allocations were previously targeted at 60% equities and 40% fixed income. However, in 2014, the Company restructured the Foreign Plans, establishing new target allocations of 30% equity and 70% fixed income in an effort to reduce plan exposure to the volatility of equity investments in favor of long-term fixed income. To attain these new target allocations, the Company has adopted a transition methodology, which uses a combination of interest rate changes and passage of time until the targeted allocation percentages are reached.

The fair values of Domestic Plan assets as of January 2, 2016 by asset category are (in thousands):



	January 2, 2016
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Mutual funds	$	—	$	57,925	$	—	$	57,925
Money funds	—		1,663		—		1,663
Cash	50		—		—		50
Total	$	50	$	59,588	$	—	$	59,638

Table of Contents

The fair values of Domestic Plan assets as of January 3, 2015 by asset category are (in thousands):



	January 3, 2015
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity securities	$	35,172	$	—	$	—	$	35,172
Mutual funds	—		9,494		—		9,494
Government securities	—		11,532		—		11,532
Money funds	—		2,390		—		2,390
Cash	43		—		—		43
Total	$	35,215	$	23,416	$	—	$	58,631

The fair values of Foreign Plan assets as of January 2, 2016 by asset category are (in thousands):



	January 2, 2016
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Pooled funds	$	—	$	64,740	$	—	$	64,740
Total	$	—	$	64,740	$	—	$	64,740

The fair values of Foreign Plan assets as of January 3, 2015 by asset category are (in thousands):



	January 3, 2015
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Pooled funds	$	—	$	70,420	$	—	$	70,420
Cash	2		—		—		2
Total	$	2	$	70,420	$	—	$	70,422

Equity Securities: Equity securities classified as Level 1 investments primarily include common stock of large, medium and small sized corporations and international equities. These investments are comprised of securities listed on an exchange, market or automated quotation system for which quotations are readily available. The valuation of these securities was determined based on the closing price reported on the active market on which the individual securities were traded.

Mutual Funds and Government Securities: Mutual funds and government securities classified as Level 2 investments primarily include government debt securities and bonds. The valuation of investments classified as Level 2 was determined using a market approach based upon quoted prices for similar assets and liabilities in active markets based on pricing models which incorporate information from market sources and observed market movements.

Money Funds: Money funds classified as Level 2 investments seek to maintain the net asset value (“NAV”) per share at $1.00. Money funds are valued under the amortized cost method which approximates current market value. Under this method, the securities are valued at cost when purchased and thereafter, a constant proportionate amortization of any discount or premium is recorded until the maturity of the security.

Pooled Funds: Pooled funds held by the Company’s foreign plans are classified as Level 2 investments and are reported at their NAV. These pooled funds use the close or last trade price as fair value of the investments to determine the daily transactional NAV for purchases and redemptions by its unit holders as determined by the fund’s trustee based on the underlying securities in the fund.

Table of Contents

Estimated future benefit payments are as follows (in thousands):



	Pension Plans				OPEB Plans
	Domestic Plans		Foreign Plans		Gross		Medicare Prescription Drug Subsidy
2016	$	3,664	$	2,692	$	306	$	(30	)
2017	3,807		2,810		291		(31		)
2018	3,925		2,914		274		(31		)
2019	4,150		2,977		263		(31		)
2020	4,293		3,196		240		(30		)
2021 — 2025	23,799		17,939		1,004		(128		)

While the Company does not anticipate that contributions will be required for the Domestic Plans for 2016, they do expect to make cash and non-cash contributions of $4.5 million and $0.3 million to the Foreign Plans and OPEB Plans, respectively, in 2016. Although a 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.

Actuarial valuations require significant estimates and assumptions 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 an independent third party. 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.

16. LEASE COMMITMENTS

Commitments for future minimum lease payments under non-cancelable operating leases, principally for manufacturing and distribution facilities and certain equipment, are as follows (in thousands):



2016	$	36,893
2017	32,442
2018	26,243
2019	20,016
2020	11,492
Thereafter	15,102
Total future minimum lease payments	$	142,188

Lease expense was $39.1 million, $39.2 million and $39.8 million for the years ended January 2, 2016, January 3, 2015 and December 28, 2013, respectively. The Company’s facility lease agreements typically contain renewal options.

17. COMMITMENTS AND CONTINGENCIES

The Company is involved from time to time in litigation arising in the ordinary course of business, none of which, individually or in the aggregate, after giving effect to its existing insurance coverage, is expected to have a material adverse effect on its financial position, results of operations or liquidity.

From time to time, the Company is also involved in proceedings and potential proceedings relating to environmental, product liability and other matters, the claims of which are administered by the Company in the ordinary course of business. The Company maintains pollution and remediation insurance, as well as product liability insurance to provide coverage for these types of claims. Although it is difficult to estimate the Company’s potential exposure to these matters, the Company believes that the resolution of such matters will not have a material adverse effect on its financial position, results of operations or liquidity.

Environmental Claims

Table of Contents

the facility resulted in soil and groundwater contamination in certain areas of the property. In 1999, the property owner and Gentek signed a remediation agreement with the NJDEP, pursuant to which the property owner and Gentek agreed to continue an investigation/remediation that had been commenced pursuant to a Memorandum of Agreement with the NJDEP. Under the remediation agreement, the NJDEP required posting of a remediation funding source of $0.1 million, which is currently satisfied by a $0.3 million standby letter of credit that was provided by Gentek to the NJDEP. During 2014, the delineation studies were completed and in early 2015 the Company was presented with several remedial plans. Based on the alternatives presented, the Company identified what it believed to be the most likely option and recorded the minimum liability for that option, which totaled $1.0 million as of January 3, 2015, the balance of which remains unchanged as of January 2, 2016. The Company believes this matter will not have a material adverse effect on the Company’s financial position, results of operations or liquidity.

18. BUSINESS SEGMENTS

The Company is in the business of manufacturing and distributing exterior residential building products. The Company has a single operating segment and a single reportable segment. The Company’s chief operating decision maker is the Chief Executive Officer. The chief operating decision maker allocates resources and assesses performance of the business and other activities at the single operating segment level.

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



	Years Ended
	January 2, 2016		January 3, 2015		December 28, 2013
Vinyl windows	$	419,885	$	401,550	$	369,869
Vinyl siding products	200,518		213,949		216,872
Metal products	148,747		155,464		166,602
Third-party manufactured products	286,173		296,927		314,408
Other products and services	129,646		119,083		101,847
	$	1,184,969	$	1,186,973	$	1,169,598

The Company operates principally in the U.S. and Canada. Net sales and long-lived assets by country were determined based on the location of the selling subsidiary as follows (in thousands):



	Years Ended
	January 2, 2016		January 3, 2015		December 28, 2013
Net Sales:
United States	$	980,559	$	965,739	$	950,977
Canada	204,410		221,234		218,621
	$	1,184,969	$	1,186,973	$	1,169,598



	January 2, 2016		January 3, 2015
Long-lived Assets:
United States	$	66,580	$	64,451
Canada	24,214		29,449
	$	90,794	$	93,900

19. SUBSIDIARY GUARANTORS

The Company’s payment obligations under its 9.125% notes are fully and unconditionally guaranteed, jointly and severally, on a senior basis, by its domestic 100% owned subsidiaries, Gentek Holdings, LLC and Gentek Building Products, Inc. AMH New Finance, Inc. is a co-issuer of the 9.125% notes and is a domestic 100% owned subsidiary of the Company having no operations, revenues or cash flows for the periods presented.

Associated Materials Canada Limited, Gentek Canada Holdings Limited and Gentek Buildings Products Limited Partnership are Canadian companies and do not guarantee the Company’s 9.125% notes. In the opinion of management, separate financial statements of the respective Subsidiary Guarantors would not provide additional material information that would be useful in assessing the financial composition of the Subsidiary Guarantors.

Table of Contents

ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

January 2, 2016

(In thousands)



	Company			Co-Issuer		Subsidiary Guarantors			Non-Guarantor Subsidiaries			Reclassification/ Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	8,356		$	—	$	152		$	886		$	—		$	9,394
Accounts receivable, net	103,506			—		6,903			16,634			—			127,043
Intercompany receivables	352,323			—		67,591			1,794			(421,708		)	—
Inventories	88,440			—		5,527			29,407			—			123,374
Income taxes receivable	—			—		178			1,434			—			1,612
Deferred income taxes	243			—		1,258			1			—			1,502
Prepaid expenses and other current assets	12,114			—		955			1,094			—			14,163
Total current assets	564,982			—		82,564			51,250			(421,708		)	277,088
Property, plant and equipment, net	65,277			—		1,303			24,214			—			90,794
Goodwill	203,841			—		16,713			82,354			—			302,908
Other intangible assets, net	285,115			—		32,633			80,205			—			397,953
Intercompany receivable	—			832,684		—			—			(832,684		)	—
Other assets	12,249			—		1			1,020			—			13,270
Total assets	$	1,131,464		$	832,684	$	133,214		$	239,043		$	(1,254,392	)	$	1,082,013

LIABILITIES AND MEMBER'S DEFICIT
Current liabilities:
Accounts payable	$	68,213		$	—	$	4,183		$	19,167		$	—		$	91,563
Intercompany payables	1,794			—		—			419,914			(421,708		)	—
Accrued liabilities	71,446			—		4,876			7,308			—			83,630
Deferred income taxes	—			—		—			436			—			436
Income taxes payable	36			—		—			—			—			36
Total current liabilities	141,489			—		9,059			446,825			(421,708		)	175,665
Deferred income taxes	50,147			—		11,920			20,035			—			82,102
Other liabilities	76,641			—		19,676			16,806			—			113,123
Deficit in subsidiaries	153,964			—		246,523			—			(400,487		)	—
Long-term debt	923,584			832,684		—			1,900			(832,684		)	925,484
Member’s deficit	(214,361		)	—		(153,964		)	(246,523		)	400,487			(214,361		)
Total liabilities and member’s deficit	$	1,131,464		$	832,684	$	133,214		$	239,043		$	(1,254,392	)	$	1,082,013

Table of Contents

ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS

For The Year Ended January 2, 2016

(In thousands)



	Company			Co-Issuer		Subsidiary Guarantors			Non-Guarantor Subsidiaries			Reclassification/ Eliminations			Consolidated
Net sales	$	949,796		$	—	$	138,927		$	247,335		$	(151,089	)	$	1,184,969
Cost of sales	733,380			—		125,611			200,873			(151,089		)	908,775
Gross profit	216,416			—		13,316			46,462			—			276,194
Selling, general and administrative expenses	188,785			—		7,039			43,966			—			239,790
Restructuring costs	1,837			—		—			—			—			1,837
Income from operations	25,794			—		6,277			2,496			—			34,567
Interest expense, net	82,754			—		—			740			—			83,494
Foreign currency loss	—			—		—			1,878			—			1,878
(Loss) income before income taxes	(56,960		)	—		6,277			(122		)	—			(50,805		)
Income tax (benefit) expense	(1,637		)	—		760			184			—			(693		)
(Loss) income before equity income (loss) from subsidiaries	(55,323		)	—		5,517			(306		)	—			(50,112		)
Equity income (loss) from subsidiaries	5,211			—		(306		)	—			(4,905		)	—
Net (loss) income	$	(50,112	)	$	—	$	5,211		$	(306	)	$	(4,905	)	$	(50,112	)
Other comprehensive income (loss):
Pension and other postretirement benefit adjustments, net of tax	4,880			—		739			174			(913		)	4,880
Foreign currency translation adjustments, net of tax	(31,164		)	—		(31,164		)	(31,164		)	62,328			(31,164		)
Total comprehensive loss	$	(76,396	)	$	—	$	(25,214	)	$	(31,296	)	$	56,510		$	(76,396	)

Table of Contents

ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For The Year Ended January 2, 2016

(In thousands)



	Company			Co-Issuer		Subsidiary Guarantors			Non-Guarantor Subsidiaries			Reclassification/ Eliminations			Consolidated
Net cash (used in) provided by operating activities	$	(39,538	)	$	—	$	22,373		$	13,742		$	—		$	(3,423	)
INVESTING ACTIVITIES
Capital expenditures	(14,647		)	—		(163		)	(1,763		)	—			(16,573		)
Proceeds from the sale of assets	150			—		—			2			—			152
Payments on loans to affiliates	—			—		(22,058		)	(25,000		)	47,058			—
Receipts on loans to affiliates	2,000			—		—			17,500			(19,500		)	—
Net cash used in investing activities	(12,497		)	—		(22,221		)	(9,261		)	27,558			(16,421		)
FINANCING ACTIVITIES
Borrowings under ABL facilities	111,300			—		—			76,031			—			187,331
Payments under ABL facilities	(86,400		)	—		—			(77,553		)	—			(163,953		)
Borrowings from affiliates	47,058			—		—			—			(47,058		)	—
Repayments to affiliates	(17,500		)	—		—			(2,000		)	19,500			—
Net cash provided by (used in) financing activities	54,458			—		—			(3,522		)	(27,558		)	23,378
Effect of exchange rate changes on cash and cash equivalents	—			—		—			(103		)	—			(103		)
Increase in cash and cash equivalents	2,423			—		152			856			—			3,431
Cash and cash equivalents at beginning of year	5,933			—		—			30			—			5,963
Cash and cash equivalents at end of year	$	8,356		$	—	$	152		$	886		$	—		$	9,394

Table of Contents

ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

January 3, 2015

(In thousands)



	Company			Co-Issuer		Subsidiary Guarantors			Non-Guarantor Subsidiaries			Reclassification/ Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	5,933		$	—	$	—		$	30		$	—		$	5,963
Accounts receivable, net	98,945			—		6,411			19,765			—			125,121
Intercompany receivables	356,421			—		61,740			1,794			(419,955		)	—
Inventories	100,487			—		10,969			34,076			—			145,532
Income taxes receivable	—			—		144			—			—			144
Deferred income taxes	487			—		1,952			—			—			2,439
Prepaid expenses and other current assets	13,422			—		996			1,441			—			15,859
Total current assets	575,695			—		82,212			57,106			(419,955		)	295,058
Property, plant and equipment, net	62,977			—		1,474			29,449			—			93,900
Goodwill	203,841			—		16,713			96,703			—			317,257
Other intangible assets, net	305,127			—		33,084			99,089			—			437,300
Intercompany receivable	—			834,004		—			—			(834,004		)	—
Other assets	17,246			—		45			1,371			—			18,662
Total assets	$	1,164,886		$	834,004	$	133,528		$	283,718		$	(1,253,959	)	$	1,162,177

LIABILITIES AND MEMBER'S DEFICIT
Current liabilities:
Accounts payable	$	67,160		$	—	$	6,679		$	20,929		$	—		$	94,768
Intercompany payables	1,794			—		—			418,161			(419,955		)	—
Accrued liabilities	70,439			—		4,683			6,612			—			81,734
Deferred income taxes	—			—		—			1,292			—			1,292
Income taxes payable	46			—		—			1,736			—			1,782
Total current liabilities	139,439			—		11,362			448,730			(419,955		)	179,576
Deferred income taxes	51,012			—		13,295			24,023			—			88,330
Other liabilities	84,048			—		22,395			22,573			—			129,016
Deficit in subsidiaries	128,532			—		215,008			—			(343,540		)	—
Long-term debt	900,004			834,004		—			3,400			(834,004		)	903,404
Member’s deficit	(138,149		)	—		(128,532		)	(215,008		)	343,540			(138,149		)
Total liabilities and member’s deficit	$	1,164,886		$	834,004	$	133,528		$	283,718		$	(1,253,959	)	$	1,162,177

Table of Contents

ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE LOSS

For The Year Ended January 3, 2015

(In thousands)



	Company			Co-Issuer		Subsidiary Guarantors			Non-Guarantor Subsidiaries			Reclassification/ Eliminations			Consolidated
Net sales	$	933,837		$	—	$	155,953		$	276,822		$	(179,639	)	$	1,186,973
Cost of sales	758,858			—		143,315			220,885			(179,639		)	943,419
Gross profit	174,979			—		12,638			55,937			—			243,554
Selling, general and administrative expenses	199,298			—		4,678			43,638			—			247,614
Impairment of goodwill	96,801			—		8,850			38,508			—			144,159
Impairment of other intangible assets	54,600			—		11,721			23,366			—			89,687
Restructuring costs	(331		)	—		—			—			—			(331		)
Loss from operations	(175,389		)	—		(12,611		)	(49,575		)	—			(237,575		)
Interest expense, net	80,991			—		—			1,536			—			82,527
Foreign currency loss	—			—		—			788			—			788
Loss before income taxes	(256,380		)	—		(12,611		)	(51,899		)	—			(320,890		)
Income tax benefit	(23,340		)	—		(587		)	(3,274		)	—			(27,201		)
Loss before equity loss from subsidiaries	(233,040		)	—		(12,024		)	(48,625		)	—			(293,689		)
Equity loss from subsidiaries	(60,649		)	—		(48,625		)	—			109,274			—
Net loss	$	(293,689	)	$	—	$	(60,649	)	$	(48,625	)	$	109,274		$	(293,689	)
Other comprehensive loss:
Pension and other postretirement benefit adjustments, net of tax	(20,268		)	—		(8,252		)	(5,889		)	14,141			(20,268		)
Foreign currency translation adjustments, net of tax	(22,439		)	—		(22,439		)	(22,439		)	44,878			(22,439		)
Total comprehensive loss	$	(336,396	)	$	—	$	(91,340	)	$	(76,953	)	$	168,293		$	(336,396	)

Table of Contents

ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For The Year Ended January 3, 2015

(In thousands)



	Company			Co-Issuer		Subsidiary Guarantors			Non-Guarantor Subsidiaries			Reclassification/ Eliminations			Consolidated
Net cash (used in) provided by operating activities	$	(77,627	)	$	—	$	15,075		$	(8,413	)	$	—		$	(70,965	)
INVESTING ACTIVITIES
Capital expenditures	(11,321		)	—		(276		)	(1,255		)	—			(12,852		)
Proceeds from the sale of assets	16			—		—			3			—			19
Payments on loans to affiliates	—			—		(14,799		)	—			14,799			—
Receipts on loans to affiliates	6,500			—		—			—			(6,500		)	—
Net cash used in investing activities	(4,805		)	—		(15,075		)	(1,252		)	8,299			(12,833		)
FINANCING ACTIVITIES
Borrowings under ABL facilities	156,700			—		—			83,522			—			240,222
Payments under ABL facilities	(90,700		)	—		—			(80,110		)	—			(170,810		)
Borrowings from affiliates	14,799			—		—			—			(14,799		)	—
Repayments to affiliates	—			—		—			(6,500		)	6,500			—
Net cash provided by (used in) financing activities	80,799			—		—			(3,088		)	(8,299		)	69,412
Effect of exchange rate changes on cash and cash equivalents	—			—		—			(466		)	—			(466		)
Decrease in cash and cash equivalents	(1,633		)	—		—			(13,219		)	—			(14,852		)
Cash and cash equivalents at beginning of year	7,566			—		—			13,249			—			20,815
Cash and cash equivalents at end of year	$	5,933		$	—	$	—		$	30		$	—		$	5,963

Table of Contents

ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME

For The Year Ended December 28, 2013

(In thousands)



	Company			Co-Issuer		Subsidiary Guarantors			Non-Guarantor Subsidiaries			Reclassification/ Eliminations			Consolidated
Net sales	$	900,422		$	—	$	166,302		$	263,604		$	(160,730	)	$	1,169,598
Cost of sales	687,015			—		150,647			210,866			(160,730		)	887,798
Gross profit	213,407			—		15,655			52,738			—			281,800
Selling, general and administrative expenses	183,250			—		5,281			43,750			—			232,281
Income from operations	30,157			—		10,374			8,988			—			49,519
Interest expense, net	77,681			—		—			2,070			—			79,751
Foreign currency loss	—			—		—			754			—			754
(Loss) income before income taxes	(47,524		)	—		10,374			6,164			—			(30,986		)
Income tax (benefit) expense	(1,882		)	—		1,668			2,721			—			2,507
(Loss) income before equity income from subsidiaries	(45,642		)	—		8,706			3,443			—			(33,493		)
Equity income from subsidiaries	12,149			—		3,443			—			(15,592		)	—
Net (loss) income	$	(33,493	)	$	—	$	12,149		$	3,443		$	(15,592	)	$	(33,493	)
Other comprehensive income (loss):
Pension and other postretirement benefit adjustments, net of tax	19,774			—		9,666			7,594			(17,260		)	19,774
Foreign currency translation adjustments, net of tax	(20,443		)	—		(20,443		)	(20,443		)	40,886			(20,443		)
Total comprehensive (loss) income	$	(34,162	)	$	—	$	1,372		$	(9,406	)	$	8,034		$	(34,162	)

Table of Contents

ASSOCIATED MATERIALS, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For The Year Ended December 28, 2013

(In thousands)



	Company			Co-Issuer		Subsidiary Guarantors			Non-Guarantor Subsidiaries			Reclassification/ Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	2,063		$	—	$	(14,211	)	$	12,401		$	—		$	253
INVESTING ACTIVITIES
Capital expenditures	(10,926		)	—		(56		)	(720		)	—			(11,702		)
Proceeds from sale of assets	56			—		—			4			—			60
Supply Center acquisition	(348		)	—		—			—			—			(348		)
Payments on loans to affiliates	(20,000		)	—		—			—			20,000			—
Receipts on loans to affiliates	11,500			—		14,267			—			(25,767		)	—
Net cash (used in) provided by investing activities	(19,718		)	—		14,211			(716		)	(5,767		)	(11,990		)
FINANCING ACTIVITIES
Borrowings under ABL facilities	99,891			—		—			48,970			—			148,861
Payments under ABL facilities	(169,391		)	—		—			(57,470		)	—			(226,861		)
Borrowings from affiliates	—			—		—			20,000			(20,000		)	—
Repayments to affiliates	(14,267		)	—		—			(11,500		)	25,767			—
Equity contribution from parent	742			—		—			—			—			742
Issuance of Senior Secured Notes	106,000			—		—			—			—			106,000
Financing costs	(5,074		)	—		—			(475		)	—			(5,549		)
Net cash provided by (used in) financing activities	17,901			—		—			(475		)	5,767			23,193
Effect of exchange rate changes on cash and cash equivalents	—			—		—			(235		)	—			(235		)
Increase in cash and cash equivalents	246			—		—			10,975			—			11,221
Cash and cash equivalents at beginning of year	7,320			—		—			2,274			—			9,594
Cash and cash equivalents at end of year	$	7,566		$	—	$	—		$	13,249		$	—		$	20,815

Table of Contents

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

During the fiscal period covered by this report, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, completed an evaluation of the effectiveness of the design and operation of our 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, and subject to the limitations described below, our 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 us in reports that we file or submit 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 our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) for our Company. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. generally accepted accounting principles. Management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or internal control system will prevent all errors and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the internal control system are achieved. Because of the inherent limitations in any internal control system, no evaluation of controls can provide absolute assurance that all control issues and instances of error or fraud, if any, within a company have been or will be detected. Accordingly, our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of the internal control system are met.

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of January 2, 2016 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control — Integrated Framework 2013.” Based on this assessment and subject to the limitations described above, management, including our Chief Executive Officer and Chief Financial Officer, has determined that our internal control over financial reporting was effective as of January 2, 2016.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting during the quarter ended January 2, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

Table of Contents

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth information about the directors and executive officers of Associated Materials Group, Inc. (“Parent”), our indirect parent company, and us as of March 22, 2016:



Name	Age	Position(s)
Brian C. Strauss	50	President and Chief Executive Officer and Director
Scott F. Stephens	46	Executive Vice President and Chief Financial Officer
William L. Topper	59	Executive Vice President, Operations
Curtis J. Dobler	51	Executive Vice President and Chief Human Resources Officer
David L. King	57	Senior Vice President and Chief Commercial Officer, Direct Sales
Stephen E. DeMay	51	Senior Vice President, U.S. Distribution Sales
Dana A. Schindler	49	Senior Vice President and Chief Marketing Officer
Kenneth James	64	General Counsel and Secretary
Adam D. Casebere	40	Senior Vice President, US Supply Center Operations
Philippe Bourbonniere	46	Senior Vice President, Canada Distribution
Erik D. Ragatz	43	Director, Chairman of the Board of Directors
Lawrence M. Blackburn	61	Director
Charles A. Carroll	66	Director
Adam B. Durrett	35	Director
Dana R. Snyder	69	Director

Set forth below is a brief description of the business experience of the directors and executive officers. All of the officers serve at the discretion of Parent’s board of directors.

Brian C. Strauss, Age 50. Mr. Strauss was appointed by the Board of Directors as President and Chief Executive Officer and Director on May 5, 2014. Before joining the Company, Mr. Strauss served as President and Chief Executive Officer of Henry Company, a manufacturer of building materials and performance additives, from 2007 to April 2014. Prior to working for Henry Company, Mr. Strauss served as President of Covalence Specialty Materials Corp. and its predecessor Tyco Plastics from 2003 to 2006. From 1995 to 2003, Mr. Strauss held various management positions and commercial roles at Honeywell International Inc. and its predecessor Allied Signal Inc., lastly serving as Vice President and General Manager of the Energy Strategic Business Enterprise within Honeywell’s Industry Solutions business. Mr. Strauss’ prior executive management experience and knowledge of manufacturing operations and the building products industry make him well-qualified to serve as President and Chief Executive Officer and as a member of the Board of Directors.

Scott F. Stephens, Age 46. Mr. Stephens was appointed Executive Vice President and Chief Financial Officer on October 14, 2014. Before joining the Company, Mr. Stephens served as Vice President and Chief Financial Officer of A.M. Castle & Co., a global distributor of specialty metal and plastic products and supply chain solutions, from 2008 to 2014. Mr. Stephens also served as Chief Financial Officer of Lawson Products, Inc., an industrial distributor of maintenance and repair products from 2006 to 2008, and as Senior Vice President and Chief Financial Officer of Lawson Products from 2004 to 2006.

William L. Topper, Age 59. Mr. Topper was appointed Executive Vice President, Operations on July 14, 2014. Before joining the Company, Mr. Topper served as Senior Vice President, Operations of Goodman Global, Inc., a manufacturer of heating, ventilation and air conditioning products, from April 2002 to December 2011. Prior to joining Goodman Global, Mr. Topper spent 28 years with Electrolux (Frigidaire), where he had responsibility for all domestic refrigeration production.

Curtis J. Dobler, Age 51. Mr. Dobler has been our Executive Vice President and Chief Human Resources Officer since August 10, 2015. Before joining us, Mr. Dobler spent thirteen years with Honeywell. In his most recent role, he was VP, Human Resources for the global supply chain organization in Honeywell’s Automation & Control Solutions business group. Prior to that role, Mr. Dobler was VP, Human Resources for Honeywell’s global Environmental & Combustion Control business from 2009 to 2014 and VP, Human Resources for Honeywell’s global Sensing and Controls business from 2005 to 2009. Earlier in his Honeywell career, Mr. Dobler held various roles of increasing responsibility in Human Resources within the Aerospace and Automotive groups.

Table of Contents

David L. King, Age 57. Mr. King has been Senior Vice President and Chief Commercial Officer, Direct Sales since November 1, 2013. Mr. King has been with the Company for 17 years, previously serving as Senior Vice President of Direct Sales from February 2013 to October 2013. Mr. King was Senior Vice President, AMI Sales from 2008 to 2013 and prior to 2008, served as Vice President, National Credit Manager.

Stephen E. DeMay, Age 51. Mr. DeMay has been Senior Vice President, U.S, Distribution Sales since July 9, 2015. Before joining us, Mr. DeMay was Vice President of Sales for North America at Formica North America, a division of Fletcher Building Group based in Auckland, New Zealand. Prior to Formica, Mr. DeMay spent 13 years with Lafarge North America. a $3.9 billion division of Lafarge SA. In his most recent role, he was Vice President Sales, North America Gypsum Division where he was responsible for all North America gypsum board and compound sales. Earlier in his career, Mr. DeMay held a variety of sales roles within Goodyear Tire and Rubber, Armstrong World Industries, Dal-Tile and Florida Tile Industries.

Dana A. Schindler, Age 49. Mrs. Schindler has been Senior Vice President and Chief Marketing Officer since November 1, 2013. Mrs. Schindler has been with the Company since 2000 and has held various positions within the marketing organization, most recently as Vice President of Marketing.

Kenneth James, Age 64. Mr. James has been General Counsel since May 15, 2013. Before joining the Company, Mr. James served as Senior Counsel and Deputy General Counsel at Pernod Ricard USA, LLC from 2006 through 2012. Mr. James was a principal of The James Group from 2004 to 2006. Mr. James also served as Vice President and Assistant General Counsel for Diageo North, Inc. from 2000 to 2003, and as Counsel with General Electric Company, Lighting Business Group from 1990 to 2000.

Adam D. Casebere, Age 40. Mr. Casebere was named Senior Vice President, US Supply Center Operations on February 11, 2015. Mr. Casebere has been with the Company since 1999 and has held various positions within the Supply Center organization, most recently as Vice President, US Supply Center Operations.

Philippe Bourbonniere, Age 46. Mr. Bourbonniere was named Senior Vice President, Canada Distribution on November 21, 2014, having served as Eastern Regional Manager for Gentek Canada since joining the Company in August 2013. Previously, Mr. Bourbonniere was the General Manager, Canada/U.S. for MPS Micropaint Canada, Ltd in 2012 and 2013. Mr. Bourbonniere also served as General Manager of Business Development with Noble (Rona) in 2010 and 2011. From 2002 to 2010, Mr. Bourbonniere held various positions at Hilti, most recently as Regional Manager for the civil and residential markets.

Erik D. Ragatz, Age 43. Mr. Ragatz has been a director and the Chairman of the Board of Directors since October 2010. Mr. Ragatz has also served as Chairman of the Compensation Committee and member of the Audit Committee during this time. Mr. Ragatz is a Managing Director at Hellman & Friedman LLC. Mr. Ragatz joined Hellman & Friedman LLC in September 2001 and has served as a Managing Director since January 2008. Since August 2014, Mr. Ragatz has served as Director, Chairman of the Board of Directors, Chairman of the Compensation Committee and member of the Audit Committee of ABRA Auto Body & Glass. Since October 2014, Mr. Ragatz has served as Director, Chairman of the Board of Directors, Chairman of the Compensation Committee and member of the Audit Committee of Grocery Outlet Inc. From February 2008 until November 2012, Mr. Ragatz served as Director and member of the Compensation Committee of Goodman Global Group, Inc. In addition, Mr. Ragatz served as Chairman of the Board of Directors from March 2009 until November 2012 and Chairman of the Audit Committee from February 2008 until May 2011 and then from January to November 2012. Previously, Mr. Ragatz was a member of the Board of Directors of Texas Genco, LLC, Sheridan Holdings, Inc. and LPL Investment Holdings, Inc. As a member of the Board of Directors, Mr. Ragatz contributes his financial and capital markets expertise and draws on his years of experience with Hellman & Friedman LLC. Mr. Ragatz also brings his insight into the proper functioning and role of corporate boards of directors, gained through his years of service on the boards of directors of Hellman & Friedman LLC’s portfolio companies.

Lawrence M. Blackburn, Age 61. Mr. Blackburn has been a director since September 2013. Mr. Blackburn has served as Executive Vice President and Chief Financial Officer of Goodman Global, Inc. since September 2001. Before joining Goodman Global, Inc., Mr. Blackburn served as Vice President and Chief Financial Officer of Amana Appliances from February 2000 to July 2001, when substantially all of the assets of Amana Appliances were acquired by Maytag Corporation. From April 1983 to August 1999, Mr. Blackburn was with Newell Rubbermaid, Inc. and previously Rubbermaid, Inc., where he had most recently been President and General Manager of its wholly-owned subsidiary, Little Tikes Commercial Play Systems, Inc. Mr. Blackburn was previously a member of the board of directors of Goodman Global Group, Inc. As a member of the Board, Mr. Blackburn contributes significant industry-specific experience and financial expertise based on his years of senior executive experience and his service on other company boards, which make him well-qualified to serve as a member of the Board of Directors.

Table of Contents

Charles A. Carroll, Age 66. Mr. Carroll has been a director since October 2010. Mr. Carroll served as President and Chief Executive Officer of Goodman Global, Inc. from September 2001 to April 2008. Before joining Goodman Global, Inc., Mr. Carroll served as President and Chief Executive Officer of Amana Appliances from January 2000 to July 2001, when substantially all of the assets of Amana Appliances were acquired by Maytag Corporation. From 1971 to March 1999, Mr. Carroll was employed by Rubbermaid, Inc. where, from 1993, he held the position of President and Chief Operating Officer and was a member of the board of directors. Mr. Carroll was previously a member of the board of directors of Goodman Global Group, Inc. Mr. Carroll contributes his knowledge of the building products industry, as well as substantial experience developing corporate strategy and assessing emerging industry trends and business operations, which make him well-qualified to serve as a member of the Board of Directors.

Adam B. Durrett, Age 35. Mr. Durrett has been a director since October 2010. Mr. Durrett is a Director at Hellman & Friedman LLC. Before joining Hellman & Friedman LLC in 2005, Mr. Durrett worked in the Media and Telecommunications Mergers and Acquisitions Department of Morgan Stanley & Co. in New York from 2003 to 2005. In addition, Mr. Durrett currently serves on the board of Edelman Financial, L.P. and was a member of the Grosvenor Capital Management LP Advisory Board during 2011. As a member of the Board of Directors, Mr. Durrett contributes his financial expertise and draws on his years of experience with Hellman & Friedman LLC and in other financial positions.

Dana R. Snyder, Age 69. Mr. Snyder has been a director since November 2010. From December 2004 to October 2010, Mr. Snyder served as a director of AMH Holdings II, Inc. Mr. Snyder also served as the Company’s Interim Chief Executive Officer from January 2014 through May 2014 and from June 2011 through September 2011 and Interim President and Chief Executive Officer from July 2006 through September 2006. Previously, Mr. Snyder was an executive with Ply Gem Industries, Inc. and The Stolle Corporation and served on the board of directors of Werner Ladder from 2004 to 2007. Mr. Snyder’s valuable experience in general management, manufacturing operations, sales and marketing, as well as cost reduction and acquisitions, adds value and extensive knowledge regarding our industry and evaluation of certain strategic alternatives. In addition, Mr. Snyder has experience evaluating the financial and operational performance of companies within the building products industry. Mr. Snyder’s service as the Company’s Interim Chief Executive Officer provides him with an understanding of the financial and business issues relevant to us and makes him well-qualified to serve as a member of the Board of Directors.

Board Composition and Governance

Our Board of Directors consists of six directors. Our amended and restated limited liability company agreement provides that our Board of Directors shall consist of a number of directors between one and ten. The exact number of directors will be determined from time to time by the affirmative vote of a majority of directors then in office.

Each director serves until such director’s resignation, death, disqualification or removal. Vacancies on the Board of Directors, whether caused by resignation, death, disqualification, removal, an increase in the authorized number of directors or otherwise, may be filled by Associated Materials Incorporated (“Holdings”), our sole member, or the affirmative vote of a majority of the remaining directors, although less than a quorum, or by a sole remaining director.

In connection with the closing of the Merger on October 13, 2010, we entered into a stockholders agreement (the “Stockholders Agreement”) with Parent, Holdings, certain investment funds affiliated with Hellman & Friedman LLC ((and

such investment funds, the “H&F Investors”) and each member of our management and Board of Directors that held shares of common stock or options of Parent at that date. Under the Stockholders Agreement, before an initial public offering of the shares of Parent common stock, Parent’s board of directors will consist of the Chief Executive Officer of Parent (unless otherwise determined in writing by the H&F Investors) and such other directors as shall be designated from time to time by the H&F Investors.

For a discussion regarding the Stockholders Agreement, please refer to Item 13. “Certain Relationships, Related Transactions and Director Independence — Stockholders Agreement.”

The members of our Board of Directors have been determined by action of Holdings, our sole member and a 100% owned subsidiary of Parent. Parent has designated the members of its board of directors to also be the members of each of Holdings’ and our board of directors. Because we have a single member, we do not have a standing nominating committee of our Board of Directors and do not recommend directors for approval by Holdings.

We believe that Holdings seeks to ensure that our Board of Directors is composed of members whose particular experience, qualifications, attributes and skills, when taken together, will allow the Board of Directors to satisfy its oversight responsibilities effectively in light of our business and structure. In that regard, we believe that Holdings considers all factors it deems appropriate, including the information discussed in each director’s biographical information set forth above and, in particular, with regard to Messrs. Ragatz, Blackburn, and Durrett, their significant experience, expertise and background with regard to financial matters.

Table of Contents

Parent’s board of directors currently has two standing committees, the Audit Committee and the Compensation Committee.

Audit Committee

The members of Parent’s Audit Committee are appointed by Parent’s board of directors. The Audit Committee currently consists of Messrs. Blackburn, Ragatz and Durrett. Mr. Blackburn is the Chairperson of the Audit Committee. Messrs. Blackburn and Ragatz are considered “audit committee financial experts” under the Sarbanes-Oxley Act of 2002 and the rules and regulations of the SEC. Under the applicable listing standards, there are heightened requirements for determining whether the members of the Audit Committee are independent. Since Parent does not have a class of securities listed on any national securities exchange, Parent is not required to maintain an audit committee comprised entirely of “independent” directors under the heightened independence standards. Other than Mr. Blackburn, the members of Parent’s Audit Committee do not qualify as independent under the heightened independence standards. Parent believes the experience and education of the directors on its Audit Committee qualify them to monitor the integrity of its financial statements, compliance with legal and regulatory requirements, the public accountant’s qualifications and independence, its internal controls and procedures for financial reporting and its compliance with applicable provisions of the Sarbanes-Oxley Act and the rules and regulations thereunder. In addition, the Audit Committee has the ability on its own to retain independent accountants, financial advisors or other consultants, advisors and experts whenever it deems appropriate.

Compensation Committee

The Compensation Committee currently consists of four directors, Messrs. Ragatz, Blackburn, Carroll and Snyder. Mr. Ragatz is the Chairperson of the Compensation Committee.

Section 16(a) Beneficial Ownership Reporting Compliance

As Associated Materials LLC does not have a class of securities registered pursuant to Section 12 of the Exchange Act, none of its directors, officers or stockholders is subject to the reporting requirements of Section 16(a) of the Exchange Act.

Code of Ethics

We have adopted a code of ethics that applies to our principal executive officer and all senior financial officers, including the chief financial officer, controller and other persons performing similar functions. This code of ethics is posted on our website at http://www.associatedmaterials.com. If we amend or waive any provision of our code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or any person performing similar functions, we intend to satisfy our disclosure obligations with respect to any such waiver or amendment by posting such information on our internet website set forth above rather than by filing a Form 8-K. Information contained on our website shall not be deemed a part of this report.

ITEM 11. EXECUTIVE COMPENSATION

Named Executive Officers

For the fiscal year ended January 2, 2016, (the “2015 fiscal year”), the following individuals were our named executive officers:



Name		Title(s)
Brian C. Strauss		President and Chief Executive Officer
Scott F. Stephens		Executive Vice President and Chief Financial Officer
William L. Topper		Executive Vice President, Operations
Curtis J. Dobler		Executive Vice President and Chief Human Resources Officer
David L. King		Senior Vice President and Chief Commercial Officer, Direct Sales
James T. Kenyon		Former Senior Vice President and Chief Human Resources Officer

Objectives of Our Executive Compensation Program

The goals of our executive compensation program are to: (1) attract and retain key executives, (2) align executive pay with corporate goals and (3) encourage a long-term commitment to enhance equity value.

Our primary key performance indicator is EBITDA. We utilize EBITDA as the primary measure of our financial performance. Accordingly, our compensation programs are primarily designed to reward executives for driving growth of our EBITDA, which we believe corresponds to the enhancement of equity value. “EBITDA,” as used in our annual incentive bonus

Table of Contents

program for the 2015 fiscal year and for purposes of establishing the vesting targets for performance vesting stock options, has the same meaning as “Adjusted EBITDA” as presented elsewhere in this report. For this purpose, EBITDA does not include the run-rate cost savings add-back allowable under the ABL facilities and the Indenture and may be subject to additional adjustments as made in good faith by the Compensation Committee of our board of directors (the “Committee”) for non-recurring or unusual transactions such as acquisitions or dispositions of assets outside the ordinary course of business.

As discussed below under the heading “— Annual Incentive Bonus,” certain other operating metrics, which are established by the Committee, in mutual agreement with our President and Chief Executive Officer (“CEO”), within the first 90 days of each fiscal year are utilized as secondary performance indicators under our annual incentive bonus program.

Elements of Compensation

The compensation of our named executive officers consists of the following elements: (1) base salary, (2) discretionary bonus awards payable under special circumstances, (3) annual incentive bonus, (4) long-term incentive compensation in the form of both time and performance vesting stock options, and (5) severance and change in control benefits. We believe that offering each of these elements is necessary to remain competitive in attracting and retaining talented executives. Furthermore, the annual incentive bonus and equity-based long-term incentive compensation align the executive’s goals with those of the organization and Parent’s stockholders.

Collectively, these elements of a named executive officer’s total compensation are designed to reward and influence the executive’s individual performance and our short-term and long-term performance. Base salaries and annual incentive bonuses are designed to reward executives for their performance and our short-term performance. Discretionary bonus awards typically include sign-on bonuses or incentives to attract executives, or awards to executives paid at the discretion of the Committee under special circumstances. We believe that providing long-term incentive compensation in the form of stock options ensures that our executives have a continuing stake in our long-term success and have incentives to increase Parent’s equity value. Severance benefits are commonplace in executive positions, and we believe that offering such benefits is necessary to remain competitive in the marketplace. Total compensation for each named executive officer is reviewed annually by the Committee to ensure that the proportions of the executive’s short-term incentives and long-term incentives are, in the view of the Committee, properly balanced.

Setting Executive Compensation

The Committee reviews and approves all employment agreements entered into by our named executive officers when they commence employment with us. The Committee is also responsible for approving any changes to the compensation of our named executive officers following their commencement of employment. Historically, the Committee has not engaged in any formal benchmarking of compensation. However, the Committee from time to time has reviewed data compiled from publicly available surveys regarding the compensation paid by similarly sized companies for similar positions and will consider this data both when determining whether the named executive officers should receive a base salary increase and in deciding whether to make any changes in the compensation of our named executive officers.

Periodically, our Executive Vice President and Chief Human Resources Officer (“CHRO”) and our CEO conduct an assessment of each executive’s (other than the CEO’s) performance for the immediately preceding year. Following this assessment, our CEO presents recommendations to the Committee regarding base salary increases and any other proposed changes in the compensation of the executives, excluding himself. The Committee reviews these performance assessments and recommendations, and either approves these recommendations or adjusts such recommendations as it determines to be appropriate in its sole discretion in making changes to the compensation of any executive. Our CHRO also provides our CEO and the Committee with input regarding our annual bonus plan (as discussed below) and equity grants for executives, including but not limited to, recommendations regarding eligibility for such grants and the size of the applicable grant (determined as a percentage of base salary). Although our CEO and CHRO generally attend meetings of the Committee, each recuses himself from those portions of the meetings related to his compensation. In addition, our CEO provides input to the Committee with respect to setting the EBITDA targets under our annual bonus program and the other operating metrics under the annual bonus program are mutually agreed by the Committee and our CEO.

The Committee is exclusively responsible for determining any base salary increases for our CEO and for making any other compensation decisions with respect to our CEO. In making any such compensation decisions, the Committee has historically considered any relevant data from publicly available sources and its own assessment of the performance of our CEO for the preceding year.

Table of Contents

Base Salary

Base salaries are determined based on (1) a review of salary ranges for similar positions at companies of similar size based on annual revenues, (2) the specific experience level of the executive and (3) expected contributions by the executive toward organizational goals. Annually, the Committee reviews base salaries of executives to ensure that, along with all other compensation, base salaries continue to be competitive with respect to similarly sized companies. As described above, the Committee may also award annual increases in base salary based upon the executive’s individual contributions and performance during the prior year. The base salaries of executives hired in 2015, included the base salary for Mr. Dobler, which was determined as a result of negotiations with such executive in connection with his commencement of employment with us and the Committee’s subjective judgment (based on the experience of its members) as to what a competitive salary would be for his position. Additionally, Mr. King’s annual base salary was increased from $250,000 to $270,000 in 2015.

Bonus Awards

Discretionary bonus awards encompass any bonus provided outside of the annual incentive bonus program discussed below. Typical bonus awards include awards used to attract executives to us, such as signing bonuses or bonuses that guarantee a fixed or minimum payout as compared to a payout under the annual incentive bonus program based upon the achievement of defined performance goals. Bonus awards can also be awarded at the discretion of the Board of Directors to recognize extraordinary achievements or contributions by our executives. As an incentive for Mr. Dobler to commence employment with us, his employment agreement provided for a one-time signing bonus of $100,000. We also agreed to pay Mr. King a guaranteed target bonus of $162,000 in respect of the 2015 fiscal year. In addition, Messrs. Strauss, Stephens, Topper, and Dobler each received a special discretionary bonus of $245,823, $130,593, $130,593, and $40,931, respectively, to reward them for their efforts for the 2015 fiscal year.

Annual Incentive Bonus

For each fiscal year, the executives’ annual incentive bonuses are determined as a percentage of their base salaries (with a target bonus percentage set forth in each executive’s employment agreement), based on the achievement of the applicable performance goals.

2015 Fiscal Year Annual Bonus Program. One hundred percent (100%) of the total target bonus for the 2015 fiscal year is based on achieving an EBITDA performance goal. Each year, the Committee establishes EBITDA performance goals, including threshold, target, and maximum performance goals. The EBITDA performance goals are established by the Committee, giving consideration to our prior fiscal year performance, expected growth in EBITDA, market conditions that may impact results, and a review of the budget prepared by management. The EBITDA performance goals are established to motivate superior performance by management to achieve challenging targets and results that are deemed to be in the best interest of us and our stockholders and to tie their interest to meeting and exceeding our established financial goals. Failure to achieve the internal EBITDA performance goals is not necessarily an indication of our financial performance or our financial condition. If the EBITDA results for the period in question are between either the threshold and target performance goals or target and maximum performance goals, linear interpolation is used to calculate the portion of the incentive bonus payout that is based on the achievement of the EBITDA performance goal. As described above under the heading, “— Objectives of Our Executive Compensation Program,” EBITDA excludes the adjustment for run-rate cost savings and may be adjusted by the Committee, at its discretion, for non-recurring or unusual transactions, which may not otherwise be included as an adjustment to derive our Adjusted EBITDA as presented elsewhere in this report.

The threshold, target and maximum EBITDA performance goals for the 2015 fiscal year were $81.5 million, $89.5 million and $106.5 million, respectively. EBITDA for 2015 was $84.6 million calculated on the same basis as Adjusted EBITDA for the 2014 fiscal year excluding run-rate cost savings of $4.9 million (as presented under “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations” and elsewhere in this report), and $0.8 million in other normalizing adjustments, in accordance with the Committee’s discretion in permitting adjustments for non-recurring or unusual transactions as permitted under the Amended and Restated Revolving Credit Agreement governing our ABL facilities and the Indenture.

For the 2015 fiscal year, EBITDA was $84.6 million which exceeded the $81.5 million threshold and represented 94.5% of target. Accordingly, the following payments of target bonus have been approved to be paid to Messrs. Strauss, Stephens, Topper, and Dobler in the amounts of $354,177, $188,157, $188,157, and $58,973, respectively.

Table of Contents

For the 2015 fiscal year, the threshold, target and maximum bonuses that could have been earned by each of our named executive officers (expressed as a percentage of base salary and based on the bonus they could have earned for the full year), are set forth below:



	2015 Annual Incentive Bonus Payout Percentage
Name	Threshold		Target		Maximum
Brian C. Strauss	33	%	100	%	300	%
Scott F. Stephens	25	%	75	%	225	%
William L. Topper	25	%	75	%	225	%
Curtis J. Dobler	25	%	75	%	225	%
David L. King (1)	20	%	60	%	180	%
James T. Kenyon	20	%	60	%	180	%


(1)	For the 2015 fiscal year, Mr. King was guaranteed for a bonus equal to 60% of his annual current salary as part of his 2015 employment agreement.

Equity-Based Compensation

The Committee awards equity-based compensation, generally consisting of stock options of Parent, to named executive officers based on the expected role of the named executive officer in increasing equity value. Typically equity-based awards will be granted upon hiring or promotion of the named executive officer; however, equity-based awards may be granted at any time at the discretion of the Committee.

The time-based options vest with respect to 20% of the shares on each anniversary of the grant date, with accelerated vesting of all unvested shares in the event of a change in control, as defined below under the heading “— Associated Materials Group, Inc. 2010 Stock Incentive Plan.” The performance-based options vest based on the achievement of EBITDA targets as established by the Committee annually with respect to 20% of the shares per year over a five-year period, or if the target for a given year is not achieved, the option may vest if the applicable EBITDA target is achieved in the next succeeding year. As described above under the heading, “— Objectives of Our Executive Compensation Program,” EBITDA excludes the adjustment for run-rate cost savings and may be adjusted by the board of directors, at its discretion, for non-recurring or unusual transactions, which may not otherwise be included as an adjustment to derive our Adjusted EBITDA as presented elsewhere in this report. The shares of common stock acquired upon the exercise of such stock options are subject to the term of the Stockholders Agreement, as described below under Item 13. “Certain Relationships, Related Transactions and Director Independence — Stockholders Agreement.” The stock options expire on the tenth anniversary of the date of grant. The shares of common stock acquired upon the exercise of such stock options will be subject to both transfer restrictions and repurchase rights following a termination of employment.

In connection with Mr. Dobler’s commencement of employment with us on August 10, 2015, Parent granted Mr. Dobler an option to purchase 320,000 shares of Parent common stock subject to time-based vesting and 80,000 shares subject to performance-based vesting pursuant to Parent’s 2010 Stock Incentive Plan. The time-based vesting options will be subject to time-based vesting over a five-year period, and the performance-based vesting options will be subject to performance-based vesting conditions, based on the attainment of annual adjusted EBITDA goals over a five-year period from fiscal years 2015 through 2019. Fifty percent of the total number of options granted have an exercise price equal to the grant date fair market value of the underlying shares of common stock and the remaining fifty percent of the total number of options granted have an exercise price equal to $0.55.

Parent granted Mr. King an option to purchase 80,000 shares of Parent common stock subject to time-based vesting and 20,000 shares subject to performance-based vesting pursuant to Parent’s 2010 Stock Incentive Plan. The time-based vesting options will be subject to time-based vesting over a five-year period, and the performance-based vesting options will be subject to performance-based vesting conditions, based on the attainment of annual adjusted EBITDA goals over a five-year period from fiscal years 2016 through 2020. The options granted have an exercise price equal to the grant date fair market value of the underlying shares of common stock, which was $0.55 per share.

On June 25, 2015, the Committee modified outstanding time-based and performance-based vesting options to purchase shares of Parent common stock held by eligible participants which were scheduled to vest after March 31, 2014 (including options held by Messrs. Strauss, Stephens, Topper and King), to reduce the exercise price of such options by $4.49 (but not below the fair market value of a share of Parent common stock at the time of such amendment). The number of time-based and

Table of Contents

performance-based options repriced was 4.5 million, with a weighted average exercise price prior to repricing of $9.23 per award. Such options were held by 17 employees.

Severance Compensation/Change in Control Benefits

Severance Benefits under Employment Agreements. Our named executive officers enter into employment agreements that provide for severance benefits in the event that we terminate the named executive officer without cause (and other than due to death or disability) or, solely with respect to Mr. Strauss, if he resigns with good reason, in each case at any time. We believe that it is necessary to offer severance benefits in order to remain competitive in attracting talent to us (and to retain such talent). These named executive officers’ employment agreements do not provide for enhanced severance if we have a change in control.

Change in Control Benefits under Stock Option Award Agreements. The stock option award agreements between Parent and our named executive officers provide that the time-based vesting options, granted pursuant to the Associated Materials Group, Inc. 2010 Stock Incentive Plan (“2010 Plan”), will vest in full immediately prior to a change in control.

In the event of a change in control, these option agreements also provide that the portion of the performance-based vesting options that was otherwise scheduled to vest in the year in which the change in control occurs and the portion that was scheduled to vest in any years subsequent to such change in control will become vested immediately prior to such change in control. Parent agreed to provide accelerated vesting of unvested time-based options and performance-based options (other than that portion of the performance-based option that did not vest in any year prior to a change in control) in order to ensure that our named executive officers are solely focused on helping us consummate a change in control.

If a liquidity event occurs (defined as the first to occur of either a change in control or an initial public offering of Parent common stock), any portion of the performance-based option that did not vest in any prior year because the applicable EBITDA target was not met will vest if and only if the H&F Investors receive a three times return on their initial cash investment in Parent.

Perquisites

Upon commencement of employment, we offer relocation packages to our named executive officers if necessary, which includes temporary living costs, house searching trips for the named executive officers and their family, temporary use of a company-owned vehicle, the cost of moving household goods and reimbursement of closing costs and real estate expenses.

Table of Contents

SUMMARY COMPENSATION TABLE

The table below summarizes the total compensation paid to, or earned by our named executive officers for services rendered to us during our last three fiscal years.



Name and Principal Position	Year	Salary		Bonus (1)		Stock Awards			Option Awards (2)		Non-Equity Incentive Plan Compensation (3)		Change in Pension Value and Nonqualified Deferred Compensation Earnings	All Other Compensation			Total

Brian C. Strauss	2015	$	600,000	$	600,000	$	—		$	—	$	—	—	$	63,240	(4)	$	1,263,240
President and Chief Executive Officer	2014	$	395,769	$	178,100	$	—		$	—	$	—	—	$	41,657		$	615,526
Scott F. Stephens	2015	425,004		318,750		—			—		—		—	47,112		(4)	790,866
Executive Vice President and Chief Financial Officer	2014	91,812		293,116		—			—		—		—	10,240			395,168
William L. Topper	2015	425,000		318,750		—			—		—		—	67,741		(4)	811,491
Executive Vice President, Operations	2014	198,063		148,459		—			—		—		—	26,379			372,901
Curtis J. Dobler	2015	134,039		199,904		—			—		—		—	109,012		(4)	442,955
Executive Vice President and Chief Human Resources Officer (7)
David L. King	2015	251,669		162,000		—			—		—		—	6,985			420,654
Senior Vice President and Chief Commercial Officer, Direct Sales	2014	250,002		12,500		—			—		—		9,075	18,639			281,141
	2013	250,002		—		—			—		13,160		—	13,748			276,910
James T. Kenyon	2015	163,590		57,906		2,970		(6)	—		—		—	261,558		(5)	486,024
Former Senior Vice President and Chief Human Resources Officer (8)	2014	275,000		12,500		27,216			—		—		—	13,058			327,774
	2013	275,000		—		27,000			—		14,476		—	11,505			327,981

(1)

The amount represents the annual management incentive bonus granted by the Board in 2015. As an incentive for Mr. Dobler to commence employment with us, his employment agreement provided for a one-time signing bonus of $100,000. We also agreed to pay Mr. King a guaranteed target bonus of $162,000 in respect of the 2015 fiscal year. In addition, Messrs. Strauss, Stephens, Topper, and Dobler each received a special discretionary bonus of $245,823, $130,593, $130,593, and $40,931, respectively. The bonus for Mr. Kenyon was prorated for his time with the company in 2015.

(2)

Amounts reflect the dollar amount recognized for financial statement purposes in accordance with ASC718. The assumptions used in determining the grant date fair value of option awards and our general approach to our valuation methodology are set forth in Note 14 to the consolidated financial statements in Item 8. “Financial Statements and Supplementary Data.” Note that for purposes of ASC 718, the grant date fair value of these options is zero. Additional detail is provided below under the heading “Outstanding Equity Awards At Fiscal Year-End 2015.”


(3)	Amounts included in the column “Non-Equity Incentive Plan Compensation” reflect the annual cash incentive bonus approved by the Committee.


(4)	For Messrs. Strauss, Stephens, Topper, and Dobler, amounts include stipend to cover temporary living, airfare and other transportation expenses of 48,000, $44,000, 48,000 and 6,000, respectively. Mr. Dobler received $102,428 of moving expense reimbursements in 2015.


(5)	For Mr. Kenyon, such amount includes severance obligations accrued in 2015 of $236,320, of which $103,125 was paid in 2015. The remaining severance of $133,195 is expected to be paid in 2016.

(6)

In connection with the commencement of employment of Mr. Kenyon in June 2012, Mr. Kenyon was granted 27,000 shares of restricted stock, which vest over a five-year period (5,400 shares per year). In 2014, 5,400 shares of restricted stock vested with grant date fair value of $27,216. In 2015, 5,400 shares of restricted stock vested with an estimated market value of $2,970. The remaining 10,800 shares that had not vested were forfeited as of the date of his resignation.


(7)	Mr. Dobler was appointed Executive Vice President, Chief Human Resources Officer as of August 10, 2015.


(8)	On August 5, 2015, Mr. Kenyon resigned from his position as Senior Vice President and Chief Human Resources Officer.

Table of Contents

EMPLOYMENT AGREEMENTS

As a matter of practice, we enter into employment agreements with our executive officers that establish minimum salary levels, outline the terms of their discretionary and annual incentive bonuses, and provide for severance benefits in the event of a qualifying termination. The following is a summary of the significant terms of each named executive officer’s employment agreement.

Mr. Strauss

On March 24, 2014, we entered into an employment agreement with Mr. Strauss, pursuant to which he agreed to serve as our President and CEO. The initial term of Mr. Strauss’ employment is three years. Pursuant to his employment agreement, Mr. Strauss will receive an annual base salary of $600,000 and a one-time signing bonus of $178,100 and is eligible for an annual bonus with a target bonus opportunity equal to 100% of his base salary and a maximum bonus opportunity equal to 300% of his base salary (prorated for 2014). In addition, we will pay Mr. Strauss a monthly stipend of $4,000 to cover his monthly temporary living expenses and will reimburse Mr. Strauss for certain amounts in connection with his travel and eventual relocation to the Northeast Ohio area.

If Mr. Strauss’ employment is terminated by us without cause or he resigns for good reason, he will be entitled to (i) his base salary for two years, payable in equal installments over twenty-four months, (ii) his incentive bonus, prorated for the year in which such termination occurs and in accordance with the terms of the employment agreement and (iii) continued medical and dental benefits for up to two years. The severance benefits are subject to Mr. Strauss’ execution of a general release in favor of us and our affiliates and Mr. Strauss’ continued compliance with the restrictive covenants in the employment agreement, and are capped to the extent such benefits would not be fully deductible by us for federal income tax purposes under Section 280G of the tax code or would give rise to a related excise tax on Mr. Strauss. Pursuant to the employment agreement, Mr. Strauss will be subject to restrictions on competition and solicitation of employees and customers during his employment with us and for a period of two years thereafter.

Mr. Stephens

On October 14, 2014, we entered into an employment agreement with Mr. Stephens, pursuant to which he agreed to serve as our Executive Vice President and Chief Financial Officer. The initial term of Mr. Stephens’ employment is three years. Pursuant to his employment agreement, Mr. Stephens will receive an annual base salary of $425,000 and a one-time signing bonus of $225,000, and is eligible for an annual bonus with a target bonus opportunity equal to 75% of his base salary and a maximum bonus opportunity equal to 300% of his base salary. In addition, we will pay Mr. Stephens a monthly stipend of $4,000 to cover his monthly temporary living expenses and will reimburse Mr. Stephens for certain amounts in connection with his commuting to the Northeast Ohio area within 9 months of his employment commencement date.

If Mr. Stephens’ employment is terminated by us without cause, he will be entitled to (i) his base salary for one year, payable in equal installments over twelve months, (ii) his incentive bonus, pro-rated for the year in which such termination occurs and in accordance with the terms of the employment agreement and (iii) continued medical and dental benefits for up to one year. The severance benefits are subject to Mr. Stephens’ execution of a general release in favor of us and our affiliates and Mr. Stephens’ continued compliance with the restrictive covenants in the employment agreement, and are capped to the extent such benefits would not be fully deductible by us for federal income tax purposes under Section 280G of the tax code or would give rise to a related excise tax on Mr. Stephens. Pursuant to the employment agreement, Mr. Stephens will be subject to restrictions on competition and solicitation of employees and customers during his employment with us and for a period of two years thereafter.

Mr. Topper

On July 29, 2014, we entered into an employment agreement with Mr. Topper, pursuant to which he agreed to serve as our Executive Vice President, Operations. The initial term of Mr. Topper’s employment is four years. Pursuant to his employment agreement, Mr. Topper will receive an annual base salary of $425,000 and is eligible for an annual bonus with a target bonus opportunity equal to 75% of his base salary and a maximum bonus opportunity equal to 300% of his base salary. For the fiscal year 2014, Mr. Topper’s annual bonus will be guaranteed at 100% of the target bonus (prorated for the number of days he is employed in 2014). In addition, we will pay Mr. Topper a monthly stipend of $4,000 to cover his monthly temporary living expenses and will reimburse Mr. Topper for certain amounts in connection with his commuting to the Northeast Ohio area.

If Mr. Topper’s employment is terminated by us without cause, he will be entitled to (i) his base salary for one year, payable in equal installments over twelve months, (ii) his incentive bonus, prorated for the year in which such termination occurs and in accordance with the terms of the employment agreement and (iii) continued medical and dental benefits for up to one year. The severance benefits are subject to Mr. Topper’s execution of a general release in favor of us and our affiliates and

Table of Contents

Mr. Topper’s continued compliance with the restrictive covenants in the employment agreement, and are capped to the extent such benefits would not be fully deductible by us for federal income tax purposes under Section 280G of the tax code or would give rise to a related excise tax on Mr. Topper. Pursuant to the employment agreement, Mr. Topper will be subject to restrictions on competition and solicitation of employees and customers during his employment with us and for a period of two years thereafter.

Mr. Dobler

On July 14, 2015, we entered into an employment agreement with Mr. Dobler, pursuant to which he agreed to serve as our Executive Vice President and Chief Human Resources Officer. The initial term of Mr. Dobler’s employment is three years. Pursuant to his employment agreement, Mr. Dobler will receive an annual base salary of $340,000 and is eligible for an annual bonus with a target bonus opportunity equal to 75% of his base salary and a maximum bonus opportunity equal to 225% of his base salary.

If Mr. Dobler’s employment is terminated by us without cause, he will be entitled to (i) his base salary for one year, payable in equal installments over twelve months, (ii) his incentive bonus, pro-rated for the year in which such termination occurs and in accordance with the terms of the employment agreement and (iii) continued medical and dental benefits for up to one year. The severance benefits are subject to Mr. Dobler’s execution of a general release in favor of us and our affiliates and Mr. Dobler’s continued compliance with the restrictive covenants in the employment agreement, and are capped to the extent such benefits would not be fully deductible by us for federal income tax purposes under Section 280G of the tax code or would give rise to a related excise tax on Mr. Dobler. Mr. Dobler will also be subject to restrictions on competition and solicitation of employees and customers during his employment with us and for a period of two years thereafter.

Mr. King

On October 13, 2010, we entered into an employment agreement with Mr. King, pursuant to which he agreed to serve as our Vice President, AMI Sales. The initial term of Mr. King’s employment was three years. On January 1, 2013, Mr. King’s employment agreement was amended in connection with his assumption of the Senior Vice President and Chief Commercial Officer, Direct Sales. On December 9, 2015, Mr. King’s employment agreement was further amended to increase his annual base salary from $250,000 to $270,000, to provide him an annual bonus target opportunity equal to 60% of his base salary and a maximum bonus opportunity equal to 180% of his base salary. The 2015 employment agreement amendment also provided that Mr. King’s annual bonus for each of fiscal years 2015 and 2016 will be guaranteed to be 60% of his then current annual base salary.

If Mr. King’s employment is terminated by us without cause, he will be entitled to (i) his base salary for one year, payable in equal installments over twelve months, (ii) his incentive bonus, pro-rated for the year in which such termination occurs and in accordance with the terms of the employment agreement and (iii) continued medical and dental benefits for up to one year. The severance benefits are subject to Mr. King’s execution of a general release in favor of us and our affiliates and Mr. King’s continued compliance with the restrictive covenants in the employment agreement, and are capped to the extent such benefits would not be fully deductible by us for federal income tax purposes under Section 280G of the tax code or would give rise to a related excise tax on Mr. King. Mr. King will also be subject to restrictions on competition and solicitation of employees and customers during his employment with us and for a period of two years thereafter.

Definitions of Cause and Good Reason

Under each of the above-described employment agreements, “cause” is generally defined as the executive’s: (i) embezzlement, theft or misappropriation of any of our property; (ii) breach of the restrictive covenants set forth in the employment agreement; (iii) breach of any other material provision of the employment agreement which breach is not cured, to the extent susceptible to cure, within 30 days after we give written notice to the executive describing such breach; (iv) willful failure to perform the duties of his employment which continues for a period of 14 days following written notice by us; (v) conviction of, or a plea of no contest (or a similar plea) to, any criminal offense that is a felony or involves fraud, or any other criminal offense punishable by imprisonment of at least one year or materially injurious to the business or reputation of us involving theft, dishonesty, misrepresentation or moral turpitude; (vi) gross negligence or willful misconduct in the performance of his duties as an employee, officer or director of us; (vii) breach of fiduciary obligations to us; (viii) commission of intentional, wrongful damage to our property; (ix) chemical dependence which adversely affects the performance of his duties and responsibilities to us; or (x) violation of our code of ethics, code of business conduct or similar policies applicable to the executive. The existence or non-existence of cause shall be determined in good faith by the board of directors.

Mr. Strauss is our only named executive officer who has the right to resign for good reason. Under the employment agreement with Mr. Strauss, “good reason” is generally defined as the occurrence of any of the following, without Mr. Strauss’ express written consent: (i) a significant reduction of his duties, position, or responsibilities, relative to his duties, position, or

Table of Contents

responsibilities in effect immediately prior to such reduction; (ii) a reduction of his base salary or of the maximum possible bonus opportunity; (iii) a material reduction in the kind or level of employee benefits to which he is entitled immediately prior to such reduction with the result that his overall benefits package is significantly reduced other than pursuant to a reduction that also is applied to substantially all our other executive officers; (iv) the relocation of Mr. Strauss to a facility or location more than 50 miles from his current intended place of employment (i.e., the Company’s headquarters in Northern Ohio); or (v) our failure to obtain the assumption of the employment agreement by a successor; provided, that any such event described in clauses (i) through (v) above shall not constitute “good reason” unless Mr. Strauss delivers to us a notice of termination for good reason within 90 days after he first learns of the existence of the circumstances giving rise to good reason, and within 30 days following the delivery of such notice of termination for good reason we have failed to cure the circumstances giving rise to good reason.

Table of Contents

GRANTS OF PLAN-BASED AWARDS

The following table summarizes the grants of equity and non-equity, plan-based awards made to our named executive officers during the 2015 fiscal year:



Name	Grant Date	Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1)			Estimated Future Payouts Under Equity Incentive Plan Awards			All Other Option Awards: Number of Securities Underlying Options (#) (3)	Exercise or Base Price of Option Awards ($/Share)	All Other Stock Awards: Number of Shares of Stock (#)	Fair Market Value on Grant Date ($)	Grant Date Fair Value of Stock and Option Awards ($) (4)
Name	Grant Date	Threshold ($)	Target ($)	Maximum ($)	Threshold (#)	Target (#) (2)	Maximum (#)		Exercise or Base Price of Option Awards ($/Share)	All Other Stock Awards: Number of Shares of Stock (#)	Fair Market Value on Grant Date ($)	Grant Date Fair Value of Stock and Option Awards ($) (4)

Brian C. Strauss		198,000	600,000	1,800,000
	4/29/2015					80,000			0.55			—
Scott F. Stephens		106,250	318,750	956,250
	4/29/2015					30,000			0.55			—
William L. Topper		106,250	318,750	956,250
	4/29/2015					30,000			0.55			—
Curtis J. Dobler		26,808	99,904	241,271
	10/28/2015							320,000	0.55
	10/28/2015					16,000			0.55			—
David L. King		162,000	162,000	453,003
	4/29/2015					13,556			0.55			—
	12/9/2015							80,000	0.55
James T. Kenyon (5)		32,450	98,096	292,050
												—

(1)

The dollar amounts in the table above under “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” reflect the annual cash incentive bonuses that could be earned by each of our named executive officers upon the achievement of defined EBITDA performance goals and other operating metrics designed to measure short-term initiatives for 2015 at threshold, target and maximum levels of performance.

(2)

Numbers represent options granted in 2015 subject to performance-based vesting, including the tranche of previously granted performance-based options which are not considered granted in accordance with ASC 718 until the 2015 fiscal year adjusted EBITDA goal was established and communicated to the executives. The performance-based options vest upon the attainment of annual EBITDA-based performance targets. If the target for a given year is not achieved, the performance-based option may vest if the applicable EBITDA target is achieved in the next succeeding year. Additional detail is provided below under the heading “Outstanding Equity Awards at Fiscal Year-End 2015 — Associated Materials Group, Inc. 2010 Stock Incentive Plan.”


(3)	Numbers represent options granted in 2015 subject to time-based vesting. Each of the time-based options vest solely upon the executive’s continued service over a five year period. Additional detail is provided below under the heading “Outstanding Equity Awards at Fiscal Year-End 2015 — Associated Materials Group, Inc. 2010 Stock Incentive Plan.”

(4)

The dollar amount herein reflects the dollar amount recognized for financial statement reporting purposes for the 2015 fiscal year in accordance with ASC 718. The assumptions used by us in determining the grant date fair value of option awards and our general approach to our valuation methodology are set forth in Note 14 to the consolidated financial statements in Item 8. “Financial Statements and Supplementary Data.” Note that for purposes of ASC 718, the grant date fair value of these option awards is zero. The stock underlying the options awarded by Parent is governed by the stockholders agreement of Parent. Stock purchased as a result of the exercise of options is subject to a call right by Parent, and as a result, other than in limited circumstances, stock issued upon the exercise of the option may be repurchased at the discretion of Parent. This repurchase feature results in no compensation expense recognized in connection with options granted by Parent, until such time as the exercise of the options could occur without repurchase of the shares by the Parent, which is only likely to occur upon a liquidity event, change in control or IPO.


(5)	Mr. Kenyon’s employment with the Company was terminated in 2015 and, as a result, all unvested equity awards were forfeited.

Table of Contents

Associated Materials Group, Inc. 2010 Stock Incentive Plan

Options have been issued to our named executive officers under the 2010 Plan.

In October 2010, Parent adopted the 2010 Plan, pursuant to which a total of 6,150,076 shares of Parent common stock, par value $0.01 per share, were originally reserved for issuance pursuant to awards under the 2010 Plan. In November 2014, Parent’s board of directors and Parent’s stockholders approved an amendment and restatement to the 2010 Plan to increase the maximum number of shares which may be issued under the 2010 Plan by 1,400,000 shares of common stock, from 6,150,076 to 7,550,076. The 2010 Plan provides for the grant of stock options, restricted stock awards, and other equity-based incentive awards. The Committee administers the 2010 Plan and selects eligible executives, directors, and employees of, and consultants to, Parent and its affiliates (including us), to receive awards under the 2010 Plan. Shares of Parent common stock acquired pursuant to awards granted under the 2010 Plan will be subject to certain transfer restrictions and repurchase rights set forth in the 2010 Plan. The Committee determines the number of shares of stock covered by awards granted under the 2010 Plan and the terms of each award, including but not limited to, the terms under which stock options may be exercised, the exercise price of the stock options and other terms and conditions of the options and other awards in accordance with the provisions of the 2010 Plan. In the event Parent undergoes a change of control, as defined below, the Committee may, at its discretion, accelerate the vesting or cause any restrictions to lapse with respect to outstanding awards, or may cancel such awards for fair value, or may provide for the issuance of substitute awards. Under the 2010 Plan, a “change in control” is generally defined as a sale or disposition of all or substantially all of the assets of us and our subsidiaries (taken as a whole) to any person other than to the H&F Investors, any person or group (other than the H&F Investors) becomes the beneficial owner of more than 50% of the total voting power of our outstanding voting stock, or prior to an initial public offering of our common stock, the H&F Investors do not have the ability to cause the election of a majority of the members of the board of directors and any person or group (other than the H&F Investors) beneficially owns outstanding voting stock representing a greater percentage of voting power with respect to the general election of members of the board than the shares of outstanding voting stock the H&F Investors beneficially own. Subject to particular limitations specified in the 2010 Plan, Parent’s board of directors may amend or terminate the 2010 Plan. The 2010 Plan will terminate no later than 10 years following its effective date; however, any awards outstanding under the 2010 Plan will remain outstanding in accordance with their terms.

On June 25, 2015, the Board of Directors amended certain outstanding options to purchase shares of the Parent’s common stock that are scheduled to vest after March 31, 2014 (the “Eligible Options”) held by eligible participants, to reduce the exercise price of such Eligible Options by an amount equal to $4.49 per share, but in no event less than the then fair market value of a share of Parent’s common stock, which was $0.55. The number of Eligible Options repriced was 4.5 million to 17 employees, with a weighted average exercise price prior to repricing of $9.23.

In light of strong improvement in the business in 2015, the Board in its discretion elected to vest the performance options issued in 2015. The treatment of the vesting was as if the performance trigger had been achieved in 2015 and hence both the 2015 and 2014 performance option tranches were vested. Accordingly, Messrs. Strauss, Stephens, Topper, Dobler and King vested 160,000, 30,000, 60,000, 16,000 and 27,111 shares respectively. The tranches of the performance-based awards are subject to vesting conditions based on the attainment of future annual Adjusted EBITDA goals determined by the Board within 90 days of the commencement of each fiscal year and are not considered granted until the future annual goals are communicated in accordance with ASC 718. If the goal for a given year is not achieved, the performance-based option may vest if the applicable EBITDA goal is achieved in the next succeeding year. In the event of a change in control, that portion of the performance-based option that was scheduled to vest in the year in which such change in control occurs and the portion that was scheduled to vest in any subsequent years shall become vested immediately prior to such change in control. If a liquidity event occurs (defined as the first to occur of either a change in control of us or an initial public offering of Parent common stock), any portion of the performance-based option that did not vest in any prior year because the applicable EBITDA target was not met will vest if and only if the H&F Investors receive a three times return on their initial cash investment in Parent.

Table of Contents

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2015



	Option Awards						Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable (1)	Number of Securities Underlying Unexercised Options (#) Unexercisable (1)	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised earned Options (#) (2)	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(2)	Option Exercise Price ($)	Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)	Market Value of Shares or Units of Stock That Have Not Vested ($)

Brian C. Strauss	120,000	480,000	—	—	0.55	5/5/2024	—	—
	100,000	400,000	—	—	5.51	5/5/2024	—	—
	100,000	400,000	—	—	15.51	5/5/2024	—	—
	—	—	160,000	—	0.55	5/5/2024	—	—
Scott F. Stephens	45,000	180,000	—	—	0.55	10/14/2024	—	—
	75,000	300,000	—	—	5.51	10/14/2024	—	—
	—	—	30,000	—	0.55	10/14/2024	—	—
William L. Topper	45,000	180,000	—	—	0.55	7/14/2024	—	—
	75,000	300,000	—	—	5.51	7/14/2024	—	—
	—	—	60,000	—	5.04	7/14/2024	—	—
Curtis J. Dobler	—	320,000	—	—	0.55	10/28/2025	—	—
	—	—	16,000	—	0.55	10/28/2025	—	—
David L. King	20,333	—	—	—	10.00	10/13/2020	—	—
	16,944	—	—	—	20.00	10/13/2020	—	—
	16,944	—	—	—	30.00	10/13/2020	—	—
	81,332	—	—	—	5.00	10/13/2020	—	—
	67,776	—	—	—	10.00	10/13/2020	—	—
	67,776	—	—	—	20.00	10/13/2020	—	—
	40,666	—	—	—	0.55	10/13/2020	—	—
	33,888	—	—	—	5.51	10/13/2020	—	—
	33,888	—	—	—	15.51	10/13/2020	—	—
	—	—	13,555	—	10.00	10/13/2020	—	—
	—	—	—	27,110	5.00	10/13/2020	—	—
	—	—	27,111	—	0.55	10/13/2020	—	—
James T. Kenyon (3)	—	—	—	—	—	—	—	—

(1)

Eighty percent of the total number of options granted is subject to time-based vesting. Except for options re-priced in 2015 (where the exercise price was reduced by $4.49 but not below $0.55 for options vesting after March 31, 2014), of the total number of options granted, thirty percent have an exercise price equal to the grant date fair market value of the underlying Parent common stock; the remaining fifty percent of the total number of options granted have an exercise price equal to $10.00 or $20.00. Each of the time-based options vest solely upon the executive’s continued service over a five year period. The vesting accelerates in full if there is a change in control.

(2)

Twenty percent of the total number of options granted is subject to performance-based vesting. Except for options re-priced in 2015 (where the exercise price was reduced by $4.49 but not below $0.55 for options vesting after March 31, 2014), the performance-based options were granted with an exercise price equal to the grant date fair market value of the underlying stock and vest upon the attainment of EBITDA-based performance goals determined annually by the Board of Directors over a five-year period, subject to the executive’s continued service over such period. The 2011 tranche of performance-based awards granted or modified in 2011 are vested. The 2012 and 2013 tranches of performance-based awards granted were not vested as of January 2, 2016 since the goals for these fiscal years were not achieved. In light of strong improvement in the business in 2015, the Board in its discretion elected to vest the performance options issued in 2015. The treatment of the vesting was as if the performance trigger had been achieved in 2015 and hence both the 2015 and 2014 performance option tranches were vested. Accordingly, Messrs. Strauss, Stephens, Topper, Dobler and King vested 160,000, 30,000, 60,000, 16,000 and 27,111 shares respectively. The tranches of the performance-based awards are subject to vesting conditions based on the attainment of future annual Adjusted EBITDA goals determined by the Board within 90 days of the commencement of each fiscal year and are not considered granted until the future annual goals are communicated in accordance with ASC 718. If the goal for a given year is not achieved, the performance-based option may vest if the applicable EBITDA goal is achieved in the next succeeding year. In the event of a change in control, that portion of the performance-based option that was scheduled to vest in the year in which such change in control occurs and the portion that was scheduled to vest in any subsequent years shall become vested immediately prior to such change in control. If a liquidity event occurs (defined as the first to occur of either a change in control of us or an initial public

Table of Contents

offering of Parent common stock), any portion of the performance-based option that did not vest in any prior year because the applicable EBITDA target was not met will vest if and only if the H&F Investors receive a three times return on their initial cash investment in Parent.


(3)	Unvested options held by Mr. Kenyon were forfeited upon his resignation from the company on August 5, 2015. Vested options remained exercisable for 90 days after his resignation. As of January 2, 2016, he had not exercised any of the options and they were therefore forfeited as well.

OPTION EXERCISES AND STOCK VESTING IN FISCAL YEAR 2015



	Option Awards			Stock Awards
Name	Number of Shares Acquired on Exercise (#)	Value Realized on Exercise ($)		Number of Shares Acquired on Vesting (#)		Value Realized on Vesting ($)
Brian C. Strauss	—	$	—	—		$	—
Scott F. Stephens	—	—		—		—
William L. Topper	—	—		—		—
Curtis J. Dobler	—	—		—		—
David L. King
James T. Kenyon				5,400	(1)	2,970		(1)


(1)	In connection with the commencement of employment of Mr. Kenyon in June 2012, he was granted 27,000 shares of restricted stock which vest over a five-year period (5,400 shares per year). During 2015, 5,400 shares of restricted stock vested with grant date fair value of $2,970.

PENSION BENEFITS

We do not maintain any pension plans which provide for payments or other benefits in connection with the retirement of current named executive officers except that Mr. King has vested pension benefit under the Alside Retirement Plan (the “Alside Plan”). As the Alside Plan was frozen on December 31, 1998, employees do not earn additional years of credited service after that time in determining the amount of benefits payable under the Alside Plan. Mr. King has earned 1.92 years of service with present value of accumulated benefit of $54,220.

The Alside Plan is a defined benefit plan that covers substantially all salaried employees and certain other groups of employees of our Alside business. During 1998, the Alside Plan was amended such that benefit accruals and participation were frozen and no new employees were eligible to enter the Alside Plan after December 31, 1998. The accumulated plan benefits for Plan participants are based on their average compensation during the five years preceding December 31, 1998, and are payable upon retirement, death, disability and termination of employment. The present value of accumulated benefits above was determined using the same interest rate and mortality assumptions as those used in the Company’s financial statements. Information regarding the Company’s retirement plans can be found in Note 15 to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.”

NON-QUALIFIED DEFERRED COMPENSATION

In the fiscal year 2015, we did not maintain any non-qualified defined contribution except for the deferred stock units granted to Mr. Snyder as described below, or other deferred compensation plans.

100

Table of Contents

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

Severance Benefits for Termination without Cause

On January 2, 2016, each of Messrs. Strauss, Stephens, Topper, Dobler and King was party to an employment agreement that provides for severance benefits in the event that we terminate the executive without cause (and other than due to death or disability) or, solely with respect to Mr. Strauss, he resigns for good reason, in each case at any time (without regard to whether such termination occurs following a change in control). Refer to the “Employment Agreements” section for an additional discussion regarding the employment agreements with our named executive officers.

The table below summarizes the severance benefits that would have been payable to our named executive officers in connection with a termination without cause (or Mr. Strauss resigned with good reason) had such event occurred on January 2, 2016.



	Severance Benefits
Name	Payments (1)		Benefits (2)		Total
Brian C. Strauss	$	1,200,000	$	13,080	$	1,213,080
Scott F. Stephens	425,000		6,540		431,540
William L. Topper	425,000		6,540		431,540
Curtis J. Dobler	340,000		6,540		346,540
David L. King	432,000		6,540		438,540


(1)	Amounts represent the lump sum severance payable on termination in accordance with the terms of each executive’s individual employment agreement and are based on both the executive’s current base salary and the guaranteed bonus for the 2015 fiscal year which was not paid as of January 2, 2016.


(2)	Represents an estimate of the medical benefits, based on our current cost per employee, to which the executives would be entitled in the event of a change in control and termination in addition to amounts due for employee outplacement services.

On August 5, 2015, Mr. Kenyon resigned from his position as Senior Vice President and Chief Human Resources Officer with us, and we agreed to treat such resignation as a termination without cause. Pursuant to his employment agreement, we paid him the following severance benefits: (i) his base salary for twelve months, payable in equal installments, (ii) pro-rated incentive bonus for 2015 and (iii) continued medical and dental benefits for up to twelve months. Mr. Kenyon executed a release of claims in favor of us and we agreed to provide him with outplacement services in an amount not to exceed $14,000. We accrued severance payments in the amount of $178,415 in 2015. His severance is conditioned upon his continued compliance with the restrictions on competition and solicitation of employees and customers for the two year period following his termination.

Change in Control Vesting in Option Agreements

The stock option award agreements between us and our named executive officers provide that the time vesting stock options, granted pursuant to the 2010 Plan, will vest in full immediately prior to a change in control. In the event of a change in control, these option agreements also provide that the portion of the performance vesting stock options that was otherwise scheduled to vest in the year in which the change in control occurs and the portion that was scheduled to vest in any years subsequent to such change in control will become vested immediately prior to such change in control.

Since the per share exercise price for the options that would become fully vested and exercisable upon a change in control is more than the estimated fair value of $0.55 per share of Parent common stock on January 2, 2016, there is no value attributable to the accelerated vesting of options held by our named executive officers if a change in control had occurred on January 2, 2016.

101

Table of Contents

DIRECTOR COMPENSATION FOR FISCAL YEAR 2015



Name	Fees Earned or Paid in Cash		Stock Awards (2)		Option Awards		Non-Equity Incentive Plan Compensation		Change in Pension Value and Nonqualified Deferred Compensation Earnings		All Other Compensation		Total (1)
Erik D. Ragatz	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Lawrence M. Blackburn	90,000		35,482		—		—		—		—		125,482
Charles A. Carroll	70,000		35,482		—		—		—		—		105,482
Adam B. Durrett	—		—		—		—		—		—		—
Dana R. Snyder	70,000		30,000		—		—		—		—		100,000


(1)	Mr. Strauss, our President and CEO, is not included in this table as he was our employee in the fiscal year 2015 and thus received no compensation for his services as a director. The compensation received by Mr. Strauss is shown in the Summary Compensation Table.


(2)	As of January 2, 2016, Messrs. Blackburn and Carroll each held 187,588 shares of restricted stock of which 62,529 vested during 2015 leaving each with 125,059 shares that have not vested. Mr. Snyder held 163,636 shares of restricted stock and 23,953 shares of deferred stock, of which 54,545 and 6,000 vested during 2015 leaving 109,091 and 17,952 that have not vested.

The Non-Employee Director Compensation Policy and Equity Ownership Guidelines, entitle each of Messrs. Blackburn, Carroll and Snyder to annual retainers of $60,000. They are each also entitled to receive an additional retainer of $10,000 per year for service on the Compensation Committee. In addition, Mr. Blackburn is entitled to receive an additional annual retainer of $20,000 for his service as Chairperson of the Audit Committee. Annual retainers for Board and committee service, as applicable, are payable to Messrs. Blackburn, Snyder and Carroll quarterly, one quarter in arrears. We also pay direct travel expenses in connection with attending meetings and functions of our Board of Directors and committee(s) in accordance with applicable policies as in effect from time to time. In addition, each of Messrs. Ragatz and Durrett did not receive any compensation for their services on our Board of Directors since they are employed by and receive compensation from the H&F Investors.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Compensation decisions are made by the Board of Directors and Compensation Committee of Parent. None of our executive officers has served as a member of the Compensation Committee (or other committee serving an equivalent function) of any other entity, whose executive officers served as a director of Parent or us or members of the Compensation Committee.

Mr. Ragatz is a managing director of Hellman & Friedman. As of January 2, 2016, the H&F Investors control approximately 96% of the outstanding common stock of Parent. See Item 12. “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and Item 13. “Certain Relationships, Related Transactions and Director Independence.”

102

Table of Contents

COMPENSATION COMMITTEE REPORT

The Compensation Committee of Associated Materials Group, Inc. has reviewed and discussed the above section titled “Compensation Discussion and Analysis” with management and, based on this review and discussion, the Compensation Committee recommended to the Board of Directors of Associated Materials Group, Inc. that the “Compensation Discussion and Analysis” section be included in this Annual Report on Form 10-K.



	THE COMPENSATION COMMITTEE
	Erik D. Ragatz, Chairperson
	Lawrence M. Blackburn
	Charles A. Carroll
	Dana R. Snyder

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Parent indirectly owns all of our equity interests through its direct ownership of all of the issued and outstanding capital stock of Holdings. Parent currently has one class of common stock outstanding. All of Parent’s issued and outstanding common stock is owned by the H&F Investors and certain members of Parent’s and our board of directors and management. See Item 13. “Certain Relationships, Related Transactions and Director Independence.”

All of our equity interests have been pledged as collateral to the lenders under the ABL facilities. If we were to default on the ABL facilities, the lenders could foreclose on these equity interests, which would result in a change of control.

We have no outstanding equity compensation plans under which securities of our Company are authorized for issuance. Equity compensation plans are maintained by Parent. See Item 11. “Executive Compensation.”

The following table sets forth certain information as of March 22, 2016, regarding the beneficial ownership of Parent by:


•	each person known by us to own beneficially 5% or more of the outstanding voting preferred stock or voting common stock of Parent;


•	the directors and named executive officers of Parent and our Company; and


•	all directors and executive officers of Parent and our Company as a group.

We determined beneficial ownership in accordance with the rules of the SEC, which generally require inclusion of shares over which a person has voting or investment power. Share ownership in each case includes shares that may be acquired within 60 days as of March 22, 2016 through the exercise of any options or the conversion of convertible debt. Percentage of beneficial ownership is based on 55,975,647 shares of Parent common stock outstanding as of March 22, 2016. None of the shares of Parent common stock has been pledged as collateral. Except as otherwise indicated, the address for each of the named individuals is c/o Associated Materials, LLC, 3773 State Road, Cuyahoga Falls, Ohio 44223.



	Common Stock
	Number of Shares	% of Class
Investment funds affiliated with Hellman & Friedman LLC (1)	53,995,660	96.5	%
Named Executive Officers and Directors
Brian C. Strauss (6)	480,000	*
Scott F. Stephens (7)	150,000	*
William L. Topper (8)	180,000	*
Curtis J. Dobler	—	*
David L. King (2)	357,845	*
James T. Kenyon (2)	16,200	*
Erik D. Ragatz (1)	—	*
Lawrence M. Blackburn (3)	187,588	*
Charles A. Carroll (4)	711,588	1.3	%
Dana R. Snyder (5)	345,528	*
Adam B. Durrett (1)	—	*

All directors and executive officers as a group (11 persons) (9)	2,428,749	4.2	%

103

Table of Contents

* Indicates ownership of less than 1%

(1)

Hellman & Friedman Capital Partners VI, L.P. (“HFCP VI”), Hellman & Friedman Capital Partners VI (Parallel), L.P. (“HFCP VI (Parallel)”), Hellman & Friedman Capital Executives VI, L.P. (“HFCE VI”) and Hellman & Friedman Capital Associates VI, L.P. (“HFCA VI,” and together with HFCP VI, HFCP VI (Parallel) and HFCE VI, the “H&F Entities”) beneficially own 53,995,660 shares of Parent common stock. The address for each of the H&F Entities is c/o Hellman & Friedman LLC, One Maritime Plaza, 12th Floor, San Francisco, CA 94111. Such shares of Parent common stock are owned of record by HFCP VI, which owns 42,584,221 shares, HFCP VI (Parallel), which owns 11,179,259 shares, HFCE VI, which owns 176,025 shares, and HFCA VI, which owns 56,155 shares. Hellman & Friedman Investors VI, L.P. (“H&F Investors VI”) is the general partner of each of the H&F Entities. As the general partner of each of the H&F Entities, H&F Investors VI may be deemed to have beneficial ownership of the shares over which any of the H&F Entities has voting or dispositive power. Hellman & Friedman LLC (“H&F”) is the general partner of H&F Investors VI. As the general partner of H&F Investors VI, H&F may be deemed to have beneficial ownership of the shares over which any of the H&F Entities has voting or dispositive power. An investment committee of H&F has sole voting and dispositive control over such shares of Parent common stock. Mr. Ragatz serves as Managing Directors of Hellman & Friedman, but does not serve on the investment committee. Each of the members of the investment committee and Messrs. Ragatz and Durrett disclaim beneficial ownership of such shares of Parent common stock. The address for each of the H&F Entities and each of Messrs. Ragatz and Durrett is c/o Hellman & Friedman LLC, One Maritime Plaza, 12th Floor, San Francisco, CA 94111.


(2)	Includes 311,771 shares of Parent common stock issuable pursuant to options that are exercisable as of or within 60 days of March 22, 2016.


(3)	Includes 117,075 shares of restricted stock that have not vested as of or within 60 days of March 22, 2016.


(4)	Includes 111,075 shares of restricted stock that have not vested as of or within 60 days of March 22, 2016.


(5)	Includes 121,043 deferred stock units that have not vested as of or within 60 days of March 22, 2016.


(6)	Includes 480,000 shares of Parent common stock issuant pursuant to options that are exercisable as of or within 60 days of March 22, 2016.


(7)	Includes 150,000 shares of Parent common stock issuant pursuant to options that are exercisable as of or within 60 days of March 22, 2016.


(8)	Includes 180,000 shares of Parent common stock issuant pursuant to options that are exercisable as of or within 60 days of March 22, 2016.


(9)	Includes 1,121,771 shares of Parent common stock issuable pursuant to options that are exercisable as of or within 60 days of March 22, 2016, 228,150 shares of restricted stock and 121,043 deferred stock units that have not vested.

104

Table of Contents

ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

STOCKHOLDERS AGREEMENT

In connection with the closing of the Merger on October 13, 2010, Parent, Holdings and our Company entered into a stockholders agreement (the “Stockholders Agreement”) with certain investment funds affiliated with Hellman & Friedman LLC (such investment funds, the “H&F Investors”) and each member of our management and Board of Directors that held shares of common stock or options of Parent at that date (the “Management Investors”). Parent may not issue any equity securities (prior to an initial public offering) without the consent of the H&F Investors and unless the recipient thereof agrees to become a party to the Stockholders Agreement. The Stockholders Agreement contains the following principal provisions:

Board of Directors. The Stockholders Agreement provides that, until an initial public offering of shares of Parent common stock, the owners of such shares who are parties to the agreement will vote their shares to elect a board of directors of Parent comprised of the following persons:


•	our CEO (unless otherwise determined in writing by the H&F Investors); and


•	such other directors as shall be designated from time to time by the H&F Investors.

Following an initial public offering, subject to certain exceptions, the H&F Investors will have the right to nominate a number of persons for election to Parent’s board of directors equal to the product (rounded up to the nearest whole number) of: (1) the percentage of outstanding equity securities beneficially owned by the H&F Investors and (2) the number of directors then on the board of directors. In addition, without the consent of the H&F Investors, each stockholder party (other than the H&F Investors) must vote all of his, her or its voting shares in favor of such H&F Investors nominees, and each committee and subcommittee of Parent’s board of directors must include an H&F Investors nominee, subject to applicable law and stock exchange rules.

Indemnification. Parent is generally required to indemnify and hold harmless the H&F Investors, together with each of their respective partners, stockholders, members, affiliates, directors, officers, fiduciaries, employees, managers, controlling persons and agents from any losses arising out of either of the following, subject to limited exceptions:


•	an H&F Investor’s or its affiliates’ ownership of equity interests or other securities of Parent or their control of or ability to influence Parent or any of its subsidiaries; or


•	the business, operations, properties, assets or other rights or liabilities of Parent or any of its subsidiaries.

Transfer Restrictions. The Stockholders Agreement contains transfer restrictions applicable to the equity securities held by the H&F Investors and other stockholder parties. In particular, the consent of the H&F Investors is required for all transfers of equity securities by the other stockholder parties, subject to certain exceptions, which include transfers to permitted transferees (i.e., certain affiliates) or transfers in connection with a tag-along or drag- along sale or, in certain circumstances, the exercise of preemptive rights. The transfer restrictions expire on the twelve-month anniversary of an initial public offering.

Registration Rights. Following an initial public offering, the Stockholders Agreement provides the H&F Investors with “demand rights” allowing them to require Parent to register all or a portion of such number of registrable securities as they shall designate. In connection with a marketed underwritten offering of Parent common stock other than an initial public offering, subject to certain exceptions, all stockholder parties will have certain “piggyback” registration rights.

Tag-Along Rights. Under the Stockholders Agreement, in connection with any sale by an H&F Investor constituting not less than 15% of the equity securities of Parent, subject to certain exceptions, the other stockholder parties, including H&F Investors not initiating the sale, will have “tag-along” rights that allow them to sell a proportional amount of their equity securities on substantially the same terms as those sold by the selling H&F Investors. The tag-along rights expire on the twelve-month anniversary of an initial public offering.

Drag-Along Rights. Under the Stockholders Agreement, subject to certain exceptions, the H&F Investors have “drag-along” rights that allow them to cause the other stockholder parties to participate in a transaction or transactions involving the transfer of not less than 50% of the equity securities of Parent. The drag-along rights expire on the twelve-month anniversary of an initial public offering.

Preemptive Rights. In the event that Parent issues capital stock outside of specified exempted issuances, unless the H&F Investors have notified Parent that they will not exercise their preemptive rights, each stockholder party, including the H&F Investors, may purchase up to its pro rata portion of such new securities. The preemptive rights expire upon the consummation of an initial public offering.

105

Table of Contents

Call Rights. Upon termination of a Management Investor’s employment, Parent will have the right, but not the obligation, to purchase the common stock held by such Management Investor or his, her or its permitted transferee. If, at any time before it terminates, Parent determines not to exercise such call right, Parent must promptly notify the H&F Investors, and the H&F Investors will then have the right to exercise such call right in the same manner as Parent. The call rights expire upon the consummation of an initial public offering.

Information Rights. Pursuant to the Stockholders Agreement, the H&F Investors and certain of their affiliates are entitled to certain information rights so long as they continue to own shares of Parent’s common stock. These information rights include, among other rights, the right to inspect the books and records of Parent and receive copies of certain financial and other information, the right to periodically consult with Parent’s officers and directors regarding our Company’s business and affairs and, in certain circumstances, the right to designate a non-voting board observer who will be entitled to attend all meetings of Parent’s board of directors and participate in all deliberations of Parent’s board of directors.

Indemnification of Directors and Officers

In February 2011, Parent, Holdings and our Company, (collectively, the “Companies”) entered into indemnification agreements with each of Messrs. Ragatz, Carroll, Durrett, and Snyder, each of whom is a director of the Companies. In September 2013, the Companies entered into an indemnification agreement with Mr. Blackburn. The indemnification agreements provide that the Companies will jointly and severally indemnify each director to the fullest extent permitted by the Delaware general corporation law from and against all loss and liability suffered and expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by or on behalf of the indemnitee in connection with any threatened, pending, or completed action, suit or proceeding. Additionally, the Companies will generally advance to the indemnitee all out-of-pocket costs of any type or nature whatsoever incurred in connection therewith.

Our amended and restated limited liability company agreement provides that we will indemnify each of our members, directors and officers to the fullest extent permitted by law for claims arising by reason of the fact that such person is or was a member, director or officer of our Company or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise.

OTHER RELATIONSHIPS

HUB International

During the year ended January 2, 2016, we paid HUB International Midwest Limited, a portfolio company of investment funds affiliated with the H&F Investors, $0.1 million in connection with consulting services related to the placement and/or servicing of certain portions of our insurance coverage.

Other

Robert A. Schindler, the husband of Dana A. Schindler, our Senior Vice President and Chief Marketing Officer, is one of our employees and during the year ended January 2, 2016, we paid Mr. Schindler a base salary of $208,008 as well as management bonus compensation of $124,800.

POLICIES AND PROCEDURES FOR REVIEW AND APPROVAL OF RELATED PARTY TRANSACTIONS

We have written policies governing conflicts of interest with our employees. In addition, we circulate director and executive officer questionnaires on an annual basis to identify potential conflicts of interest and related party transactions with such directors and officers. Although we do not have a formal process for approving related party transactions, the Board of Directors as a matter of practice has reviewed all of the transactions described in this Item 13.

DIRECTOR INDEPENDENCE

The Board of Directors has determined that Messrs. Ragatz, Blackburn, Carroll, Durrett and Snyder qualify as independent directors within the meaning of Nasdaq Marketplace Rule 5605(a), which is the definition used by the Board of Directors for determining the independence of its directors. Mr. Strauss is not an independent director because of his employment as our President and CEO. Under the applicable listing standards, there are heightened requirements for determining whether the members of the Audit Committee of the Board of Directors are independent. The Board of Directors has determined that Mr. Blackburn qualifies as an independent member of the Audit Committee of the Board of Directors. Messrs. Durrett and Ragatz do not qualify as independent under the heightened independence requirements for audit committees. The Audit Committee of the Board of Directors is not comprised solely of independent members under the heightened independence requirements because we are a privately held company and not subject to applicable listing standards.

106

Table of Contents

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Our Audit Committee adopted a policy to pre-approve all audit and non-audit services provided by its independent public accountants prior to the engagement of its independent public accountants with respect to such services. Under such policy, the Audit Committee may delegate one or more members who are independent directors of the Board of Directors to pre-approve the engagement of the independent public accountants. Such member must report all such pre-approvals to its entire Audit Committee at the next committee meeting. In accordance with such policy, the Audit Committee pre-approved the services described below under the captions Audit, Audit-Related Fees, Tax Fees and All Other Fees for fiscal years 2015 and 2014.

The following table sets forth the aggregate fees billed to us by our independent accountants, Deloitte & Touche LLP (“D&T”) for services rendered (in thousands):



	2015		2014
Audit Fees (1)	$	941	$	1,076
Audit-Related Fees (2)	4		—
Tax Fees (3)	82		102
All Other Fees (4)	3		3
Total Fees	$	1,030	$	1,181


(1)	Audit fees principally constitute fees billed for professional services rendered by D&T for the audit of our consolidated financial statements for the years ended January 2, 2016 and January 3, 2015 and interim reviews of the consolidated financial statements included in our Quarterly Reports on Form 10-Q.


(2)	Audit-related fees constitute fees billed for assurance and related services by D&T that are reasonably related to the performance of the audit or review of our consolidated financial statements, other than the services reported above under “Audit Fees.”


(3)	Tax fees constitute fees billed for professional services rendered by D&T for tax advice and tax planning.


(4)	All other fees constitute fees billed for professional services rendered principally related to advisory services and information services.

107

Table of Contents

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are included in this report.

(A)(1) FINANCIAL STATEMENTS

See Index to Consolidated Financial Statements at Item 8. “Financial Statements and Supplementary Data” on page 41 of this report.

(A)(2) FINANCIAL STATEMENT SCHEDULES

All financial statement schedules have been omitted due to the absence of conditions under which they are required or because the information required is included in the consolidated financial statements or the notes thereto.

(A)(3) EXHIBITS

See Exhibit Index beginning on the page immediately preceding the exhibits for a list of exhibits filed as part of this Annual Report on Form 10-K, which Exhibit Index is incorporated herein by reference. Management contracts and compensatory plans and arrangements required to be filed as an exhibit pursuant to Form 10-K are denoted in the Exhibit Index by an asterisk (*).

108

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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

Date:	March 22, 2016	By:	/s/ Brian C. Strauss
			Brian C. Strauss
			President and Chief Executive Officer
			(Principal Executive Officer)

Date:	March 22, 2016	By:	/s/ Scott F. Stephens
			Scott F. Stephens
			Executive Vice President and Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



Signature	Title	Date

/s/ Brian C. Strauss	President and Chief Executive Officer	March 22, 2016
Brian C. Strauss	(Principal Executive Officer)

/s/ Scott F. Stephens	Executive Vice President and Chief Financial Officer	March 22, 2016
Scott F. Stephens	(Principal Financial Officer and Principal Accounting Officer)

/s/ Erik D. Ragatz	Chairman of the Board of Directors	March 22, 2016
Erik D. Ragatz

/s/ Lawrence M. Blackburn	Director	March 22, 2016
Lawrence M. Blackburn

/s/ Charles A. Carroll	Director	March 22, 2016
Charles A. Carroll

/s/ Dana R. Snyder	Director	March 22, 2016
Dana R. Snyder

/s/ Adam B. Durrett	Director	March 22, 2016
Adam B. Durrett

109

Table of Contents

EXHIBIT INDEX



Exhibit Number		Description

3.1		Certificate of Formation of Associated Materials, LLC (incorporated by reference to Exhibit 3.1 to Associated Materials, LLC’s Annual Report on Form 10-K, filed with the SEC on March 25, 2008).

3.2†		Amended and Restated Limited Liability Company Agreement of Associated Materials, LLC.

4.1†		Indenture, dated as of October 13, 2010, among Carey Acquisition Corp., Carey New Finance, Inc. (now known as AMH New Finance, Inc.), Associated Materials, LLC, the guarantors named therein and Wells Fargo Bank, National Association, as trustee and notes collateral agent.

4.2		First Supplemental Indenture, dated as of May 1, 2013, among Associated Materials, LLC, AMH New Finance, Inc., the guarantors named therein and Wells Fargo Bank, National Association, as trustee and notes collateral agent (incorporated by reference to Exhibit 4.1 to Associated Materials, LLC’s Quarterly Report on Form 10-Q, filed with the SEC on May 10, 2013).

4.3†		Form of 9.125% Senior Secured Note due 2017 (included in Exhibit 4.1 hereto).

10.1		Amended and Restated Revolving Credit Agreement, dated as of April 18, 2013, among Associated Materials, LLC, Carey Intermediate Holdings Corp., Gentek Holdings, LLC, Gentek Building Products, Inc., AMH New Finance, Inc. (f/k/a Carey New Finance), Associated Materials Canada Limited, Gentek Canada Holdings Limited, Gentek Building Products Limited Partnership and several lenders and agent party thereto (incorporated by reference to Exhibit 4.1 to Associated Materials, LLC’s Quarterly Report on Form 10-Q, filed with the SEC on May 10, 2013).

10.2†		US Security Agreement, dated as of October 13, 2010, among Carey Intermediate Holdings Corp. (now known as Associated Materials Incorporated), Associated Materials, LLC, the other grantors named therein and UBS AG, Stamford Branch, as US collateral agent.

10.3†		US Pledge Agreement, dated as of October 13, 2010, among Carey Intermediate Holdings Corp. (now known as Associated Materials Incorporated), Associated Materials, LLC, the other pledgors named therein and UBS AG, Stamford Branch, as US collateral agent.

10.4†		US Guarantee, dated as of October 13, 2010, among Carey Intermediate Holdings Corp. (now known as Associated Materials Incorporated), Associated Materials, LLC, the other guarantors named therein and UBS AG, Stamford Branch, as US collateral agent.

10.5†		Canadian Security Agreement, dated as of October 13, 2010, among Associated Materials Canada Limited, Gentek Canada Holdings Limited, Gentek Building Products Limited Partnership, the other grantors named therein and UBS AG Canada Branch, as Canadian collateral agent.

10.6†		Canadian Pledge Agreement, dated as of October 13, 2010, among Associated Materials Canada Limited, Gentek Canada Holdings Limited, Gentek Building Products Limited Partnership, the other pledgors named therein and UBS AG Canada Branch, as Canadian collateral agent.

10.7†		Canadian Pledge Agreement, dated as of October 13, 2010, between Gentek Building Products, Inc. and UBS AG, Stamford Branch, as US collateral agent.

10.8†		Canadian Guarantee, dated as of October 13, 2010, among Associated Materials Canada Limited, Gentek Canada Holdings Limited, Gentek Building Products Limited Partnership, the other guarantors named therein and UBS AG Canada Branch, as Canadian collateral agent.

10.9†		Intercreditor Agreement, dated as of October 13, 2010, between UBS AG, Stamford Branch, as collateral agent under the revolving loan documents, and Wells Fargo Bank, National Association, as collateral agent under the indenture and notes collateral documents.

10.10†		Notes Security Agreement, dated as of October 13, 2010, among Associated Materials, LLC, the other grantors named therein and Wells Fargo Bank, National Association, as notes collateral agent.

10.11†		Notes Pledge Agreement, dated as of October 13, 2010, among Associated Materials, LLC, the other pledgors named therein and Wells Fargo Bank, National Association, as collateral agent.

10.12*†		Stockholders Agreement, dated as of October 13, 2010, among Carey Investment Holdings Corp. (now known as Associated Materials Group, Inc.), Carey Intermediate Holdings Corp. (now known as Associated Materials Incorporated), Associated Materials, LLC and the stockholders and holders of options signatory thereto.

110

Table of Contents



10.13*†		Associated Materials Group, Inc. 2010 Stock Incentive Plan.

10.14*†		Form of Stock Option Agreement (Time Vesting Option) for awards made under the 2010 Stock Incentive Plan.

10.15*†		Form of Stock Option Agreement (Performance Vesting Option) for awards made under the 2010 Stock Incentive Plan.

10.16*		Executive Cash Incentive Plan (incorporated by reference to Exhibit 10.2 to Associated Materials, LLC’s Quarterly Report on Form 10-Q, filed with the SEC on May 10, 2013).

10.17*		Form of Restricted Stock Award Agreement for awards made under the 2010 Stock Incentive Plan (incorporated by reference to Exhibit 10.26 to Associated Materials Group, Inc.’s Amendment No. 1 to Registration Statement on Form S-1, filed with the SEC on August 22, 2013).

10.18*		Form of Deferred Stock Unit Agreement for awards made under the 2010 Stock Incentive Plan (incorporated by reference to Exhibit 10.28 to Associated Materials Group, Inc.’s Amendment No. 2 to Registration Statement on Form S-1, filed with the SEC on September 18, 2013).
10.19*		Employment Agreement, dated as of September 12, 2011, between Associated Materials, LLC and Jerry W. Burris (incorporated by reference to Exhibit 10.1 to Associated Materials, LLC’s Current Report on Form 8-K, filed with the SEC on September 12, 2011).

10.20*		Employment Agreement, dated as of August 1, 2011, between Associated Materials, LLC and Robert C. Gaydos (incorporated by reference to Exhibit 10.1 to Associated Materials, LLC’s Current Report on Form 8-K, filed with the SEC on August 3, 2011).

10.21*		Employment Agreement, dated as of February 27, 2012, between Associated Materials, LLC and Paul Morrisroe (incorporated by reference to Exhibit 10.1 to Associated Materials, LLC’s Current Report on Form 8-K, filed with the SEC on March 1, 2012).

10.22*		Employment Agreement, dated as of February 10, 2012, between Associated Materials, LLC and David S. Nagle (incorporated by reference to Exhibit 10.26 to Associated Materials, LLC’s Annual Report on Form 10-K, filed with the SEC on March 30, 2012).

10.23*		Employment Agreement, dated as of June 4, 2012, between Associated Materials, LLC and James T. Kenyon (incorporated by reference to Exhibit 10.1 to Associated Materials, LLC’s Quarterly on Form 10-Q, filed with the SEC on June 30, 2012).

10.24*		Amendment No. 1 to Employment Agreement, dated as of October 25, 2013, between Associated Materials, LLC and David S. Nagle (incorporated by reference to Exhibit 10.1 to Associated Materials, LLC’s Quarterly Report on Form 10-Q, filed with the SEC on November 8, 2013).

10.25*		Interim Chief Executive Officer Agreement, dated as of January 18, 2014, between Associated Materials, LLC and Dana R. Snyder (incorporated by reference to Exhibit 10.1 to Associated Materials, LLC’s Current Report on Form 8-K, filed with the SEC on January 21, 2014).

10.26*		Employment Agreement, dated as of March 24, 2014, between Associated Materials, LLC and Brian C. Strauss (incorporated by reference to Exhibit 10.1 to Associated Materials, LLC’s Current Report on Form 8-K, filed with the SEC on May 5, 2014).

10.27*		Employment Agreement, dated as of October 14, 2014, between Associated Materials, LLC and Scott F. Stephens (incorporated by reference to Exhibit 10.1 to Associated Materials, LLC’s Current Report on Form 8-K, filed with the SEC on October 14, 2014).

10.28*		Form of Indemnification Agreement between Associated Materials, LLC and directors and executive officers of Associated Materials, LLC (incorporated by reference to Exhibit 10.22 to Associated Materials, LLC’s Annual Report on Form 10-K, filed with the SEC on April 1, 2011).

10.29*		Agreement, dated June 17, 2013, between Jerry W. Burris and Choice Relocation Management, LLC (incorporated by reference to Exhibit 10.26 to Associated Materials, LLC’s Registration Statement on Form S-4, filed with the SEC on July 24, 2013).

10.30*		Agreement, dated June 17, 2013, between Paul Morrisroe and Choice Relocation Management, LLC (incorporated by reference to Exhibit 10.27 to Associated Materials, LLC’s Registration Statement on Form S-4, filed with the SEC on July 24, 2013).

111

Table of Contents



10.31		Amendment No. 1 to Revolving Credit Agreement and US Security Agreement, dated April 26, 2012, among Associated Materials, LLC, AMH Intermediate Holdings Corp. (now known as Associated Materials Incorporated), Gentek Holdings, LLC, Gentek Building Products, Inc., AMH New Finance, Inc. (f/k/a Carey New Finance, Inc.), Associated Materials Canada Limited, Gentek Canada Holdings Limited, Gentek Building Products Limited Partnership and several Lenders and Agents thereto (incorporated by reference to Exhibit 99.1 to Associated Materials, LLC’s Current Report on Form 8-K, filed with the SEC on May 2, 2012).

10.32		Omnibus Amendment to Canadian Loan Documents, dated April 26, 2012, among Associated Materials Canada Limited, Gentek Canada Holdings Limited, Gentek Building Products Limited Partnership and the Canadian Collateral Agent (incorporated by reference to Exhibit 99.2 to Associated Materials, LLC’s Current Report on Form 8-K, filed with the SEC on May 2, 2012).

10.33		Amendment No. 1 to Amended and Restated Revolving Credit Agreement, dated March 23, 2015, among Associated Materials Incorporated, Associated Materials, LLC, Gentek Holdings, LLC, Gentek Building Products, Inc., AMH New Finance, Inc., Associated Materials Canada Limited, Gentek Canada Holdings Limited, Gentek Building Products Limited Partnership and several lenders and agents thereto (incorporated by reference to Exhibit 10.33 to Associated Materials, LLC’s Annual Reports on Form 10-K, filed with the SEC on March 23, 2015).

10.34		Amendment No. 2 to Amended and Restated Revolving Credit Agreement, dated December 7, 2015, among Associated Materials Incorporated, Associated Materials, LLC, Gentek Holdings, LLC, Gentek Building Products, Inc., AMH New Finance, Inc., Associated Materials Canada Limited, Gentek Canada Holdings Limited, Gentek Building Products Limited Partnership and several lenders and agents thereto (incorporated by reference to Exhibit 10.33 to Associated Materials, LLC’s Annual Reports on Form 10-K, filed with the SEC on March 23, 2015).

10.35		Amendment No. 3 to Amended and Restated Revolving Credit Agreement and US Security Agreement, dated February 19, 2016, among Associated Materials Incorporated, Associated Materials, LLC, Gentek Holdings, LLC, Gentek Building Products, Inc., AMH New Finance, Inc., Associated Materials Canada Limited, Gentek Canada Holdings Limited, Gentek Building Products Limited Partnership and several lenders and agents thereto.

10.36		First Lien Promissory Note, dated February 19, 2016, among Associated Materials Incorporated, Associated Materials, LLC, Gentek Holdings, LLC, Gentek Building Products, Inc., AMH New Finance, Inc., Associated Materials Canada Limited, Gentek Canada Holdings Limited, Gentek Building Products Limited Partnership and H&F Finco LLC.

12.1		Statement of Computation of Ratio of Earnings to Fixed Charges.

21.1†		Subsidiaries of the Registrant.

31.1		Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Principal Financial Officer pursuant to Rule 13a-14 or 15d-14(a) 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.

101.INS		XBRL Instance Document.

101.SCH		XBRL Taxonomy Extension Schema Document.

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB		XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.

*	Management contract or compensatory plan or arrangement.

112

Table of Contents



†	Incorporated by reference to the exhibit filed under the corresponding Exhibit Number to Associated Materials, LLC’s Annual Report on Form 10-K, filed with the SEC on April 1, 2011.

113

Attached files

ASSOCIATED MATERIALS, LLC Reports

Also read