EURAMAX INTERNATIONAL PLC, 10-Q, 2000-11-09

EURAMAX INTERNATIONAL PLC
10-Q, 2000-11-09
ROLLING DRAWING & EXTRUDING OF NONFERROUS METALS

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

FORM 10-Q

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

For the quarterly period ended September 29, 2000

/ /	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 333-05978

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

Delaware (State or other jurisdiction of incorporation or organization)		58-2502320 (I.R.S. Employer Identification No.)
5445 Triangle Parkway, Suite 350, Norcross, Georgia (Address of principal executive offices)		30092 (Zip Code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /x/ No / /

As of November 9, 2000, Registrant had outstanding 455,822.33 shares of Class A common stock and 44,346.80 shares of Class B common stock.

Page 1 of 33
Exhibit Index located on page 28

Part I—Financial Information

Item 1. Financial Statements

Euramax International, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings

(Thousands of U.S. Dollars)

(Unaudited)

			Quarters ended						Nine months ended
			September 29, 2000			September 25, 1999			September 29, 2000			September 25, 1999
Net sales			$	159,534		$	152,722		$	465,522		$	441,308
Costs and expenses:
	Cost of goods sold			132,875			122,744			381,778			354,468
	Selling and general			14,393			13,923			42,097			41,284
	Depreciation and amortization			4,365			3,577			12,424			10,404

		Earnings from operations		7,901			12,478			29,223			35,152
Interest expense, net				(6,727	)		(5,687	)		(18,925	)		(16,318	)
Other income (expense), net				(220	)		360			(871	)		(442	)

		Earnings before income taxes		954			7,151			9,427			18,392
Provision for income taxes				1,498			3,041			5,185			7,813

		Net earnings (loss)		(544	)		4,110			4,242			10,579
Dividends on redeemable preference shares				—			1,738			—			5,038

Net earnings (loss) available for common shareholders			$	(544	)	$	2,372		$	4,242		$	5,541

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

Euramax International, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Thousands of U.S. Dollars)

(Unaudited)

			September 29,			December 31,
			2000			1999
ASSETS
Current assets:
	Cash and equivalents		$	15,200		$	13,385
	Accounts receivable, net			94,651			80,087
	Inventories			89,867			82,499
	Other current assets			4,850			4,271

		Total current assets		204,568			180,242
Property, plant and equipment, net				117,660			120,409
Goodwill, net				114,555			82,587
Deferred income taxes				6,608			6,638
Other assets				15,450			9,783

			$	458,841		$	399,659

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Cash overdrafts		$	1,427		$	2,009
	Accounts payable			60,608			49,682
	Accrued expenses and other current liabilities			25,879			31,745
	Current maturities of long-term debt			3,802			6,236

		Total current liabilities		91,716			89,672
Long-term debt, less current maturities				274,664			215,043
Deferred income taxes				20,264			20,689
Other liabilities				8,015			9,187

		Total liabilities		394,659			334,591

Shareholders'equity:
	Common stock			500			500
	Additional paid-in capital			53,220			53,220
	Treasury stock			(1,581	)		—
	Retained earnings			20,767			16,525
	Accumulated other comprehensive loss			(8,724	)		(5,177	)

Total shareholders' equity				64,182			65,068

			$	458,841		$	399,659

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

Euramax International, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Thousands of U.S. Dollars)

(Unaudited)

			Nine months ended
			September 29, 2000			September 25, 1999
Net cash (used in)/provided by operating activities			$	(9,844	)	$	24,501

Cash flows from investing activities:
	Purchases of businesses			(45,550	)		(23,155	)
	Proceeds from sales of assets			397			660
	Capital expenditures			(7,292	)		(10,154	)

		Net cash used in investing activities		(52,445	)		(32,649	)
Cash flows from financing activities:
	Repayment of debt			(23,897	)		(34,039	)
	Proceeds from debt			83,881			34,700
	Purchase of treasury stock			(1,581	)		—
	Change in cash overdrafts			(582	)		1,954

		Net cash provided by financing activities		57,821			2,615
Effect of exchange rate changes on cash				6,283			361

Net increase/(decrease) in cash and equivalents				1,815			(5,172	)
Cash and equivalents at beginning of period				13,385			19,044

Cash and equivalents at end of period			$	15,200		$	13,872

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

Euramax International, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Thousands of U.S. Dollars)

(Unaudited)

1. Basis of Presentation:

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

The Condensed Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial information and with the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the management of the Company, these statements include all adjustments necessary for a fair presentation of the results of all interim periods reported herein. All adjustments are of a normal recurring nature unless otherwise disclosed. Management believes that the disclosures made are adequate for a fair presentation of results of operations, financial position and cash flows. These Condensed Consolidated Financial Statements should be read in conjunction with the year-end Consolidated Financial Statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. Operating results for the period ended September 29, 2000, are not necessarily indicative of future results that may be expected for the year ending December 29, 2000.

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

Certain 1999 amounts have been reclassified to conform to current year presentation.

2. Acquisitions:

On April 10, 2000, the Company, through its wholly owned subsidiary Amerimax Home Products, Inc., acquired substantially all of the assets and assumed certain liabilities of Gutter World, Inc. and Global Expanded Metals, Inc., companies under common control, ("Gutter World" and "Global", respectively). The acquisition was accounted for under the purchase method of accounting, and the purchase price, including approximately $345.0 thousand in acquisition-related fees and expenses, was approximately $45.6 million in cash. Gutter World is a manufacturer of raincarrying accessories, such as gutter guards, water diverters and downspout strainers, as well as door guards. Global manufactures expanded metal products.

The following unaudited pro forma data present the results of operations for the nine months ended September 29, 2000 and September 25, 1999, as though the acquisition had been completed January 1, 2000 and January 1, 1999, respectively, and assume that there are no other changes in the operations of the Company. Such pro forma information includes adjustments to interest expense; changes in depreciation of property, plant and equipment and amortization of goodwill relating to the allocation of the purchase price; elimination of the effect of transactions between Gutter World and a Euramax subsidiary and between Gutter World and Global; and the income tax effect related to these items. The pro forma results

are not necessarily indicative of the financial results that might have occurred had the acquisition actually taken place on the above-mentioned dates, or of the future results of operations:

	Nine months ended September 29, 2000		Nine months ended September 25, 1999
Net sales	$	474,215	$	460,029
Earnings before income taxes		10,995		18,651
Net earnings		5,198		10,376

3. Summary of Significant Accounting Policies:

For information regarding significant accounting policies, see Note 2 to the Consolidated Financial Statements of the Company for the year ended December 31, 1999, set forth in the Company's Annual Report on Form 10-K.

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS 133 is effective for all fiscal quarters of all fiscal years beginning after June 15, 2000 (January 1, 2001 for the Company). SFAS 133 requires that all derivative instruments be recorded on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. For fair-value hedge transactions in which the Company is hedging changes in the fair value of an asset, liability, or firm commitment, changes in the fair value of the derivative instrument will generally be offset in the income statement by changes in the hedged item's fair value. For cash-flow hedge transactions, in which the Company is hedging the variability of cash flows related to a variable-rate asset, liability, or a forecasted transaction, changes in the fair value of the derivative instrument will be reported in other comprehensive income. The gains and losses on the derivative instrument that are reported in other comprehensive income will be reclassified as earnings in the periods in which earnings are impacted by the variability of the cash flows of the hedged item. The ineffective portion of all hedges will be recognized in current-period earnings. Although the pronouncement is not expected to have a significant impact on the Company's financial position or results of operation, the Company continues to evaluate the full extent of such impact and finalize the development of its implementation plan.

In December 1999, the staff of the Securities and Exchange Commission issued Staff Accounting Bulletin ("SAB") 101, "Revenue Recognition in Financial Statements." SAB 101 outlines the basic criteria for revenue recognition and related disclosures. SAB 101 is effective beginning in the fourth quarter of 2000. Based upon the guidance provided by SAB 101, the impact of this adoption will not materially impact the Company's financial position or results of operation.

4. Inventories:

Inventories were comprised of:

	September 29, 2000		December 31, 1999
Raw materials	$	62,970	$	57,146
Work in process		10,778		11,708
Finished products		16,119		13,645

	$	89,867	$	82,499

5. Long-Term Obligations:

Long-term obligations consisted of the following:

		September 29, 2000			December 31, 1999
Credit Agreement:
	Revolving Credit Facility	$	79,905		$	57,600
	Term Loans		63,561			28,679
11.25% Senior Subordinated Notes due 2006			135,000			135,000

			278,466			221,279
Less current portion			(3,802	)		(6,236	)

		$	274,664		$	215,043

Effective April 10, 2000, the Company amended its Credit Agreement to, among other items, permit the acquisition of Gutter World and Global; provide an additional term loan of $40.0 million; and permanently waive the 1999 Excess Cash Flow payment provision (as defined in the Credit Agreement).

6. Commitments and Contingencies:

Litigation

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

Environmental Matters

The Company's operations are subject to federal, state, local and European environmental laws and regulations concerning the management of pollution and hazardous substances.

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

In connection with the acquisition of the Company from Alumax Inc. (acquired by Aluminum Company of America in May 1998, and hereafter referred to as "Alumax") on September 25, 1996, the Company was indemnified by Alumax for substantially all of its costs, if any, related to environmental matters for occurrences arising prior to the closing date of the acquisition during the period of time it was owned directly or indirectly by Alumax. Such indemnification includes costs that may ultimately be incurred to contribute to the remediation of certain specified existing National Priorities List ("NPL") sites for which the Company had been named a potentially responsible party under the federal Comprehensive Environmental Response, Compensation, and Liability Information System ("CERCLA") as of the closing date of the acquisition, as well as certain potential costs for sites listed on state hazardous cleanup lists. With respect to all other environmental matters, Alumax's obligations are limited to $125.0 million. However, notwithstanding the indemnity, the Company does not believe that it has any significant probable liability for environmental claims. Further, the Company believes it to be unlikely that the Company would be required to bear environmental costs in excess of its pro rata share of such costs as a potentially responsible party under CERCLA.

7. Comprehensive Income:

	Quarters ended					Nine months ended
	September 29, 2000			September 25, 1999		September 29, 2000			September 25, 1999
Net earnings (loss)	$	(544	)	$	4,110	$	4,242		$	10,579
Other comprehensive (loss) income, principally foreign currency translation adjustments		(2,175	)		438		(3,547	)		(2,930	)

Comprehensive income (loss)	$	(2,719	)	$	4,548	$	695		$	7,649

8. Income Taxes:

The income tax provision for the nine months ended September 29, 2000, is based upon the effective rate projected to be applicable for the full year. The income tax provision for the quarter ended September 29, 2000, was adjusted to obtain the income tax provision for the nine months ended September 29, 2000, that would be equivalent to the effective rate projected to be applicable for the full year.

9. Subsequent Events:

Sale of Dutch Guilder currency swap

On October 20, 2000, the Company sold its interests in its Dutch Guilder currency swap whereby it was to receive $37.5 million in exchange for 85.1 million Dutch Guilders on October 1, 2003. Proceeds from the sale approximated $10.0 million and were used to reduce long-term indebtedness.

Reverse stock split

Effective October 31, 2000, the stockholders of Euramax International, Inc. authorized the amendment of the Company's certificate of incorporation to reduce the aggregate number of authorized shares of common stock. In addition, the stockholders authorized the reduction of the number of outstanding shares of common stock pursuant to a reverse stock split. Accordingly, the Company's certificate of incorporation was amended to revise the number of authorized shares from 60,000,000 shares consisting of (i) 55,000,000 shares of Class A voting common stock, par value of one cent ($.01) per share, and (ii) 5,000,000 shares of Class B restricted voting common stock, par value of one cent ($.01) per share to 1,200,000 shares consisting of (i) 600,000 shares of Class A voting common stock, par value of one dollar ($1.00) per share, and (ii) 600,000 shares of Class B restricted voting common stock, par value of one dollar ($1.00) per share. Further, the Company effected a 100 to 1 reverse split of its outstanding common stock such that one hundred outstanding shares of common stock shall be converted into one share of common stock.

Euramax International, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Thousands of U.S. Dollars)

(Unaudited)

10. Segment Information:

For detailed information regarding the Company's reportable segments, see Note 13 to the Consolidated Financial Statements of the Company for the year ended December 31, 1999, set forth in the Company's Annual Report on Form 10-K.

The table below presents information about reported segments and a reconciliation of total segment sales to total consolidated sales and of total segment EBITDA to total consolidated earnings before income taxes, for the quarters and nine months ended September 29, 2000 and September 25, 1999, is as follows:

		Quarter ended September 29, 2000			Quarter ended September 25, 1999			Nine months ended September 29, 2000			Nine months ended September 25, 1999
Sales
European Roll Coating		$	33,087		$	31,768		$	111,371		$	103,136
U.S. Fabrication			115,716			108,962			311,286			294,750
European Fabrication			11,723			12,637			45,435			45,399

	Total segment sales		160,526			153,367			468,092			443,285
Eliminations			(992	)		(645	)		(2,570	)		(1,977	)

	Consolidated net sales	$	159,534		$	152,722		$	465,522		$	441,308

EBITDA
European Roll Coating		$	3,752		$	4,522		$	15,205		$	15,145
U.S. Fabrication			8,983			11,353			24,926			27,950
European Fabrication			1,022			1,456			5,289			5,337

	Total EBITDA for reportable segments	$	13,757		$	17,331		$	45,420		$	48,432
Expenses that are not segment specific			(1,711	)		(916	)		(4,644	)		(3,318	)
Depreciation and amortization			(4,365	)		(3,577	)		(12,424	)		(10,404	)
Interest expense, net			(6,727	)		(5,687	)		(18,925	)		(16,318	)

	Consolidated net earnings before income taxes	$	954		$	7,151		$	9,427		$	18,392

The following table reflects revenues from external customers by groups of similar products for the quarters and nine months ended September 29, 2000 and September 25, 1999:

		Quarters ended				Nine months ended
Customers/Markets	Primary Products	September 29, 2000		September 25, 1999		September 29, 2000		September 25, 1999
Original Equipment Manufacturers ("OEMs")	Painted aluminum sheet and coil; fabricated painted aluminum, laminated and fiberglass panels; RV doors, windows and roofing; and composite building panels	$	59,869	$	61,435	$	205,895	$	198,801
Rural Contractors	Steel and aluminum roofing and siding		32,491		32,926		86,333		87,469
Home Centers	Raincarrying systems, roofing accessories, windows, doors and shower enclosures		36,520		26,924		78,805		65,883
Manufactured Housing	Steel siding and trip components		7,700		10,903		28,071		35,144
Distributors	Metal coils, raincarrying systems and roofing accessories		8,263		8,761		24,605		20,882
Industrial and Architectural Contractors	Standing seam panels and siding and roofing accessories		5,513		5,118		15,195		13,776
Home Improvement Contractors	Vinyl replacement windows; metal coils, raincarrying systems; metal roofing and insulated roofing panels; shower, patio and entrance doors; and awnings		9,178		6,655		26,618		19,353

		$	159,534	$	152,722	$	465,522	$	441,308

11. Supplemental Condensed Combined Financial Statements:

On September 25, 1996, Euramax purchased the Company from Alumax. The acquisition was financed, in part, through Senior Subordinated Notes due 2006 (the "Notes"). Euramax International Limited, Euramax European Holdings Limited and Euramax European Holdings B.V. are co-obligors under the Notes (the "Co-Obligors"). Euramax International, Inc. has provided a full and unconditional guarantee of the Notes ("Parent Guarantor"). In addition, Amerimax Holdings, Inc., Amerimax Fabricated Products, Inc., Euramax International Holdings Limited and Euramax Continental Limited, holding company subsidiaries of Euramax, have provided full and unconditional guarantees of the Notes (collectively, the "Guarantor Subsidiaries"). The following supplemental condensed combining financial statements as of September 29, 2000 and December 31, 1999, and for the quarters and nine months ended September 29, 2000 and September 25, 1999, reflect the financial position, results of operations, and cash flows of each of the Parent Guarantor, the Co-Obligors, and such combined information of the Guarantor Subsidiaries and the non-guarantor subsidiaries, principally the operating subsidiaries, (collectively, the "Non-Guarantor Subsidiaries"). The Co-Obligors and Guarantors are wholly-owned subsidiaries of Euramax and are each jointly, severally, fully, and unconditionally liable under the Notes. Separate complete financial statements of each Co-Obligor and Guarantor are not presented because management has determined that they are not material to investors.

			Quarter ended September 29, 2000
			Euramax International, Inc. (Parent Guarantor)			Euramax International Limited (Co-Obligor)			Euramax European Holdings Limited (Co-Obligor)			Euramax European Holdings B.V. (Co-Obligor)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated Totals
Net sales			$	—		$	—		$	—		$	—		$	—		$	159,534		$	—		$	159,534
Costs and expenses:
	Cost of goods sold			—			—			—			—			275			132,600			—			132,875
	Selling and general			846			254			—			—			88			13,205			—			14,393
Depreciation and amortization				—			—			—			—			92			4,273			—			4,365

		Earnings (loss) from operations		(846	)		(254	)		—			—			(455	)		9,456			—			7,901
Equity in earnings of subsidiaries				20			886			(99	)		3,580			3,195			—			(7,582	)		—
Interest expense, net				(376	)		(24	)		(88	)		(3	)		(1,024	)		(5,212	)		—			(6,727	)
Other income (expense), net				—			85			(810	)		(3,049	)		—			3,554			—			(220	)

		Earnings (loss) before income taxes		(1,202	)		693			(997	)		528			1,716			7,798			(7,582	)		954
Provision (benefit) for income taxes				(658	)		(66	)		(263	)		(1,060	)		(878	)		4,423			—			1,498

		Net earnings (loss)	$	(544	)	$	759		$	(734	)	$	1,588		$	2,594		$	3,375		$	(7,582	)	$	(544	)

			Quarter ended September 25, 1999
			Euramax International, Inc. (Parent Guarantor)		Euramax International Limited (Co-Obligor)			Euramax European Holdings Limited (Co-Obligor)			Euramax European Holdings B.V. (Co-Obligor)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated Totals
Net sales			$	—	$	—		$	—		$	—		$	—		$	152,722		$	—		$	152,722
Costs and expenses:
	Cost of goods sold			—		—			—			—			60			122,684			—			122,744
	Selling and general					727			—			—			396			12,800			—			13,923
	Depreciation and amortization			—		—			—			—			18			3,559			—			3,577

		Earnings (loss) from operations		—		(727	)		—			—			(474	)		13,679			—			12,478
Equity in earnings of subsidiaries				—		4,611			(836	)		1,816			3,615			—			(9,206	)		—
Interest expense, net				—		—			(158	)		(124	)		(230	)		(5,175	)		—			(5,687	)
Other income (expense), net				—		—			982			60			57			(739	)		—			360

		Earnings (loss) before income taxes		—		3,884			(12	)		1,752			2,968			7,765			(9,206	)		7,151
Provision (benefit) for income taxes				—		(226	)		264			(13	)		(93	)		3,109			—			3,041

Net earnings (loss)				—		4,110			(276	)		1,765			3,061			4,656			(9,206	)		4,110
Dividends on redeemable preference shares				—		1,738			—			—			—			—			—			1,738

Net earnings (loss) available for ordinary shareholders			$	—	$	2,372		$	(276	)	$	1,765		$	3,061		$	4,656		$	(9,206	)	$	2,372

			Nine months ended September 29, 2000
			Euramax International, Inc. (Parent Guarantor)			Euramax International Limited (Co-Obligor)			Euramax European Holdings Limited (Co-Obligor)			Euramax European Holdings B.V. (Co-Obligor)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated Totals
Net sales			$	—		$	—		$	—		$	—		$	—		$	465,522		$	—		$	465,522
Costs and expenses:
	Cost of goods sold			—			—			—			—			275			381,503			—			381,778
	Selling and general			2,552			495			—			—			397			38,653			—			42,097
	Depreciation and amortization			—			—			—			—			273			12,151			—			12,424

		Earnings (loss) from operations		(2,552	)		(495	)		—			—			(945	)		33,215			—			29,223
Equity in earnings of subsidiaries				6,486			5,454			1,207			9,583			14,963			—			(37,693	)		—
Interest expense, net				(1,127	)		(74	)		(288	)		(178	)		(1,137	)		(16,121	)		—			(18,925	)
Other income (expense), net				—			76			(2,539	)		(5,156	)		(44	)		6,792			—			(871	)

		Earnings (loss) before income taxes		2,807			4,961			(1,620	)		4,249			12,837			23,886			(37,693	)		9,427
Provision (benefit) for income taxes				(1,435	)		(121	)		(828	)		(1,843	)		(724	)		10,136			—			5,185

Net earnings (loss)			$	4,242		$	5,082		$	(792	)	$	6,092		$	13,561		$	13,750		$	(37,693	)	$	4,242

			Nine months ended September 25, 1999
			Euramax International, Inc. (Parent Guarantor)		Euramax International Limited (Co-Obligor)			Euramax European Holdings Limited (Co-Obligor)			Euramax European Holdings B.V. (Co-Obligor)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated Totals
Net sales			$	—	$	—		$	—		$	—		$	—		$	441,308		$	—		$	441,308
Costs and expenses:
	Cost of goods sold			—		—			—			—			60			354,408			—			354,468
	Selling and general			—		2,148			—			2			468			38,666			—			41,284
	Depreciation and amortization			—		—			—			—			53			10,351			—			10,404

		Earnings (loss) from operations		—		(2,148	)		—			(2	)		(581	)		37,883			—			35,152
Equity in earnings of subsidiaries				—		12,063			827			7,626			7,298			—			(27,814	)		—
Interest expense, net				—		—			(25	)		(257	)		(234	)		(15,802	)		—			(16,318	)
Other income (expense), net				—		(3	)		(498	)		(4,093	)		33			4,119			—			(442	)

		Earnings (loss) before income taxes		—		9,912			304			3,274			6,516			26,200			(27,814	)		18,392
Provision (benefit) for income taxes				—		(667	)		(152	)		(1,495	)		(127	)		10,254			—			7,813

Net earnings (loss)				—		10,579			456			4,769			6,643			15,946			(27,814	)		10,579
Dividends on redeemable preference shares				—		5,038			—			—			—			—			—			5,038

Net earnings (loss) available for ordinary shareholders			$	—	$	5,541		$	456		$	4,769		$	6,643		$	15,946		$	(27,814	)	$	5,541

			As of September 29, 2000
			Euramax International, Inc. (Parent Guarantor)			Euramax International Limited (Co-Obligor)			Euramax European Holdings Limited (Co-Obligor)			Euramax European Holdings B.V. (Co-Obligor)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated Totals
ASSETS
Current assets:
	Cash and equivalents		$	—		$	—		$	—		$	—		$	—		$	15,200		$	—		$	15,200
	Accounts receivable, net			1			100			—			—			—			94,550			—			94,651
	Inventories			—			—			—			—			—			89,867			—			89,867
	Other current assets			—			—			—			—			2,151			2,699			—			4,850

		Total current assets		1			100			—			—			2,151			202,316			—			204,568
Property, plant and equipment, net				—			—			—			—			129			117,531			—			117,660
Amounts due from affiliates				82,481			75,850			45,491			44,429			351,469			125,321			(725,041	)		—
Goodwill, net				—			—			—			—			8,154			106,401			—			114,555
Investment in consolidated subsidiaries				121,271			20,666			(8,757	)		24,196			152,671			—			(310,047	)		—
Deferred income taxes				—			—			—			—			—			6,608			—			6,608
Other assets				—			2,015			515			511			1,252			11,157			—			15,450

			$	203,753		$	98,631		$	37,249		$	69,136		$	515,826		$	569,334		$	(1,035,088	)	$	458,841

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Cash overdrafts		$	—		$	—		$	—		$	—		$	(3,654	)	$	5,081		$	—		$	1,427
	Accounts payable			—			—			—			—			63			60,545			—			60,608
	Accrued expenses and other current liabilities			(1,641	)		(2,257	)		(2,141	)		4,415			(3,873	)		31,376			—			25,879
	Current maturities of long-term debt			—			—			—			—			1,491			2,311			—			3,802

		Total current liabilities		(1,641	)		(2,257	)		(2,141	)		4,415			(5,973	)		99,313			—			91,716
Long-term debt, less current maturities				—			70,605			27,179			37,216			121,717			17,947			—			274,664
Amounts due to affiliates				137,802			15,556			15,007			5,222			255,709			295,745			(725,041	)		—
Deferred income taxes				2,203			421			—			—			(474	)		18,114			—			20,264
Other liabilities				—			—			—			—			945			7,070			—			8,015

		Total liabilities		138,364			84,325			40,045			46,853			371,924			438,189			(725,041	)		394,659

Shareholders'equity:
	Common stock			500			2			78			23			35,001			4,984			(40,088	)		500
	Additional paid-in capital			65,218			20,726			6,922			9,077			174,855			159,426			(383,004	)		53,220
	Treasury stock			(1,581	)		—			—			—			—			—			—			(1,581	)
	Retained earnings (deficit)			3,980			1,074			(9,557	)		19,249			(60,412	)		(25,101	)		91,534			20,767
	Accumulated other comprehensive loss			(2,728	)		(7,496	)		(239	)		(6,066	)		(5,542	)		(8,164	)		21,511			(8,724	)

Total shareholders' equity				65,389			14,306			(2,796	)		22,283			143,902			131,145			(310,047	)		64,182

			$	203,753		$	98,631		$	37,249		$	69,136		$	515,826		$	569,334		$	(1,035,088	)	$	458,841

			As of December 31, 1999
			Euramax International, Inc. (Parent Guarantor)			Euramax International Limited (Co-Obligor)			Euramax European Holdings Limited (Co-Obligor)			Euramax European Holdings B.V. (Co-Obligor)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated Totals
ASSETS
Current assets:
	Cash and equivalents		$	—		$	—		$	—		$	—		$	1,537		$	11,848		$	—		$	13,385
	Accounts receivable, net			—			103			—			—			1,354			78,630			—			80,087
	Inventories			—			—			—			—			2,622			79,877			—			82,499
	Other current assets			—			—			—			—			1,467			2,804			—			4,271

		Total current assets		—			103			—			—			6,980			173,159			—			180,242
Property, plant and equipment, net				—			—			—			—			5,603			114,806			—			120,409
Amounts due from affiliates				76,535			81,757			46,846			49,743			345,507			141,423			(741,811	)		—
Goodwill, net				—			—			—			—			8,368			74,219			—			82,587
Investment in consolidated subsidiaries				117,490			17,918			(10,829	)		17,360			98,088			—			(240,027	)		—
Deferred income taxes				—			—			—			—			—			6,638			—			6,638
Other assets				—			2,267			635			658			1,691			4,532			—			9,783

			$	194,025		$	102,045		$	36,652		$	67,761		$	466,237		$	514,777		$	(981,838	)	$	399,659

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Cash overdrafts		$	—		$	—		$	—		$	—		$	(2,030	)	$	4,039		$	—		$	2,009
	Accounts payable			2			—			—			—			230			49,450			—			49,682
	Accrued expenses and other current liabilities			(340	)		(772	)		(595	)		4,095			1,316			28,041			—			31,745
	Current maturities of long-term debt			—			—			—			—			5,540			696			—			6,236

		Total current liabilities		(338	)		(772	)		(595	)		4,095			5,056			82,226			—			89,672

Long-term debt, less current maturities				—			70,605			27,179			37,216			45,568			34,475			—			215,043
Amounts due to affiliates				126,739			19,861			12,275			7,571			279,293			296,072			(741,811	)		—
Deferred income taxes				2,203			421			—			—			(374	)		18,439			—			20,689
Other liabilities				—			—			—			—			1,021			8,166			—			9,187

		Total liabilities		128,604			90,115			38,859			48,882			330,564			439,378			(741,811	)		334,591

Shareholders'equity:
	Common stock			500			2			78			23			35,001			4,983			(40,087	)		500
	Additional paid-in capital			65,218			20,726			6,922			9,077			174,855			114,412			(337,990	)		53,220
	Retained earnings (deficit)			(262	)		16,787			4,170			20,049			(46,325	)		(14,760	)		36,866			16,525
	Dividends declared			—			(20,793	)		(12,932	)		(6,891	)		(27,650	)		(25,076	)		93,342			—
	Accumulated other comprehensive loss			(35	)		(4,792	)		(445	)		(3,379	)		(208	)		(4,160	)		7,842			(5,177	)

Total shareholders' equity				65,421			11,930			(2,207	)		18,879			135,673			75,399			(240,027	)		65,068

			$	194,025		$	102,045		$	36,652		$	67,761		$	466,237		$	514,777		$	(981,838	)	$	399,659

			Nine months ended September 29, 2000
			Euramax International, Inc. (Parent Guarantor)			Euramax International Limited (Co-Obligor)			Euramax European Holdings Limited (Co-Obligor)			Euramax European Holdings B.V. (Co-Obligor)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated Totals
Net cash (used in)/provided by operating activities			$	(3,548	)	$	(1,602	)	$	(3,602	)	$	(2,537	)	$	2,573		$	(1,128	)	$	(9,844	)

Cash flows from investing activities:
	Purchases of businesses			—			—			—			—			—			(45,550	)		(45,550	)
	Proceeds from sales of assets			—			—			—			—			—			397			397
	Capital expenditures			—			—			—			—			(28	)		(7,264	)		(7,292	)

		Net cash used in investing activities		—			—			—			—			(28	)		(52,417	)		(52,445	)
Cash flows from financing activities:
	Repayment of debt			—			—			—			—			(4,899	)		(18,998	)		(23,897	)
	Proceeds from debt			—			—			—			—			77,000			6,881			83,881
	Purchase of treasury stock			(1,581	)		—			—			—			—			—			(1,581	)
	Change in cash overdrafts			—			—			—			—			(1,623	)		1,041			(582	)
	Due to/from affiliates			5,129			1,602			4,088			2,967			(74,560	)		60,774			—

		Net cash (used in)/provided by financing activities		3,548			1,602			4,088			2,967			(4,082	)		49,698			57,821
Effect of exchange rate changes on cash				—			—			(486	)		(430	)		—			7,199			6,283

Net increase/(decrease) in cash and equivalents				—			—			—			—			(1,537	)		3,352			1,815
Cash and equivalents at beginning of period				—			—			—			—			(1,537	)		14,922			13,385

Cash and equivalents at end of period			$	—		$	—		$	—		$	—		$	(3,074	)	$	18,274		$	15,200

			Nine months ended September 25, 1999
			Euramax International, Inc. (Parent Guarantor)		Euramax International Limited (Co-Obligor)			Euramax European Holdings Limited (Co-Obligor)			Euramax European Holdings B.V. (Co-Obligor)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated Totals
Net cash (used in)/provided by operating activities			$	—	$	(2,307	)	$	438		$	1,661		$	(2,887	)	$	27,596		$	24,501

Cash flows from investing activities:
	Purchases of businesses			—		—			—			—			(16,555	)		(6,600	)		(23,155	)
	Proceeds from sales of assets			—		—			—			—			1			659			660
	Capital expenditures			—		—			—			—			(39	)		(10,115	)		(10,154	)

		Net cash used in investing activities		—		—			—			—			(16,593	)		(16,056	)		(32,649	)
Cash flows from financing activities:
	Repayment of debt			—		—			—			—			(14,049	)		(19,990	)		(34,039	)
	Proceeds from debt			—		—			—			—			31,000			3,700			34,700
	Change in cash overdrafts			—		—			—			—			2,776			(822	)		1,954
	Due to/from affiliates			—		2,307			(318	)		(1,422	)		(152	)		(415	)		—

		Net cash (used in)/provided by financing activities		—		2,307			(318	)		(1,422	)		19,575			(17,527	)		2,615
Effect of exchange rate changes on cash				—		—			(120	)		(239	)		—			720			361

Net increase/(decrease) in cash and equivalents				—		—			—			—			95			(5,267	)		(5,172	)
Cash and equivalents at beginning of period				—		—			—			—			12			19,032			19,044

Cash and equivalents at end of period			$	—	$	—		$	—		$	—		$	107		$	13,765		$	13,872

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

Business Overview

The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements included elsewhere in this document, as well as the year-end Consolidated Financial Statements and Management's Discussion and Analysis included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999.

The Company is an international producer of value-added aluminum, steel, vinyl and fiberglass fabricated products, with facilities strategically located in the United Kingdom ("U.K."), The Netherlands, France, and all major regions of the continental United States ("U.S."). Euramax's core products include specialty coated coils, aluminum recreational vehicle ("RV") sidewalls, RV doors, farm and agricultural panels, roofing accessories, metal and vinyl raincarrying systems, soffit and fascia systems, and vinyl replacement windows. The Company's customers include original equipment manufacturers ("OEMs") such as RV, commercial panel and transportation industry manufacturers; rural contractors; home centers; manufactured housing producers; distributors; industrial and architectural contractors; and home improvement contractors.

Financial results for the quarter ended September 29, 2000, compared to the same period of 1999, reflect further softening of demand in certain U.S. markets that began in the first half of the year, further weakening of European currencies relative to the U.S. Dollar, and higher aluminum and freight costs. These conditions contributed to reduce operating earnings for the third quarter of 2000 to $7.9 million from $12.5 million in the third quarter of 1999, a 36.7% reduction. Approximately $2.0 million of this $4.6 million decrease was attributable to weakening European currencies relative to the dollar.

Effective April 10, 2000, the Company, through its wholly owned subsidiary Amerimax Home Products, Inc., acquired substantially all of the assets and assumed certain liabilities of Gutter World, Inc. ("Gutter World") and Global Expanded Metals, Inc. ("Global"). Gutter World manufactures a variety of raincarrying accessories, including gutter and door guards, water diverters and downspout strainers. Global manufactures expanded metal products.

These acquisitions have resulted in increased net sales in its U.S. Fabrication segment, particularly those to home centers. Consistent with the Company's business strategy, management expects to continue identifying and acquiring businesses that will allow it to expand its customer base, geographic coverage and product offerings.

Results of Operations

Quarter Ended September 29, 2000 as Compared to Quarter Ended September 25, 1999

The following table sets forth the Company's Statements of Earnings Data expressed as a percentage of net sales:

			Quarters ended
			September 29, 2000		September 25, 1999
Statements of Earnings Data:
Net sales			100.0	%	100.0	%
Costs and expenses:
	Cost of goods sold		83.3		80.4
	Selling and general		9.0		9.1
	Depreciation and amortization		2.7		2.3

		Earnings from operations	5.0		8.2
Interest expense, net			(4.2	)	(3.7	)
Other expense, net			(0.2	)	0.2

		Earnings before income taxes	0.6		4.7
Provision for income taxes			0.9		2.0

		Net earnings	(0.3	)	2.7

		Net Sales Quarters ended						Earnings from Operations Quarters ended
*In thousands*		September 29, 2000		September 25, 1999		Increase/ (decrease)		September 29, 2000		September 25, 1999		Increase/ (decrease)
United States		$	115,717	$	108,961	6.2	%	$	4,890	$	8,857	(44.8	)%
Europe			43,817		43,761	0.1	%		3,011		3,621	(16.8	)%

	Totals	$	159,534	$	152,722	4.5	%	$	7,901	$	12,478	(36.7	)%

Net Sales. Net sales increased 4.5% to $159.5 million for the quarter ended September 29, 2000, from $152.7 million for the quarter ended September 25, 1999. Sales in the U.S. increased principally due to increased sales to home centers and home improvement contractors resulting primarily from the second quarter acquisitions of Gutter World and Global (see Note 2 to the Condensed Consolidated Financial Statements), as well as the 1999 acquisition of Atlanta Metal Products, Inc., acquired in June 1999 (see Note 2 to the Consolidated Financial Statements of the Company for the year ended December 31, 1999, set forth in the Company's Annual Report on Form 10-K). These increases were offset by a decline in sales of steel roofing and siding, particularly to the manufactured housing market, due to reduced demand for products. Additionally, third quarter 2000 sales of aluminum and laminated fiberglass wall products to the U.S. RV market were 13.4% lower than in the third quarter of 1999. These results provide indication that the effects of rising interest rates, rising fuel costs and lower consumer confidence are affecting end-user demand for RV's in the U.S. For the balance of 2000, management expects to see a further deterioration of market conditions in the U.S. RV industry and continued softness in markets for steel roofing and siding panels. The Company's U.S. subsidiaries are included in the U.S. Fabrication Segment (see Note 10 to the Condensed Consolidated Financial Statements).

Excluding a decline in reported net sales of approximately $5.6 million due to the weakening of foreign exchange rates relative to the U.S. Dollar, third quarter net sales in Europe increased by approximately 13% over the same period in 1999. Sales in the European Roll Coating Segment (see Note 10 to the Condensed Consolidated Financial Statements) increased primarily from strong demand

for painted aluminum in Europe resulting from general economic conditions and a healthy European RV (caravan) market. Offsetting the increases within the European Roll Coating Segment were decreases in sales to the U.K. export markets resulting, in part, from the continued strength of the Pound Sterling relative to other European currencies. For the balance of 2000, management expects that the strength of the Company's European markets will continue.

Cost of goods sold. Cost of goods sold, as a percentage of net sales, increased to 83.3% for the quarter ended September 29, 2000, from 80.4% for the quarter ended September 25, 1999. This increase is primarily attributable to an increase in raw material aluminum prices and freight costs compared to the same period in the prior year.

Selling and general. Selling and general expenses, as a percentage of net sales, decreased to 9.0% for the quarter ended September 29, 2000, from 9.1% for the quarter ended September 25, 1999. This decrease is primarily attributable to a weakening of foreign exchange rates relative to the U.S. Dollar.

Depreciation and amortization. Depreciation and amortization, as a percentage of net sales, was 2.7% for the quarter ended September 29, 2000, compared to 2.3% for the quarter ended September 25, 1999. The increase in depreciation and amortization is primarily the result of business acquisitions.

Earnings from operations. As noted above, earnings from operations in the U.S. decreased to $4.9 million for the quarter ended September 29, 2000, from $8.9 million for the quarter ended September 25, 1999, and earnings from operations in Europe decreased to $3.0 million for the quarter ended September 25, 2000, from $3.6 million for the quarter ended September 25, 1999. Significant market resistance to higher selling prices exacerbated the effect that lower U.S. demand had on operating margins. The Company was not able to obtain price increases in the U.S. to offset higher freight and aluminum costs. Since the close of the third quarter, price increases have been negotiated within certain key markets and such increases, barring further cost increases, are expected to widen U.S. operating margins. The decrease in earnings from operations in Europe is attributable to the weakening of European currencies relative to the U.S. Dollar, which reduced reported operating earnings by $542.0 thousand compared to the third quarter of 1999.

Interest expense, net. Net interest expense, increased to $6.8 million for the quarter ended September 29, 2000, from $5.7 million for the quarter ended September 25, 1999. The increase in interest expense is due to additional borrowings to fund acquisitions, as well as to higher interest rates.

Other expenses, net. Other expenses were not significant for the quarters ended September 29, 2000 and September 25, 1999.

Provision for income taxes. The income tax provision for the period is based on the effective tax rate expected to be applicable for the full year. The effective rate for the provision for income taxes increased to 157.0% from 42.5% for the quarters ended September 29, 2000 and September 25, 1999, respectively. The higher rate is due to an adjustment made during the quarter necessary to adjust the year-to-date provision to approximate the effective tax rate expected to be applicable for the full year.

Nine Months Ended September 29, 2000 as Compared to Nine Months Ended September 25, 1999

The following table sets forth the Company's Statements of Earnings Data expressed as a percentage of net sales:

			Nine months ended
			September 29, 2000		September 25, 1999
Statements of Earnings Data:
Net sales			100.0	%	100.0	%
Costs and expenses:
	Cost of goods sold		82.0		80.3
	Selling and general		9.0		9.3
	Depreciation and amortization		2.7		2.4

		Earnings from operations	6.3		8.0
Interest expense, net			(4.1	)	(3.7	)
Other expense, net			(0.2	)	(0.1	)

		Earnings before income taxes	2.0		4.2
Provision for income taxes			1.1		1.8

		Net earnings	0.9		2.4

		Net Sales Nine months ended						Earnings from Operations Nine months ended
*In thousands*		September 29, 2000		September 25, 1999		Increase/ (decrease)		September 29, 2000		September 25, 1999		Increase/ (decrease)
United States		$	311,286	$	294,749	5.6	%	$	14,426	$	21,656	(33.4	)%
Europe			154,236		146,559	5.2	%		14,797		13,496	9.6	%

	Totals	$	465,522	$	441,308	5.5	%	$	29,223	$	35,152	(16.9	)%

Net Sales. Net sales increased 5.5% to $465.5 million for the nine months ended September 25, 2000, from $441.3 million for the nine months ended September 25, 1999. As reflected in the quarter ended September 29, 2000, compared to the quarter ended September 25, 1999, sales in the U.S. were higher principally due to increased sales to home centers and home improvement contractors resulting primarily from the second quarter acquisitions of Gutter World and Global, as well as the 1999 acquisition of Atlanta Metal Products, Inc. Increases were also experienced in vinyl window sales to home improvement contractors and sales of roofing accessories to distributors and industrial and architectural contractors. These increases were offset by a decline in sales to producers of manufacturing housing and to the RV market. See "Quarter Ended September 29, 2000 as Compared to Quarter Ended September 25, 2000—Net Sales" for further discussion of the factors affecting sales in the U.S., as these factors also apply to the change in net sales for the nine months ended September 29, 2000, compared to the nine months ended September 25, 1999.

Despite a decline in reported net sales of approximately $15.6 million due to the weakening of foreign exchange rates relative to the U.S. Dollar, net sales in Europe for the nine months ended September 29, 2000, increased by approximately 5.2% over the same period in 1999. Excluding the effect of the weakening of foreign exchange rates relative to the U.S. Dollar, net sales in Europe increased 15.9%. Sales in the European Roll Coating Segment increased primarily from the continued strength of the demand for painted aluminum in Europe. Offsetting the increases in the European Roll Coating Segment were decreases in sales to the U.K. export markets resulting, in part, from the continued strength of the Pound Sterling relative to other European currencies.

Cost of goods sold. Cost of goods sold, as a percentage of net sales, increased to 82.0% for the nine months ended September 29, 2000, from 80.3% for the nine months ended September 25, 1999. This increase is primarily attributable to an increase in raw material aluminum prices and freight costs compared to the same period in the prior year.

Selling and general. Selling and general expenses, as a percentage of net sales, decreased to 9.0% for the nine months ended September 29, 2000, from 9.3% for the nine months ended September 25, 1999. This decrease is primarily attributable to higher net sales, lower levels of spending on incentive compensation, and a weakening of foreign exchange rates relative to the U.S. Dollar.

Depreciation and amortization. Depreciation and amortization, as a percentage of net sales, was 2.7% for the nine months ended September 29, 2000, compared to 2.4% for the nine months ended September 25, 1999. The increase in depreciation and amortization is primarily the result of business acquisitions.

Earnings from operations. As noted above, earnings from operations in the U.S. decreased to $14.4 million for the nine months ended September 25, 2000, from $21.7 million for the nine months ended September 29, 1999, and earnings from operations in Europe increased to $14.8 million for the nine months ended September 29, 2000, from $13.5 million for the nine months ended September 25, 1999. Earnings from operations in the U.S. were more negatively impacted by the higher raw material costs than were earnings in Europe, as, historically, the U.S. operations are not able to pass along raw material price increases as quickly as the European operations, and there is significant market resistance to higher selling prices. The ability to pass along price increases at a quicker pace in Europe, together with strong European demand, enabled the increase in earnings from operations in Europe. This increase was achieved despite weakening European currencies, which reduced reported operating earnings by $2.0 million compared to the first nine months of 1999.

Interest expense, net. Net interest expense, increased to $18.9 million for the nine months ended September 29, 2000, from $16.3 million for the nine months ended September 25, 1999. The increase in interest expense is due to additional borrowings to fund acquisitions, as well as to higher interest rates.

Other expenses, net. Other expenses were not significant for the nine months ended September 29, 2000 and September 25, 1999.

Provision for income taxes. The income tax provision for the period is based on the effective tax rate expected to be applicable for the full year. The effective rate for the provision for income taxes increased to 55.0% from 42.5% for the nine months ended September 29, 2000 and September 25, 1999, respectively. The higher rate is primarily due to lower earnings diluted by the effect of permanent differences, as well as to an increase in non-deductible goodwill amortization resulting from the acquisition of Atlanta Metal Products, Inc.

Liquidity and Capital Resources

Liquidity. The Company's primary liquidity needs arise from debt service incurred in connection with acquisitions and the funding of capital expenditures. The Company's liquidity sources at September 29, 2000, included $20.1 million fully available under its revolving credit facility and $15.2 million in cash. In addition, on October 20, 2000, the Company was able to liquidate its position in its Dutch currency swap, which provided $10.0 million for debt reduction.

The Company's leveraged financial position requires that a substantial portion of the Company's cash flow from operations be used to pay interest on the Notes, principal and interest under the Company's Credit Agreement and other indebtedness. Significant increases in the floating interest rates on the Term Loans and Revolving Credit Facility would result in increased debt service requirements, which may reduce the funds available for capital expenditures and other operational needs. In addition, the Company's leveraged position may impede its ability to obtain financing in the future for working capital, capital

expenditures and general corporate purposes. Further, the Company's leveraged position may make it more vulnerable to economic downturns, may limit its ability to withstand competitive pressures, and may limit its ability to comply with restrictive financial covenants required under its Credit Agreement.

The Company's primary source of liquidity is funds generated from operations, which are supplemented by borrowings under the Credit Agreement. Net cash used in operating activities for the nine months ended September 29, 2000, was $9.8 million, compared to cash provided by operating activities of $24.5 million for the nine months ended September 25, 1999. The increase in cash used in operating activities for the nine months ended September 29, 2000, compared to the nine months ended September 25, 1999, is primarily related to lower net earnings coupled with an increase in accounts receivable resulting from higher sales and an increase in inventories due to higher aluminum prices.

Net cash used in investing activities increased primarily as a result of the acquisitions of Gutter World and Global in the second quarter of 2000 as compared to the acquisition of Atlanta Metal Products during the second quarter of 1999. Capital expenditures were approximately $2.9 million lower in the nine months ended September 29, 2000, compared to the nine months ended September 25, 1999. Management expects to reduce capital spending to maintenance levels until cash flow from operations grows to support capital spending on expansion projects.

Net cash provided by financing activities increased primarily due to the borrowings under the Credit Agreement to fund the acquisitions of Gutter World and Global, and to fund increased working capital needs of the business during the nine months ended September 29, 2000, compared to the nine months ended September 25, 1999.

The above-noted sources are expected to provide the liquidity required, if necessary, to supplement lower cash flow from operations, although no assurance to that effect can be given.

Capital Expenditures. The Company's capital expenditures were $7.3 million and $10.0 million for the nine months ended September 29, 2000 and September 25, 1999, respectively. Capital expenditures in 2000 include approximately $2.6 million for several projects related to business expansion and cost reduction activities, and approximately $1.0 million for improvements to the paintlines in Helena, Arkansas; Roermond, The Netherlands; and Corby, England. The balance of capital expenditures relates primarily to purchases and upgrades of fabricating equipment. Capital expenditures in 1999 included $3.9 million for improvements to the paintline in Corby, England and Helena, Arkansas. The balance of capital expenditures in 1999 related to purchases and upgrades of fabricating equipment, transportation and material moving equipment, and information systems.

The Company has made and will continue to make capital expenditures to comply with Environmental Laws. The Company estimates that its environmental capital expenditures for 2000 will approximate $250.0 thousand.

Working Capital Management. Working capital was $112.9 million as of September 29, 2000, compared to $90.6 million as of December 31, 1999. The increase in working capital is primarily attributable to lower than expected sales to rural construction markets, rising aluminum prices, higher net sales, the acquisitions of Gutter World and Global, and seasonal demands of the business. The Company continues to aggressively manage working capital levels and believes that current levels of working capital represent a liquid source of funds available for future cash flows.

Recent Accounting Pronouncements

whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. For fair-value hedge transactions in which the Company is hedging changes in the fair value of an asset, liability, or firm commitment, changes in the fair value of the derivative instrument will generally be offset in the income statement by changes in the hedged item's fair value. For cash-flow hedge transactions, in which the Company is hedging the variability of cash flows related to a variable-rate asset, liability, or a forecasted transaction, changes in the fair value of the derivative instrument will be reported in other comprehensive income. The gains and losses on the derivative instrument that are reported in other comprehensive income will be reclassified as earnings in the periods in which earnings are impacted by the variability of the cash flows of the hedged item. The ineffective portion of all hedges will be recognized in current-period earnings. Although the pronouncement is not expected to have a significant impact on the Company's financial position or results of operation, the Company continues to evaluate the full extent of such impact and finalize the development of its implementation plan.

Environmental Matters

The Company's exposure to environmental matters has not changed significantly from the year ended December 31, 1999. For detailed information regarding environmental matters, see "Management's Discussion and Analysis—Risk Management" set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 1999.

Note Regarding Forward-Looking Statements: The Management's Discussion and Analysis and other sections of this Form 10-Q may contain forward-looking statements that are based on current expectations, estimates and projections about the industries in which the Company operates, and management's beliefs and assumptions. Such forward-looking statements include terminology such as "expects," "anticipates," "intends," "plans," "believes," "estimates," or variations of such words and similar expressions regarding beliefs, plans, expectations or intentions regarding the future. Forward-looking statements in this report include, but are not limited to: (1) statements regarding the Company's expectations to continue acquiring businesses that will allow it to expand its customer base, geographic coverage and product offerings; (2) statements regarding the Company's belief that rising interest rates, rising fuel costs and lower consumer confidence are affecting end-user demand for RV's in the US; (3) statements regarding the Company's expectation for further deterioration of market conditions in the U.S. RV industry and continued softness in markets for steel roofing and siding panels; (4) statements regarding the Company's expectation that the strength of its European markets will continue; (5) statements regarding the Company's expectation that negotiated price increases in the U.S. will widen U.S. operating margins; (6) statements regarding the Company's expectation that its sources of liquidity will provide the liquidity required, if necessary, to supplement lower cash flow from operations; and (7) statements regarding the Company's belief that current levels of working capital represent a liquid source of funds available for future cash flows. These forward-looking statements are based on a number of assumptions that could ultimately prove inaccurate, and, therefore, there can be no assurance that they will prove to be accurate. All such forward-looking statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Important factors that could cause future financial performance to differ materially and significantly from past results and from those expressed or implied in this document include, without limitation, the risks of acquisition of businesses (including limited knowledge of the businesses acquired and misrepresentations by sellers), changes in business strategy or development plans, the cyclical demand for the Company's products, the supply and/or price of aluminum and other raw materials, currency exchange rate fluctuations, environmental regulations, availability of financing, competition,

reliance on key management personnel, ability to manage growth, loss of customers, and a variety of other factors. For further information on these and other risks, see the "Risk Factors" section of Item 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 1999, as well as the Company's other filings with the Securities and Exchange Commission. The Company assumes no obligation to update publicly its forward-looking statements, whether as a result of new information, future events or otherwise.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The following discussion about the Company's risk-management activities includes forward-looking statements that involve risk and uncertainties. Actual results could differ materially from those projected in the forward-looking statement. See "Note Regarding Forward Looking Statements" for additional information regarding the Private Securities Litigation Reform Act. The Company's management of market risk from changes in interest rates, exchange rates and commodity prices has not changed from the year ended December 31, 1999. For detailed information regarding the Company's risk management, see "Management's Discussion and Analysis—Risk Management" and "Item 7A. Quantitative and Qualitative Disclosures about Market Risk" set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 1999.

Interest Rate Risk

This analysis presents the hypothetical loss in fair value and increase in interest expense of those financial instruments and derivative instruments held by the Company at September 29, 2000, which are sensitive to changes in interest rates. All other factors remaining unchanged, a hypothetical 10 percent increase in interest rates would decrease the fair value of the Company's fixed-rate, long-term debt outstanding at September 29, 2000, by approximately $6.6 million, based upon the use of a discounted cash flow model, as compared to a hypothetical decrease in fair value of approximately $7.0 million at December 31, 1999.

A hypothetical 10 percent increase in interest rates for one year on the Company's variable rate financial instruments and derivative instruments would increase interest expense by approximately $1.3 million as calculated at September 29, 2000, as compared to a hypothetical increase in interest expense of approximately $580.9 thousand as calculated at December 31, 1999. The hypothetical increase in interest expense is primarily the result of increases in interest rates and an increase in the Company's variable rate debt.

Foreign Currency Exchange Risk

This analysis presents the hypothetical increase in foreign exchange loss and increase in interest expense related to those financial instruments and derivative instruments held by the Company at September 29, 2000, which are sensitive to changes in foreign currency exchange risks. A hypothetical 10 percent decrease in foreign currency exchange rates would increase the Company's foreign exchange loss by approximately $685.0 thousand for those financial instruments and derivative instruments affected by foreign currency exchange fluctuations, as compared to a hypothetical increase in foreign exchange loss of approximately $822.5 thousand for the year ended December 31, 1999.

All other factors remaining unchanged, a hypothetical 10 percent increase in foreign currency exchange rates for one year would increase interest expense by approximately $515.2 thousand as calculated at September 29, 2000, for those financial instruments and derivative instruments affected by foreign currency exchange fluctuations, as compared to a hypothetical increase in interest expense of approximately $795.2 thousand as calculated at December 31, 1999. The hypothetical decrease in interest expense is primarily due to the weakening of the Euro and Pound Sterling relative to the U.S. Dollar on the Company's currency swaps.

Part II—Other Information

Item 6. Exhibits and Reports on Form 8-K

(a)(1)		The following consolidated financial statements of Euramax International, Inc. and its subsidiaries are included in Part I, Item 1.
		Condensed Consolidated Statements of Earnings for the quarters and nine months ended September 29, 2000 and September 25, 1999
		Condensed Consolidated Balance Sheets at September 29, 2000 and December 31, 1999
		Condensed Consolidated Statements of Cash Flows for the nine months ended September 29, 2000 and September 25, 1999
		Notes to Condensed Consolidated Financial Statements
(b)		Reports on Form 8-K:
		The Company filed a report on Form 8-K dated September 8, 2000, reporting a change in its independent auditors.
		The Company filed a report on Form 8-K dated April 24, 2000, reporting the acquisitions of substantially all of the assets of Gutter World, Inc. and Global Expanded Metals, Inc., and which included the following documents:
(1)		Audited financial Statements of Gutter World, Inc. as of and for the year ended December 31, 1999.
(2)		Audited financial statements of Global Expanded Metals, Inc. as of and for the year ended December 31, 1999.
(3)		Pro Forma Financial Information including an unaudited Pro Forma Condensed Combined Balance Sheet of Euramax International, Inc. and Subsidiaries as of December 31, 1999, and an unaudited Pro Forma Condensed Combined Statement of Earnings of Euramax International, Inc. and Subsidiaries for the year ended December 31, 1999, giving effect to the Transaction.
(c)		Exhibits:

2.1**		Purchase Agreement dated as of April 28, 1997, among the Company and Genstar Capital Corporation ("GCC"), Ontario Teachers' Pension Plan Board and the Management Stockholders of Gentek Holdings, Inc. ("Holdings") as sellers GCC as sellers' representative; Holdings and Gentek Building Products, Inc. ("GBPI"). (Incorporated by reference to Exhibit 2.1 of the Registrant's Form 8-K filed August 1, 1997).
2.2******		Proposals for the acquisition of the entire issued share capital of Euramax International Limited by Euramax International, Inc. to be effected by means of a Scheme Arrangement under Section 425 of the Companies Act 1985
2.3********		Purchase Agreement dated as of March 10, 2000, by and between Amerimax Home Products, Inc., Gutter World, Inc. and Global Expanded Metals, Inc., and all of the stockholders of Gutter World, Inc. and Global Expanded Metals, Inc.
3.1*		Articles of Association of Euramax International plc
3.2*		Memorandum and Articles of Association of Euramax European Holdings plc
3.3*		Articles of Association of Euramax International B.V.

3.4*		Articles of Incorporation of Amerimax Holdings, Inc.
3.5*		Bylaws of Amerimax Holdings, Inc.
4.3*		Indenture, dated as of September 25, 1996, by and among Euramax International plc, Euramax European Holdings plc, Euramax European Holdings B.V., Amerimax Holdings, Inc. and the Chase Manhattan Bank, as Trustee.
4.4*		Deposit Agreement, dated as of September 25, 1996, by and among Euramax International plc, Euramax European Holdings plc, Euramax European Holdings B.V., and The Chase Manhattan Bank, as book-entry depositary
4.5*		Registration Rights Agreement, dated as of September 25, 1996, by and among Euramax International plc, Euramax European Holdings plc, Euramax European Holdings B.V., Amerimax Holdings, Inc. and J.P. Morgan Securities Inc. and Goldman Sachs & Co.
4.6*		Purchase Agreement dated as of September 18, 1996, by and among Euramax International Ltd., Euramax European Holdings Ltd., Euramax European Holdings B.V., Amerimax Holdings, Inc. and J.P. Morgan Securities Inc. and Goldman Sachs & Co.
4.7*******		Supplemental Indenture, dated as of November 18, 1999, among Euramax International Limited, Euramax European Holdings plc, Euramax European Holdings, B.V., as Issuers, Amerimax Holdings, Inc., as Guarantor, and The Chase Manhattan Bank, as Trustee
4.8*******		Amended and Restated Supplemental Indenture, dated as of December 14, 1999, among Euramax International Limited, Euramax European Holdings plc, Euramax European Holdings, B.V., as Issuers, Amerimax Holdings, Inc., as Guarantor, and The Chase Manhattan Bank, as Trustee
10.1*		Purchase Agreement, dated as of June 24, 1996, by and between Euramax International Ltd. and Alumax Inc.
10.2*		Executive Employment Agreement, dated as of September 25, 1996, by and between J. David Smith and Euramax International plc
10.5*		Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Holdings, Inc. in favor of Banque Paribas, as agent
10.6*		Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Fabricated Products, Inc. in favor of Banque Paribas, as agent
10.7*		Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Home Products, Inc. in favor of Banque Paribas, as agent
10.8*		Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Building Products, Inc. in favor of Banque Paribas, as agent
10.9*		Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Coated Products, Inc. in favor of Banque Paribas, as agent
10.10*		Domestic Security Agreement, dated as of September 25, 1996, by Johnson Door Products, Inc. in favor of Banque Paribas, as agent
10.11*		Domestic Security Agreement, dated as of September 25, 1996, by Amerimax Specialty Products, Inc. in favor of Banque Paribas, as agent

10.12*		Domestic Subsidiary Guaranty, dated as of September 25, 1996, by each of Amerimax Home Products, Inc., Amerimax Specialty Products, Inc., Amerimax Building Products, Inc., Amerimax Coated Products and Johnson Door Products, Inc. in favor of the Guarantied Parties referred to therein
10.13*		U.S. Holdings Guaranty, dated as of September 25, 1996, by Amerimax Holdings, Inc. in favor of the Guaranteed Parties referred to therein
10.14*		U.S. Holdings Pledge Agreement, dated as of September 25, 1996, by Amerimax Holdings, Inc., to Banque Paribas, as Agent
10.15*		U.S. Operating Co. Guaranty, dated as of September 25, 1996, by Amerimax Fabricated Products, Inc. in favor of the Guarantied Parties referred to therein
10.16*		U.S. Operating Co. Pledge Agreement dated as of September 25, 1996, by Amerimax Fabricated Products, Inc. to Banque Paribas, as Agent
10.17*		Euramax Assignment Agreement, dated as of September 25, 1996, by Euramax International plc in favor of Banque Paribas, as Agent
10.18*		Euramax Pledge Agreement, dated as of September 25, 1996, by Euramax International plc to Banque Paribas, as Agent
10.19*		Building Products Pledge Agreement, dated as of September 25, 1996, by Amerimax Building Products, Inc. to Banque Paribas, as Agent
10.20*		Dutch Holdings Guaranty, dated as of September 25, 1996, by Euramax European Holdings B.V. in favor of the Guarantied Parties referred to therein
10.21*		Dutch Company Guaranty, dated as of September 25, 1996, by Euramax Netherlands B.V., in favor of the Guarantied Parties referred to therein
10.22*		Dutch Operating Co. Guaranty, dated as of September 25, 1996, by Euramax Europe B.V., in favor of the Guarantied Parties referred to therein
10.23*		Dutch Subsidiary Guaranty, dated as of September 25, 1996, by Euramax Coated Products B.V., in favor of the Guarantied Parties referred to therein
10.24***		Amended and Restated Credit Agreement, dated as of July 16, 1997, by and among Amerimax Fabricated Products, Euramax Holdings Limited, Euramax Europe B.V., Euramax Netherlands B.V., as Borrowers; Euramax International plc, Amerimax Holdings, Inc., Euramax European Holdings plc, Euramax European Holdings B.V., Euramax Europe Limited and certain of their operating subsidiaries, as other Loan Parties; Banque Paribas, as Agent, as a Lender and as the Issuer; and the other lenders named therein. (Incorporated by reference to Exhibit 10.1 of the Registrant's Form 10-Q for the quarter ended June 28, 1997.)
10.25***		Amendment to Credit Agreement, dated as of December 18, 1997, by and among Amerimax Fabricated Products, Euramax Holdings Limited, Euramax Europe B.V., Euramax Netherlands B.V., as Borrowers; Euramax International plc, Amerimax Holdings, Inc., Euramax European Holdings plc, Euramax European Holdings B.V., Euramax Europe Limited and certain of their operating subsidiaries, as other Loan Parties; Banque Paribas, as Agent, as a Lender and as the Issuer; and the other lenders named therein. (Incorporated by reference to Exhibit 10.25 of the Registrant's Form 10-K for the year ended December 26, 1997.)

10.26****		Incentive Compensation Plan effective January 1, 1997, by Euramax International Limited
10.27****		Phantom Stock Plan effective January 1, 1999, by Euramax International Limited
10.28*****		Amendment and Waiver dated as of April 6, 1999, among Euramax International Limited, and its subsidiaries, Paribas (as Agent and Lender), and the Lenders, to the Amended and Restated Credit Agreement dated as of July 16, 1997
10.29*******		Amendment, dated as of December 8, 1999, among Euramax International Limited, the other Loan Parties, the Swing Loan Lender and the Issuer and Paribas, as Agent, to (a) the Amended and Restated Credit Agreement, dated as of July 16, 1997 and (b) the other Loan Documents
10.30*******		Amendment and Consent, dated as of December 9, 1999, among Euramax International Limited, the other Loan Parties, the Swing Loan Lender and the Issuer and Paribas, as Agent, to (a) Amended and Restated Credit Agreement, dated as of July 16, 1997 and (b) the other Loan Documents
10.31		Amendment and Waiver dated as of April 10, 2000, among Euramax International, Inc. and its subsidiaries, Paribas (as Agent and Lender), and the Lenders, to the Amended and Restated Credit Agreement dated as of July 16, 1997
27		Financial Data Schedule

*		Incorporated by reference to the Exhibit with the same number in the Registrant's Registration Statement on Form S-4 (333-05978) which became effective on February 7, 1997.
**		Incorporated by reference to the Exhibit with the same number in the Registrant's Annual Report on Form 10-K (333-05978) which was filed on March 12, 1998.
***		Incorporated by reference to the Exhibit with the same number in the Registrant's Annual Report on Form 10-K (333-05978) which was filed on March 5, 1999.
****		Incorporated by reference to the Exhibit with the same number in the Quarterly Report on Form 10-Q (333-05978) which was filed on April 26, 1999.
*****		Incorporated by reference to the Exhibit with the same number in the Quarterly Report on Form 10-Q (333-05978) which was filed on August 2, 1999.
******		Incorporated by reference to the Exhibit with the same number in the Quarterly Report on Form 10-Q (333-05978) which was filed on November 3, 1999.
*******		Incorporated by reference to the Exhibit with the same number in the Registrant's Annual Report on Form 10-K (333-05978) which was filed on March 23, 2000.
********		Incorporated by reference to Exhibit 2.2 in the Registrant's Current Report on Form 8-K (333-05978) which was filed on April 24, 2000.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, Euramax International, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EURAMAX INTERNATIONAL, INC.

Signature	Title	Date

/s/ J. DAVID SMITH J. David Smith	Chief Executive Officer and President	November 9, 2000
/S/ R. SCOTT VANSANT R. Scott Vansant	Chief Financial Officer and Secretary	November 9, 2000

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Part I—Financial Information

Item 1. Financial Statements

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

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Part II—Other Information

SIGNATURES