<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------------------
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
------------------------------------------
or
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: 0-24956
ASSOCIATED MATERIALS INCORPORATED
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 75-1872487
- --------------------------------------------------------------------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation of Organization) Identification No.)
2200 Ross Avenue, Suite 4100 East, Dallas, Texas 75201
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (214) 220-4600
-----------------------------
Not Applicable
- --------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report
Indicate by check [X] whether the registrant (1) has filed all reports
required to be filed by Section 13 of 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No
------- -------
Shares of Common Stock, $.0025 par value outstanding at May 7, 1999: 6,503,351
Shares of Class B Common Stock, $.0025 par value outstanding at
May 7, 1999: 1,550,000
<PAGE> 2
ASSOCIATED MATERIALS INCORPORATED
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets......................................................... 1
March 31, 1999 (Unaudited) and December 31, 1998
Statements of Operations (Unaudited)................................... 2
Quarter ended March 31, 1999 and 1998
Statements of Cash Flows (Unaudited)................................... 3
Quarter ended March 31, 1999 and 1998
Notes to Financial Statements (Unaudited).............................. 4
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition...................................... 6
Item 3. Quantitative and Qualitative Disclosures About Market Risk........ 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.................................. 10
SIGNATURES................................................................... 11
</TABLE>
<PAGE> 3
Part I. Financial Information
Item 1. Financial Statements
ASSOCIATED MATERIALS INCORPORATED
BALANCE SHEETS
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
----------- ---------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................. $ 1,859 $ 14,964
Accounts receivable, net.............................. 46,804 45,756
Inventories........................................... 59,399 56,245
Other current assets.................................. 4,023 3,572
--------- ---------
Total current assets..................................... 112,085 120,537
Property, plant and equipment, net....................... 67,181 61,130
Investment in Amercord Inc............................... 4,733 4,961
Other assets............................................. 2,659 2,691
--------- ---------
Total assets............................................. $ 186,658 $ 189,319
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank overdrafts....................................... $ 2,393 $ --
Accounts payable...................................... 21,887 11,713
Accrued liabilities................................... 13,090 25,417
Income taxes payable.................................. 300 582
Current portion of long-term debt..................... 3,150 3,600
--------- ---------
Total current liabilities................................ 40,820 41,312
Deferred income taxes.................................... 2,935 2,616
Other liabilities........................................ 5,999 6,013
Long-term debt........................................... 75,000 75,000
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value:
Authorized shares - 100,000 at March 31, 1999 and
December 31, 1998
Issued shares - 0 at March 31, 1999 and
December 31, 1998............................... -- --
Common stock, $.0025 par value:
Authorized shares - 15,000,000
Issued shares - 6,943,747 at March 31, 1999
and 6,938,747 at December 31, 1998........... 17 17
Common stock, Class B, $.0025 par value:
Authorized and issued shares - 1,550,000 at
March 31, 1999 and December 31, 1998......... 4 4
Less: Treasury stock, at cost - 323,396 shares at
March 31, 1999 and 88,396 at December 31, 1998.. (3,507) (1,048)
Capital in excess of par........................... 12,303 12,273
Retained earnings.................................. 53,087 53,132
--------- ---------
Total stockholders' equity......................... 61,904 64,378
--------- ---------
Total liabilities and stockholders' equity............... $ 186,658 $ 189,319
========= =========
</TABLE>
See accompanying notes.
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<PAGE> 4
ASSOCIATED MATERIALS INCORPORATED
STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Quarter Ended
March 31,
--------------------
1999 1998
-------- --------
<S> <C> <C>
Net sales................................................... $ 84,597 $ 78,650
Cost of sales............................................... 59,442 56,320
-------- --------
25,155 22,330
Selling, general and administrative expense................. 21,895 20,474
-------- --------
Income from operations...................................... 3,260 1,856
Interest expense............................................ 1,679 2,283
-------- --------
1,581 (427)
Equity in loss of Amercord Inc.............................. (228) (564)
-------- --------
Income (loss) before income taxes and extraordinary item.... 1,353 (991)
Income tax expense (benefit)................................ 553 (224)
-------- --------
Income (loss) before extraordinary item..................... 800 (767)
Extraordinary loss from retirement of debt, net of
income taxes................................................ -- (4,054)
-------- --------
Net income (loss)........................................... $ 800 $ (4,821)
======== ========
Earnings Per Common Share - Basic:
Income (loss) before extraordinary item..................... $ 0.10 $ (0.10)
Extraordinary loss from retirement of debt.................. -- (0.52)
-------- --------
Net income (loss) per common share.......................... $ 0.10 $ (0.62)
======== ========
Earnings Per Common Share - Assuming Dilution:
Income (loss) before extraordinary item..................... $ 0.09 $ (0.10)
Extraordinary loss from retirement of debt.................. -- (0.52)
-------- --------
Net income (loss) per common share.......................... $ 0.09 $ (0.62)
======== ========
</TABLE>
See accompanying notes.
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<PAGE> 5
ASSOCIATED MATERIALS INCORPORATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Quarter Ended
March 31,
--------------------
1999 1998
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss)............................................. $ 800 $ (4,821)
Adjustments to reconcile net income (loss) to net cash
used by operating activities:
Depreciation and amortization........................... 1,999 1,739
Deferred income taxes................................... 319 786
Loss in earnings of Amercord Inc........................ 228 564
Loss on sale of assets.................................. -- 8
Extraordinary loss on retirement of debt................ -- 4,054
Changes in operating assets and liabilities:
Accounts receivable, net............................. (1,048) 3,834
Inventories.......................................... (3,154) (5,185)
Income taxes receivable/payable...................... (282) (935)
Bank overdrafts...................................... 2,393 1,789
Accounts payable and accrued liabilities............. (2,153) (7,213)
Other assets and liabilities......................... (501) (588)
-------- --------
Net cash used by operating activities......................... (1,399) (5,968)
INVESTING ACTIVITIES
Proceeds from sale of assets.................................. 15 9
Additions to property, plant and equipment.................... (7,997) (3,942)
-------- --------
Net cash used by investing activities......................... (7,982) (3,933)
FINANCING ACTIVITIES
Net proceeds from issuance of long-term debt.................. -- 75,000
Net proceeds from issuance of common stock.................... -- 11,485
Net increase in revolving line of credit...................... -- 4,583
Principal payments of long-term debt.......................... (450) (450)
Principal payments on 11 1/2% Senior Subordinated Notes....... -- (72,900)
Prepayment premium of early retirement of debt................ -- (4,809)
Debt issuance cost............................................ -- (2,509)
Dividends paid................................................ (845) (569)
Treasury stock acquired....................................... (2,459) --
Options exercised............................................. 30 --
-------- --------
Net cash provided by (used by) financing activities........... (3,724) 9,831
Net decrease in cash.......................................... (13,105) (70)
Cash at beginning of period................................... 14,964 1,935
-------- --------
Cash at end of period......................................... $ 1,859 $ 1,865
======== ========
Supplemental information:
Cash paid for interest........................................ $ 3,544 $ 4,958
======== ========
Net cash paid for income taxes................................ $ 1,116 $ 771
======== ========
</TABLE>
See accompanying notes.
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<PAGE> 6
ASSOCIATED MATERIALS INCORPORATED
NOTES TO FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 1999
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The unaudited financial statements of Associated Materials Incorporated (the
"Company") for the quarter ended March 31, 1999 have been prepared in accordance
with generally accepted accounting principles for interim financial reporting,
the instructions to Form 10-Q, and Rule 10-01 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. These
financial statements should be read in conjunction with the audited financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1998 filed with the Securities and Exchange
Commission. In the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation of the
interim financial information have been included. The results of operations for
any interim period are not necessarily indicative of the results of operations
for a full year.
NOTE 2 - INVENTORIES
Inventories are valued at the lower of cost (first in, first out) or market.
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
------- -------
<S> <C> <C>
Raw materials ....................... $15,045 $16,422
Work in process ..................... 5,076 4,728
Finished goods and purchased stock... 39,278 35,095
------- -------
$59,399 $56,245
======= =======
</TABLE>
NOTE 3 - INVESTMENT IN AMERCORD INC. ("AMERCORD")
The Company's investment in Amercord, a 50% owned affiliate, is accounted for
using the equity method. Condensed statements of operations for Amercord are
presented below (in thousands):
<TABLE>
<CAPTION>
Quarter Ended
March 31,
--------------------
1999 1998
-------- --------
<S> <C> <C>
Net sales .................... $ 13,762 $ 16,647
Costs and expenses ........... 14,160 18,085
-------- --------
Loss from operations ......... (398) (1,438)
Interest expense ............. 325 352
Income tax benefit ........... (268) (663)
-------- --------
Net loss ..................... $ (455) $ (1,127)
======== ========
Company's share of net loss... $ (228) $ (564)
======== ========
</TABLE>
Amercord was not in compliance with certain financial covenants under its
existing bank credit agreement. Amercord has extended its forbearance agreement
with its lender to June 30, 1999 subject to certain conditions. In connection
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<PAGE> 7
with this forbearance agreement, the Company has guaranteed borrowings of up to
$3,000,000 under Amercord's credit agreement. The Company has announced its
intention to sell its 50% interest in Amercord.
NOTE 4 - STOCKHOLDERS' EQUITY
Under its stock repurchase program, the Company is authorized to purchase up to
800,000 shares of common stock in open market transactions. The Company
purchased 235,000 shares of its common stock during the first quarter of 1999 at
a cost of $2,459,000. At March 31, 1999, 282,000 shares have been purchased
under the program.
NOTE 5 - EARNINGS PER COMMON SHARE
The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
Quarter Ended
March 31,
------------------
1999 1998
------- -------
<S> <C> <C>
Numerator:
Numerator for basic and diluted earnings per common
share - earnings (loss) before extraordinary item ............. $ 800 $ (767)
Denominator:
Denominator for basic earnings per common share -
weighted-average shares ....................................... 8,340 7,829
Effect of dilutive securities:
Employee stock options ........................................ 152 --
------- -------
Denominator for diluted earnings per common share -
adjusted weighted-average shares .............................. 8,492 7,829
Basic earnings (loss) per common share before extraordinary item .... $ 0.10 $ (0.10)
======= =======
Diluted earnings (loss) per common share before extraordinary item... $ 0.09 $ (0.10)
======= =======
</TABLE>
In accordance with Statement of Financial Accounting Standards No. 128,
approximately 174,000 potential common shares were excluded from the calculation
of weighted average shares outstanding for the quarter ended March 31, 1998. Due
to the loss incurred in that quarter, inclusion of these shares would have been
antidilutive.
For the quarter ended March 31, 1999, options to purchase 140,000 shares of
common stock were excluded from the calculation of weighted average shares
outstanding because the average exercise price of these shares was higher than
the average market price of the common stock during the period.
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<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
Quarter Ended March 31, 1999 Compared to Quarter Ended March 31, 1998
The table below sets forth for the periods indicated certain items of the
Company's financial statements by segment:
<TABLE>
<CAPTION>
Quarter Ended March 31,
--------------------------------------------------------------------------
1999 1998
------------------------------------ -----------------------------------
Percentage of Percentage of
Amount Total Net Sales Amount Total Net Sales
--------------- ------------------ -------------- -----------------
<S> <C> <C> <C> <C>
Total Company:
Net sales - Alside........................ $ 74,109 87.6% $ 64,393 81.9%
Net sales - AmerCable..................... 10,488 12.4 14,257 18.1
--------- ------- ---------- ------
Total net sales........................ 84,597 100.0 78,650 100.0
Gross profit.............................. 25,155 29.7 22,330 28.4
Selling, general and
administrative expense (1)............. 21,895 25.9 20,474 26.0
--------- ------- ---------- ------
Income from operations.................... $ 3,260 3.8% $ 1,856 2.4%
========= ======= ========== ======
Alside:
Net sales................................. $ 74,109 100.0% $ 64,393 100.0%
Gross profit.............................. 23,155 31.2 19,343 30.0
Selling, general and
administrative expense................. 19,815 26.7 18,642 29.0
--------- ------- ---------- ------
Income from operations.................... $ 3,340 4.5% $ 701 1.0%
========= ======= ========== ======
AmerCable:
Net sales................................. $ 10,488 100.0% $ 14,257 100.0%
Gross profit.............................. 2,000 19.1 2,987 21.0
Selling, general and
administrative expense................. 1,194 11.4 1,225 8.6
--------- ------- ---------- ------
Income from operations.................... $ 806 7.7% $ 1,762 12.4%
========= ======= ========== ======
</TABLE>
(1) Consolidated selling, general and administrative expenses include corporate
expenses of $886,000 and $607,000 for the quarter ended March 31, 1999 and 1998,
respectively.
Overview
The Company's sales, income from operations and net income increased
significantly during the quarter ended March 31, 1999 as compared to the year
earlier period due to very strong operating results from the Company's Alside
division. Net sales and income from operations increased 7.6% and 75.5% to $84.6
million and $3.3 million respectively in the quarter ended March 31, 1999 as
compared to the same period in 1998 due to strong sales at the Alside division.
The Company's net income of $800,000, or $0.09 per share, for the first
quarter of 1999 was a substantial improvement over the loss before extraordinary
item of ($0.10) per share in 1998 as higher income from operations was
accompanied by lower interest expense and nonoperating losses.
Because most of Alside's building products are intended for exterior
use, Alside's sales and operating profits tend to be lower during periods of
inclement weather. Weather conditions in the first quarter of each calendar year
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<PAGE> 9
historically result in that quarter producing significantly less sales revenue
than in any other period of the year. As a result, the Company has historically
had losses in the first quarter, with the exception of the current period, and
reduced profits in the fourth quarter of each calendar year due to the
significant impact of Alside on the Company's performance.
ALSIDE. Alside's net sales increased 15.1% to $74.1 million for the
quarter ended March 31, 1999 as compared to $64.4 million for the same period in
1998 due to higher sales volume, particularly vinyl siding. Unit sales of vinyl
siding increased 20.2% for the first quarter of 1999 as compared to the 1998
period. Unit sales of vinyl windows increased 6.0% for the first quarter of 1999
as compared to 1998 as the Company continues to progress with the reorganization
of its window manufacturing operations. The Company expects the improvements in
Alside's window operations to continue throughout 1999. Gross profit as a
percentage of sales increased to 31.2% for the 1999 period as compared to 30.0%
for the same period in 1998 due to lower material costs, primarily vinyl resin.
Income from operations increased $2.6 million to $3.3 million for the 1999
period due to higher sales volume and lower material costs. Selling, general and
administrative expense increased $1.2 million to $19.8 million but decreased as
a percentage of net sales.
AMERCABLE. AmerCable's net sales decreased 26.4% to $10.5 million for
the first quarter of 1999 as compared with $14.3 million for the same period in
1998 due primarily to lower sales to AmerCable's mining and offshore drilling
industry customers as a result of lower commodity prices. Gross profit as a
percentage of sales decreased to 19.1% for the 1999 period as compared to 21.0%
for the 1998 period due to lower fixed cost absorption resulting from lower
production volumes. Income from operations was $806,000 for the quarter ended
March 31, 1999 as compared to $1.8 million for the same period in 1998. Selling,
general and administrative expenses decreased slightly to $1.2 million for the
first quarter of 1999.
AMERCORD. The Company recorded a loss of $228,000 (or $0.03 per share)
reflecting its share of the after-tax loss of Amercord for the quarter ended
March 31, 1999 as compared with a loss of $564,000 during the same period in
1998. Amercord's gross profit increased $1.1 million to $221,000 in first
quarter of 1999 as compared to $(840,000) for the same period in 1998 due
primarily to increased manufacturing efficiencies. Selling, general and
administrative expenses increased slightly to $619,000 in 1999 from $597,000 in
1998.
OTHER. Net interest expense decreased $604,000 or 26.5% for the first
quarter of 1999 compared with the same period in 1998 due to the refinancing of
the Company's 11 1/2% Notes with 9 1/4% Notes and a decrease in the Company's
average short-term borrowings. The Company recorded interest income of $131,000
for the quarter ended March 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1999 the Company had cash and cash equivalents of $1.9
million and available borrowing capacity of approximately $41.9 million under
its existing credit facility. Outstanding letters of credit totaled $8.1 million
securing $3.2 million of taxable notes, $1.9 million securing various insurance
letters of credit and $3.0 million securing a letter of credit to guarantee
borrowings of up to $3.0 million of Amercord's credit facility. The $3.2 million
of taxable notes are due April 1, 1999. The Company expects to renew or replace
its existing credit facility with a credit facility of similar size. The
existing facility expires May 31, 1999.
Net cash used by operations was $1.4 million in the quarter ended March
31, 1999 compared with $6.0 million in the same period in 1998. The decrease in
cash used by operations for the 1999 period was due primarily to an increase in
net income as well as lower working capital requirements in 1999 as compared to
1998.
Capital expenditures totaled $8.0 million for the quarter ended March
31, 1999, compared with $3.9 million during the same period in 1998.
Expenditures in the 1999 period were used primarily in the construction of the
Company's new vinyl siding manufacturing plant as well as to increase production
flexibility and capacity at AmerCable. Capital expenditures on the new vinyl
siding manufacturing plant were $4.8 million for the first quarter of 1999. The
Company expects its new vinyl siding facility will be operational by the end of
the second quarter of 1999.
Amercord was not in compliance with certain financial covenants under
its existing bank credit agreement. Amercord has extended its forbearance
agreement with its lender to June 30, 1999 subject to certain conditions. In
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<PAGE> 10
connection with this forbearance agreement, the Company has guaranteed
borrowings of up to $3.0 million under Amercord's credit agreement.
The Company believes the future cash flows from operations and its
borrowing capacity under its existing or new credit agreement will be sufficient
to satisfy its obligations to pay principal and interest on its outstanding
debt, maintain current operations, provide sufficient capital for presently
anticipated capital expenditures and fund its stock repurchase program. However,
there can be no assurances that the cash so generated by the Company will be
sufficient for these purposes.
YEAR 2000
Historically, computer programs have used a two-digit format rather
than a four-digit format to refer to the year. After the year 1999, these
computer programs will not recognize the year correctly which may cause the
computer application to fail or to process data incorrectly.
STATE OF READINESS. The Company began its Year 2000 program in 1997 in
order to ensure all systems were Year 2000 compliant. The Company's Alside
division divided its Year 2000 information technology ("IT") project as follows:
mainframe, AS 400 systems, manufacturing systems and PC systems. Alside has
reviewed its mainframe and AS 400 systems and believes all date fields have been
corrected. All mission critical programs within its mainframe have been tested
and are believed to be Year 2000 compliant. The mission critical programs
include the general ledger, accounts payable, billing/receivable and payroll.
Updates to Alside's manufacturing systems were completed in the first quarter of
1999. Alside has established a task force consisting of representatives from
Information Services and each of the manufacturing facilities to review the
status of its PC systems. The task force identified several non-critical issues
that will be addressed by the second quarter of 1999. The Company's AmerCable
division believes its IT systems are Year 2000 compliant. Alside and AmerCable
are currently assessing and updating their non-IT systems. The Company's Alside
and AmerCable divisions are currently contacting significant customers and
suppliers to assess Year 2000 compliance and readiness. Approximately 90% of the
questionnaires sent to suppliers have been returned. Based upon the responses
received, it appears the Company's suppliers are aware of the Year 2000 issue
and are taking the necessary steps to ensure Year 2000 compliance. The Company
will continue to monitor and evaluate the responses to determine the possible
risks that may affect the Company's operations.
COSTS. To date, the Company's costs to address Year 2000 issues have
not been material. The Company's Alside division designs the majority of its
application systems in-house. The process of reviewing the in-house systems and
converting date sensitive fields was done by Alside's computer programmers as
part of routine system maintenance. Alside retained an independent consultant to
assist with Year 2000 compliance for its manufacturing systems. Alside has spent
approximately $250,000 to update its manufacturing system. Based upon the review
of the PC systems task force, Alside estimates it will spend approximately
$100,000 in 1999 to upgrade certain hardware and software systems. The Company's
AmerCable division installed a new information system in 1996 that is Year 2000
compliant. AmerCable's system acquisition was not accelerated due to Year 2000
and is therefore not considered as part of the Year 2000 expenditures.
COMPANY RISKS AND CONTINGENCY PLAN. The Company believes that its most
significant remaining Year 2000 risk is associated with its customers and
suppliers. Once the Company completes its customer and supplier readiness
evaluation it will be better able to formulate a contingency plan. The Company
believes its customers will not be significantly impacted by the Year 2000 due
to the nature of the home improvement business.
EFFECTS OF INFLATION
The Company believes that the effects of inflation on its operations
have not been material during the past two years. Inflation could adversely
affect the Company if inflation results in significantly higher interest rates
or substantial weakness in economic conditions. Alside's principal raw material,
vinyl resin, has been subject to rapid price changes. Alside has historically
been able to pass on price increases to its customers. No assurances can be
given that Alside will be able to pass on any price increases in the future.
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<PAGE> 11
CERTAIN FORWARD-LOOKING STATEMENTS
This report contains "forward-looking statements" as that term is
defined in the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on the beliefs of, and estimates and
assumptions made by and information currently available to, the Company's
management. When used in this report, the words "anticipate," "believe,"
"estimate," "expect," "intend," and similar words, as they relate to the Company
or the Company's management, identify forward-looking statements. These
statements reflect the current views of the Company's management regarding the
operations and results of operations of the Company as well as its customers and
suppliers, including as a result of the availability of consumer credit,
interest rates, employment trends, changes in levels of consumer confidence,
changes in consumer preferences, national and regional trends in new housing
starts, raw material costs, pricing pressures, shifts in market demand and
general economic conditions. These statements are subject to certain risks and
uncertainties. Certain factors that might cause a difference are discussed in
more detail in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998. Should one or more of these risks or uncertainties occur, or
should management's assumptions or estimates prove incorrect, actual results and
events may vary materially from those discussed in the forward-looking
statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is subject to commodity price risk, interest rate risk and
foreign currency exchange rate risk. The Company has experienced no significant
changes in market risk during the first quarter of 1999. The Company's market
risk is described in more detail in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998.
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<PAGE> 12
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27 - Financial Data Schedule.
(b) Reports on Form 8-K
During the quarter ended March 31, 1999, Associated Materials
Incorporated filed no Current Reports on Form 8-K.
-10-
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ASSOCIATED MATERIALS INCORPORATED
---------------------------------
(Registrant)
Date: May 11, 1999 By: /s/ Robert L. Winspear
------------------------------
Robert L. Winspear
Vice President and Chief
Financial Officer
Date: May 11, 1999 /s/ Robert L. Winspear
------------------------------
Robert L. Winspear
Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
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<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
27 Financial Data Schedule.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,859
<SECURITIES> 0
<RECEIVABLES> 51,676
<ALLOWANCES> 4,872
<INVENTORY> 59,399
<CURRENT-ASSETS> 112,085
<PP&E> 67,181
<DEPRECIATION> 0
<TOTAL-ASSETS> 186,658
<CURRENT-LIABILITIES> 40,820
<BONDS> 75,000
0
0
<COMMON> 21
<OTHER-SE> 61,883
<TOTAL-LIABILITY-AND-EQUITY> 186,658
<SALES> 84,597
<TOTAL-REVENUES> 0
<CGS> 59,442
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 21,895
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,679
<INCOME-PRETAX> 1,353
<INCOME-TAX> 553
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 800
<EPS-PRIMARY> 0.10
<EPS-DILUTED> 0.09
</TABLE>
