10-Q September 2012

10-Q 1 a10-qseptember2012.htm 10-Q 10-Q September 2012

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 28, 2012

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 333-05978

EURAMAX HOLDINGS, 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 Number)
5445 Triangle Parkway, Suite 350, Norcross, GA (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 ¨ No x*

* The registrant is a voluntary filer of reports required to be filed by certain companies under Sections 13 or 15(d) of the Securities Exchange Act of 1934 and has filed all reports that would have been required to be filed by the registrant since December 22, 2011, the date of effectiveness of its Registration Statement on Form S-4, had it been subject to such filing requirements.

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



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

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

There were 188,938 shares of the registrant’s common stock, par value $0.01 per share, issued and outstanding as of November 8, 2012, none of which are publicly traded.

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES

TABLE OF CONTENTS



PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets as of September 28, 2012 and December 30, 2011	1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 28, 2012 and September 30, 2011	2
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 28, 2012 and September 30, 2011	3
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 28, 2012 and September 30, 2011	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	43

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 6.	Exhibits	44

Part I. Financial Information

Item 1. Financial Statements (unaudited)

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)



	September 28, 2012			December 30, 2011
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	9,790		$	14,327
Accounts receivable, net of allowance for doubtful accounts of $3,133 and $4,391, respectively	103,122			83,234
Inventories, net	100,830			83,396
Income taxes receivable	831			697
Deferred income taxes	2,369			1,906
Other current assets	6,359			4,336
Total current assets	223,301			187,896
Property, plant and equipment, net	142,190			146,549
Goodwill	196,502			196,686
Customer relationships, net	57,943			69,636
Other intangible assets, net	7,643			8,148
Deferred income taxes	35			6
Other assets	9,109			10,325
Total assets	$	636,723		$	619,246
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable, including cash overdrafts of $3,533 and $65, respectively	$	81,119		$	54,329
Accrued expenses and other current liabilities	31,184			33,425
Accrued interest payable	17,704			8,886
Deferred income taxes	884			891
Total current liabilities	130,891			97,531
Long-term debt	515,420			507,988
Deferred income taxes	20,039			21,501
Other liabilities	46,192			45,519
Total liabilities	712,542			672,539
Shareholders’ equity (deficit):
Common stock	189			185
Additional paid-in capital	721,114			718,837
Accumulated loss	(806,974		)	(782,087		)
Accumulated other comprehensive income	9,852			9,772
Total shareholders’ equity (deficit)	(75,819		)	(53,293		)
Total liabilities and shareholders’ equity (deficit)	$	636,723		$	619,246

See the accompanying notes to these condensed consolidated financial statements.

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

(unaudited)



	Three months ended						Nine months ended
	September 28, 2012			September 30, 2011			September 28, 2012			September 30, 2011
Net sales	$	219,173		$	246,780		$	641,648		$	714,017
Costs and expenses:
Cost of goods sold (excluding depreciation and amortization)	182,557			209,135			534,257			595,376
Selling and general (excluding depreciation and amortization)	20,503			23,130			64,423			70,898
Depreciation and amortization	8,624			9,318			25,938			28,064
Other operating charges	840			1,421			2,602			5,322
Multiemployer pension withdrawal expense	39			—			39			1,200
Income from operations	6,610			3,776			14,389			13,157
Interest expense	(13,394		)	(13,370		)	(40,791		)	(42,122		)
Other income (loss), net	3,494			(17,568		)	675			(8,912		)
Loss before income taxes	(3,290		)	(27,162		)	(25,727		)	(37,877		)
Benefit for income taxes	(2,115		)	(117		)	(840		)	(375		)
Net loss	$	(1,175	)	$	(27,045	)	$	(24,887	)	$	(37,502	)

See the accompanying notes to these condensed consolidated financial statements.

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)



	Three months ended						Nine months ended
	September 28, 2012			September 30, 2011			September 28, 2012			September 30, 2011

Net loss	$	(1,175	)	$	(27,045	)	$	(24,887	)	$	(37,502	)
Other comprehensive income (loss):
Foreign currency translation adjustment	26			(1,866		)	(176		)	2,893
Net change in pension and other benefit liabilities, net of tax	86			11			256			32
Total comprehensive loss	$	(1,063	)	$	(28,900	)	$	(24,807	)	$	(34,577	)

See the accompanying notes to these condensed consolidated financial statements.

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)



	Nine months ended
	September 28, 2012			September 30, 2011
Net cash (used in) provided by operating activities	$	(4,625	)	$	1,625
Cash flows from investing activities:
Purchase of a business, net of cash acquired	(6,446		)	—
Proceeds from sales of assets	1,289			80
Capital expenditures	(4,586		)	(8,382		)
Net cash used in investing activities	(9,743		)	(8,302		)
Cash flows from financing activities:
Changes in cash overdrafts	3,467			—
Net borrowings on ABL Credit Facility	7,113			25,274
Net repayments on First Lien Credit Facility	—			(412,028		)
Borrowings under Senior Secured Notes	—			375,000
Borrowings under Senior Unsecured Notes	—			19,812
Debt issuance costs	(59		)	(10,623		)
Net cash provided by (used in) financing activities	10,521			(2,565		)
Effect of exchange rate changes on cash	(690		)	927
Net decrease in cash and cash equivalents	(4,537		)	(8,315		)
Cash and cash equivalents at beginning of period	14,327			24,902
Cash and cash equivalents at end of period	$	9,790		$	16,587

See the accompanying notes to these condensed consolidated financial statements.

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation and Principles of Consolidation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Euramax Holdings, Inc. and its subsidiaries (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, these statements include all adjustments considered necessary for the fair presentation of all interim periods reported herein. All adjustments are of a normal recurring nature unless otherwise disclosed.

The Company’s sales volumes have historically been higher in the second and third quarters due to the seasonal demand of the building products markets served. Accordingly, results for the three and nine months ended September 28, 2012 are not necessarily indicative of the results that may be expected for the full year. Management believes that the disclosures made are adequate for a fair presentation of the Company’s results of operations, financial position and cash flows. These condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 30, 2011.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the Company’s accounts and the accounts of its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Each of our interim reporting periods ends on the Friday closest to the last day of the corresponding quarterly calendar period. The third quarter of 2012 and 2011 ended on September 28, 2012 and September 30, 2011, respectively. Beginning in 2012, our fiscal year will end on December 31 regardless of the day of the week on which December 31 falls. Our 2011 fiscal year end was December 30, 2011.

On August 14, 2012 , the Company acquired Cleveland Tubing, Inc. ("CTI") for approximately $6.4 million, net of cash acquired. CTI is a developer and manufacturer of corrugated plastic parts that include several products sold through the Company's U.S. Residential Products Segment including collapsible and flexible specialty drainage products. The results of operations for CTI have been included in the Company’s condensed consolidated financial statements as of and from the date of the acquisition. The Company allocated the purchase price to the assets acquired and liabilities assumed based on preliminary estimates of their fair values as of the acquisition dates. The acquired assets of CTI consisted primarily of accounts receivable, property, plant and equipment, and inventories. The liabilities assumed generally consisted of accounts payable and accrued liabilities.

2. Inventories

Inventories were comprised of:



	September 28, 2012		December 30, 2011
	(in thousands)
Aluminum and steel coil	$	67,711	$	52,681
Raw materials	14,591		12,808
Work in process	2,309		2,980
Finished products	16,219		14,927
	$	100,830	$	83,396

The Company has disclosed aluminum and steel coil inventory separately, as it represents inventory that can be classified as raw material, work in process or finished product. Aluminum and steel coil includes both painted and bare coil. Inventories are net of related reserves totaling $2.8 million and $3.0 million as of September 28, 2012 and December 30, 2011, respectively.

3. Long-Term Obligations

Long-term obligations consisted of the following:



	September 28, 2012		December 30, 2011
	(in thousands)
Senior Secured Notes (9.50%)	$	375,000	$	375,000
Senior Unsecured Loan Facility (12.25%)	123,101		122,782
ABL Credit Facility	17,319		10,206
Dutch Revolving Credit Facility	—		—
	$	515,420	$	507,988

On March 18, 2011, Euramax International, Inc. (“Euramax”), a wholly-owned subsidiary of the Company, issued $375 million of Senior Secured Notes (the “Notes”) in a private placement exempt from registration requirements under the Securities Act of 1933, as amended. Concurrent with the issuance of the Notes, the Company entered into a new senior unsecured loan facility (the “Senior Unsecured Loan Facility”) with an aggregate principal amount of $125 million. The Company also entered into an Amended and Restated Senior Secured Revolving Credit and Guaranty Agreement (the “ABL Credit Facility”), which provided revolving credit financing of up to $70 million and extended the maturity from June 23, 2012 to September 18, 2015.

Prior to the issuance of the Notes and the Senior Unsecured Loan Facility, the Company had outstanding obligations of approximately $514.7 million under the First Lien Credit Agreement. In the first quarter of 2011, proceeds from the $375 million offering of Notes, issued at par, were used to pay lenders under the First Lien Credit Agreement. Additionally, certain existing lenders exchanged approximately $102.7 million of existing loans under the First Lien Credit Agreement and cash of $19.8 million for the $125 million of loans under the new Senior Unsecured Loan Facility, which were issued at 98% of par. Cash proceeds along with borrowings under the Company’s ABL Credit Facility were used to repay the remaining outstanding amounts due under the First Lien Credit Agreement and expenses related to the refinancing. The difference between the consideration received and the aggregate face amount of the Senior Unsecured Loan Facility ($1.9 million) is being amortized and recorded in interest expense using the effective interest rate method over the term of the Senior Unsecured Loan Facility.

The Company recognized a loss of approximately $1.5 million on the extinguishment of the First Lien Credit Agreement in the first quarter of 2011. This loss is primarily comprised of the write-off of previously capitalized deferred debt issuance costs and is recorded in other income (loss). Deferred debt issuance costs, related to First Lien Credit Agreement obligations which were exchanged for obligations under the Senior Unsecured Loan Facility, are being amortized to interest expense over the term of the new Senior Unsecured Loan Facility using the effective interest rate method. Direct and incremental debt issuance costs related to the Senior Unsecured Notes, Senior Unsecured Credit Facility, and ABL Credit Facility, including legal fees, printing costs and bank fees totaled approximately $10.6 million and have been capitalized and reported as deferred financing costs within other assets. These costs are being amortized and recorded in interest expense using the effective interest rate method over the term of the applicable agreement.

Senior Secured Notes

The Notes were issued pursuant to an indenture, ("the Indenture"), dated March 18, 2011, among Euramax, the Company, and certain of its domestic subsidiaries as guarantors, and Wells Fargo Bank, National Association, the Trustee. Substantially all of Euramax’s U.S. subsidiaries are guarantors of the Notes. The Notes bear interest at 9.50% per year and mature on April 1, 2016, unless earlier redeemed or repurchased by Euramax. Interest is payable semi-annually on April 1 and October 1 of each year.

The Notes may be redeemed at the option of Euramax, in whole or in part, under the conditions specified in the Indenture plus accrued and unpaid interest to the redemption date, at the following redemption prices if redeemed during the twelve-month period beginning on April 1 of the years indicated:



Year	Percentage
2013	107.125%
2014	104.750%
2015 and thereafter	100.000%

Additionally, at any time on or before April 1, 2013, Euramax may redeem the greater of (i) $37.5 million and (ii) up to 10% of the aggregate principal amount of the Notes at any time and from time to time, but not more than once in any twelve month period, at a price equal to 103% of the principal amount of the Notes redeemed and accrued and unpaid interest, if any, to the date of redemption; up to 35% of the aggregate principal amount of the Notes issued with the net proceeds of certain equity offerings at a price equal to 109.5% of the principal amount of the Notes redeemed plus accrued and unpaid interest, if any, to the date of redemption; or Euramax may, on any one or more occasions, redeem all or a part of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus the Applicable Premium (as defined in the Indenture) and accrued and unpaid interest, if any, to the date of redemption.

The Indenture contains restrictive covenants that limit, among other things, the ability of Euramax and certain of its subsidiaries to incur additional indebtedness, pay dividends and make certain distributions, make other restricted payments, make investments, incur liens, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets and enter into certain transactions with affiliates, in each case, subject to exclusions, and other customary covenants. These limitations also prohibit Euramax's ability to transfer cash or assets to Euramax Holdings, whether by dividend, loan or otherwise. The Indenture also contains customary events of default. If Euramax undergoes a change of control (as defined in the Indenture), Euramax will be required to make an offer to repurchase the Notes at 101% of the principal amount of the Notes redeemed plus accrued and unpaid interest, if any, to the date of redemption.

In connection with the sale of the Notes, Euramax, the guarantors and the initial purchasers entered into a registration rights agreement. Pursuant to the registration rights agreement, Euramax and the guarantors agreed to file a registration statement with the Securities and Exchange Commission with respect to publicly registered Notes having identical terms to the outstanding Notes. The Company completed an effective registration of the Notes with the Securities and Exchange Commission on December 22, 2011. An exchange offer was launched December 23, 2011 for the holders of the outstanding Notes to exchange their Notes for the exchange notes. The exchange offer was completed on January 26, 2012 with 100% of the $375 million 9.50% Senior Secured Notes due 2016 tendered in the exchange offer.

Senior Unsecured Loan Facility

Proceeds from the Senior Unsecured Loan Facility were borrowed on March 18, 2011 and will mature on October 1, 2016. Loans under the Senior Unsecured Loan Facility bear interest at 12.25% per year in the event no election is made to pay interest in kind (PIK) , and 14.25% (7.875% cash pay and 6.375% PIK) per annum in the event a PIK election is made. The Company may make a PIK election for up to six quarters during the term of the Senior Unsecured Loan Facility. The interest rate on outstanding borrowings under the Senior Unsecured Loan Facility at September 28, 2012 was 12.25%, as the Company has not made a PIK election.

The Senior Unsecured Loan Facility may not be voluntarily prepaid before March 18, 2013. Thereafter, and assuming the term of the loan is set by the Company to be 5 1/2 years or less, Euramax may prepay outstanding amounts under the Senior Unsecured Loan Facility, in whole or in part, at the prices (expressed as percentages of the loans) set forth below:



Prepayment Date	Percentage
On or after the second anniversary of the closing but prior to the third anniversary thereof	103%
On or after the third anniversary of the closing but prior to the fourth anniversary thereof	102%
On or after the fourth anniversary of the closing	100%

Additionally, at any time before March 18, 2013, Euramax may on one or more occasions prepay up to 35% of the aggregate principal amount of the loans outstanding on the closing date at 112.25%, plus accrued and unpaid interest. Upon a change of control, Euramax may be required to purchase all or a portion of the Senior Unsecured Loan Facility at a price equal to 101% of the principal amount plus accrued and unpaid interest. All obligations under the Senior Unsecured Loan Facility are unconditionally guaranteed by the Company and substantially all of Euramax’s existing and future direct and indirect wholly‑owned domestic material restricted subsidiaries.

The Senior Unsecured Loan Facility contains restrictive covenants that limit, among other things, the ability of Euramax and certain of its subsidiaries to incur additional indebtedness, pay dividends and make certain distributions, make other restricted payments, make investments, incur liens, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets and enter into certain transactions with affiliates, in each case, subject to exclusions, and other customary covenants.

The Senior Unsecured Loan Facility contains certain customary representations and warranties, affirmative covenants and events of default, including among other things, payment defaults, covenant defaults, cross‑defaults to certain indebtedness, certain events of bankruptcy, material judgments, and failure of any guaranty supporting the Senior Unsecured Loan Facility to be in force and effect in any material respect. If such an event of default occurs, the administrative agent would be entitled to take various actions, including the acceleration of amounts due under the Senior Unsecured Loan Facility and all actions permitted to be taken by an unsecured creditor.

ABL Credit Facility

On March 18, 2011, the Company, Euramax, and certain of its domestic subsidiaries, entered into the ABL Credit Facility with Regions Bank, as Collateral and Administrative Agent, Wells Fargo Capital Finance, LLC, as Co-Collateral Agent, and Regions Business Capital, as Sole Lead Arranger and Bookrunner. The ABL Credit Facility provides for revolving credit financing of up to $70 million, subject to borrowing base availability. At September 28, 2012, $35.1 million was available to be drawn on the ABL Facility. The ABL Credit Facility matures on September 18, 2015.

Borrowings under the ABL Credit Facility bear interest at a rate per annum equal to either (a) LIBOR plus an applicable margin or (b) a base rate determined by reference to the highest of (1) the prime commercial lending rate published by Regions Bank as its “prime rate” for commercial loans, (2) the federal funds effective rate plus 0.50% and (3) the one-month LIBOR plus 1.00%, plus an applicable margin. The applicable margin is dependent upon the type of borrowings the Company has made under the ABL Credit Facility. At September 28, 2012, the applicable margins were 2.50% and 1.50% for LIBOR and Base Rate borrowings, respectively. The applicable margins are subject to Euramax’s corporate credit rating as determined from time to time by Standard and Poor’s and Moody’s Investors Service and range from 2.00% to 2.75% for LIBOR borrowings and 1.00% to 1.75% for Base Rate borrowings. The weighted average interest rate, including the applicable margin payable on outstanding borrowings under the ABL Credit Facility, at September 28, 2012 was 2.8%. The ABL Credit Facility requires the Company to pay a commitment fee ranging from 0.375% to 0.5%, based on the unutilized commitments. The Company is also required to pay customary letter of credit fees, including, without limitation, a letter of credit fee equal to the applicable margin on revolving credit LIBOR loans and fronting fees.

All obligations under the ABL Credit Facility are unconditionally guaranteed by the Company and substantially all of Euramax’s existing and future direct and indirect, wholly-owned domestic restricted subsidiaries which are not borrowers. All obligations under the ABL Credit Facility are secured, subject to certain exceptions, by a first‑priority security interest in Euramax’s and the Guarantors’ inventory and accounts receivable and related assets, referred to as the ABL Collateral, and a junior‑priority security interest in (i) substantially all of Euramax’s and the Guarantors’ assets (other than inventory and accounts receivable and related assets, which assets secure the ABL Credit Facility on a first priority basis) and (ii) all of Euramax’s capital stock and the capital stock of each material domestic restricted subsidiary owned by Euramax or a Guarantor and 65% of the voting capital stock and 100% of any non-voting capital stock of foreign restricted subsidiaries directly owned by Euramax or a Guarantor, which we refer to collectively as the Notes Collateral.

The ABL Credit Facility contains affirmative and negative covenants customary for this type of financing, including, but not limited to financial covenants requiring Euramax to meet a minimum consolidated fixed charge coverage ratio of at least 1.15 to 1.00 when excess availability is less than 15% of the lesser of the aggregate amount of commitments outstanding at such time and the borrowing base. As of September 28, 2012, excess availability exceeded 15% of the borrowing base; therefore, Euramax was not required to meet the minimum consolidated fixed charge coverage ratio. Additionally, restrictive covenants limit the ability of the Company and certain of its subsidiaries to incur liens, incur, assume or permit to exist additional indebtedness, guarantees and other contingent obligations, consolidate, merge or sell all or substantially all of their assets, pay dividends or make other distributions, make certain loans and investments, amend or otherwise alter the terms of documents related to certain of their indebtedness, enter into transactions with affiliates and prepay certain indebtedness, in each case, subject to exclusions, and other customary covenants.

Dutch Revolving Credit Facility

In February 2012, the Company's wholly-owned subsidiary Euramax Coated Products, BV, entered into a revolving credit facility, with Rabobank Roermond (the "Dutch Revolving Credit Facility"). The Dutch Revolving Credit Facility provides revolving credit financing of up to EUR 15 million and matures on April 1, 2016. Borrowings under the Dutch Revolving Credit Facility bear interest at a rate per annum which is the aggregate of the average one month Euribor rate over a calendar month plus a margin of 2% and requires payment of a commitment fee of 0.35% per annum on the nominal amount of the credit facility. All obligations under the Dutch Revolving Credit Facility are secured by a mortgage on the real estate of Euramax Coated Products, BV, a pledge on present and future machinery and present and future accounts receivable balances of Euramax Coated Products, BV. There were no outstanding borrowings under the Dutch Revolving Credit Facility as of September 28, 2012.

The Dutch Revolving Credit Facility contains financial and non-financial covenants customary for this type of financing. Financial Covenants include, but are not limited to, a minimum annual EBITDA target and a minimum amount of risk-bearing capital for Euramax Coated Products, BV both measured at the Company's fiscal year-end. The Dutch Revolving Credit Facility also contains a clause limiting further indebtedness. As of September 28, 2012, the Company is in compliance with all covenants.

4. Financial Instruments

The Company is directly and indirectly affected by changes in certain market conditions. These changes in market conditions may adversely impact the Company's financial performance and are referred to as "market risks." The Company, when deemed appropriate, uses derivatives as a risk management tool to mitigate the potential impact of certain market risks. The primary market risk managed by the Company through the use of derivative instruments is foreign currency exchange rate risk. The Company does not enter into derivative contracts for trading purposes.

The Company has entered into forward contracts to buy or sell a quantity of a currency at a predetermined future date, and at a predetermined rate or price to mitigate uncertainty and volatility, and to cover underlying exposures to certain payments in currencies other than the functional currency. The Company has not designated these contracts for hedge accounting treatment and, therefore, the gains and losses on these contracts are recorded in other income (loss). In the first nine months of 2012, the Company recognized a loss of $(0.1) million in other income (loss), net related to these forward contracts.

Derivatives are carried at fair value in the condensed consolidated balance sheet in the line item other current assets. As of September 28, 2012, the fair value of outstanding derivative financial instruments was not significant. As of December 30, 2011, derivatives totaled $0.6 million. The Company determined that the fair value of the foreign exchange contracts were level 1 measurements in the fair value hierarchy. To measure the fair value of the foreign exchange contracts the Company obtained quotations from financial institutions.

5. Commitments and Contingencies

Raw Material Commitments

The Company’s primary raw materials are aluminum and steel coil. Because changes in aluminum and steel prices are generally passed through to customers, increases or decreases in aluminum and steel prices generally cause corresponding increases and decreases in reported net sales, causing fluctuations in reported revenues that are unrelated to the level of business activity. However, if the Company is unable to pass through aluminum and steel price increases to customers in the future, its business and results of operations could be materially adversely affected. Although the Company believes there is sufficient supply in the marketplace to competitively source all of its aluminum and steel needs without reliance on any particular supplier, any major disruption in the supply and/or price of aluminum and steel could have a material adverse effect on the Company’s business and financial condition.

To ensure a margin on specific customer orders, the Company may commit to purchase aluminum ingot or coil at a fixed market price for future delivery. These contracts are for normal purchases and sales, and therefore are not required to be accounted for as derivatives.

Litigation

The Company is currently party to legal proceedings that have arisen in the ordinary course of business. The Company has and will continue to vigorously defend itself in these matters. It is the opinion of the Company’s management, based upon information available at this time, that the expected outcome of all matters to which the Company is currently a party 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.

Environmental Matters

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

In connection with the acquisition of the Company from Alumax Inc. (which was acquired by Aluminum Company of America in May 1998, and hereafter referred to as Alumax) on September 25, 1996, the Company was indemnified by Alumax for substantially all of its costs, if any, related to specifically identified environmental matters arising prior to the closing date of the acquisition during the period of time it was owned directly or indirectly by Alumax. Such indemnification includes costs that may ultimately be incurred to contribute to the remediation of eleven 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 Act (CERCLA) as of the closing date of the acquisition from Alumax, as well as certain potential costs for nine sites to which the Company may have sent waste for disposal. The Company does not believe that it has any significant probable liability for environmental claims. Further, the Company believes it to be unlikely that the Company would be required to bear environmental costs in excess of its pro rata share of such costs as a potentially responsible party at any site. Any receivable for recoveries under the indemnification would be recorded separately from the corresponding liability when the environmental claim and related recovery is determined to be probable. 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 be material. The Company’s reserves, expenditures, and expenses for all environmental exposures were not significant as of any of the dates or for any of the periods presented.

Product Warranties

The Company provides warranties on certain products. The warranty periods differ depending on the product, but generally range from one year to limited lifetime warranties. The Company provides for warranties based on historical experience and expectations of future occurrence. Changes in the product warranty accrual are summarized as follows:



	Three months ended						Nine months ended
	September 28, 2012			September 30, 2011			September 28, 2012			September 30, 2011
	(in thousands)						(in thousands)
Balance, beginning of period	$	5,272		5,746			$	5,050		$	5,561
Payments made or service provided	(596		)	(1,296		)	(2,008		)	(3,248		)
Warranty expense	718			1,207			2,386			3,152
Foreign currency translation	47			(217		)	13			(25		)
Balance, end of period	$	5,441		$	5,440		$	5,441		$	5,440

6. Income Taxes

The benefit for income taxes for 2012 and 2011 are computed at the effective rate expected to be applicable in each respective full year using the statutory rates on a country by country basis, adjusted for changes in valuation allowances relating to the Company’s net operating loss and capital loss carryforwards. The effective rates for the three month periods ended September 28, 2012 and September 30, 2011, were (64.3)% and (0.4)%, respectively.

The effective rate for the three months ended September 28, 2012 differed from the U.S. statutory rate primarily due to state income taxes, lower tax rates of our foreign operations as compared to the U.S. federal rates, U.S. tax impact of foreign dividends and non-deductible foreign currency transaction gains and losses and recognition of valuation allowances related to net losses in the U.K. and for U.S. federal and state net operating losses.

The effective rate for the three months ended September 30, 2011 differed from the U.S. statutory rate primarily due to state income taxes, lower tax rates of our foreign operations as compared to the U.S. federal rates, U.S. tax impact of foreign dividends and non-deductible foreign currency transaction gains and losses, and recognition of valuation allowances for U.S. federal and state net operating losses.

The effective tax rates for the nine month periods ended September 28, 2012 and September 30, 2011, were (3.3)% and (1.0)%, respectively.

The effective rate for the nine months ended September 28, 2012 differed from the U.S. statutory rate primarily due to state income taxes, lower tax rates of our foreign operations as compared to the U.S. federal rates, U.S. tax impact of foreign dividends and non-deductible foreign currency transaction gains and losses and recognition of valuation allowances related to net losses in the U.K. and for U.S. federal and state net operating losses.

The effective rate for the nine months ended September 30, 2011 differed from the U.S. statutory rate primarily due to state income taxes, lower tax rates of our foreign operations as compared to the U.S. federal rates, U.S. tax impact of foreign dividends and non-deductible foreign currency transaction gains and losses and recognition of valuation allowances for U.S. federal and state net operating losses.

7. Employee Benefit Plans

In the second quarter of 2011, the Company announced plans to move its operations in Romeoville, IL to its existing facility in Nappanee, IN. This move, intended to reduce fixed overhead costs, triggered an early withdrawal from the multiemployer pension plan benefiting hourly employees at the Romeoville facility. Accordingly, the Company recorded a $1.2 million charge in its U.S. Commercial Products segment for liabilities associated with this withdrawal. The liability represents the present value of estimated future payments for the Company’s proportionate share of unfunded vested benefits under the multiemployer plan. The Company received notification of the final assessment from the plan trustee in July 2012. The total withdrawal liability was determined to be $1.2 million. The Company has the option to settle the liability in a lump sum payment or in monthly installments over a 20 year period. The Company is currently paying this liability on a monthly basis.

Retirement Plans

The Company maintains a non-contributory defined benefit pension plan covering substantially all U.S. hourly employees (the U.S. Plan). In addition, the employees at Euramax Coated Products Limited and Ellbee Limited participate in a single employer pension plan (the UK Plan). The measurement date for the U.S. and UK plans is the last day of the fiscal year. The Company curtailed the accrual of participant benefits provided under the UK Plan effective March 31, 2009. This curtailment did not affect the timing for the payment of benefits earned under the UK Plan through the curtailment date. In January 2010, the Company's board of directors approved a motion to freeze future benefit accruals under the U.S. Pension Plan. The impact on the Company's projected benefit obligation was not significant. Components of net periodic pension cost for the Company’s defined and multiemployer pension plans were as follows:



	Three months ended												Nine months ended
	September 28, 2012						September 30, 2011						September 28, 2012						September 30, 2011
	U.S. Plan			UK Plan			U.S. Plan			UK Plan			U.S. Plan			UK Plan			U.S. Plan			UK Plan
	(in thousands)												(in thousands)
Components of net periodic pension cost
Service cost	$	19		$	—		$	10		$	—		$	57		$	—		$	30		$	—
Interest cost	128			590			128			598			384			1,770			384			1,783
Expected return on assets	(144		)	(418		)	(140		)	(464		)	(432		)	(1,254		)	(420		)	(1,384		)
Recognized actuarial net loss	62			24			11			—			186			70			32			—
Total Company defined benefit plan expense	65			196			9			134			195			586			26			399
Multiemployer benefit expense	308			—			352			—			884			—			925			—
Multiemployer pension withdrawal penalty	39			—			—			—			39			—			1,200			—
Net periodic pension cost	$	412		$	196		$	361		$	134		$	1,118		$	586		$	2,151		$	399

8. Fair Value Measurements

Accounting principles generally accepted in the United States define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Additionally, the inputs used to measure fair value are prioritized based on a three-level hierarchy. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:


•	Level 1 — Quoted prices in active markets for identical assets or liabilities.


•	Level 2 — Observable inputs other than quoted prices included in Level 1. We value assets and liabilities included in this level using dealer and broker quotations, certain pricing models, bid prices, quoted prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable market data.


•	Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

Recurring Fair Value Measurements

In accordance with accounting principles generally accepted in the United States, certain assets and liabilities are required to be recorded at fair value on a recurring basis. For our Company, the only assets and liabilities that are adjusted to fair value on a recurring basis are derivative financial instruments.

Derivative Financial Instruments

The fair values of our futures contracts were primarily determined using quoted contract prices from financial institutions. The fair values of these instruments were based on the closing contract price as of the balance sheet date and were classified as Level 1. As of September 28, 2012, the fair value of outstanding derivatives was not significant. As of December 30, 2011, the fair value of outstanding derivatives totaled $0.6 million.

Nonrecurring Fair Value Measurements

In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a nonrecurring basis as required by accounting principles generally accepted in the United States. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges.

The Company did not record any impairment charges related to assets measured at fair value on a nonrecurring basis during the three and nine month periods ended September 28, 2012 and September 30, 2011.

Other Fair Value Disclosures

The carrying amounts of cash and cash equivalents; receivables; accounts payable and accrued expenses; and loans and notes payable approximate their fair values because of the relatively short-term maturities of these instruments.

The fair value of our long-term debt is estimated using Level 2 inputs based on dealer quoted prices for our debt instruments based on recent transactions obtained from various sources. As of September 28, 2012, the carrying amount and fair value of our Senior Secured Notes, were $375.0 million and $345.0 million, respectively.

9. Segment Information

The Company manages its business and serves its customers through reportable segments differentiated by product type, end market, and geography. In the first quarter of 2012, the Company completed a reorganization of its U.S. operational structure. The reorganization included the consolidation of all U.S. operating companies into one legal entity and realigned reporting and management responsibilities based upon the Company's residential and commercial product offerings. As a result of the restructuring, the Company has identified two U.S. reporting segments; U.S. Residential Products and U.S. Commercial Products. Prior to this restructuring, the Company's reporting segments consisted of U.S. Residential Building Products, U.S. Non-Residential Building Products and U.S. RV and Specialty Building Products. The Company's 2011 results have been adjusted to reflect the change in reportable segments. These organizational changes did not impact the Company's European reportable segments.

The Company's four reportable segments are described below:

U.S. Residential Products—The U.S. Residential Products segment utilizes aluminum, steel, copper and vinyl to produce residential roof drainage products, including preformed gutters, downspouts, elbows, soffit, drip edge, fascia, flashing, snow guards and related accessories. These products are used primarily for the repair, replacement or enhancement of residential roof drainage systems. The Company sells these products to home improvement retailers, lumber yards, distributors and contractors from manufacturing and distribution facilities throughout North America. The Company also produces specialty made-to-order vinyl replacement windows and aluminum patio and awning components sold primarily to home improvement contractors in the Western U.S.

U.S. Commercial Products—The U.S. Commercial Products segment utilizes various materials, including steel coil, aluminum coil and fiberglass to create various products with commercial applications, including roofing and siding panels, ridge caps, flashing, trim, soffit and other accessories as well as sidewall components, siding and other exterior components for the towable RV, cargo and manufactured housing markets. The Company sells these products to builders, contractors, lumber yards, home improvement retailers, OEMs, and RV manufacturers from manufacturing and distribution facilities located throughout the U.S. These products are used in the construction of a wide variety of small scale non-residential, agricultural and industrial building types on either wood or metal frames, manufactured homes, and towable RVs.

European Roll Coated Aluminum—The European Roll Coated Aluminum segment uses a roll coating process to apply paint to bare aluminum coil and, to a lesser extent, bare steel coil in order to produce specialty coated coil, which the Company also processes into specialty coated sheets and panels. The Company sells these products to building panel manufacturers, contractors and UK “holiday home,” RV and transportation OEMs throughout Europe and in parts of Asia. The Company’s customers use its specialty coated metal products to manufacture, among other things, RV sidewalls, commercial roofing panels, interior ceiling panels, and liner panels for shipping containers. The Company produces and distributes these roll coated products from facilities located in the Netherlands and the UK.

European Engineered Products—The European Engineered Products segment utilizes aluminum and vinyl extrusions to produce residential windows, doors and shower enclosures. These products are sold to home improvement retailers, distributors and factory‑built “holiday home” builders in the UK. The Company also produces windows used in the operator compartments of heavy equipment, components sold to suppliers to automotive OEMs in Western Europe and RV doors. The Company produces and distributes these engineered products from facilities in France and the UK and has developed extensive in-house manufacturing capabilities, including powder coating, glass cutting, anodizing and glass toughening.

The Company evaluates the performance of its segments and allocates resources to them based primarily on segment income or (loss) from operations. Expenses, income and assets that are not segment specific relate to holding company and business development activities conducted for the overall benefit of the Company, and accordingly, are not attributable to the Company’s segments.

Beginning in the third quarter of 2012, the Company has allocated depreciation expense related to its North American ERP system to its U.S. Residential and U.S. Commercial Products Segments. In prior quarters, depreciation expense related to the ERP system was recorded at the Company's Corporate Headquarters and included in other non-allocated expenses. Expenses related to the North American ERP system were previously allocated to its North American segments through a corporate charge, and therefore, were included in earnings (loss) from operations for the appropriate segment. Depreciation and amortization expense for the U.S. Residential Segment after allocation of ERP depreciation totaled$2,867 thousand, $2,872 thousand, and $2,926 thousand for the 1st, 2nd, and 3rd quarters of 2012 and $2,966 thousand, $3,062 thousand, and $2,976 thousand for the 1st, 2nd, and 3rd quarters of 2011, respectfully. Depreciation and amortization expense for the U.S. Commercial Segment after allocation of ERP depreciation totaled $2,713 thousand, $2,690 thousand, and $2,686 thousand for the 1st, 2nd, and 3rd quarters of 2012 and $2,774 thousand, $2,733 thousand, and $2,717 thousand for the 1st, 2nd, and 3rd quarters of 2011, respectfully. All amounts in the following tables include the adjustments described above.

The following table presents information about reported segments for the three months ended September 28, 2012:



	U.S. Residential Products		U.S. Commercial Products		European Roll Coated Aluminum		European Engineered Products			Other Non- Allocated			Eliminations			Consolidated
Three months ended September 28, 2012	(in thousands)
Net sales:
Third party	$	77,469	$	79,334	$	48,540	$	13,830		$	—		$	—		$	219,173
Intersegment	191		33		176		—			—			(400		)	—
Total net sales	$	77,660	$	79,367	$	48,716	$	13,830		$	—		$	(400	)	$	219,173
Income (loss) from operations	$	7,475	$	1,707	$	2,095	$	(1,461	)	$	(3,206	)	$	—		$	6,610
Depreciation and amortization	$	2,926	$	2,686	$	2,299	$	615		$	98		$	—		$	8,624
Capital expenditures	$	345	$	329	$	493	$	89		$	683		$	—		$	1,939

The following table presents information about reported segments for the three months ended September 30, 2011:



	U.S. Residential Products		U.S. Commercial Products			European Roll Coated Aluminum		European Engineered Products			Other Non- Allocated			Eliminations			Consolidated
Three months ended September 30, 2011	(in thousands)
Net sales:
Third party	$	90,407	$	79,766		$	57,410	$	19,197		$	—		$	—		$	246,780
Intersegment	318		137			98		—			—			(553		)	—
Total net sales	$	90,725	$	79,903		$	57,508	$	19,197		$	—		$	(553	)	$	246,780
Income (loss) from operations	$	7,889	$	(2,998	)	$	1,953	$	(1,032	)	$	(2,036	)	$	—		$	3,776
Depreciation and amortization	$	2,976	$	2,717		$	2,730	$	812		$	83		$	—		$	9,318
Capital expenditures	$	263	$	975		$	626	$	203		$	325		$	—		$	2,392

The following table presents information about reported segments for the nine months ended September 28, 2012:



	U.S. Residential Products		U.S. Commercial Products		European Roll Coated Aluminum		European Engineered Products			Other Non- Allocated			Eliminations			Consolidated
Nine months ended September 28, 2012	(in thousands)
Net sales:
Third party	$	214,665	$	222,267	$	152,012	$	52,704		$	—		$	—		$	641,648
Intersegment	774		162		441		—			—			(1,377		)	—
Total net sales	$	215,439	$	222,429	$	152,453	$	52,704		$	—		$	(1,377	)	$	641,648
Income (loss) from operations	$	18,261	$	165	$	7,979	$	(2,304	)	$	(9,712	)	$	—		$	14,389
Depreciation and amortization	$	8,665	$	8,089	$	7,054	$	1,868		$	262		$	—		$	25,938
Capital expenditures	$	1,085	$	724	$	1,243	$	541		$	993		$	—		$	4,586

The following table presents information about reported segments for the nine months ended September 30, 2011:



	U.S. Residential Products		U.S. Commercial Products			European Roll Coated Aluminum		European Engineered Products			Other Non- Allocated			Eliminations			Consolidated
Nine months ended September 30, 2011	(in thousands)
Net sales:
Third party	$	233,519	$	224,661		$	190,399	$	65,438		$	—		$	—		$	714,017
Intersegment	833		207			494		—			—			(1,534		)	—
Total net sales	$	234,352	$	224,868		$	190,893	$	65,438		$	—		$	(1,534	)	$	714,017
Income (loss) from operations	$	18,021	$	(3,035	)	$	11,390	$	(489	)	$	(12,730	)	$	—		$	13,157
Depreciation and amortization	$	9,004	$	8,224		$	8,165	$	2,440		$	231		$	—		$	28,064
Capital expenditures	$	698	$	3,010		$	1,389	$	1,385		$	1,900		$	—		$	8,382

It is impractical for the Company to provide revenues from external customers by groups of similar products. Accordingly, the following table reflects revenues from external customers by markets for the periods indicated.



		Three months ended				Nine months ended
Customers/Markets	Primary Products	September 28, 2012		September 30, 2011		September 28, 2012		September 30, 2011
		(in thousands)
Original Equipment Manufacturers (“OEMs”)	Painted aluminum sheet and coil; fabricated painted aluminum, laminated and fiberglass panels; windows and roofing and composite building panels	$	43,457	$	54,262	$	161,946	$	187,215
Home Improvement Retailers	Rain carrying systems, roofing accessories, steel roofing and siding, windows, doors and shower enclosures	51,806		62,537		139,740		155,842
Industrial and Architectural Contractors	Standing seam panels; siding and roofing accessories; and composite building panels	40,321		42,078		110,908		134,821
Rural Contractors	Steel and aluminum roofing and siding	43,116		41,882		107,412		101,934
Distributors	Metal coils, rain carrying systems and roofing accessories	23,917		26,788		68,807		75,283
Manufactured Housing	Steel siding and trim components	6,992		8,884		25,245		29,106
Home Improvement Contractors	Vinyl replacement windows; metal coils, rain carrying systems; metal roofing and insulated roofing panels; shower, patio and entrance doors; and awnings	9,564		10,349		27,590		29,816
		$	219,173	$	246,780	$	641,648	$	714,017

10. Supplemental Guarantor Condensed Financial Information

On March 18, 2011, Euramax Holdings, Inc. (presented as Parent in the following schedules), through its 100%-owned subsidiary, Euramax International, Inc. (presented as Issuer in the following schedules) issued the Notes. The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by Euramax Holdings, Inc. Additionally, the Notes were fully and unconditionally guaranteed by all material domestic subsidiaries, collectively referred to as the "Guarantors." On December 30, 2011, as permitted by the Indenture, the Company completed the merger of the Guarantor subsidiaries with Euramax International, Inc. This merger does not adversely affect the legal rights under the Indenture of any holder of the Notes in any material respect. All other subsidiaries of Euramax International, Inc., whether direct or indirect, do not guarantee the Senior Secured Notes (the "Non-Guarantors").

Additionally, the Notes are secured on a second priority basis by liens on all of the collateral (subject to certain exceptions) securing Euramax International, Inc.’s senior secured credit facilities. In the event that secured creditors exercise remedies with respect to Euramax International, Inc.'s pledged assets, the proceeds of the liquidation of those assets will first be applied to repay obligations secured by the first priority liens under the senior secured credit facilities and any other first priority obligations.

The following condensed consolidating financial statements present the results of operations, comprehensive loss, financial position and cash flows of (1) the Parent, (2) the Issuer (including all Guarantor subsidiaries prior to the merger), (3) the Non-Guarantor Subsidiaries, and (4) eliminations to arrive at the information for Euramax Holdings, Inc. on a consolidated basis. The condensed consolidating financial statements for all periods presented reflect the legal entity structure and Notes guaranty as of September 28, 2012 for comparative purposes. Separate financial statements and other disclosures concerning the former Guarantor subsidiaries are not presented because management does not believe such information is material to investors.

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

September 28, 2012
(in thousands)

(unaudited)



	Parent			Issuer			Non-Guarantor			Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	303		$	9,487		$	—		$	9,790
Accounts receivable, net of allowance for doubtful accounts	—			61,889			41,233			—			103,122
Inventories, net	—			71,569			29,261			—			100,830
Income taxes receivable	—			429			402			—			831
Deferred income taxes	—			2,171			198			—			2,369
Other current assets	—			4,576			1,783			—			6,359
Total current assets	—			140,937			82,364			—			223,301
Property, plant and equipment, net	—			70,989			71,201			—			142,190
Amounts due from affiliates	—			209,027			24,321			(233,348		)	—
Goodwill	—			81,182			115,320			—			196,502
Customer relationships, net	—			35,993			21,950			—			57,943
Other intangible assets, net	—			7,643			—			—			7,643
Investment in consolidated subsidiaries	(71,014		)	24,641			—			46,373			—
Deferred income taxes	—			—			35			—			35
Other assets	—			5,742			3,367			—			9,109
Total assets	$	(71,014	)	$	576,154		$	318,558		$	(186,975	)	$	636,723
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	—		$	56,198		$	24,921		$	—		$	81,119
Accrued expenses and other current liabilities	224			17,154			13,806			—			31,184
Accrued interest payable	—			17,704			—			—			17,704
Deferred income taxes	—			—			884			—			884
Total current liabilities	224			91,056			39,611			—			130,891
Long-term debt	—			515,420			—			—			515,420
Amounts due to affiliates	4,581			8,802			219,965			(233,348		)	—
Deferred income taxes	—			9,236			10,803			—			20,039
Other liabilities	—			22,654			23,538			—			46,192
Total liabilities	4,805			647,168			293,917			(233,348		)	712,542
Shareholders’ equity (deficit):
Common stock	189			—			21			(21		)	189
Additional paid-in capital	721,114			658,215			199,452			(857,667		)	721,114
Accumulated loss	(806,974		)	(739,081		)	(188,377		)	927,458			(806,974		)
Accumulated other comprehensive income	9,852			9,852			13,545			(23,397		)	9,852
Total shareholders’ equity (deficit)	(75,819		)	(71,014		)	24,641			46,373			(75,819		)
Total liabilities and shareholders’ equity (deficit)	$	(71,014	)	$	576,154		$	318,558		$	(186,975	)	$	636,723

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

December 30, 2011
(in thousands)



	Parent			Issuer			Non-Guarantor			Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	962		$	13,365		$	—		$	14,327
Accounts receivable, net of allowance for doubtful accounts	—			43,241			39,993			—			83,234
Inventories, net	—			51,456			31,940			—			83,396
Income taxes receivable	—			177			520			—			697
Deferred income taxes	—			1,702			204			—			1,906
Other current assets	—			2,688			1,648			—			4,336
Total current assets	—			100,226			87,670			—			187,896
Property, plant and equipment, net	—			72,848			73,701			—			146,549
Amounts due from affiliates	—			232,191			28,360			(260,551		)	—
Goodwill	—			81,054			115,632			—			196,686
Customer relationships, net	—			43,110			26,526			—			69,636
Other intangible assets, net	—			8,148			—			—			8,148
Investment in consolidated subsidiaries	(48,935		)	30,605			—			18,330			—
Deferred income taxes	—			—			6			—			6
Other assets	—			6,418			3,907			—			10,325
Total assets	$	(48,935	)	$	574,600		$	335,802		$	(242,221	)	$	619,246
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	—		$	32,692		$	21,637		$	—		$	54,329
Accrued expenses and other current liabilities	96			16,623			16,706			—			33,425
Accrued interest payable	—			8,886			—			—			8,886
Deferred income taxes	—			—			891			—			891
Total current liabilities	96			58,201			39,234			—			97,531
Long-term debt	—			507,988			—			—			507,988
Amounts due to affiliates	4,262			27,315			228,974			(260,551		)	—
Deferred income taxes	—			8,158			13,343			—			21,501
Other liabilities	—			21,873			23,646			—			45,519
Total liabilities	4,358			623,535			305,197			(260,551		)	672,539
Shareholders’ equity (deficit):
Common stock	185			—			21			(21		)	185
Additional paid-in capital	718,837			655,934			199,452			(855,386		)	718,837
Accumulated loss	(782,087		)	(714,641		)	(182,232		)	896,873			(782,087		)
Accumulated other comprehensive income	9,772			9,772			13,364			(23,136		)	9,772
Total shareholders’ equity (deficit)	(53,293		)	(48,935		)	30,605			18,330			(53,293		)
Total liabilities and shareholders’ equity (deficit)	$	(48,935	)	$	574,600		$	335,802		$	(242,221	)	$	619,246

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended September 28, 2012
(in thousands)

(unaudited)



	Parent			Issuer			Non-Guarantor			Eliminations			Total
Net Sales	$	—		$	154,293		$	67,987		$	(3,107	)	$	219,173
Costs and Expense:
Cost of goods sold (excluding depreciation and amortization)	—			128,191			57,473			(3,107		)	182,557
Selling and general (excluding depreciation and amortization)	150			13,487			6,866			—			20,503
Depreciation and amortization	—			5,595			3,029			—			8,624
Other operating charges	—			635			205			—			840
Multiemployer pension withdrawal expense	—			39			—			—			39
Income (loss) from operations	(150		)	6,346			414			—			6,610
Equity in earnings of subsidiaries	(1,025		)	(2,055		)	—			3,080			—
Interest expense	—			(13,141		)	(253		)	—			(13,394		)
Intercompany income (loss), net	—			4,189			(4,189		)	—			—
Other income (loss), net	—			3,492			2			—			3,494
Loss before income taxes	(1,175		)	(1,169		)	(4,026		)	3,080			(3,290		)
Benefit for income taxes	—			(144		)	(1,971		)	—			(2,115		)
Net loss	$	(1,175	)	$	(1,025	)	$	(2,055	)	$	3,080		$	(1,175	)

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
For the Three Months Ended September 28, 2012
(in thousands)

(unaudited)



	Parent			Issuer			Non-Guarantor			Eliminations			Total
Net loss	$	(1,175	)	$	(1,025	)	$	(2,055	)	$	3,080		$	(1,175	)
Other comprehensive income (loss):
Foreign currency translation adjustment	26			26			26			(52		)	26
Net change in pension and other benefit liabilities, net of tax	86			86			24			(110		)	86
Total comprehensive loss	$	(1,063	)	$	(913	)	$	(2,005	)	$	2,918		$	(1,063	)

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 2011
(in thousands)

(unaudited)



	Parent			Issuer			Non-Guarantor			Eliminations			Total
Net Sales	$	—		$	167,465		$	84,157		$	(4,842	)	$	246,780
Costs and Expense:
Cost of Goods Sold (excluding depreciation and amortization)	—			143,049			70,928			(4,842		)	209,135
Selling and general (excluding depreciation and amortization)	148			15,230			7,752			—			23,130
Depreciation and amortization	—			5,693			3,625			—			9,318
Other operating charges	—			1,380			41			—			1,421
Income (loss) from operations	(148		)	2,113			1,811			—			3,776
Equity in earnings of subsidiaries	(26,897		)	(1,397		)	—			28,294			—
Interest expense	—			(13,357		)	(13		)	—			(13,370		)
Intercompany income (loss), net	—			4,688			(4,688		)	—			—
Other income (loss), net	—			(18,881		)	1,313			—			(17,568		)
Loss before income taxes	(27,045		)	(26,834		)	(1,577		)	28,294			(27,162		)
Provision (benefit) for income taxes	—			63			(180		)	—			(117		)
Net loss	$	(27,045	)	$	(26,897	)	$	(1,397	)	$	28,294		$	(27,045	)

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

For the Three Months Ended September 30, 2011

(in thousands)

(unaudited)



	Parent			Issuer			Non-Guarantor			Eliminations			Total
Net loss	$	(27,045	)	$	(26,897	)	$	(1,397	)	$	28,294		$	(27,045	)
Other comprehensive income (loss):
Foreign currency translation adjustment	(1,866		)	(1,866		)	(1,866		)	3,732			(1,866		)
Amortization of actuarial net loss, net of tax	11			11			—			(11		)	11
Comprehensive loss	$	(28,900	)	$	(28,752	)	$	(3,263	)	$	32,015		$	(28,900	)

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 28, 2012
(in thousands)

(unaudited)



	Parent			Issuer			Non-Guarantor			Eliminations			Total
Net Sales	$	—		$	429,610		$	219,675		$	(7,637	)	$	641,648
Costs and Expense:
Cost of goods sold (excluding depreciation and amortization)	—			358,378			183,516			(7,637		)	534,257
Selling and general (excluding depreciation and amortization)	447			42,921			21,055			—			64,423
Depreciation and amortization	—			16,679			9,259			—			25,938
Other operating charges	—			1,712			890			—			2,602
Multiemployer pension withdrawal expense	—			39			—			—			39
Income (loss) from operations	(447		)	9,881			4,955			—			14,389
Equity in earnings of subsidiaries	(24,440		)	(6,145		)	—			30,585			—
Interest expense	—			(40,055		)	(736		)	—			(40,791		)
Intercompany income (loss), net	—			12,861			(12,861		)	—			—
Other income (loss), net	—			(53		)	728			—			675
Loss before income taxes	(24,887		)	(23,511		)	(7,914		)	30,585			(25,727		)
(Benefit) provision for income taxes	—			929			(1,769		)	—			(840		)
Net loss	$	(24,887	)	$	(24,440	)	$	(6,145	)	$	30,585		$	(24,887	)

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
For the Nine Months Ended September 28, 2012
(in thousands)

(unaudited)



	Parent			Issuer			Non-Guarantor			Eliminations			Total
Net loss	$	(24,887	)	$	(24,440	)	$	(6,145	)	$	30,585		$	(24,887	)
Other comprehensive income (loss):
Foreign currency translation adjustment	(176		)	(176		)	112			64			(176		)
Net change in pension and other benefit liabilities, net of tax	256			256			70			(326		)	256
Total comprehensive loss	$	(24,807	)	$	(24,360	)	$	(5,963	)	$	30,323		$	(24,807	)

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 2011
(in thousands)

(unaudited)



	Parent			Issuer			Non-Guarantor			Eliminations			Total
Net Sales	$	—		$	450,585		$	273,353		$	(9,921	)	$	714,017
Costs and Expense:
Cost of Goods Sold (excluding depreciation and amortization)	—			378,874			226,423			(9,921		)	595,376
Selling and general (excluding depreciation and amortization)	445			45,683			24,770			—			70,898
Depreciation and amortization	—			17,109			10,955			—			28,064
Other operating charges	—			4,907			415			—			5,322
Multiemployer pension withdrawal expense	—			1,200			—			—			1,200
Income (loss) from operations	(445		)	2,812			10,790			—			13,157
Equity in earnings of subsidiaries	(37,057		)	1,687			—			35,370			—
Interest expense	—			(39,344		)	(2,778		)	—			(42,122		)
Intercompany income (loss), net	—			10,172			(10,172		)	—			—
Other income, net	—			(12,578		)	3,666			—			(8,912		)
(Loss) income before income taxes	(37,502		)	(37,251		)	1,506			35,370			(37,877		)
Benefit for income taxes	—			(194		)	(181		)	—			(375		)
Net (loss) income	$	(37,502	)	$	(37,057	)	$	1,687		$	35,370		$	(37,502	)

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

For the Nine Months Ended September 30, 2011

(in thousands)

(unaudited)



	Parent			Issuer			Non-Guarantor		Eliminations			Total
Net (loss) income	$	(37,502	)	$	(37,057	)	$	1,687	$	35,370		$	(37,502	)
Other comprehensive income (loss):
Foreign currency translation adjustment	2,893			2,893			2,631		(5,524		)	2,893
Net change in pension and other benefit liabilities, net of tax	32			32			—		(32		)	32
Total comprehensive (loss) income	$	(34,577	)	$	(34,132	)	$	4,318	$	29,814		$	(34,577	)

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 28, 2012
(in thousands)

(unaudited)



	Parent		Issuer			Non-Guarantor			Eliminations		Total

Net cash (used in) provided by operating activities	$	—	$	(8,362	)	$	3,737		$	—	$	(4,625	)
Cash flows from investing activities:
Purchase of a business, net of cash acquired	—		(6,446		)	—			—		(6,446		)
Proceeds from sale of assets	—		1,287			2			—		1,289
Capital expenditures	—		(2,688		)	(1,898		)	—		(4,586		)
Net cash used in investing activities	—		(7,847		)	(1,896		)	—		(9,743		)

Cash flows from financing activities:
Changes in cash overdraft	—		3,467			—			—		3,467
Net borrowings on ABL Credit Facility	—		7,113			—			—		7,113
Debt issuance costs	—		—			(59		)	—		(59		)
Due (to) from affiliates	—		4,970			(4,970		)	—		—
Net cash provided by (used in) financing activities	—		15,550			(5,029		)	—		10,521
Effect of exchange rate changes on cash	—		—			(690		)	—		(690		)
Net decrease in cash and cash equivalents	—		(659		)	(3,878		)	—		(4,537		)
Cash and cash equivalents at beginning of period	—		962			13,365			—		14,327
Cash and cash equivalents at end of period	$	—	$	303		$	9,487		$	—	$	9,790

EURAMAX HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2011
(in thousands)

(unaudited)



	Parent		Issuer			Non-Guarantor			Eliminations			Total
Net cash (used in) provided by operating activities	$	—	$	(19,692	)	$	21,317		$	—		$	1,625
Cash flows from investing activities:
Proceeds from sale of assets	—		79			1			—			80
Capital expenditures	—		(5,540		)	(2,842		)	—			(8,382		)
Contributed capital to subsidiaries	—		(88,096		)	—			88,096			—
Return of capital from subsidiaries	—		151,085			—			(151,085		)	—
Net cash (used in) provided by investing activities	—		57,528			(2,841		)	(62,989		)	(8,302		)

Cash flows from financing activities:
Net borrowings on ABL Credit Facility	—		25,274			—			—			25,274
Net repayments on First Lien Credit Facility	—		(302,394		)	(109,634		)	—			(412,028		)
Borrowings under Senior Secured Notes	—		375,000			—			—			375,000
Borrowings under Senior Unsecured Notes	—		19,812			—			—			19,812
Contributed capital to subsidiaries	—		—			88,096			(88,096		)	—
Return of capital	—		—			(151,085		)	151,085			—
Debt issuance costs	—		(10,623		)	—			—			(10,623		)
Due (to) from affiliates	—		(147,774		)	147,774			—			—
Net cash (used in) provided by financing activities	—		(40,705		)	(24,849		)	62,989			(2,565		)
Effect of exchange rate changes on cash	—		—			927			—			927
Net decrease in cash and cash equivalents	—		(2,869		)	(5,446		)	—			(8,315		)
Cash and cash equivalents at beginning of period	—		8,271			16,631			—			24,902
Cash and cash equivalents at end of period	$	—	$	5,402		$	11,185		$	—		$	16,587

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

Forward-Looking Statements

Certain statements contained in this document are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements related to plans for future business development activities, anticipated costs of revenues, product mix, research and development and selling, general and administrative activities, and liquidity and capital needs and resources. When used in this report, the words “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” and similar expressions are generally intended to identify forward-looking statements. You should not place undue reliance on these forward-looking statements, which only speak as of the date of this quarterly report. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements.

Business Overview

We are a leading international producer of metal and vinyl products sold to the residential repair and remodel, commercial construction and recreational vehicle (RV) markets primarily in North America and Europe. We are a leader in several niche product categories, including preformed roof-drainage products sold in the U.S., metal roofing and siding for post frame construction in the U.S., and aluminum siding for towable RVs in the U.S. and Europe.

Our customers are located predominantly throughout North America and Europe and include distributors, contractors and home improvement retailers, as well as RV, transportation and other original equipment manufacturers, or OEMs. We have extensive in-house manufacturing and distribution capabilities for our more than 10,000 unique products and operate through a network consisting of 39 facilities, including 33 located in North America and six located in Europe. We have over 50 years of experience manufacturing building products and RV exterior components, including our time as a division of our former parent, Alumax Inc., or Alumax, a fully integrated aluminum producer acquired by Alcoa Inc. in 1998. We have operated as an independent company since 1996 when our division was acquired in a management-led buyout.

On August 14, 2012, we acquired Cleveland Tubing, Inc. ("CTI") for approximately $6.4 million, net of cash acquired. CTI is a developer and manufacturer of corrugated plastic parts that include several products sold through our U.S. Residential Products Segment including collapsible and flexible specialty drainage products. The results of operations for CTI have been included in our condensed consolidated financial statements as of and from the date of the acquisition. The acquisition of CTI provides the Company with strategic manufacturing expertise for corrugated plastic products included in our residential product segment and expands our product offering to our existing customer base.

Results of Operations

Our financial performance is affected by, among other factors, underlying trends in the United States and Europe that influence demand for products sold to residential repair and remodeling, commercial construction and RV markets.

•

Our building products sold for residential repair and remodeling activities include roof drainage products, vinyl windows, patios and awnings, and doors. Projects that utilize many of our roof drainage repair and remodeling products are often low cost activities that are necessary to prevent home damage as a result of wear and tear or weather damage. Roof drainage repair projects are often low cost and non‑discretionary in nature. Repair and remodeling activity related to products other than roof drainage are typically higher cost and driven by turnover and aging of housing stock, consumer sentiment, availability of home equity and consumer financing and, in the case of our vinyl window products, consumer interest in energy efficiency.

•

Our building products sold for commercial construction include, in the United States, light gauge steel and aluminum roofing and siding panels, trim and hardware and, in Europe, the Middle East and Asia, roll coated aluminum coil and sheet. Demand for these products is driven by consumer confidence, interest rates, consumer disposable income, the strength of agricultural markets, consumer access to affordable financing and commercial construction trends.

•

Our commercial products sold to the RV market include siding and roofing. Demand for these RV products is driven by trends in disposable income, interest rates and general economic conditions, as well as similar demographic trends relating to the increased proportion of the United States and European population in the 55 through 74 year old age group, who serve as an important source of demand for our RV products.

Our sales volumes have historically been higher in the second quarter and third quarters due to the seasonal demand of the building products markets served. Our working capital needs have been at their highest during these periods as well.

Segment Information

We manage our business and serve our customers through reportable segments differentiated by product type, end market, and geography. In the first quarter of 2012, we completed a reorganization of our U.S. operational structure. The reorganization included the consolidation of all U.S. operating companies into one legal entity and realigned reporting and management responsibilities based upon the Company's residential and commercial product offerings. As a result of the restructuring, we have identified two U.S. reporting segments; U.S. Residential Products and U.S. Commercial Products. Prior to this restructuring, our reporting segments consisted of U.S. Residential Building Products, U.S. Non-Residential Building Products and U.S. RV and Specialty Building Products. Our third quarter 2011 results have been adjusted to reflect the Company's change in reportable segments. These organizational changes did not impact our European reportable segments.

Our four reportable segments are described below:

U.S. Residential Products—The U.S. Residential Products segment utilizes aluminum, steel, copper and vinyl to produce residential roof drainage products, including preformed gutters, downspouts, elbows, soffit, drip edge, fascia, flashing, snow guards and related accessories. These products are used primarily for the repair, replacement or enhancement of residential roof drainage systems. We sell these products to home improvement retailers, lumber yards, distributors and contractors from manufacturing and distribution facilities throughout North America. We also produce specialty made-to-order vinyl replacement windows and aluminum patio and awning components sold primarily to home improvement contractors in the Western U.S.

U.S. Commercial Products—The U.S. Commercial Products segment utilizes various materials, including steel coil, aluminum coil and fiberglass to create various products with commercial applications, including roofing and siding panels, ridge caps, flashing, trim, soffit and other accessories as well sidewall components, siding and other exterior components for the towable RV, cargo and manufactured housing markets. We sell these products to builders, contractors, lumber yards, home improvement retailers, OEMs, and RV manufacturers from manufacturing and distribution facilities located throughout the U.S. These products are used in the construction of a wide variety of small scale non-residential, agricultural and industrial building types on either wood or metal frames, manufactured homes, and towable RVs.

European Roll Coated Aluminum—The European Roll Coated Aluminum segment uses a roll coating process to apply paint to bare aluminum coil and, to a lesser extent, bare steel coil in order to produce specialty coated coil, which the Company also processes into specialty coated sheets and panels. We sell these products to building panel manufacturers, contractors and UK “holiday home,” RV and transportation OEMs throughout Europe and in parts of Asia. Our customers use our specialty coated metal products to manufacture, among other things, RV sidewalls, commercial roofing panels, interior ceiling panels, and liner panels for shipping containers. We produce and distribute these roll coated products from facilities located in the Netherlands and the UK.

European Engineered Products—The European Engineered Products segment utilizes aluminum and vinyl extrusions to produce residential windows, doors and shower enclosures. These products are sold to home improvement retailers, distributors and factory‑built “holiday home” builders in the UK. We also produce windows used in the operator compartments of heavy equipment, components sold to suppliers to automotive OEMs in Western Europe and RV doors. We produce and distribute these engineered products from facilities in France and in the UK and have developed extensive in-house manufacturing capabilities, including powder coating, glass cutting, anodizing and glass toughening.

In the current quarter, we have allocated depreciation expense related to our North American ERP system to our U.S. Residential and U.S. Commercial Products Segments. In prior quarters, depreciation expense related to the ERP system was recorded at our Corporate Headquarters and included in other non-allocated expenses. Expenses related to the North American ERP system were allocated through a corporate charge, and therefore, were included in earnings (loss) from operations for the appropriate segment. Depreciation and amortization expense for the U.S. Residential Segment after allocation of ERP depreciation totaled $2,867 thousand, $2,872 thousand, and $2,926 thousand for the 1st, 2nd, and 3rd quarters of 2012 and $2,966 thousand, $3,062 thousand, and $2,976 thousand for the 1st, 2nd, and 3rd quarters of 2011, respectfully. Depreciation and amortization expense for the U.S. Commercial Segment after allocation of ERP depreciation totaled $2,713 thousand, $2,690 thousand, and $2,686 thousand for the 1st, 2nd, and 3rd quarters of 2012 and $2,774 thousand, $2,733 thousand, and $2,717 thousand for the 1st, 2nd, and 3rd quarters of 2011, respectfully.

Three months ended September 28, 2012 Compared to the Three months ended September 30, 2011.

The following table sets forth net sales and income (loss) from operations data by segment for the three months ended September 28, 2012 and September 30, 2011:



	Net Sales						Income (loss) from Operations
	Three Months Ended						Three Months Ended
	September 28, 2012		September 30, 2011		Increase (Decrease)		September 28, 2012			September 30, 2011			Increase (Decrease)
	(Dollars in millions)
U.S. Residential Products	$	77.5	$	90.4	(14.3	)%	$	7.5		$	7.9		(5.1	)%
U.S. Commercial Products	79.3		79.8		(0.6	)%	1.7			(3.0		)	156.7	%
European Roll Coated Aluminum	48.6		57.4		(15.3	)%	2.1			2.0			5.0	%
European Engineered Products	13.8		19.2		(28.1	)%	(1.5		)	(1.0		)	(50.0	)%
Other Non-Allocated	—		—		—		(3.2		)	(2.1		)	(52.4	)%
Totals	$	219.2	$	246.8	(11.2	)%	$	6.6		$	3.8		73.7	%

Net Sales. Net sales include revenue recognized from the sales of our products less provisions for returns, allowances, rebates and discounts. Our net sales declined $27.6 million, or 11.2%, to $219.2 million in the third quarter of 2012 compared to $246.8 million in the third quarter of 2011. Net sales in our European Roll Coated Aluminum and European Engineered Product segments continue to be negatively impacted by European economic malaise which delayed or curtailed architectural and industrial construction projects and reduced consumer confidence. Accordingly, demand from our European customers weakened compared to the third quarter of 2011. The weakening of the euro and British pound sterling against the U.S. dollar also resulted in an approximate $5.7 million decline in net sales during the quarter. Net sales of our U.S. Residential Products segment have declined in the third quarter of 2012 compared to the third quarter of 2011, while net sales of our U.S. Commercial Products remained relatively flat compared to third quarter 2011.

Total net sales for our U.S. segments declined $13.4 million, or 7.9%, to $156.8 million in the third quarter of 2012 compared to $170.2 million in the third quarter of 2011.

Net sales of our U.S. Residential Products segment declined $12.9 million, or 14.3%, to $77.5 million in the third quarter of 2012 compared to $90.4 million in the third quarter of 2011. Demand for our roof drainage, roof edge and related products continued to be negatively impacted by severe drought conditions throughout much of the U.S., which resulted in lower net sales in the third quarter of 2012. Net sales were also negatively impacted by lower sales prices as a result of declining aluminum raw material costs compared to the prior year quarter.

Net sales of our U.S. Commercial Products segment declined $0.5 million, or 0.6%, to $79.3 million in the third quarter of 2012 compared to $79.8 million in the third quarter of 2011. The decline in net sales is primarily due to lower sales prices as a result of lower steel and aluminum raw material costs in the third quarter of 2012 compared to the third quarter of 2011. The decline in steel and aluminum prices represented an approximate $6.8 million decrease in net sales. These declines were generally offset by higher demand for steel and aluminum roofing and siding sold to distributors, contractors, lumber yards, and builders in the post frame construction markets during the third quarter of 2012. Sales volumes for aluminum, steel, fiberglass and laminated products from original equipment manufacturers in the RV and transportation markets also increased in the current quarter partially offset by lower demand from distributors for specialty coated aluminum coil and declines in sales volumes of RV doors as a result of our decision to exit the U.S. RV door product line during the first quarter of 2012.

Total net sales for our European segments declined $14.2 million, or 18.5%, to $62.4 million in the third quarter of 2012 compared to $76.6 million in the third quarter of 2011. Net sales declines were primarily the result of weakening demand as a result of continuing economic uncertainty across Europe. The economic crisis has resulted in the delay of architectural and industrial projects and lower consumer confidence has resulted in declining demand for holiday home and caravan production throughout Europe. Additionally, the weakening of the euro and British pound sterling against the U.S. dollar resulted in lower net sales of approximately $5.7 million compared to the third quarter of 2011.

Net sales of our European Roll Coated Aluminum segment declined $8.8 million, or 15.3%, to $48.6 million in the third quarter of 2012 compared to $57.4 million in the third quarter of 2011. The decline in net sales was primarily due to lower demand for specialty coated coil and panels used in architectural and industrial projects and for specialty coated coils and panels sold to OEMs in the transportation industry. Demand in these markets has been negatively impacted by the continuing economic crisis in Europe which has resulted in delays in architectural and other large scale projects as a result of economic uncertainty. The weakening of the euro and British pound sterling against the U.S. dollar resulted in lower net sales of $4.8 million compared to the third quarter of 2011.

Net sales of our European Engineered Products segment declined $5.4 million, or 28.1%, to $13.8 million in the third quarter of 2012 compared to $19.2 million in the third quarter of 2011. Demand in this segment has been negatively impacted by the continuing economic crisis in Europe. Specifically, declines in net sales were primarily the result of lower demand for residential windows, doors and shower enclosures sold to distributors and factory built holiday home builders in the United Kingdom. These declines were primarily the result of lower levels of holiday home production and consumer spending in the UK market. Declines in demand for engineered transportation components sold to suppliers in the compact vehicle market also negatively impacted first quarter sales. Sales declines in these markets were partially offset by increased demand for windows used in the operating compartments of heavy equipment. Weakening of foreign currencies, primarily the euro and British pound sterling, against the U.S. dollar also resulted in lower net sales of approximately $0.9 million compared to the third quarter of 2011.

Cost of Goods Sold. Cost of goods sold includes the cost of raw materials, manufacturing labor, packaging, utilities, freight, maintenance and other elements of manufacturing overhead. Cost of goods sold declined $26.5 million, or 12.7%, to $182.6 million in the third quarter of 2012 compared to $209.1 million in the third quarter of 2011. The decline in cost of goods sold is primarily related to volume declines in our European segments and in our US Residential Products segment. Cost of goods sold also decreased as a result of lower aluminum and steel raw material costs in the current quarter compared to the prior year. The weakening of the euro and British pound sterling against the U.S. dollar resulted in lower cost of goods sold of approximately $4.9 million.

Selling and General. Selling and general expenses include salaries, benefits, incentive compensation, insurance, travel and entertainment and other administrative costs. Selling and general expenses declined $2.6 million, or 11.3%, to $20.5 million in the third quarter of 2012 compared to $23.1 million in the third quarter of 2011. The consolidation of operations at multiple U.S. plant locations during 2011 and the simplification of our U.S. organizational structure resulted in an overall reduction in selling and general costs during the third quarter of 2012. The weakening of the euro and British pound sterling against the U.S. dollar also decreased selling and general expenses $0.5 million compared to the third quarter of 2011.

Depreciation and Amortization. Depreciation and amortization declined $0.7 million, or 7.5%, to $8.6 million in the third quarter of 2012 compared to $9.3 million in the third quarter of 2011.

Other Operating Charges. Other operating charges includes costs related to restructuring initiatives including facility closures, relocation, severance, and acquisition costs. Other operating charges declined $0.6 million, or 42.9%, to $0.8 million in the third quarter of 2012 compared to $1.4 million in the third quarter of 2011.

In the third quarter of 2012, other operating charges of approximately $0.8 million included $0.4 million of severance and relocation costs related to restructuring and cost savings initiatives in both the U.S. and Europe, $0.2 million of legal and professional fees related to our reorganization activities in North America and Europe, and $0.2 million of costs related to the acquisition of Cleveland Tubing, Inc.

In the third quarter of 2011, other operating charges of $1.4 million consisted primarily of restructuring initiatives including facility closures, relocation, and severance costs intended to reduce overhead and streamline operations.

Income (Loss) from Operations. As a result of the aforementioned items, our income from operations increased $2.8 million, to $6.6 million in the third quarter of 2012 compared to $3.8 million for the third quarter of 2011.

Income (loss) from operations of our U.S. Residential Products segment declined $0.4 million, or 5.1%, to $7.5 million for the third quarter of 2012 compared to $7.9 million for the third quarter of 2011. This decrease is primarily related to the decline in volume in the third quarter of 2012, partially offset by lower selling and general costs as a result of the consolidation of plant locations and the simplification of our U.S. operating structure in 2011.

Income from operations of our U.S. Commercial Products segment increased $4.7 million to income of $1.7 million for the third quarter of 2012 compared to a loss of $(3.0) million in the third quarter of 2011. This increase is primarily the result of higher sales volumes in the post frame market and improved margins in the RV and transportation markets in the third quarter. Income from operations also benefited from initiatives to simplify the U.S. operating structure and consolidate operations at certain plant locations during 2011.

Income from operations of our European Roll Coated Aluminum segment increased $0.1 million to $2.1 million in the third quarter of 2012 compared to $2.0 million in the third quarter of 2011. Declines in income from operations as a result of lower sales volumes were generally offset by reductions to selling and general costs as a result of cost savings initiatives to reduce overhead and other operating costs in response to the continuing economic uncertainty throughout Europe.

Income (loss) from operations of our European Engineered Products segment declined $0.5 million to a loss of $(1.5) million for the third quarter of 2012 compared to a loss of $(1.0) million in the third quarter of 2011. The decline was primarily due to lower sales volumes in this segment, partially offset by lower labor and overhead costs and selling and general expenses in the third quarter of 2012. Income (loss) from operations for the third quarter of 2012 included approximately $(0.2) million of non-recurring other operating charges primarily related to severance and relocation activities in the U.K. which are expected to streamline operations and provide cost savings in future periods.

Interest Expense. Interest expense for third quarter of 2012 and for the third quarter of 2011 totaled approximately $(13.4) million. Interest expense is primarily comprised of interest on our Senior Secured Notes, Senior Unsecured Loan Facility and ABL Credit Facility.

Other Income (Loss), Net. Other income (loss), net includes translation gains and losses on intercompany obligations, gains and losses on asset disposals, interest income and other income or expense items of a non-operating nature. Other income in the third quarter of 2012 of $3.5 million consisted primarily of translation gains on intercompany obligations due to the strengthening of the euro compared to the U.S. dollar totaling $3.8 million, which were partially offset by losses of approximately $0.2 million on forward foreign currency contracts. Other loss, net in the third quarter of 2011 of $(17.6) million consisted primarily of translation losses on intercompany obligations.

Provision (Benefit) for Income Taxes. We reported an income tax benefit of $(2.1) million for the third quarter of 2012 compared to a benefit of $(0.1) million for the third quarter of 2011. Our effective tax rates were (64.3)% for the three months ended September 28, 2012 and (0.4)% for the three months ended September 30, 2011.

The effective rate for the third quarter of 2012 differed from the U.S. statutory rate primarily due to state income taxes, lower tax rates of our foreign operations as compared to the U.S. federal rates, U.S. tax impact of foreign dividends and non-deductible foreign currency transaction gains and losses and recognition of valuation allowances related to net losses in the UK and for U.S. federal and state net operating losses.

The effective rate for the third quarter of 2011 differed from the U.S. statutory rate primarily due to state income taxes, lower tax rates of our foreign operations as compared to the U.S. federal rates, U.S. tax impact of foreign dividends and non-deductible foreign currency transaction gains and losses, and recognition of valuation allowances for U.S. federal and state net operating losses.

Our effective tax rate reflects a full valuation allowance on losses in the United States. Without a valuation allowance, earnings from the United States are generally taxed at rates higher than the foreign statutory tax rates. The 2012 effective tax rate reflects a full valuation allowance on losses in the United Kingdom. A change in the mix of pretax income from the various tax jurisdictions can have a significant impact on our periodic effective tax rate.

Net Loss. Our net loss was $1.2 million for the third quarter of 2012, as compared to a net loss of $27.0 million for the third quarter of 2011.

Nine months ended September 28, 2012 Compared to the Nine months ended September 30, 2011.

The following table sets forth net sales and income (loss) from operations data by segment for the nine months ended September 28, 2012 and September 30, 2011:



	Net Sales						Income (loss) from Operations
	Nine Months Ended						Nine Months Ended
	September 28, 2012		September 30, 2011		Increase (Decrease)		September 28, 2012			September 30, 2011			Increase (Decrease)
	(Dollars in millions)
U.S. Residential Products	$	214.6	$	233.5	(8.1	)%	$	18.3		$	18.0		1.7	%
U.S. Commercial Products	222.3		224.7		(1.1	)%	0.1			(3.0		)	(103.3	)%
European Roll Coated Aluminum	152.0		190.4		(20.2	)%	8.0			11.4			(29.8	)%
European Engineered Products	52.7		65.4		(19.4	)%	(2.3		)	(0.5		)	360.0	%
Other Non-Allocated	—		—		—	%	(9.7		)	(12.7		)	23.6	%
Totals	$	641.6	$	714.0	(10.1	)%	$	14.4		$	13.2		9.1	%

Net Sales. Net sales include revenue recognized from the sales of our products less provisions for returns, allowances, rebates and discounts. Our net sales declined $72.4 million, or 10.1%, to $641.6 million in the first nine months of 2012 compared to $714.0 million in the first nine months of 2011. Net sales in our European Roll Coated Aluminum and European Engineered Product segments continue to be negatively impacted by European economic malaise which delayed or curtailed architectural and industrial construction projects and reduced consumer confidence. Accordingly, demand from our European customers weakened compared to the prior year. Foreign currency fluctuations also contributed to a $15.4 million decrease in net sales compared to the prior year period. Net sales of our U.S. Residential Products and U.S. Commercial Products have also declined in the first nine months of 2012 compared to the first nine months of 2011. Declines in our U.S. segments reflect lower sales prices due to declining steel and aluminum raw material costs combined with declining volume in our U.S. Residential Products segment.

Total net sales for our U.S. segments declined $21.3 million, or 4.6%, to $436.9 million in the first nine months of 2012 compared to $458.2 million in the first nine months of 2011. We estimate that lower sales prices as a result of declining aluminum and steel raw material costs resulted in an approximate $21.4 million decrease over the prior year. Declining sales prices were generally offset by increased demand in our U.S. Commercial Segment.

Net sales of our U.S. Residential Products segment declined $18.9 million, or 8.1%, to $214.6 million in the first nine months of 2012 compared to $233.5 million in the first nine months of 2011. This decline in net sales is primarily due to lower demand in the home center market and declines in demand for vinyl windows and patio components sold to home improvement contractors. Severe drought conditions throughout much of the U.S. in the first nine months of 2012 contributed to the decline in demand for our roof drainage, roof edge and related products. Demand for our vinyl window and patio components continue to be impacted by economic uncertainty affecting consumer demand for higher end repair, remodel and replacement projects. Demand from distributors for our roof drainage, roof edge and related products was relatively flat compared to the first nine months of 2011. Sales price declines as a result of lower aluminum raw material costs also contributed to the net sales decline.

Net sales of our U.S. Commercial Products segment declined $2.4 million, or 1.1%, to $222.3 million in the first nine months of 2012 compared to $224.7 million in the first nine months of 2011. Net sales declines in our U.S. Commercial Products Segment were primarily the result of declines in steel prices during the first nine months of 2012 compared to the prior year. Overall demand for our U.S Commercial Products segment increased in the first nine months of 2012, primarily for our steel and aluminum roofing and siding sold to distributors, contractors, lumber yards, and builders in both the post frame construction and industrial and architectural markets. Demand for aluminum, steel, fiberglass and laminated products sold to original equipment manufacturers in the RV and transportation markets also increased. These increases in net sales were offset by lower demand from distributors for specialty coated aluminum coil and declines in sales volumes of RV doors as a result of our decision to exit the U.S. RV door product line during the first quarter of 2012.

Total net sales for our European segments declined $51.1 million, or 20.0%, to $204.7 million in the first nine months of 2012 compared to $255.8 million in the first nine months of 2011. Net sales declines were primarily the result of weakening demand as a result of continuing economic uncertainty throughout Europe. The economic crisis has resulted in the delay of architectural and industrial projects and lower consumer confidence has resulted in declining demand for holiday home and caravan production throughout Europe. Additionally, the weakening of the euro and British pound sterling against the U.S. dollar resulted in lower net sales of approximately $15.4 million compared to the first nine months of 2011.

Net sales of our European Roll Coated Aluminum segment declined $38.4 million, or 20.2%, to $152.0 million in the first nine months of 2012 compared to $190.4 million in the first nine months of 2011. The decline in net sales was primarily due to lower demand for specialty coated coil and panels used in architectural and industrial projects and for specialty coated coils and panels sold to OEMs in the RV and transportation markets. Demand in these markets has been negatively impacted by the continuing economic crisis in Europe which has resulted in delays in architectural and other large scale projects as a result of economic uncertainty. The weakening of the euro and British pound sterling against the U.S. dollar resulted in lower net sales of $12.2 million compared to the first nine months of 2011.

Net sales of our European Engineered Products segment declined $12.7 million, or 19.4%, to $52.7 million in the first nine months of 2012 compared to $65.4 million in the first nine months of 2011. Demand in this segment has been negatively impacted by the continuing economic crisis in Europe. Specifically, declines in net sales were primarily the result of lower demand for residential windows, doors and shower enclosures sold to distributors and factory built holiday home builders in the United Kingdom. These declines were primarily the result of lower levels of holiday home production and consumer spending in the UK market. Declines in demand for engineered transportation components sold to suppliers in the compact vehicle market also negatively impacted sales for the first nine months of 2012. Weakening of foreign currencies, primarily the euro and British pound sterling, against the U.S. dollar also resulted in lower net sales of approximately $3.2 million compared to the first nine months of 2011.

Cost of Goods Sold. Cost of goods sold includes the cost of raw materials, manufacturing labor, packaging, utilities, freight, maintenance and other elements of manufacturing overhead. Cost of goods sold declined $61.1 million, or 10.3%, to $534.3 million in the first nine months of 2012 compared to $595.4 million in the first nine months of 2011. The decline in cost of goods sold is primarily related to volume declines in our European segments and in our US Residential Products segment. Declines in aluminum and steel raw material costs in our U.S. segments also resulted in an approximate $9.5 million decline in costs of goods sold. The weakening of the euro and British pound sterling against the U.S. dollar resulted in lower cost of goods sold of approximately $13 million.

Selling and General. Selling and general expenses include salaries, benefits, incentive compensation, insurance, travel and entertainment and other administrative costs. Selling and general expenses declined $6.5 million, or 9.2%, to $64.4 million in the first nine months of 2012 compared to $70.9 million in the first nine months of 2011. The consolidation of operations at multiple U.S. plant locations during 2011, the simplification of our U.S. organizational structure, and restructuring and cost saving initiatives in Europe resulted in an overall reduction in selling and general costs during the first nine months of 2012. The weakening of the euro and British pound sterling against the U.S. dollar also decreased selling and general expenses of approximately $1.3 million compared to the first nine months of 2011.

Depreciation and Amortization. Depreciation and amortization declined $2.2 million, or 7.8%, to $25.9 million in the first nine months of 2012 compared to $28.1 million in the first nine months of 2011.

Other Operating Charges. Other operating charges includes costs related to restructuring initiatives including facility closures, relocation, severance, and acquisition costs. Other operating charges declined $2.7 million to $2.6 million in the first nine months of 2012 compared to $5.3 million in the first nine months of 2011.

In the first nine months of 2012, other operating charges of $2.6 million included $1.7 million related to cost savings initiatives and restructuring activities in our European and U.S. segments, $0.7 million of non-recurring legal and professional fees related to the Company's North American reorganization, and $0.2 million of costs related to the acquisition of Cleveland Tubing, Inc in the third quarter of 2012.

In the first nine months of 2011, other operating charges of $5.3 million included approximately $2.5 million of tax consulting and legal and professional fees incurred as part of our debt refinancing. As a result of these initiatives we removed restrictive financial covenants, significantly reduced interest costs, and extended maturity dates of our long-term debt. Approximately $2.8 million was incurred for restructuring initiatives including facility closures, relocation, and severance costs intended to reduce overhead and streamline operations.

Multiemployer pension withdrawal expense. In the third quarter of 2011, we recorded a $1.2 million charge in our U.S. Residential Products segment for liabilities associated with the early withdrawal from a multiemployer pension plan covering hourly employees in our Romeoville, IL facility. The liability represents the present value of estimated future payments for our proportionate share of unfunded vested benefits under the multiemployer plan.

Income (loss) from Operations. As a result of the aforementioned items, our income from operations increased $1.2 million, to $14.4 million in the first nine months of 2012 compared to $13.2 million for the first nine months of 2011.

Income from operations of our U.S. Residential Products segment increased $0.3 million, or 1.7%, to $18.3 million for the first nine months of 2012 compared to $18.0 million for the first nine months of 2011. Declining sales volumes were generally offset by a reduction in certain non-recurring costs incurred during the prior year, including a $1.2 million charge recorded in the second quarter of 2011 for the early withdrawal from a multiemployer pension plan. In the first nine months of 2011, we also incurred approximately $0.6 million of non-recurring charges related to facility closures, relocation, and severance costs intended to reduce overhead and streamline operations compared to other operating charges of $0.3 million for the first nine months of 2012. Income from operations also increased as a result of lower selling and general costs due to the consolidation of plant locations and the simplification of our U.S. operating structure late in 2011.

Income (loss) from operations of our U.S. Commercial Products segment increased $3.1 million to income of $0.1 million for the first nine months of 2012 compared to $(3.0) million for the first nine months of 2011. This increase is primarily related to higher sales volumes in the post frame construction markets and improved margins in the RV and transportation markets. Organizational initiatives to simplify the U.S. operating structure and consolidate operations at certain plant locations during 2011 also contributed to the improvement in operating income in 2012. Other operating charges for the first nine months of 2011 totaled approximately $0.8 million, primarily related to our North America reorganization. Other operating charges in the first nine-months of 2012 totaled only approximately $0.2 million. These improvement were partially offset by quality issues from a large raw material supplier in the first half of 2012 which resulted in additional costs of approximately $0.6 million as the Company had to use alternative supply sources at increased costs.

Income from operations of our European Roll Coated Aluminum segment declined $3.4 million to $8.0 million in the first nine months of 2012 compared to $11.4 million in the first nine months of 2011. Lower sales volumes were the primary driver of the decline in operating income in the current quarter. Additionally, selling and general costs remained relatively flat compared to the prior year quarter due to the economic crisis in Europe and uncertainty regarding the timing of recovery in our end markets.

(Loss) income from operations of our European Engineered Products segment declined $1.8 million to a loss of $(2.3) million for the first nine months of 2012 compared to a loss of $(0.5) million for the first nine months of 2011. The decline was primarily due to lower sales volumes in this segment offset by slightly lower labor and overhead costs and selling and general expenses in the first nine months of 2012.

Interest Expense. Interest expense declined $1.3 million, or 3.1%, to $40.8 million in the first nine months of 2012 compared to $42.1 million in the first nine months of 2011. The decline in interest expense is primarily related to the Company's issuance, in March of 2011, of Senior Secured Notes at an interest rate of 9.5% and the Senior Unsecured Credit Facility at an interest rate of 12.25%. The proceeds of these issuances were used to settle outstanding amounts under the Company’s First Lien Credit Agreement, which carried a higher rate of interest.

Other Income (Loss), Net. Other income (loss), net includes translation gains and losses on intercompany obligations, gains and losses on asset disposals, interest income and other income or expense items of a non-operating nature. Other income in the first nine months of 2012 of $0.7 million was primarily comprised of a $0.5 million gain on the sale of assets associated with the decision to exit our U.S. RV door product line in the Commercial Products segment and $0.3 million of translation gains on intercompany obligations due to the strengthening of the euro compared to the U.S. dollar offset by a $0.1 million loss on forward foreign currency contracts. Other loss in the first nine months of 2011 of $(8.9) million included translation lossed on intercompany obligations of $7.3 million and a $1.5 million loss on extinguishment of indebtedness under the First Lien Credit Agreement primarily related to the write-off of capitalized deferred financing fees.

Provision (Benefit) for Income Taxes. We reported income tax benefit of $(0.8) million for the first nine months of 2012, as compared to a benefit of $(0.4) million for the first nine months of 2011. Our effective tax rates were (3.3)% for the nine months ended September 28, 2012 and (1.0)% for the nine months ended September 30, 2011.

The effective rate for the first nine months of 2012 differed from the U.S. statutory rate primarily due to state income taxes, lower tax rates of our foreign operations as compared to the U.S. federal rates, U.S. tax impact of foreign dividends and non-deductible foreign currency transaction gains and losses and recognition of valuation allowances related to net losses in the U.K. and for U.S. federal and state net operating losses.

The effective rate for the first nine months of 2011 differed from the U.S. statutory rate primarily due to state income taxes, lower tax rates of our foreign operations as compared to the U.S. federal rates, U.S. tax impact of foreign dividends and non-deductible foreign currency transaction gains and losses, recognition of valuation allowances for U.S. federal and state net operating losses.

Net Loss. Our net loss was $24.9 million for the first nine months of 2012, as compared to a net loss of $37.5 million for the first nine months of 2011.

Liquidity and Capital Resources

Our principal sources of liquidity are from cash and cash equivalents, cash from operations and borrowings under our ABL Credit Facility and Dutch Revolving Credit Facility. As of September 28, 2012, we had cash and cash equivalents of $9.8 million. Net cash used in operating activities was $(4.6) million for the nine months ended September 28, 2012 compared to net cash provided by operating activities of $1.6 million for the nine months ended September 30, 2011. As of September 28, 2012, we had $17.3 million outstanding and availability of $54.4 million under our revolving credit facilities.

Our ability to make debt service payments, refinance our indebtedness, maintain capital assets and satisfy our other capital and commercial commitments will depend on our ability to generate cash flow in the future. This ability, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors. While these factors are beyond our control, we frequently invest sources of liquidity with the intent of improving our ability to generate future cash flow. Such investments have, and may in the future, include product development initiatives, restructuring and growth oriented capital expenditures, and business acquisitions. We believe our September 28, 2012 cash levels, together with our cash from operations and borrowings under our revolving credit facilities will be adequate to fund our cash requirements based on our current level of operations for at least the next twelve months.

In the third quarter of 2012, borrowings from our ABL Credit Facility were used to fund the acquisition of Cleveland Tubing, Inc. ("CTI") for approximately $6.4 million, net of cash acquired. CTI is a developer and manufacturer of corrugated plastic parts that include several products sold through the Company's U.S. Residential Products Segment including collapsible and flexible specialty drainage products. The acquisition of CTI provides the Company with strategic manufacturing expertise for corrugated plastic products included in our residential product segment and expands our product offering to our existing customer base.

Debt

Senior Secured Notes

Euramax International, Inc. (“Euramax”), the Company and certain domestic subsidiaries entered into a purchase agreement with Deutsche Bank Securities Inc., Gleacher & Company Securities, Inc., Wells Fargo Securities, LLC and Morgan Keegan & Company, Inc., which we refer to collectively as the Initial Purchasers, for the sale of $375 million aggregate principal amount of 9.50% Senior Secured Notes due 2016, which we refer to as the Notes, of our wholly‑owned subsidiary Euramax International, Inc. The Notes were issued at par pursuant to an indenture, or the Indenture, dated March 18, 2011, among Euramax, the Company and certain domestic subsidiaries and Wells Fargo Bank, National Association, as trustee, which we refer to as the Trustee. Euramax used the net proceeds from the Notes, together with cash on hand, the net proceeds from the Senior Unsecured Loan Facility and borrowings under the ABL Credit Facility, to repay its existing first lien credit facility in full. The Notes bear interest at 9.50% per year and mature on April 1, 2016, unless earlier redeemed or repurchased by Euramax. Interest is payable semi-annually on April 1 and October 1 of each year, beginning on October 1, 2011.

The Notes may be redeemed at Euramax's option, in whole or in part, under the conditions specified in the Indenture plus accrued and unpaid interest to the redemption date, at the following redemption prices if redeemed during the 12‑month period beginning on April 1 of the years indicated:



Year	Percentage
2013	107.125%
2014	104.750%
2015 and thereafter	100.000%

Additionally at any time on or before April 1, 2013, Euramax may redeem (a) the greater of (i) $37.5 million and (ii) up to 10% of the aggregate principal amount of the Notes at any time and from time to time, but not more than once in any 12‑month period, at a price equal to 103% of the principal amount of the Notes redeemed plus accrued and unpaid interest, if any, to the date of redemption; (b) up to 35% of the aggregate principal amount of the Notes issued with the net proceeds of certain equity offerings at a price equal to 109.5% of the principal amount of the Notes redeemed plus accrued and unpaid interest, if any, to the date of redemption; or (c) on any one or more occasions, redeem all or a part of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus the Applicable Premium (as defined in the Indenture) , and accrued and unpaid interest, if any, to the date of redemption.

The Indenture contains restrictive covenants that limit, among other things, the ability of Euramax and certain of its subsidiaries to incur additional indebtedness, pay dividends and make certain distributions, make other restricted payments, make investments, incur liens, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets and enter into certain transactions with affiliates, in each case, subject to exclusions, and other customary covenants. These limitations also prohibit Euramax's ability to transfer cash or assets to Euramax Holdings, whether by dividend, loan, or otherwise. The Indenture also contains customary events of default. If Euramax undergoes a change of control (as defined in the Indenture), Euramax will be required to make an offer to repurchase the notes at 101% of the principal amount of the Notes redeemed plus accrued and unpaid interest, if any, to the date of redemption.

Senior Unsecured Loan Facility

On March 3, 2011, Euramax, Euramax Holdings, and certain of our domestic subsidiaries, as guarantors, entered into a credit and guaranty agreement for a new senior unsecured loan facility (the “Senior Unsecured Loan Facility”) in the aggregate principal amount of $125 million, which was issued at 98% of par value. The $125 million Senior Unsecured Loan Facility matures on October 1, 2016 and bears interest at 12.25% per year in the event no election is made to pay interest in kind (PIK) by increasing the principal amount of the Notes, and 14.25% (7.875% cash pay and 6.375% PIK) per annum in the event a PIK election is made. Euramax may make a PIK election for up to 6 quarters during the term of the Senior Unsecured Loan Facility. The interest rate on outstanding borrowings under the Senior Unsecured Loan Facility at September 28, 2012 was 12.25% as we have not made a PIK election.

The Senior Unsecured Loan Facility may not be voluntarily prepaid before March 18, 2013. Thereafter, and assuming that the term of the loan is set by the Company to be 5 1/2 years or less, Euramax may prepay outstanding amounts under the Senior Unsecured Loan Facility, in whole or in part, at the prices (expressed as a percentage of the loans) set forth below:



Prepayment Date	Percentage
On or after the second anniversary of the closing but prior to the third anniversary thereof	103%
On or after the third anniversary of the closing but prior to the fourth anniversary thereof	102%
On or after the fourth anniversary of the closing	100%

Additionally, at any time before March 18, 2013, Euramax may on one or more occasions prepay up to 35% of the aggregate principal amount of the loans outstanding on the closing date at 112.25%, plus accrued and unpaid interest. Upon a change of control, Euramax may be required to repay all or a portion of the Senior Unsecured Loan Facility at a price equal to 101% of the principal amount plus accrued and unpaid interest. All obligations under the Senior Unsecured Loan Facility are unconditionally guaranteed by, Euramax Holdings and substantially all of our existing and future direct and indirect wholly‑owned domestic material restricted subsidiaries subject to certain exceptions.

The Senior Unsecured Loan Facility contains restrictive covenants that limit, among other things, the ability of Euramax and certain of its subsidiaries to incur additional indebtedness, pay dividends and make certain distributions, make other restricted payments, make investments, incur liens, consolidate, merge, sell or otherwise dispose of all or substantially all of our assets and enter into certain transactions with affiliates, in each case, subject to exclusions, and other customary covenants.

ABL Credit Facility

On March 18, 2011, Euramax Holdings, Euramax, and certain of our domestic subsidiaries as borrowers, and certain of our domestic subsidiaries as guarantors, entered into the Amended and Restated Senior Secured Revolving Credit and Guaranty Agreement, which we refer to as the ABL Credit Facility, with various lenders, Regions Bank, as Collateral and Administrative Agent, Wells Fargo Capital Finance, LLC, as Co-Collateral Agent, and Regions Business Capital, as Sole Lead Arranger and Bookrunner. The ABL Credit Facility provides for revolving credit financing of up to $70 million, subject to a borrowing base. The ABL Credit Facility matures on September 18, 2015.

Borrowings under the ABL Credit Facility bear interest at a rate per annum equal to either (a) LIBOR plus an applicable margin or (b) a base rate determined by reference to the highest of (1) the prime commercial lending rate published by Regions Bank as its “prime rate” for commercial loans, (2) the federal funds effective rate plus 0.50% and (3) the one-month LIBOR plus 1.00%, plus an applicable margin. The applicable margin is dependent upon the type of borrowings Euramax has made under the ABL Credit Facility. At September 28, 2012, the applicable margins were 2.50% and 1.50% for LIBOR and Base Rate borrowings, respectively. The applicable margins are subject to the Company's corporate credit rating as determined from time to time by Standard and Poor’s and Moody’s Investors Service and range from 2.00% to 2.75% for LIBOR borrowings and 1.00% to 1.75% for Base Rate borrowings. The ABL Credit Facility requires Euramax to pay a commitment fee ranging from 0.375% to 0.5%, based on the unutilized commitments. Euramax is also required to pay customary letter of credit fees, including, without limitation, a letter of credit fee equal to the applicable margin on revolving credit LIBOR loans and fronting fees.

All obligations under the ABL Credit Facility are unconditionally guaranteed by Euramax Holdings and substantially all of our existing and future direct and indirect, wholly-owned domestic restricted subsidiaries which are not borrowers. All obligations under the ABL Credit Facility and the guarantees of those obligations are secured, subject to certain exceptions, by a first‑priority security interest in Euramax’s and the guarantors’ inventory and accounts receivable and related assets, which we refer to as the ABL Collateral, and a junior‑priority security interest in (i) substantially all of Euramax’s and the guarantors’ assets (other than inventory and accounts receivable and related assets, which assets secure our ABL Credit Facility on a first priority basis) and (ii) all of Euramax’s capital stock and the capital stock of each material domestic restricted subsidiary owned by Euramax or a guarantor and 65% of the voting capital stock and 100% of any non-voting capital stock of foreign restricted subsidiaries directly owned by Euramax or a guarantor, which we refer to collectively as the Notes Collateral. The security interests are granted in accordance with the Amended and Restated Pledge and Security Agreement dated March 18, 2011, by and among us, the other guarantors party thereto and Regions Bank as Agent.

The ABL Credit Facility contains affirmative and negative covenants customary for this type of financing, including, but not limited to financial covenants requiring Euramax to meet a minimum consolidated fixed charge coverage ratio of at least 1.15 to 1.00 when excess availability is less than 15% of the lesser of the aggregate amount of commitments outstanding at such time and the borrowing base. As of September 28, 2012, excess availability exceeded 15% of the borrowing base, and therefore, Euramax was not required to meet the minimum consolidated fixed charge coverage ratio. Additionally, restrictive covenants limit the ability of Euramax Holdings, Inc. and certain of our subsidiaries to incur liens, incur, assume or permit to exist additional indebtedness, guarantees and other contingent obligations, consolidate, merge or sell all or substantially all of their assets, pay dividends or make other distributions, make certain loans and investments, amend or otherwise alter the terms of documents related to certain of their indebtedness, enter into transactions with affiliates and prepay certain indebtedness, in each case, subject to exclusions, and other customary covenants.

Dutch Revolving Credit Facility

In February 2012, our wholly-owned subsidiary in the Netherlands, Euramax Coated Products, BV, entered into the Dutch Revolving Credit Facility, with Rabobank Roermond (Rabobank). The Dutch Revolving Credit Facility provides revolving credit financing of up to EUR 15 million and matures on April 1, 2016. Borrowings under the Dutch Revolving Credit Facility bear interest at a rate per annum which is the aggregate of the average one month Euribor rate over a calendar month plus a margin of 2% and requires payment of a Credit Fee of 0.35% per annum on the nominal amount of the credit facility. All obligations under the Dutch Revolver are secured by a mortgage on the real estate of Euramax Coated Products, BV, a pledge on present and future machinery and present and future accounts receivable balances of Euramax Coated Products, BV. There were no outstanding borrowings under the Dutch Revolving Credit Facility as of September 28, 2012.

The Dutch Revolving Credit Facility contains financial and non-financial covenants customary for this type of financing. Financial Covenants include, but are not limited to a minimum annual EBITDA target and a minimum requirement for risk-bearing capital, for Euramax Coated Products, BV both measured at the Company's fiscal year-end. The Dutch Revolving Credit Facility also contains a clause limiting further indebtedness.

The First Lien Credit Facility

Our amended and restated first lien credit agreement (the “First Lien Credit Facility”) consisted of $525.3 million in term loans in the form of the Cash Pay Loan and the PIK Loan. The Cash Pay Loan and PIK Loan each included (i) a U.S. dollar term loan facility (the “U.S. Dollar Term Loan Facility”) and (ii) Euro and British pound sterling term loan facilities (together the “European Term Loan Facility”). Our subsidiaries Euramax International, Inc. and Euramax International Holdings B.V. were the borrowers (collectively, the “U.S. Borrowers”) under the U.S. Dollar Term Loan Facility. Our subsidiaries Euramax Holdings Limited, Euramax Europe B.V. and Euramax Netherlands B.V. were the borrowers (collectively, the “European Borrowers”) under the European Term Loan Facility. Outstanding amounts under the First Lien Credit Facility totaling approximately $514.7 million million were repaid in the first quarter of 2011 with the proceeds of our notes and Senior Unsecured Credit Facility.

Covenant Ratios Contained in the Indenture Governing the Exchange Notes, the ABL Credit Facility and the Senior Unsecured Loan Facility.

The indenture governing the exchange notes and the Senior Unsecured Loan Facility contain two material covenants which utilize financial ratios. These covenants do not require Euramax to maintain specified ratio levels at all times or at regular intervals. However, if Euramax elected to incur additional indebtedness under the ratio test without having availability under other debt baskets, or make restricted payments under the restricted payment covenant without having availability under our restricted payment baskets, non-compliance with these covenants could result in an event of default under the indenture and, under certain circumstances, a requirement to immediately repay all amounts outstanding under the Notes and could trigger a cross-default under our senior secured credit facilities or other indebtedness we may incur in the future. First, Euramax is permitted to incur indebtedness under the indenture and the Senior Unsecured Loan Facility if the ratio of Consolidated Cash Flow to Fixed Charges on a pro forma basis (referred to in the indenture and the Senior Unsecured Loan Facility as the "Fixed Charge Coverage Ratio") is greater than 2:1 or, if the ratio is less, only if the indebtedness falls into specified debt baskets, including, for example, a credit agreement debt basket, an existing debt basket, a capital lease and purchase money debt basket, an intercompany debt basket, a permitted guarantee debt basket, a hedging debt basket, a receivables transaction debt basket and a general debt basket. In addition, under the indenture and Senior Unsecured Loan Facility, Euramax is permitted to incur secured debt only if the ratio of Consolidated Secured Indebtedness to Consolidated Cash Flow on a pro forma basis (referred to in the indenture and the Senior Unsecured Loan Facility as the "Secured Debt Ratio") is equal to or less than 3.75:1.00. Second, the restricted payment covenant provides that Euramax may declare certain dividends, or repurchase equity securities, in certain circumstances only if the Fixed Charge Coverage Ratio is greater than 2:1. In addition, under the ABL Credit Facility, Euramax is required to meet a minimum consolidated fixed charge coverage ratio of at least 1.15:1.00 when excess availability is less than 15% of the lesser of the aggregate amount of commitments outstanding at such time and the borrowing base.

The Fixed Charge Coverage Ratio under the Indenture and the Secured Debt Ratio under the Indenture only limit the ability of Euramax to incur additional indebtedness. Euramax has not incurred any additional indebtedness or made any restricted payments pursuant to the provisions in the indenture and the Senior Unsecured Loan Facility that rely on such ratios. The provisions of the ABL Credit Facility, only require Euramax to meet the minimum Fixed Charge Coverage Ratio under the ABL Credit Facility when excess availability is less than 15%. As of September 28, 2012, because excess availability under the ABL Credit Facility exceeded 15% of the borrowing base, Euramax International was not required to meet the minimum consolidated fixed charge coverage ratio under the ABL Credit Facility. The Company does not expect excess availability to fall below 15% during the next twelve months.

Cash Flows

The following table summarizes our cash flows for the nine months ended September 28, 2012 and September 30, 2011:



	Nine months ended
(Amounts in thousands)	September 28, 2012			September 30, 2011
Net cash (used in) provided by operating activities	$	(4,625	)	$	1,625
Net cash used in investing activities	(9,743		)	(8,302		)
Net cash provided by (used in) financing activities	10,521			(2,565		)
Effect of exchange rate changes on cash	(690		)	927
Net decrease in cash and cash equivalents	$	(4,537	)	$	(8,315	)

Nine months ended September 28, 2012 Compared to the Nine months ended September 30, 2011.

Operating Activities. Cash used in operating activities in the first nine months of 2012 was approximately $4.6 million compared to cash provided by operating activities of $1.6 million for the first nine months of 2011, a decrease in cash flow of $6.2 million. Cash used in operating activities during the first nine months of 2012 was primarily related to interest payments on our long term debt facilities totaling $30.1 million. In the first nine months of 2011, interest payments totaled approximately $17.8 million. This increase is related to the timing of the first interest payment on our Senior Secured Notes which occurred during the second quarter of 2012. Increases in working capital in the first nine months of 2012 are consistent with the seasonality of our business to support increases in working capital necessary to support net sales growth.

Investing Activities. Cash used in investing activities in the first nine months of 2012 was $9.7 million. The purchase of Cleveland Tubing, Inc, net of cash for $6.4 million and capital expenditures of $4.6 million were offset by asset sales of approximately $1.3 million in the first nine months of 2012.

Cash used in investing activities in the first nine months of 2011 was $8.3 million. Capital expenditures of $8.4 million in the first nine months of 2011 were offset by $0.1 million of proceeds from the sale of assets.

Financing Activities. Net cash provided by financing activities during the first nine months of 2012 was $10.5 million and consisted primarily of net borrowings on the ABL Credit Facility.

Cash used in financing activities during the first nine months of 2011 was $2.6 million. Net borrowings under the ABL Credit Facility of $25.3 million and borrowings from the issuance of the Notes during the first nine months of 2011 totaling $375.0 million were offset by cash payments of $412.0 million to settle outstanding borrowings under the First Lien Credit Facility of $514.7 million. The remaining $102.7 million in outstanding loans under the First Lien Credit Facility were exchanged by various lenders along with cash of $19.8 million for $125.0 million aggregate principal amount of indebtedness under the Senior Unsecured Loan Facility. Payments of debt issuance costs totaled $10.6 million.

Capital Expenditures

Our capital expenditures for the first nine months of 2012 and the first nine months of 2011 were $4.6 million and $8.4 million, respectively. Capital expenditures in the first nine months of 2011 included approximately $1.6 million related to the implementation of our ERP system in the United States. There were no expenditures related to our ERP system in the first nine months of 2012. The balance of capital expenditures in each period relates primarily to purchases and upgrades of coil coating, fabricating, transportation and material moving and handling equipment.

Seasonality; Inflation

Our sales have historically been seasonal, with the second and third quarters typically accounting for our highest sale volumes. First and fourth quarter sale volumes are generally lower primarily due to reduced repair and remodel activity and reduced activity in the building and construction industry as a result of colder and more inclement weather in our geographic end markets, as well as customer plant shutdowns in the RV and automotive industries during holidays and model changeovers.

Our cost of goods sold is subject to inflationary pressures and price fluctuations of the raw materials we use, particularly the cost of aluminum and steel. In addition, we are party to certain leases that contain escalator clauses contingent on increases based on changes in the Consumer Price Index. We believe that inflation and/or deflation had a minimal impact on our overall operations during the nine months ended September 28, 2012 and September 30, 2011.

Working Capital Management

Working capital increased $2.0 million, or 2.3%, to $92.4 million as of September 28, 2012 from $90.4 million as of December 30, 2011. The increase in working capital is primarily attributable to seasonal increases in accounts receivable and inventory, offset by increases in accounts payable. We historically experience an increase in inventory and accounts receivable during the first half of the year as many customers in our markets increase purchases in the spring and gradually decline throughout the second half of the year.

Accounts receivable of $103.1 million as of September 28, 2012 increased $19.9 million, or 23.9%, from $83.2 million as of December 30, 2011. As of September 28, 2012, days sales outstanding in accounts receivable were 42.8 days, compared to 34.5 days as of December 30, 2011. The primary reason for the increase in accounts receivable was a 13.2% increase in net sales for the two months ended September 28, 2012 compared to the two months ended December 30, 2011. The majority of outstanding receivables are generated from net sales in the preceding two months.

Inventories of $100.8 million as of September 28, 2012 increased $17.4 million, or 20.9%, from $83.4 million as of December 30, 2011, primarily as a result of seasonal increases in demand. As of September 28, 2012, days sales in inventories were 50.2 days, compared to 40.0 days as of December 30, 2011, which reflects higher inventory levels necessary to support higher sales activity.

Accounts payable of $81.1 million as of September 28, 2012 increased $26.8 million, or 49.4%, from $54.3 million as of December 30, 2011. Higher accounts payable balances reflect increasing inventory levels throughout the year to support higher demand in peak seasons.

Critical Accounting Policies

We prepare our consolidated financial statements in accordance with U.S. GAAP. In order to apply these principles, management must make judgments, assumptions and estimates based on the best available information at the time. Actual results may differ based on the accuracy of the information utilized and subsequent events. Our critical accounting policies, which are described below, could materially affect the amounts recorded in our financial statements. Management believes that the following policies are critical because they involve significant judgment, assumptions and estimates.

Allowance for Doubtful Accounts, Inventory Realizability and Obsolescence and Warranty Reserves

We record trade accounts receivable at net realizable value. This value includes an allowance for doubtful accounts based on historical experience, current economic conditions and an evaluation of the relevant customer’s credit worthiness. We charge off accounts receivable against the allowance for doubtful accounts when it is probable that the receivable will not be recovered.

Our inventories are stated at the lower of cost or market, with cost determined under the first-in, first-out (FIFO) method. Cost of manufactured inventory includes direct labor and manufacturing overhead. Market with respect to all inventories is replacement cost subject to a floor for an approximate normal profit margin on disposition.

We provide warranties on certain products. The warranty periods differ depending on the product, but generally range from one year to limited lifetime warranties. We provide accruals for warranties based on historical experience and expectations of future occurrences.

We make estimates and assumptions related to establishing reserves and allowances for doubtful accounts, for inventory obsolescence and warranty costs. Ranges of estimates are developed based upon historical experience, specifically identified conditions and management expectations for the future occurrence of certain events. In the event that actual results differ from these estimates or we adjust these estimates in future periods, adjustments to the amounts recorded could materially impact our financial position and results of operations. Historically, our experience has not been materially different than our estimates. There have been no significant changes in the assumptions used to develop our estimates in establishing reserves and allowances for doubtful accounts, inventory obsolescence and warranty costs from fiscal year 2011 and no significant changes are anticipated for fiscal year 2012.

Property, Plant, and Equipment

We record property, plant, and equipment at cost. Cost of property, plant, and equipment acquired in a business combination is recorded at fair value based on the age and current replacement cost for similar assets on the date of the acquisition. We generally expense repair and maintenance costs unless they extend the useful lives of assets. Depreciation of property, plant, and equipment is computed principally on the straight-line method over the estimated useful lives of the assets ranging from 3 to 37 years for equipment and from 17 to 25 years for buildings. Gains and losses related to the disposition of property, plant, and equipment are charged to other income or expense when incurred. Also, when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, management assesses whether there has been an impairment in the value of the asset by comparing the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition to the carrying amount of the asset. If the expected future cash flows are less than the carrying amount of the asset, an impairment loss is recognized based on the excess of the asset’s carrying value over its fair value. Fair value is estimated based on discounted cash flows, independent appraisals or comparable market transactions.

Goodwill and Intangible Assets

Our goodwill represents the excess of the purchase price we pay in a business combination over the fair value of net tangible and identifiable intangible assets acquired. We test our goodwill for impairment annually on the first day of our fourth quarter, or more frequently, if events or circumstances indicate the potential for impairment. For impairment testing purposes, we have identified five reporting units at the operating segment level, primarily based upon the nature of discrete businesses comprising our operations.

We have recognized intangible assets, apart from goodwill, acquired in business combinations and resulting from certain shareholder transactions, at fair value on the date of the transactions. Indefinite lived intangible assets are not amortized, but are tested for impairment annually on the first day of our fourth quarter, or more frequently if events or circumstances indicate the potential for impairment. We amortize our intangible assets with finite lives over their useful lives based upon the pattern in which the economic benefits of the intangible assets are recognized. If that pattern cannot be determined, a straight-line amortization method is used. Intangible assets with finite lives are tested for impairment when there are indications that the carrying amount of an intangible asset may not be recoverable. We utilize an income approach to estimate the fair value of our definite and indefinite lived intangible assets to test for impairment.

Income Taxes

We account for income taxes using the asset and liability method of accounting. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates applicable for future years to differences between financial statement and tax bases of existing assets and liabilities. We establish valuation allowances if we believe it is more likely than not that some or all of the deferred tax assets will not be realized. We do not recognize a tax benefit unless we conclude that it is more likely than not that the benefit will be sustained on audit by the taxing authority based solely on the technical merits of the associated tax position. If the recognition threshold is met a tax benefit is recognized and measured as the largest amount of the tax benefit that in our judgment is greater than 50 percent likely to be realized. Interest and penalties related to unrecognized tax positions are recorded in provision (benefit) for income taxes in our consolidated financial statements.

Revenue Recognition

We recognize revenue when persuasive evidence of an agreement exists, delivery has occurred, our price to the buyer is fixed and determinable and collectibility is reasonably assured. Delivery is not considered to have occurred until the customer takes title and assumes the risks and rewards of ownership.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements as of September 28, 2012.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in currency exchange rates (primarily the euro and British pound sterling), interest rates and commodity prices (primarily aluminum and steel).

Foreign Currency Exchange Risk

Approximately 32.0% of our net sales for the nine months ended September 28, 2012 originated in Europe. Although our sales outside the United States are subject to exchange rate fluctuations, we do not use derivatives to manage our foreign currency exchange risks resulting from foreign sales. Changes in foreign exchange rates affect interest expense recorded in relation to our foreign currency‑denominated debt instruments.

Interest Rate Risk

We have market risk related to changing interest rates. Although we historically entered into interest rate agreements to reduce the impact of interest rate fluctuations on our interest expense, we terminated all of our outstanding interest rate swaps in connection with the Restructuring. We may enter into additional interest rate swaps in the future to manage our interest rate risk.

Commodity Price Risk

From time to time we enter into contracts for the purchase of aluminum and steel at market values in an attempt to assure a margin on specific customer orders. We may also choose to commit to purchase a specific quantity of aluminum over a specified time period at a fixed price, exposing us to the difference between the fixed price and the market price of aluminum during that time period. We do not use hedges to manage our long-term risks relating to market prices of steel and aluminum raw materials because we are generally able to pass on changes in market prices to customers.

Item 4. Controls and Procedures

The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (its principal executive officer) and the Chief Financial Officer (its principal financial officer), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of September 28, 2012. Based upon that evaluation, our management, including our Chief Executive Officer and our Chief Financial Officer, concluded that as of September 28, 2012 the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d- 15(e) of the Securities Exchange Act of 1934, as amended) are effective. In addition, there were no changes in our internal control over financial reporting during the first nine months of 2012 that have materially affected, or are reasonably likely to affect our internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

From time to time, we are party to various legal proceedings arising in the ordinary course of business. The Company is not currently a party to any legal proceeding the result of which it believes could have a material adverse impact upon its business, financial position or results of operations.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 30, 2011, which could materially affect our business, financial condition or future results. The risks described in this report and in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. There have been no material changes in the risk factors discussed in our Annual Report on Form 10-K for the year ended December 30, 2011.

Item 6. Exhibits

EXHIBIT INDEX




Number	Exhibit Title
31.1	Rule 13a-14(a)/15d-14(a) Certification of Euramax Holdings, Inc.'s Chief Executive Officer.
31.2	Rule 13a-14(a)/15d-14(a) Certification of Euramax Holding's Inc.’s Chief Financial Officer.
32.1	Certification of the CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase

SIGNATURE

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.





		EURAMAX HOLDINGS, INC.


Date: November 9, 2012		/s/ R. Scott Vansant
		R. Scott Vansant
		Vice President and Chief Financial Officer