Vinyl has never gone out of style at Associated Materials (AM). The company makes and distributes vinyl, aluminum, and steel exterior building products, as well as siding, windows, fencing, decking, and railing. Products are marketed under the brand names Alpine, Alside, Gentek, Preservation, Revere, and UltraGuard. Its products are also sold through about 275 independent distributors in North America under brands such as Alside, Revere, and Gentek. The company's customer base includes contractors, remodelers, and architects. Private equity firm Hellman & Friedman owns a majority stake of the company.
AM operates about a dozen manufacturing facilities and around 120 supply centers in the US and Canada. The company's vinyl windows manufacturing facilities are located in Cuyahoga Falls, Ohio; Bothell, Washington; Cedar Rapids, Iowa; Kinston, North Carolina; Yuma, Arizona, and London, Ontario. Its vinyl extrusion sites are located in West Salem, Ohio; Ennis, Texas; and Burlington, Ontario. The company's two metal manufacturing locals are in Woodbridge, New Jersey, and Pointe Claire, Quebec.
In 2011 revenues from the US accounted for some $910 million in 2011 and Canada represented around $250 million in 2011.
Overall, the company's net sales in 2011 accounted for some $1.1 billion; while in 2010 net sales represented around $1.2 billion. The company sells its products primarily through its supply centers, which accounted for some 75% of net sales in 2011. When it came to the marketplace, the residential repair and remodeling markets accounted for some 70% of net sales and the residential new construction market the remaining 30% of net sales in 2011.
The company's product line includes vinyl windows (30% of net sales), third-party manufactured products (29% of net sales), vinyl siding (19% of net sales), and metal products (15% of net sales) in 2011.
In 2011 the company reported around $265 million in gross profit, about 23% of net sales. The company's product mix, especially from its third-party manufactured products segment affected gross margins. Other factors included higher material and freight costs, lower production volumes, and higher commodity prices. Increased production costs in the manufacturing of its windows strained gross margins in 2011.
As part of the company's strategy, it is focused on increasing sales through current supply centers, expanding sales from independent specialty distributor and third-party manufactured products' customers, developing new products, and reducing operational costs. – less