1. HIGH YIELD
RESEARCH
REPORT
MILLER TABAK ROBERTS SECURITIES, LLC
________________________________________________________________________
Ply Gem Holdings, Inc. (PLYGEM)
Coupon Description Maturity Mdy's/S&P Amt O/S Bond Price Curr. Yield Spread YTW
9.0% Senior Subordinated Notes 2/15/2012 B3/B- $ 360MM 90.50 9.95% 628 11.31%
CUSIP # 729416AG2. Moody's and S&P's outlooks are negative.
June 14, 2006
Ronald A. Rich
(212) 692-5185
rrich@mtrdirect.com
OPINION
We initiate coverage of Ply Gem with a BUY recommendation on the 9.0% Senior
Subordinated Notes. Faced with an increasingly challenged new home construction market
and a volatile raw material cost environment, Ply Gem is positioned to mitigate negative macro
trends. We project positive free cash flow generation in the coming years, despite assumptions
that incorporate a slowdown in certain of the company’s business lines. While investor
concern regarding the residential construction sector may cause further volatility in the bonds
and a widening in spreads, we expect the Notes to outperform comparably rated sector peers in
the medium-term. Based on our pricing analysis of the bonds of Ply Gem’s peer group, as
well as our view to company fundamentals, we find the 9.0% Senior Subordinated Notes
currently priced at a 230bp discount to comparable residential construction-related securities.
SUMMARY
• While Ply Gem has significant exposure to a slowing new home construction market (68% of
net sales), we believe that it is positioned to partially offset this macro trend with new siding
business at 84 Lumber; increased Window and Door sales in Alberta, Canada and the
southern U.S. (the latter through its February 2006 acquisition of AWC Holding); and cost-
side synergies that should be achieved through enhanced purchasing savings and broadened
vertical integration.
• With the balance of Ply Gem’s business targeted to the less volatile repair and remodel
market, we project a rebound in repair/remodel Windows and Doors unit volumes in 2007,
due to improved service levels following product re-launches.
• Ply Gem’s gross margins have material exposure to raw materials that include PVC,
aluminum, glass, and fuel used in transportation. While the company has successfully passed
through higher resin costs, it is still working to recover higher aluminum costs.
• With pro forma, for its latest acquisition, LTM adjusted EBITDA at $135.5 million for the
period ending March 31, 2006, we project adjusted EBITDA to be slightly down from the
pro forma figure through 2006 and to increase 7.5% year-over-year in 2007. We anticipate
that liquidity will improve to $118.0 million and $133.2 million in the fourth quarters of
2006 and 2007, respectively, from $92.2 million at the end of 2005.
• Future acquisitions and possible dividend recapitalizations place the company’s credit quality
at risk, though the company’s near-term acquisition appetite may currently be tempered
given the slowing housing market, the ongoing integration of recent acquisitions and the
planned retirement of its CEO, Lee Meyer.
331 MADISON AVENUE NEW YORK, NEW YORK 10017
(212) 867-7959 FAX (212) 867-6492 (800) 452-4528 (888) HI-YIELD
www.MTRdirect.com
Please refer to the last page of this report for important disclosures

2. BUSINESS OVERVIEW
Ply Gem Holdings, Inc. (“Ply Gem” or “Company”) is a leading manufacturer of residential
exterior building products in the U.S. and Alberta, Canada. The Company produces a full line of
vinyl siding and skirting, aluminum trim coil, composite fencing, railing and decking, vinyl,
wood and aluminum windows, vinyl, steel and fiberglass doors, as well as vinyl and aluminum
soffit and siding accessories. Ply Gem sells these products into both the new home construction
and home repair and remodeling markets; after giving effect to Ply Gem’s February 2006
acquisition of AWC Holding, approximately 68% of pro forma net sales are derived from new
home construction, as compared with the Company’s fiscal 2003 concentration of 60%. Ply
Gem organizes its financial reporting across two business segments: (1) Siding, Fencing, Decking
and Railing (“SFDR”), which comprises 40% of pro forma fiscal 2005 net sales, and (2)
Windows and Doors, which accounts for the balance. Net sales for the twelve months ended
March 31, 2006 were $883.4 million, with EBITDA of $121.3 million. Pro forma (for its latest
acquisition) LTM net sales were approximately $1.0 billion, with pro forma LTM EBITDA of
$135.5 million.
ACQUISITIONS
Owned by Caxton-Iseman Capital, Ply Gem Industries has served as a platform for a
portfolio build-up in the building materials space, and we anticipate that add-on
acquisitions will continue to be core to Ply Gem’s growth strategy. With fiscal 2005 U.S.
window and door sales down in Ply Gem’s legacy divisions (pre-acquisition of MWM Holding
and AWC Holding, herein referred to as “Ply Gem Industries”) as a result of service issues
relating to product re-launches, much of the Company’s recent growth and profitability in the
segment has stemmed from its acquisitions of MWM Holding and AWC Holding. The
following section provides an overview of the three business groupings that comprise Ply Gem
Holdings, each differentiated by its product mix, geographic focus, customer base and
distribution channels (see Figure 1).
Ply Gem Industries
Formerly known as the Windows, Doors and Siding division of Nortek, Ply Gem Industries was
acquired on February 12, 2004 by an affiliate of Caxton-Iseman Capital, Inc. for $570.0 million,
or an 8.5x multiple to fiscal 2003 EBITDA of $67.1 million. Principal products include vinyl
siding, windows, patio doors, fencing, railing, decking and accessories, which are marketed
under the Variform, Great Lakes, Napco, CWD and Kroy brand names. With fiscal 2005 net
sales of $546.7 million, the legacy Ply Gem business represents 56% of Ply Gem Holdings’ total
business following its latest acquisition.
Geographic Footprint. The SFDR product lines accounted for 72% of Ply Gem Industries’ fiscal
2005 net sales. Manufactured at six facilities throughout the Northeast, Midwest and South,
these products are readily transported and sold across all 50 states; over two-thirds of Ply Gem’s
SFDR products are sold to the home repair and remodel markets. The windows and doors
products are distributed in regional proximity to manufacturing facilities located in Pennsylvania,
Ohio and Calgary, Canada, with approximately 37% ultimately sold into new home construction,
primarily in Canada.
2

3. Figure 1
PLY GEM HOLDINGS
Business Structure
Distribution Manufacturing 2005
Corporate Entity Operating Segments Brands Regions Served Channels Locations Competition PF Net Sales
(1) Missouri, West
Specialty Owens Corning,
Georgia-Pacific, Virginia,
Variform, Patriot Siding and distributors (1-step), Alcoa,
Napco, Variform, Nationwide Tennessee,
Manufacturing Accessories wholesale distributors CertainTeed,
Durabuilt (Lowe's) Pennsylvania
(2-step) Alside
(metals)
U.S. Fence, $ 390.9MM
Homeland,
Fabricators,
Kroy, Assurance, Westech,
Kroy Building Fencing, Railing, distributors, retail Nebraska, North
Georgia-Pacific, Nationwide Bufftech,
Products Decking home centers, Carolina
Fusion Fence (Lowe's) Outdoor
lumberyards
Technologies,
Royal
(2)
Great Lakes Building material
Windows and Doors Great Lakes East North Central Ohio
Window dealers, distributors
$ 97.6MM
Napco Window Building material
Windows and Doors Napco Mid-Atlantic Pennsylvania
Systems dealers, distributors
Builder buying MI Home
CWD Windows and
Windows and Doors CWD Calgary, Canada groups, retail Calgary, Canada Products, $ 58.2MM
Doors
lumberyards Silverline,
Building material Simonton,
Mid-Atlantic, East dealers, large New Jersey, Milgard (Masco),
MW Manufacturers Windows and Doors MW, Patriot, Twinseal South Central, South regional chains, Virginia, Atrium, Alside $ 292.1MM
Atlantic builders, retail home Mississippi
centers
West South Central,
Building material Texas, Georgia,
AWC Holding Windows and Doors Alenco South Atlantic, $ 135.2MM
dealers Arizona
Mountain
Source: Company reports and MTR.
(1) Specialty distributors sell directly to remodeling contractors and builders. Wholesale distributors sell to retail home centers and lumberyards who, in turn, sell to remodeling
contractors, builders and consumers.
(2) Building material dealers typically market directly to homeowners or contractors in connection with repair/remodel while distributors concentrate on local independent retailers.
Customers. With 41% of SFDR products sold to BlueLinx (formerly a distribution arm of
Georgia-Pacific Corporation) under the GP brand, recent acquisitions have helped to reduce Ply
Gem’s exposure to this large customer; the relationship accounted for approximately 16% of pro
forma consolidated 2005 net sales, with another 10% of segment sales made to Lowe’s and
Home Depot (see Figure 2). Management has recently mentioned that it will be leveraging its
strong windows and doors relationship with 84 Lumber to sell more siding, a deal which it
expects to account for tens of millions of dollars in sales. Ply Gem Industries’ windows and
doors products are sold through a diversified customer base of dealers and distributors (dealers
typically market directly to homeowners and contractors). CWD Windows and Doors is the
one division of Ply Gem Industries that is discernibly thriving, growing 19.0% in fiscal
2005. Eighty percent of window and door sales in Canada are made to the new construction
market, which the Canada Mortgage and Housing Corporation expects to remain robust due to
strong demand created by increased oil exploration in Alberta, Canada (see Markets).
3

4. Figure 2
PLY GEM HOLDINGS
Customer Concentration
(a)
Ply Gem '05 Rev Co. Sales Growth Customer Company
Company Business Dollars % PF '05 2003 2004 2005 End-Markets Regions Served 2005 Sales Notes
50% New Home
Focusing on specialty
BlueLinx Distributor $ 158.7MM 16.3% 7.2% 16.0% 9.4% (b) Construction, 15% Nationwide $ 2.1BN
product growth.
Repair/Remodel
Washington, DC and
98% New Home Mid-Atlantic,
Baltimore, MD metro areas
NVR Homebuilder $ 40.3MM 4.1% 17.7% 18.0% 21.9% (c) Construction, 2% South Atlantic, $ 5.2BN
account for 52% of 2005
Mortgage Banking Midwest
homebuilding revenue.
100% New Home Southern and Targets production
Builders FirstSource Distributor $ 34.5MM 3.5% NA 10.3% 14.4% (d) $ 447.5MM
Construction Eastern U.S. homebuilders.
Lowe's Distributor $ 29.3MM 3.0% 18.3% 21.8% 23.6% (e) Repair/Remodel Nationwide $ 43.2BN
Nationwide,
87% New
Stock Building Supply Distributor $ 25.5MM 2.6% 0.0% 30.0% 27.2% (f) operating in 30 $ 2.5BN Subsidiary of Wolseley plc.
Construction
states
Nationwide,
Canada,
Home Depot Distributor $ 9.8MM 1.0% 11.8% 18.6% 10.6% (g) Repair/Remodel $ 81.5BN
Mexico, Puerto
Rico
85% New Home
84 Lumber Distr/Manuf NA NA 20.5% 30.6% 13.3% Nationwide $ 3.9BN
Construction
Source: Company reports and MTR.
(a) Percentages are pro forma of the AWC Holding acquisition.
(b) Sales and growth figures reflect specialty products which include vinyl siding, composite decking, moulding, insulation, roofing, hardwood plywood and engineered lumber. Comprised 39.9% of siding, fencing,
railing, decking segment.
(c) Sales and growth figures reflect homebuilding segment.
(d) Sales and growth figures reflect Windows & Doors product category.
(e) Ply Gem figures have been estimated. Lowe's sales growth reflects its building materials product category.
(f) As reported in the U.S. Building Materials segment of Wolseley plc.
(g) Ply Gem figures have been estimated. Home Depot sales growth reflects its building materials, lumber and millwork product category.
MW Windows
On August 27, 2004, Ply Gem acquired MWM Holding (“MW”) from Investcorp for $320.0
million, at an estimated trailing EBITDA multiple of 8.5x and an estimated post-synergies
EBITDA multiple of 7.2x. MW is a leading low-cost, vertically-integrated manufacturer of
vinyl, vinyl clad-wood, wood and composite windows that also manufactures vinyl patio doors
and marketing steel and fiberglass exterior doors. With fiscal 2005 net sales of $292.1 million
and EBITDA of $47.6 million, MW was a very significant addition to Ply Gem’s Windows and
Doors segment.
Synergies. The acquisition of MW in 2004 provided Ply Gem with the opportunity to leverage a
number of sales and cost-side synergies; total cost-side synergies were estimated at $7.0 million
at the time of acquisition. On the cost-side, the purchase of MW has allowed Ply Gem to
improve raw material purchasing power (PVC, wood, aluminum and glass), source PVC from
the siding business for the manufacture of vinyl lineals (used in the construction of the vinyl
window frame) at MW, and leverage the vertical integration of MW’s manufacturing capabilities
to produce vinyl lineals for the repair/remodel window business (traditionally outsourced). With
$2.0 million of cost-side savings achieved in 2005, management expects to phase-in additional
savings of $5.0 million beginning in the third quarter of 2006, which are anticipated to be fully
realized by the first quarter of 2007. As for sales-side synergies, the acquisition presents the
opportunity to exploit economies of scope across markets and customers.
Geographic Footprint. With a network of vertically-integrated production and distribution
facilities located in New Jersey, North Carolina, Virginia and Mississippi, the acquisition of MW
expanded Ply Gem’s footprint to include the Mid-Atlantic and South Atlantic regions. Window
distribution is closely tied to proximity to manufacturing facilities, given on-time delivery
requirements and the potential for glass breakage. As discussed below in the Markets section,
new home construction remains near historical highs in the Northeast, though down significantly
in the Southeast; net sales orders of the major home builders have declined materially in both
regions.
4

5. Customers. MW’s product lines are sold for use in new home construction and home repair and
remodeling through a diverse customer base that includes independent building material dealers,
large regional chains, builder direct/OEMs and retail homecenters. MW’s emphasis on new
home construction (80% of net sales) and its alliance with strong customers has provided Ply
Gem with a near-term beneficial sales allocation-shift from some of its softer repair/remodel
markets. The subsidiary’s focus on windows and doors has also reduced Ply Gem’s dependence
on siding sales, which have experienced a volume decline at the Company and industry levels.
With 800 customers across four distribution channels, three customers represented 34.3% of
MW’s fiscal 2005 net sales; in fiscal 2005, NVR, Builders FirstSource and Stock Building
Supply accounted for 13.8%, 11.8% and 8.7% of MW net sales, respectively (see Figure 2). As
referenced above, 84 Lumber is also a strong customer of MW’s, and that relationship is
currently being expanded to include vinyl siding.
Alenco
Ply Gem acquired AWC Holding Company (“Alenco”) on February 24, 2006 from Linsalata
Capital for $120.0 million. With an estimated pre-synergies fiscal 2005 EBITDA of $16.3
million and post-synergies fiscal 2005 EBITDA of $20.3 million, we calculate acquisition
EBITDA multiples of 7.4x and 5.9x, respectively. Headquartered in Bryan, TX, Alenco is a
manufacturer of residential aluminum and vinyl windows and doors, largely used in single and
multi-family new construction. Alenco’s sales for the twelve months ended March 31, 2006
were $139.7 million, with aluminum products accounting for 66% of net sales.
Synergies. Management estimates that the Alenco acquisition will initially produce $4.0 million
of cost-side synergies, primarily through purchasing savings on PVC, aluminum and insurance;
MW will supply Alenco with vinyl lineals, while Alenco will provide MW with aluminum
extrusions. The PVC-based synergies are not expected to be achieved until fiscal 2007, due to
the retooling that must occur at MW’s manufacturing facilities. Ply Gem anticipates that the
Alenco acquisition’s sale-side synergies will ultimately exceed those of the MW acquisition.
Some of MW’s larger customers are working to consolidate their supplier base, and the addition
of Alenco will allow Ply Gem to grow its footprint along with that of its customers.
Geographic Footprint. Alenco’s sales are concentrated in the South region of the U.S. With
manufacturing facilities historically operating in Georgia and Texas, Alenco has expanded its
presence into the Southwest with the opening of a new 150,000 square foot facility in Phoenix,
AZ. Management has discussed expansion into Nevada, further leveraging the new facility, as
well as into Florida where the aluminum window is particularly competitive.
Customers. Alenco’s customer base is comprised primarily of independent building materials
distributors located in the Southeastern and Southwestern U.S. According to The Freedonia
Group, an industry research company, the southeastern U.S. and the Gulf Coast comprise 41% of
the total U.S. window and door market, driven by population growth rates above the national
average and growing second home ownership.
MARKETS
While management’s success in driving growth, business integration and corporate synergies is
extremely relevant to Ply Gem’s story, its near-term future is also dependent upon exogenous
5

6. factors that affect the Company’s product, raw material and geographic markets. The following
section will discuss those markets that directly impact Ply Gem and their corresponding drivers.
Windows and Doors
Pro forma for the Alenco acquisition, Ply Gem’s Windows and Doors segment comprised 61%
of 2005 net sales, up from 30% in 2003. While Ply Gem’s product line has historically
concentrated on vinyl windows and doors, the purchase of Alenco has increased the
Company’s focus on aluminum products, which comprised an estimated $90 million of
Alenco’s 2005 net sales. Domestic window and door demand has grown rapidly over the past
ten years, driven by growth in remodeling and an increasing trend toward larger homes that
require a greater number of windows. The vinyl window’s initial success in the marketplace
came at the expense of aluminum, but it is increasingly taking market share from wood. Vinyl’s
success in the repair/remodel market stems from the manufacturing flexibility required to
produce a wide variety of custom sizes. In 2004, Ducker Research, a market intelligence firm,
estimated that vinyl windows accounted for 35.1% of all windows used in new construction and
52.3% of windows used in the repair and remodel market (see Figures 3,4). The Freedonia
Group has estimated that window demand for the year-ended 2004 was comprised of 47%
vinyl, 41% wood and 10% aluminum, with vinyl window demand growing at a
compounded annual rate of 5.0% between 2002 and 2012. Due primarily to the aluminum
window’s higher transference of cold air, high strength-to-weight ratio and lower price, the
material garners greater market share in warmer climates and coastal areas; Ducker Research
determined that aluminum had a 48% market share of Florida window shipments in 2003, while
vinyl and wood’s market shares were 28% and 23%, respectively. As for future market share
allocation, industry participants expect vinyl to continue to take share from wood and aluminum,
except in regions where aluminum has a competitive advantage.
Figure 3 Figure 4
VINYL WINDOW SHARE OF WINDOW MARKET RESIDENTIAL WINDOW MARKET
(In Millions of Units)
0.355 0.525
32
New Construction
Repair/Remodel
0.52
0.35 30
28
Units
0.515
0.345 26
0.51
24
0.34 0.505 22
2000 2001 2002 2003 2004 2000 2001 2002 2003 2004
Percentage of New Construction Percentage of Repair/Remodel New Construction Repair/Remodel
Source: Ducker Research Co. from National Fenestration Rating Council Source: Ducker Research Co. from National Fenestration Rating Council
Siding
The National Association of Home Builders expects the exterior cladding market as a whole to
be flat through 2006 at 12.0 billion square feet, versus 11.9 billion square feet in 2003. As
shown in Figure 5, exterior cladding in the repair/remodel segment is expected to continue to
grow to 6.5 billion square feet in 2006, while the new construction market is projected to remain
relatively flat at 5.5 billion square feet.
6

7. Figure 5 Figure 6
U.S. AND CANADA EXTERIOR CLADDING U.S. SHIPMENTS OF VINYL SIDING AND SOFFIT*
(In Billions of SF) (In Millions of Squares)
6.6 45
40
Squares (10x10SF)
6.2
Square Feet
35
5.8
30
5.4
25
5 20
2002 2003 2004 2005P 2006P
15
New Construction Repair/Remodel 1991 1993 1995 1997 1999 2001 2003 2005
Source: NAHB from James Hardie Industries * Data reflects only companies reporting shipments to VSI, except 1991 data.
Source: Vinyl Siding Institute from Plastics News
Vinyl siding has grown tremendously over the past twenty years, peaking at an estimated 41.3
million squares (1 square=100 sq.ft. of coverage) in 2004 (see Figure 6). Much of its market
share growth has been rooted in its low installation and maintenance costs. Recently, rising resin
and micro-ingredient costs have driven the price of vinyl siding higher and closer to that of
potential substitutes, such as fiber-cement. Vinyl siding industry unit volumes were down 2.6%
year-over-year in 2005, and some industry participants believe that the category has matured.
We have had a number of conversations with building materials distributors and extrusion
equipment manufacturers, and we believe that Figure 7
fiber-cement siding may very well be taking NATIONAL NEW HOME STARTS
Seasonally Adjusted Annual Rate
market share from vinyl siding.
2,200
Units In Thousands
New Home Construction 2,100
2,000
New home construction currently accounts for 1,900
68% of Ply Gem’s pro forma 2005 net sales. 1,800
While sales in the new home construction 1,700
market are lower margin than those in the
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repair/remodel market, the pursuit of Source: U.S. Department of Commerce
additional new construction business aligns
Ply Gem with large, growing customers that are increasing their footprint and acquiring
market share from smaller competitors; the increased focus on the new construction
market also raises volatility and decreases visibility to future earnings.
Since 1991, housing starts have increased at a compounded annual growth rate of 4.9%. Driven
by low mortgage interest rates, favorable demographics, increasing immigrant demand for starter
homes, and maturing baby boomers seeking second homes, this rate has accelerated to 12.3%
over the past two years; new home starts increased from a seasonally adjusted annual rate of 1.7
million units in the first quarter of 2003 to a peak of 2.13 million units in the first quarter of 2006
(see Figure 7). The Homeownership Alliance predicts that these demand drivers will lead to
1.85 million to 2.17 million new U.S. housing starts per year through 2014. The recent decline
in new home starts has been driven by softening demand that has resulted from rising mortgage
rates.
The regional trends in new home construction are distinct, with new home start data for the first
four months of 2006 mixed: 1) while down from an exceptionally high January, the Northeast is
basically flat at a strong level; 2) the South has declined the most of the four regions, 26.4%
down from its January peak; 3) the Midwest has trended sideways with April data higher than
that of February and March; and 4) the West is basically flat, though down from the fourth
7

8. quarter of 2005. While Ply Gem’s SFDR business has a national presence and greater
representation in the repair/remodel market, the Company’s Windows and Doors business has
gradually shifted to the south and west and into the new construction market. Following the
acquisitions of MW and Alenco, the Company’s regional manufacturing capacity (on a square
foot basis) as a percentage of total manufacturing capacity in the Windows and Doors segment
changed from 42% to 20% in the Midwest, 17% to 46% in the Northeast, and 0% to 16% in the
South. While expansion into the South has provided Ply Gem with access to larger and
faster growing markets, it also exposes the Company to greater volatility and potential
decline in sales.
Figure 8 Figure 9
U.S. REGIONAL NEW HOME STARTS U.S. REGIONAL NEW HOME STARTS
Seasonally Adjusted Annual Rate Seasonally Adjusted Annual Rate
South New Home Starts
220 420 1,100 560
West New Home Starts
Northeast New Home
Midwest New Home
210 400 1,050 540
200 1,000 520
190 380 950
Starts
Starts
500
180 360 900
170 480
340 850
160 800 460
150 320 750 440
140 300 700 420
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Northeast Midwest South West
Source: U.S. Department of Commerce Source: U.S. Department of Commerce
The National Association of Home Builders’ chief economist, David Seiders, currently
expects overall housing starts to decline 6% to 7% in 2006, down from 2.07 million units in
2005. Mr. Seiders has speculated that a lot of the recent build-up of inventory of new single-
family homes represents temporary weather-related factors and is still projecting a “soft landing”
for the single-family market in 2006.
A likely leading indicator of new home starts, net sales orders (the number of new sales
contracts executed with customers, net of cancellations) of the major new homebuilders are
in decline across all markets (see Figure 10). The decrease in net sales orders has been
attributed to an increase in cancellations and has resulted in an increase in housing inventory.
With the supply of new homes rising at a greater rate than demand, many homebuilders are
hopeful that a more favorable supply/demand balance will be reached when inventory generated
by speculators flows through the channel. This sentiment was affirmed by Robert Toll, CEO of
Toll Brothers, during the company’s second quarter fiscal 2006 earnings conference call.
8

9. Figure 10
NET SALES ORDERS
New Homebuilders
(Based on Units)
DR Horton Pulte Lennar Centex KB Beazer Ryland Hovnanian
Latest Quarter Ending 3/31/06 3/31/06 2/28/06 3/31/06 2/28/06 3/31/06 3/31/06 4/30/06
East
Qtr Change, Y/Y - - 12.4% - - - - -
% of Total - - 32.1% - - - - -
Northeast
Qtr Change, Y/Y - -29.2% - - - - -21.5% 3.7%
% of Total - 8.5% - - - - 25.9% 19.2%
Mid-Atlantic
Qtr Change, Y/Y 8.7% - - -5.2% - -7.8% - -
% of Total 8.8% - - 16.8% - 10.7% - -
Midwest
Qtr Change, Y/Y -32.4% -13.1% - -13.5% - -16.5% - -
% of Total 6.1% 12.6% - 19.0% - 12.3% - -
Central
Qtr Change, Y/Y - 6.7% 10.9% - -9.7% 27.6% - -
% of Total - 13.4% 30.1% - 30.3% 7.7% - -
Texas
Qtr Change, Y/Y - - - - - - 2.0% -
% of Total - - - - - - 19.7% -
Southeast
Qtr Change, Y/Y 24.1% -9.2% - -26.7% 0.7% -5.0% -17.0% -17.8%
% of Total 13.7% 30.8% - 17.9% 22.0% 32.5% 29.7% 31.5%
Southwest
Qtr Change, Y/Y 12.8% - - -17.8% -30.3% - - 1.1%
% of Total 39.2% - - 30.0% 25.5% - - 31.2%
West
Qtr Change, Y/Y 7.5% -14.6% -9.9% 12.8% -24.7% -46.3% -44.3% -41.0%
% of Total 32.3% 34.7% 37.8% 16.4% 22.2% 36.8% 24.7% 18.1%
Source: Company reports
Canada. Accounting for 13% of Ply Gem’s windows and doors business, Alberta, Canada
posted 19.0% growth in net sales in 2005. In the midst of soaring oil prices, the region has
become home to an economic boom driven by Figure 11
oil sands exploration. Oil sands in the region are ALBERTA, CANADA NEW HOME STARTS
Seasonally Adjusted Annual Rate
estimated to hold reserves equivalent to as much 50
as 175 billion barrels of oil. The drive to 48
46
In Thousands
increase crude production has led to a shortage 44
42
of workers, which has resulted in rising wages 40
38
and the importation of labor from the eastern 36
34
Canadian provinces and Europe. Income growth 32
03 Q03 Q03 Q03 Q04 Q04 Q04 Q04 Q05 Q05 Q05 Q05 Q06 '06
and population inflow have, in turn, led to a rise 1Q 2 3 4 1 2 3 4 1 2 3 4 1
A
pr
in new home starts, which are projected to Source: Canadian Statistics
increase 10.9% to 45,000 in 2006 from 40,600 in
2005 (see Figure 11). With oil sands production at just over one million barrels a day and
projected to rise to 2.7 million barrels by 2015, and with residential building permits at
record levels, we anticipate that new home starts will remain strong in the region in the
medium-term.
9

10. Repair and Remodel
With volumes down approximately 10% from 2004 levels, sales into the repair/remodel market
account for approximately 30% of Ply Gem’s pro forma 2005 net sales. Strength in the
repair/remodel market is driven by underlying demand and the consumer’s ability to pay for this
demand. During the recent market expansion, demand has been driven by favorable
demographics led by the baby boom generation, an aging housing stock, increased average home
size and low financing rates. While remodeling spending has increased from $153 billion in
1995 to an estimated $275 billion in 2005, it has grown at a slower rate than new construction
spending.
In a recent presentation on the state of the U.S. Figure 12
home improvement industry, the Joint Center for CONSUMER CONFIDENCE
Housing Studies (JCHS) at Harvard University East North Central Region Spread to Entire U.S.
40.0
addressed a number of concerns regarding the
future of the repair/remodel market. Firstly, 30.0
Spread
with regard to rising mortgage interest rates, the 20.0
JCHS points out that less than one-third of all 10.0
home remodeling is financed (though studies by -
the Federal Reserve Board have found that a
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significant share of recent refinancings was used Source: The Conference Board
for home improvements). Secondly, Center data
suggests that high-end income growth has kept pace with home price inflation, allowing recent
homebuyers to continue to afford home improvements. Lastly, as baby boomers age beyond
their prime remodeling years, their consumption is being replaced by Generation X’ers that
possess greater spending power than their predecessors, compensating for the variance in
population size.
In the near-term, the JCHS expects remodeling spending to continue to grow modestly, as
key drivers of home improvement spending, such as home sales, employment increases and
income growth, remain steady. The latter two elements directly affect consumer confidence,
which is a leading indicator for remodeling expenditures. In Figure 12, we have graphed the
spread between the Consumer Confidence Index, as reported by The Conference Board, of the
East North Central region and the nation. Comprised of Ohio, Indiana, Illinois, Michigan and
Wisconsin, the East North Central region is not only lagging the rest of the country, but it is also
diverging. With vinyl siding highly represented in the Midwest region and in the
repair/remodel marketplace, Ply Gem siding volumes were down in fiscal 2005, though
they rebounded in the fourth quarter; window volumes were also weaker in the
repair/remodel market, but the decline was more likely related to Company service levels.
As shown in Figures 13 and 14, residential spending on home improvements on an LTM basis
has increased in the third and fourth quarters of 2005. While spending in the Northeast and
Midwest regions is down from recent highs, it has reached new levels in the South and West.
10

11. Figure 13 Figure 14
LTM TOTAL IMPROVEMENTS SPENDING LTM TOTAL IMPROVEMENTS SPENDING
Not Seasonally Adjusted Not Seasonally Adjusted
28,000 45,000
40,000
Millions of Dollars
Millions of Dollars
26,000
35,000
24,000
30,000
22,000
25,000
20,000 20,000
4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05
Northeast Midwest South West
Source: U.S. Census Bureau Source: U.S. Census Bureau
Raw Materials
Ply Gem’s greatest exposure to raw materials includes PVC and aluminum. Along with the
industry as a whole, the Company, to date, has been successful in passing through price increases
to its customer base. While gross margins have been slightly compromised, Ply Gem has, for
the most part, recovered unit gross contribution. Its continued success in passing through
future cost increases will be highly dependent upon the strength of demand in its end-
markets.
PVC. Resin is an important component of Ply Figure 15
Gem’s raw material mix, accounting for PRIME PVC PRICING
approximately 60% of siding cost of goods sold 75
and 30% of window cost of goods sold. The 70
Company’s vinyl siding and vinyl window 65
Cents per Pound
60
products utilize PVC, as well as micro- 55
50
ingredients that are responsible for a variety of 45
physical properties. PVC is a widely used 40
35
plastic found in products ranging from clothing
P
P
P
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to plumbing fixtures, and its presence is so
Source: Plastics News
pervasive in the building industry through its use
in pipe, conduit, frames and siding, that its demand cycles with construction trends. The
American Plastics Council estimates that rigid pipe and tubing account for half of all domestic
PVC sales in the United States and Canada, while other construction-related uses account for
almost 22%. PVC is produced from its monomer, vinyl chloride, which is dependent upon the
feedstocks natural gas, chlorine and ethylene.
PVC pricing is not only dependent on petrochemical pricing but also on the supply and demand
dynamic of its chemical and monomer feeds. Dow Chemical is expected to close its vinyl
chloride monomer plant in the first half of 2006, accounting for an estimated 10% reduction in
domestic production capacity. It has been speculated that PVC pricing has increased to a level
that will spur the use of substitutes such as concrete and ductile iron for rigid pipe in the
construction industry. While there appears to be a number of opposing forces on pricing, we
have based our projections on our conversations with PVC producers, who predict pricing relief
over the coming year.
Pricing on prime PVC is currently up 80% since the first quarter of fiscal 2003, having peaked at
72.5 cents per pound in the fourth quarter of 2005 (see Figure 15). In response to the recent
increase in the cost of PVC, Ply Gem successfully increased its price on siding and fencing by
15% year-over-year in the fourth quarter of 2005, giving back some pricing in the first quarter of
11

12. 2006. Currently priced at 66.5 cents per pound, we have forecast PVC pricing to continue
to gradually abate to 60 cents per pound in the second quarter of 2007; the decrease will be
driven by increased supply due to normalized domestic production capacity following
Hurricanes Katrina and Rita, as well as augmented production capacity in China.
Aluminum. With the acquisition of Alenco, Ply Gem has increased its exposure to aluminum
pricing. In addition to its use in aluminum windows, aluminum is a key raw material in the
Company’s metal offerings, including trim coil and flatstock. Since 2003, aluminum has
consistently trended upward, increasing 73.8% through the first quarter of 2006 (see Figure 16).
According to American Metal Market, many industry sources believe that speculation by
investment funds has driven the steep rise of aluminum pricing, given that aluminum supply is
not that constrained; it has been estimated that, by the end of 2005, there had been $80 billion
invested in commodity index funds, up from $50 Figure 16
billion twelve months earlier. The demand for ALUMINUM PRICING
As of June 8, 2006
aluminum will also be affected by its cost 1.20
differential with copper; as the differential 1.10
Dollars per Pound
widens, aluminum becomes an increasingly 1.00
more attractive substitute. Offsetting these 0.90
demand drivers is the possible start-up of idled 0.80
0.70
smelting capacity, as well as substitute products 0.60
that become more competitive as aluminum
t
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es
Pr
pricing increases. With the base metals market’s Source: The London Metal Exchange
recent cooling, it is unclear whether the price of
aluminum will continue to move higher in the medium-term.
CORPORATE STRUCTURE
Figure 17
PLY GEM HOLDINGS, INC.
(no operations)
Guarantees Credit Facilities
Guarantees Senior Sub Notes
PLY GEM INDUSTRIES, INC.
Guarantees Canadian Term Loan
$ 70MM Revolving Credit Facility
$ 375MM U.S. Term Loan
$ 360MM 9.0% Senior Sub Notes
U.S. SUBSIDIARIES CWD WINDOWS AND DOORS
Canadian subsidiary
Guarantees Credit Facilities
Guarantees Senior Sub Notes US$ 25MM Canadian Term Loan
Source: Company reports
12

13. CAPITAL STRUCTURE
As shown in Figure 17, Ply Gem’s capital structure is comprised of a bank facility and a Senior
Subordinated Note issue, with Ply Gem Industries the borrower of the revolving credit facility
and the U.S. term loan, and its Canadian subsidiary, CWD Windows and Doors, the borrower of
the Canadian term loan. The Senior Subordinated Notes were issued by Ply Gem Industries.
Senior Credit Facility
In connection with its acquisition of Alenco on February 24, 2006, Ply Gem Industries
refinanced its credit facility pursuant to the Third Amended and Restated Credit Agreement. The
senior credit facility is currently comprised of a revolver with a maximum availability of $70
million, a $375 million U.S. term loan and a US$25 million Canadian term loan. As of March
15, 2006, $13.2 million had been drawn under the revolver to fund working capital requirements.
The revolving credit facility bears interest at LIBOR plus 2.50%, declining as low as 1.75% as
the Company’s Total Leverage Ratio decreases below 4.5x. The revolver pays interest quarterly
and is scheduled to mature on February 24, 2011. The credit facility’s term loan bears interest at
LIBOR plus 2.25% as long as Ply Gem’s corporate family rating from Moody’s and S&P equals
or exceeds B1 and B+, respectively. The term loan amortizes at the rate of $4.0 million per
annum, payable in equal quarterly installments beginning June 30, 2006, and matures on August
15, 2011. The credit facility also incorporates an annual Excess Cash Flow sweep to reduce
outstanding term borrowings.
All indebtedness under the senior credit facilities is secured by a perfected first priority security
interest in all tangible and intangible assets, as well as a first priority pledge of all of Ply Gem’s
equity interests and those of its subsidiaries; however, assets of the Canadian subsidiary only
secure debt of the Canadian borrower. The credit facilities are guaranteed by Ply Gem Holdings
and all of Ply Gem’s subsidiaries, while the indebtedness of the Canadian borrower is guaranteed
by Ply Gem Holdings, Ply Gem Industries and all of the Canadian borrower’s subsidiaries.
Financial covenants delineated in the credit agreement include: (1) Maximum Total Leverage
Ratio of 6.50:1.00 through June 30, 2007, thereafter declining from 6.40:1.00 to 4.75:1.00; (2)
Minimum Interest Coverage Ratio of 1.50:1.00 through December 31, 2006, increasing over time
to 1.90:1.00; and (3) Limitation on Capital Expenditures of $37.5 million in any fiscal year,
subject to carryover amounts.
Notable Permitted Additional Indebtedness clauses under the credit agreement include: (1)
indebtedness assumed in connection with an acquisition not to exceed $40.0 million at any time
outstanding; (2) unsecured indebtedness of Ply Gem Holdings, such that the pro forma Parent
Consolidated Leverage ratio is less than 5.5:1.0 and the pro forma Total Leverage ratio is less
than 4.0:1.0; and (3) indebtedness incurred by foreign subsidiaries not to exceed $30.0 million.
In addition, the Third Amended and Restated Credit Agreement provides for the repurchase of
up to $40.0 million of the Company’s Senior Subordinated Notes through the use of excess cash
flow and/or a portion of the revolving credit facility, an increase from the $25.0 million allowed
in the Second Amended and Restated Credit Agreement. Assuming no further acquisitions,
which we consider unlikely, we anticipate that Ply Gem will be in compliance with the financial
covenants delineated in the credit agreement. The relatively limited tightening of near-term
covenant metrics may have intentionally been structured to provide Ply Gem with the flexibility
to make additional acquisitions.
13

14. 9.0% Senior Subordinated Notes
In connection with the acquisition of Ply Gem Industries from Nortek on February 12, 2004, and
the acquisition of MWM Holding on August 27, 2004, Ply Gem issued $225.0 million and
$135.0 million of 9.0% Senior Subordinated Notes (“Notes”), respectively, for a total of $360
million. The Notes bear interest at 9.0% per annum, payable on February 15 and August 15 of
each year, and mature on February 15, 2012.
The 9.0% Notes are general unsecured obligations of the Company, and are subordinated in right
of payment to all current and future senior debt, including the credit facilities. The Notes are
guaranteed on a senior subordinated basis by Ply Gem Holdings and the domestic subsidiaries of
Ply Gem; Ply Gem’s Canadian subsidiary is not a guarantor.
The 9.0% Notes indenture allows the Company to incur additional indebtedness such that the
Consolidated Interest Coverage ratio would be at least 2.0:1.0. The Consolidated Interest
Coverage Ratio is defined as the ratio of Consolidated Cash Flow for the most recent four fiscal
quarters to Consolidated Interest Expense for the same period; Consolidated Cash Flow is
defined as the sum of, among other items, net income, income tax expense, depreciation expense,
interest expense, restructuring expense, and payment pursuant to the Advisory Agreement, net of
all other non-cash items. Notwithstanding this ratio, key Permitted Indebtedness clauses, as
defined in the indenture, include: (1) indebtedness under the credit facility not to exceed the
greater of (a) $250 million less permanent repayments and (b) 2.5 times the trailing four quarter
Consolidated Cash Flow; (2) Acquired Indebtedness not to exceed $20 million at any time
outstanding; (3) indebtedness of foreign subsidiaries not to exceed $30 million at any time
outstanding and resulting in a Consolidated Interest Coverage ratio of at least 2.0:1.0; and (4) a
basket for indebtedness not to exceed $25 million at any time outstanding. According to
management, permitted additional indebtedness as of March 31, 2006, was $150 million and was
limited by the Interest Coverage ratio in section 4.10 of the Note indenture.
The Notes are callable on or after February 15, 2008 at 104.50%, February 15, 2009 at 102.25%,
and February 15, 2010 and thereafter at 100.00%. The Notes carry a change of control put at
101%.
Leverage / Liquidity
As of March 31, 2006, Ply Gem pro forma leverage Figure 18
PLY GEM HOLDINGS
through its bank credit facility and the Senior Pro Forma Leverage *
Subordinated Notes was 3.0x and 5.7x, respectively (see As of March 31, 2006
Figure 18). The Company’s leverage ratio increased Amount Leverage
($ millions) Thru
recently as a result of the refinancing and expansion of Revolving Credit Facility $ 13.2
its credit facility, which was done in connection with its Term Loans 400.0 3.0x
9.0% Senior Sub Notes 360.3 5.7x
purchase of Alenco. LTM net interest coverage at Total Debt 773.5 5.7x
quarter-end was 2.1x, up from 2.0x in the prior quarter.
Pro Forma LTM Adj. EBITDA $ 135.5
Net of outstanding borrowings of $13.2 million and Source: Company reports and MTR estimates.
outstanding LC’s of $2.4 million, revolver availability * Pro forma of Alenco acquisiton, not acquisition synergies.
was $54.4 million. Together with a cash balance of $17.9 million, total liquidity as of March 31,
2006 was $72.3 million, an increase of $28.1 million over liquidity levels at the end of the first
quarter of fiscal 2005.
14

15. OWNERSHIP / MANAGEMENT
On February 12, 2004, Ply Gem Investment Holdings, through Ply Gem Holdings, acquired all
of the outstanding shares of Ply Gem Industries. Ply Gem Investment Holdings is owned by an
investor group led by Caxton-Iseman Capital, a private equity firm that specializes in leveraged
buyouts, and its affiliates. As defined in the General Advisory Agreement, Ply Gem pays
Caxton-Iseman a 2% annual advisory fee based on the Company’s EBITDA. Management has a
significant stake in Ply Gem, with an 8.9% ownership of outstanding common stock as of March
27, 2006.
On November 4, 2005, Lee Meyer, Ply Gem’s president and chief executive officer since 2002,
informed the Board of Directors of his intention to retire in 2006. Mr. Meyer has agreed to
remain with the Company in his current role until a successor has been identified and for any
transition period thought necessary by the Company. Following his departure, Mr. Meyer will
still have a significant financial interest in Ply Gem and his services will be retained on an
advisory basis.
RECENT FINANCIAL RESULTS
Consolidated
Net sales increased 25.9% year-over-year to a record level of $216.3 million in the first quarter
of 2006, in part due to the acquisition of Alenco; excluding the acquisition, strong year-over-year
organic growth of 17.9% was driven by unit growth in siding and new construction windows, as
well as price increases (see Figure 19). Unit volume growth resulted from the company’s
alignment with customers that continue to take market share; excluding the share shift from a
large account, siding unit volumes increased over 10% year-over-year (an easy comparable
period), while window unit volumes (pre-Alenco) rose 5.6%. Gross margin improved 20bps
year-over-year, while SG&A expense increased to $26.5 million from $23.0 million in the prior
year’s quarter, declining as a percentage of net sales to 12.3% from 13.4%. Adjusted EBITDA
increased 42.6% to $21.5 million from $15.1 million in the first quarter of 2005, with adjusted
EBITDA margin up 116bps year-over-year.
Windows and Doors
Net sales increased 24.6% year-over-year to $115.8 million in the first quarter of 2006;
excluding $13.9 million of net sales contributed through the Alenco acquisition, the increase was
due primarily to higher volumes in new construction window and door products sold in the U.S.
and Canada and to price increases of approximately 3.5%, partially offset by weakness in the
Company’s repair and remodel product line. Gross margin declined 210bps year-over-year,
driven primarily by increased raw material costs that resulted from the transition to producing
vinyl lineals at the MW Windows’ lineal facility; management expects the transition to continue
through 2006. The $2.4 million increase in SG&A expense over the prior year’s quarter was due
to the acquisition of Alenco. Adjusted EBITDA for the first quarter of 2006 was $10.1 million,
up 11.0% year-over-year; excluding Alenco, adjusted EBITDA was down 5.5% over the same
period.
Alenco’s net sales increased approximately 15% year-over-year, while its earnings as a
percentage of net sales declined as the cost of aluminum increased. The Company has not fully
recovered these raw material costs, and it is currently evaluating its next steps in passing through
price increases. Aluminum pass-throughs may prove more difficult to implement than those
associated with PVC, given that the aluminum window is a lower-cost alternative to vinyl and
15