10-Q

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 April 2, 2016

or

[   ]      TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________.

Commission File Number:   001-35930

PLY GEM HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	3089	20-0645710
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)
	5020 Weston Parkway, Suite 400 Cary, North Carolina 27513

Registrant's telephone number, including area code: 919-677-3900

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  

Yes [X]                 No [ ]

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 Regulation 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 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   [   ]                                                                       Accelerated filer                    [X]   

Non-accelerated filer     [ ]                                                                       Smaller reporting company   [   ]

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [  ]   No [X]

As of May 9, 2016, there were 68,143,681 shares of common stock, $0.01 par value, outstanding.

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES

FORM 10-Q

QUARTERLY PERIOD ENDED April 2, 2016

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) -
	Three months ended April 2, 2016 and April 4, 2015	2
	Condensed Consolidated Balance Sheets -
	April 2, 2016 and December 31, 2015	3
	Condensed Consolidated Statements of Cash Flows -
	Three months ended April 2, 2016 and April 4, 2015	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition
	and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	47
Item 4.	Controls and Procedures	49

PART II – OTHER INFORMATION

Item 6.	Exhibits	50
Signatures		51

PART I

Item 1.      FINANCIAL STATEMENTS

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(Amounts in thousands, except shares and per share data)	For the three months ended
	April 2, 2016			April 4, 2015
Net sales	$	408,614		$	376,048
Cost of products sold	321,913			315,767
Gross profit	86,701			60,281
Operating expenses:
Selling, general and administrative expenses	70,735			68,132
Amortization of intangible assets	6,390			6,199
Total operating expenses	77,125			74,331
Operating earnings (loss)	9,576			(14,050		)
Foreign currency gain (loss)	584			(934		)
Interest expense	(18,692		)	(19,093		)
Interest income	10			9
Loss on modification or extinguishment of debt	(2,399		)	—
Tax receivable agreement liability adjustment	(18,150		)	(17,185		)
Loss before benefit from income taxes	(29,071		)	(51,253		)
Benefit from income taxes	(1,494		)	(2,394		)
Net loss	$	(27,577	)	$	(48,859	)
Comprehensive loss	$	(24,524	)	$	(54,210	)
Basic and diluted net loss per share attributable to common shareholders	$	(0.40	)	$	(0.72	)
Basic and diluted weighted average shares outstanding	68,127,491			67,923,707

See accompanying notes to condensed consolidated financial statements.

2

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(Amounts in thousands, except share amounts)	April 2, 2016			December 31, 2015
ASSETS
Current Assets:
Cash and cash equivalents	$	34,341		$	109,425
Accounts receivable, less allowances of $3,477 and $3,588, respectively	204,159			195,165
Inventories:
Raw materials	69,335			64,002
Work in process	24,469			25,319
Finished goods	67,602			61,082
Total inventory	161,406			150,403
Prepaid expenses and other current assets	24,200			24,647
Deferred income taxes	14,202			11,261
Total current assets	438,308			490,901
Property and Equipment, at cost:
Land	8,222			8,175
Buildings and improvements	67,177			66,321
Machinery and equipment	392,127			385,750
Total property and equipment	467,526			460,246
Less accumulated depreciation	(305,749		)	(299,243		)
Total property and equipment, net	161,777			161,003
Other Assets:
Intangible assets, net	122,957			128,384
Goodwill	479,549			477,739
Other	8,262			8,545
Total other assets	610,768			614,668
	$	1,210,853		$	1,266,572
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable	$	73,793		$	74,496
Accrued expenses	117,263			152,962
Current portion of payable to related parties pursuant to tax receivable agreement	3,005			3,005
Current portion of long-term debt	4,300			4,300
Total current liabilities	198,361			234,763
Deferred income taxes	24,642			21,387
Long-term portion of payable to related parties pursuant to tax receivable agreement	38,961			20,811
Other long-term liabilities	89,770			90,893
Long-term debt, less current portion	960,120			975,531
Commitments and contingencies
Stockholders' Deficit:
Preferred stock $0.01 par, 50,000,000 shares authorized, none issued and outstanding	—			—
Common stock $0.01 par, 250,000,000 shares authorized, 68,127,491 issued and outstanding	681			681
Additional paid-in-capital	749,633			749,296
Accumulated deficit	(817,801		)	(790,224		)
Accumulated other comprehensive loss	(33,514		)	(36,566		)
Total stockholders' deficit	(101,001		)	(76,813		)
	$	1,210,853		$	1,266,572

See accompanying notes to condensed consolidated financial statements.

3

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(Amounts in thousands)	For the three months ended
	April 2, 2016			April 4, 2015
Cash flows from operating activities:
Net loss	$	(27,577	)	$	(48,859	)
Adjustments to reconcile net loss to cash
used in operating activities:
Depreciation and amortization expense	14,030			14,821
Non-cash restructuring costs	566			46
Non-cash interest expense, net	3,416			3,419
(Gain) loss on foreign currency transactions	(584		)	934
Loss on modification or extinguishment of debt	2,399			—
Stock based compensation	337			586
Deferred income taxes	65			1,019
Tax receivable agreement liability adjustment	18,150			17,185
Increase in tax uncertainty, net of valuation allowance	62			73
Other	138			(13		)
Changes in operating assets and liabilities:
Accounts receivable, net	(9,134		)	(5,964		)
Inventories	(10,978		)	469
Prepaid expenses and other assets	(255		)	4,793
Accounts payable	(875		)	(7,801		)
Accrued expenses	(37,775		)	(39,757		)
Cash payments on restructuring liabilities	(668		)	(473		)
Other	137			(1,469		)
Net cash used in operating activities	(48,546		)	(60,991		)
Cash flows from investing activities:
Capital expenditures	(7,732		)	(7,071		)
Proceeds from sale of assets	76			25
Net cash used in investing activities	(7,656		)	(7,046		)
Cash flows from financing activities:
Net revolver borrowings	10,000			60,000
Payments on long-term debt	(31,075		)	(1,075		)
Proceeds from exercises of employee stock options	—			182
Net cash provided by (used in) financing activities	(21,075		)	59,107
Impact of exchange rate movements on cash	2,193			(1,788		)
Net decrease in cash and cash equivalents	(75,084		)	(10,718		)
Cash and cash equivalents at the beginning of the period	109,425			33,162
Cash and cash equivalents at the end of the period	$	34,341		$	22,444

See accompanying notes to condensed consolidated financial statements.

4

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Ply Gem Holdings, Inc. and its subsidiaries (referred to herein as “Ply Gem Holdings”, “Ply Gem”, the “Company”, “we”, “us”, or “our”) have been prepared in accordance with U.S. generally accepted accounting principles as described in the consolidated financial statements and related notes included in our 2015 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2016.  These statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles and should be read in conjunction with our 2015 Annual Report on Form 10-K.  In management’s opinion, all normal and recurring adjustments considered necessary for a fair presentation have been included.  Operating results for the period from January 1, 2016 through April 2, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

The condensed consolidated balance sheet at December 31, 2015 has been derived from the audited consolidated financial statements of Ply Gem Holdings at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

The Company’s fiscal quarters are based on periods ending on the Saturday of the last week in the quarter.  Therefore, the financial results of certain fiscal quarters will not be comparable to the prior and subsequent fiscal quarters.  The accompanying financial statements include the Company’s condensed consolidated statements of operations and comprehensive income (loss) for the three months ended April 2, 2016 and April 4, 2015, the condensed consolidated statements of cash flows for the three months endedApril 2, 2016 and April 4, 2015, and the condensed consolidated balance sheets as of April 2, 2016 and December 31, 2015.

Ply Gem is a diversified manufacturer of residential and commercial building products, which are sold primarily in the United States and Canada, and include a wide variety of products for the residential and commercial construction, the do-it-yourself and the professional remodeling and renovation markets.  The demand for the Company’s products is seasonal, particularly in the Northeast and Midwest regions of the United States and Canada where inclement weather during the winter months usually reduces the level of building and remodeling activity in both the home repair and remodeling and new home construction sectors.  The Company’s sales are usually lower during the first and fourth quarters.

To a significant extent our performance is dependent upon the levels of home repair and remodeling and new home construction spending, all of which are affected by such factors as interest rates, inflation, consumer confidence, unemployment, and availability of consumer credit.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Ply Gem Holdings and its subsidiaries, all of which are wholly owned.  All intercompany accounts and transactions have been eliminated.

Reclassifications

Due to the adoption of ASU No. 2015-03, Interest-Imputation of Interest, certain balance sheet amounts in the prior fiscal year have been reclassified to conform to the presentation adopted in the current fiscal year, with no effect on net income (loss), accumulated deficit, or net cash provided by/used in operating, investing, and financing activities. Refer to Note 5, Long-Term Debt, for the presentation impact on net debt.

5

Accounting Policies and Use of Estimates

The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles involves estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of income and expense during the reporting periods.  Certain of the Company’s accounting policies require the application of judgment in selecting the appropriate assumptions for calculating financial estimates.  By their nature, these judgments are subject to an inherent degree of uncertainty.  The Company periodically evaluates the judgments and estimates used in their critical accounting policies to ensure that such judgments and estimates are reasonable.  Such estimates include the allowance for doubtful accounts receivable, rebates, pensions, valuation of inventories, warranty reserves, insurance reserves, legal contingencies, assumptions used in the calculation of income taxes and the tax receivable agreement liability, projected cash flows used in the goodwill and intangible asset impairment tests, and environmental accruals and other contingencies.  These judgments are based on the Company’s historical experience, current trends and information available from other sources, and are based on management’s best estimates and judgments.  The Company adjusts such estimates and assumptions when facts and circumstances dictate.  Volatile equity markets, foreign currency, and litigation risk have combined to increase the uncertainty inherent in such estimates and assumptions.  If different conditions result from those assumptions used in the Company’s judgments, actual results could be materially different from the Company’s estimates.

Cash and Cash Equivalents

Cash equivalents consist of short-term highly liquid investments with original maturities of three months or less and which are readily convertible into cash.

Accounts Receivable

Accounts receivable-trade are recorded at their net realizable value.  The allowance for doubtful accounts was $3.5 million at April 2, 2016 and $3.6 million at December 31, 2015.  The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company estimates the allowance for doubtful accounts based on a variety of factors including the length of time receivables are past due, the financial health of its customers, unusual macroeconomic conditions and historical experience. If the financial condition of its customers deteriorates or other circumstances occur that result in an impairment of customers’ ability to make payments, the Company records additional allowances as needed. The Company writes off uncollectible trade accounts receivable against the allowance for doubtful accounts when collection efforts have been exhausted and/or any legal action taken by the Company has concluded.

Inventories

Inventories in the accompanying condensed consolidated balance sheets are valued at the lower of cost or market and are determined primarily by the first-in, first-out (FIFO) method.  The Company records provisions, as appropriate, to write-down obsolete and excess inventory to estimated net realizable value.  The process for evaluating obsolete and excess inventory often requires the Company to make subjective judgments and estimates concerning future sales levels, quantities and prices at which such inventory will be able to be sold in the normal course of business.  Accelerating the disposal process or incorrect estimates of future sales potential may cause actual results to differ from the estimates at the time such inventory is disposed or sold. As of April 2, 2016, the Company had inventory purchase commitments of approximately $52.9 million.

Inventory reserves were approximately $9.0 million at April 2, 2016, increasing during the three months endedApril 2, 2016 by $0.7 million compared to the December 31, 2015 reserve balance of approximately $8.3 million.

Property and Equipment

Property and equipment are presented at cost.  Depreciation of property and equipment are provided on a straight-line basis over estimated useful lives, which are generally as follows: 

Buildings and improvements	10-37 years
Machinery and equipment, including leases	3-15 years
Leasehold improvements	Term of lease or useful life, whichever is shorter

6

Expenditures for maintenance and repairs are expensed when incurred. Expenditures for renewals and betterments are capitalized.  When assets are sold, or otherwise disposed, the cost and related accumulated depreciation are eliminated and the resulting gain or loss is recognized in operations.  

Intangible Assets, Goodwill and Other Long-lived Assets

Acquisitions

On May 29, 2015, Ply Gem completed an acquisition for cash consideration of approximately $21.0 million to acquire substantially all of the assets of Canyon Stone Inc. ("Canyon Stone"), a manufacturer and distributor of stone veneer and accessories in the United States. Canyon Stone has manufacturing facilities in Olathe, Kansas and Youngsville, North Carolina. The purchase agreement also includes contingent consideration in the form of potential earn-out payments of up to $1.0 million based on Canyon Stone's earnings for fiscal years 2015 through 2017. This acquisition expanded the Company's stone veneer manufacturing footprint across the United States as it complements the existing Ply Gem Stone manufacturing facility in Middleburg, Pennsylvania. The Company accounted for the transaction as an acquisition in accordance with the provisions of Accounting Standards Codification 805, Business Combinations, which results in a new valuation for the assets and liabilities of Canyon Stone based upon fair values as of the acquisition date.

Since the acquisition was completed on May 29, 2015, the final acquisition accounting allocation remains subject to further adjustments. The specific accounts subject to ongoing purchase accounting adjustments include accounts receivable, inventories, prepaid expenses and other current assets, property and equipment, goodwill, intangibles, accounts payable, accrued expenses, and other liabilities. Therefore, the measurement date remains open as of April 2, 2016, and the preliminary acquisition accounting allocation detailed below is subject to adjustment. The Company anticipates completing these acquisition accounting adjustments during 2016.

The Company determined the fair value of the tangible and intangible assets and the liabilities acquired, and recorded goodwill based on the excess of fair value of the acquisition consideration over such fair values, as follows:

(Amounts in thousands)
Accounts receivable	$	3,559
Inventories	712
Prepaid expenses and other current assets	41
Property and equipment	2,019
Intangible assets	9,300
Goodwill	7,642
Accounts payable, accrued expenses and other long-term liabilities	(2,273		)
	$	21,000

The $7.6 million of goodwill was allocated to the Siding, Fencing and Stone segment and the goodwill is expected to be deductible for tax purposes. The Company has recognized a liability of approximately $0.8 million as the estimated acquisition date fair value of the earn-out as of April 2, 2016 and December 31, 2015. This amount is included within other long-term liabilities in the condensed consolidated balance sheets. Any change in the fair value of the contingent consideration subsequent to the acquisition date will be recognized in earnings in the period of change.

Long-lived assets

The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.  The Company performs an undiscounted operating cash flow analysis to determine if impairment exists.  If an impairment is determined to exist, any related impairment loss is calculated based on the asset’s fair value and the discounted cash flows.

7

The Company tests for long-lived asset impairment at the following asset group levels: (i) the combined U.S. Siding, Fencing and Stone companies in the Siding, Fencing and Stone segment (“Siding”), (ii) the combined U.S. Windows companies in the Windows and Doors segment (“U.S. Windows”), (iii) the combined Simonton windows companies in the Windows and Doors segment, (iv) Gienow Canada Inc. ("Gienow Canada") (a combined Western Canadian company created by the January 2014 amalgamation of the Company's legacy Western Canadian business and the Gienow entity acquired in April 2013) in the Windows and Doors segment, and (v) Mitten in the Siding, Fencing and Stone segment. For purposes of recognition and measurement of an impairment loss, a long-lived asset or asset group should represent the lowest level for which an entity can separately identify cash flows that are largely independent of the cash flows of other assets and liabilities.  There were no indicators of impairment during the three months ended April 2, 2016.

Goodwill and other intangible assets

The Company evaluates goodwill for impairment on an annual basis and whenever events or business conditions warrant.  All other intangible assets are amortized over their estimated useful lives and are assessed for impairment as necessary.  The Company assesses goodwill for impairment at the November month end each year and also at any other date when events or changes in circumstances indicate that the carrying value of these assets may exceed their fair value.  To evaluate goodwill for impairment, the Company estimates the fair value of reporting units considering such factors as discounted cash flows and valuation multiples for comparable publicly traded companies.  A significant reduction in projected sales and earnings, which would lead to a reduction in future cash flows, could indicate potential impairment.  There were no indicators of impairment during the three months ended April 2, 2016 that would trigger an interim impairment test.  The Company will continue to evaluate goodwill during future periods and future declines in the residential housing and repair and remodeling markets could result in goodwill impairments.

Debt Issuance Costs

Debt issuance costs, composed of facility, agency, and certain legal fees associated with issuing new debt financing, are amortized over the contractual term of the related agreement using the effective interest method.  Net debt issuance costs totaled approximately $20.9 million and $22.2 million as of April 2, 2016 and December 31, 2015, respectively, and have been recorded within long-term debt ($18.2 million at April 2, 2016 and $19.3 million at December 31, 2015) and other non-current assets ($2.7 million at April 2, 2016 and $2.9 million at December 31, 2015) in the accompanying condensed consolidated balance sheets. The debt issuance costs included in other long term assets relate to the ABL Facility. Amortization of debt issuance costs for the three months ended April 2, 2016 and April 4, 2015 was approximately $0.8 million and $0.8 million, respectively. Amortization of debt issuance costs is recorded in interest expense in the accompanying condensed consolidated statements of operations and comprehensive income (loss).

Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes which requires that deferred tax assets and liabilities be recorded to reflect the future tax consequences of temporary differences between the book and tax basis of various assets and liabilities.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect of changes in tax rates on deferred tax assets and liabilities is recognized as income or expense in the period in which the rate change occurs.  A valuation allowance is established to offset any deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Estimates are required with respect to, among other things, the appropriate state income tax rates used in the various states that the Company and its subsidiaries are required to file, the potential utilization of operating and capital loss carry-forwards for both federal and state income tax purposes and valuation allowances required, if any, for tax assets that may not be realized in the future.  The Company establishes reserves when, despite our belief that our tax return positions are fully supportable, certain positions could be challenged, and the positions may not be fully sustained.  The Company along with its U.S. subsidiaries file a consolidated federal income tax return, separate state income tax returns, combined state returns, and unitary state returns. Gienow Canada and Mitten both file separate Canadian federal income tax returns and separate provincial returns.

8

Tax receivable agreement ("TRA") liability

As a result of the Company’s full tax valuation allowance position, the Company’s methodology for calculating the TRA liability considers expectations regarding (i) current year taxable income only (due to the uncertainty of future taxable income associated with the Company’s cumulative loss position) and (ii) future income due to the expected reversals of deferred tax liabilities. During the three months ended April 2, 2016, the Company estimated its projected taxable income for the full year ending December 31, 2016 based on the Company’s estimates. However, the Company’s methodology to estimate the TRA liability excludes forecasts for fiscal years subsequent to 2016 because such future forecasts and projections cannot be relied upon based on the negative evidence from the Company’s three year cumulative loss position. For fiscal year 2016, the Company estimated to be in a taxable income position; however, this taxable income estimate was currently not sufficient to outweigh the negative evidence or alleviate the Company’s three year cumulative loss position. In addition to projecting the Company’s current year taxable income estimate, the Company considered the reversals of deferred tax assets and deferred tax liabilities.

Environmental

The Company accrues for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable. Environmental remediation obligation accruals are adjusted as further information develops or circumstances change.  Costs of future expenditures for environmental remediation obligations are not discounted to their present value.  Recoveries of environmental remediation costs from other parties are recorded as assets when their receipt is deemed probable.

Commitments and Contingencies

The Company accrues for all direct costs associated with the estimated resolution of contingencies at the earliest date at which it is deemed probable that a liability has been incurred and the amount of such liability can be reasonably estimated.  Costs accrued have been estimated based upon an analysis of potential results, assuming a combination of litigation and settlement strategies and outcomes. Insurance recoveries are recorded as assets when their receipt is deemed probable.

Foreign Currency

Gienow Canada and Mitten, the Company’s Canadian subsidiaries, utilize the Canadian dollar as their functional currency.  For reporting purposes, the Company translates the assets and liabilities of its foreign entities at the exchange rates in effect at period-end.  Net sales and expenses are translated using average exchange rates in effect during the period.  Gains and losses from foreign currency translation are credited or charged to accumulated other comprehensive income or loss in the accompanying condensed consolidated balance sheets.

The Company recorded a gain from foreign currency transactions of approximately $0.6 million for the three months ended April 2, 2016 and a loss of approximately $0.9 million for the three months ended April 4, 2015. During the three months ended April 2, 2016 accumulated other comprehensive income (loss) included a currency translation gain of approximately $4.8 million and a loss of approximately $7.5 million for the three months ended April 4, 2015.

Derivative Financial Instruments

As of April 2, 2016, the Company had entered into a foreign currency forward contract agreements to hedge approximately $27.8 million of its 2016 non-functional currency inventory purchases to protect the Company from variability in cash flows attributable to changes in the U.S. dollar relative to the Canadian dollar.

The Company has designated these forward contracts as cash flow hedges. As a cash flow hedge, unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. These forward contract agreements are highly correlated to the changes in foreign currency rates to which the Company is exposed. Unrealized gains and losses on these agreements are designated as effective or ineffective. The effective portion of such gains or losses is recorded as a component of accumulated other comprehensive income or loss, while the ineffective portion of such gains or losses is recorded as a component of cost of goods sold. Future realized gains and losses in connection with each inventory purchase will be reclassified from accumulated other comprehensive income or loss to cost of goods sold.

9

The changes in fair values of derivatives that have been designated and qualify as cash flow hedges are recorded in accumulated other comprehensive income or loss and are reclassified into cost of goods sold in the same period the hedged item affects earnings. Due to the high degree of effectiveness between the hedging instruments and the underlying exposures being hedged, fluctuations in the value of the derivative instrument are generally offset by changes in the fair value or cash flows of the underlying exposures being hedged. The changes in the fair value of derivatives that do not qualify as effective are immediately recognized in earnings.

The gains and losses on derivative contracts that are reclassified from accumulated other comprehensive income or loss to current period earnings are included in the line item in which the hedged item is recorded in the same period the forecasted transaction affects earnings. As of April 2, 2016, approximately $0.9 million of the deferred net liability on derivative instruments included in accumulated other comprehensive loss is expected to be reclassified to cost of goods sold during the next four months. This expectation is based on the expected timing of the occurrence of the hedged forecasted transactions. During the three months ended April 2, 2016, the Company recognized $0.4 million within earnings as a reduction of cost of goods sold in the condensed consolidated statement of operations. During the three months ended April 4, 2015, the Company recognized $1.1 million within earnings as a reduction of cost of goods sold in the condensed consolidated statement of operations.

The fair value of the foreign currency forward contract agreements are estimated using industry standard valuation models using market-based observable inputs, including spot rates, forward points, interest rates and volatility inputs (Level 2). A summary of the recorded asset and liability included in the accompanying condensed consolidated balance sheets is as follows:

(Amounts in thousands)	April 2, 2016			December 31, 2015
Foreign currency hedge included in other current assets/(liabilities)	$	(891	)	$	829

Fair Value Measurement

The accounting standard for fair value discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flows), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The standard utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

• Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

• Level 3: Inputs that reflect the reporting entity’s own assumptions.

The hierarchy requires the use of observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.  The fair value of the long-term debt instruments was determined by utilizing available market information.  The carrying value of the Company’s other assets and liabilities approximates their fair value. The Company’s population of recurring financial assets and liabilities subject to fair value measurements and the necessary disclosures are as follows:

10

					Quoted Prices in Active Markets		Significant Other		Significant
(Amounts in thousands)			Fair		for Identical		Observable		Unobservable
	Carrying		Value		Assets		Inputs		Inputs
Description	Value		Total		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Senior Notes-6.50%	$	650,000	$	635,375	$	635,375	$	—	$	—
Term Loan Facility	391,400		380,637		—		380,637		—
As of April 2, 2016:	$	1,041,400	$	1,016,012	$	635,375	$	380,637	$	—
Liabilities:
Senior Notes-6.50%	$	650,000	$	585,000	$	585,000	$	—	$	—
Term Loan Facility	422,475		411,913		—		411,913		—
As of December 31, 2015	$	1,072,475	$	996,913	$	585,000	$	411,913	$	—

Earnings (Loss) Per Common Share

Basic earnings (loss) per share ("EPS") is computed based upon weighted-average shares outstanding during the period. Dilutive earnings per share is computed consistently with the basic computation while giving effect to all dilutive potential common shares and common share equivalents that were outstanding during the period. Ply Gem Holdings uses the treasury stock method to reflect the potential dilutive effect of unvested stock awards and unexercised options.

The Company was in a net loss position for the three months ended April 2, 2016 and April 4, 2015 and therefore the impact of stock options and unvested restricted stock were excluded from the computation of diluted earnings (loss) per share for those specific periods, as the inclusion of such amounts would be anti-dilutive.

The computation of the dilutive effect of other potential common shares excluded options and unvested restricted stock representing approximately 0.1 million shares of common stock for the three months ended April 2, 2016. The computation of the dilutive effect of other potential common shares excluded options and unvested restricted stock representing approximately 0.1 million shares of common stock for the three months ended April 4, 2015.

New Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. The amendments in this updated guidance include changes to simplify the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. The Company is in the process of evaluating the potential impacts of this new guidance on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This update provides guidance on recording revenue on a gross basis versus a net basis based on the determination of whether an entity is a principal or an agent when another party is involved in providing goods or services to a customer. The amendments in this update affect the guidance in ASU No. 2014-09 and are effective in the same timeframe as ASU No. 2014-09 as discussed below.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The core principal of the guidance is that an entity should recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. The standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal years. Early adoption is permitted. The guidance is to be applied using a modified retrospective transition method with the option to elect a package of practical expedients. The Company is currently evaluating the impact of the adoption of this accounting standard update on its internal processes, operating results and financial reporting. The impact is currently not known or reasonably estimable.

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In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which completes the joint effort by the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and improve financial reporting by creating common revenue recognition guidance for U.S. generally accepted accounting principles ("GAAP") and International Financial Reporting Standards ("IFRS"). ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using IFRS and GAAP. The core principle of this update is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB finalized a one-year deferral of the effective date of the new revenue recognition standard. The new standard will become effective for Ply Gem beginning with the first quarter of 2018 and can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. The method of adoption has not been determined yet by the Company. The Company is currently reviewing the revised guidance and assessing the potential impact on the consolidated financial statements.

2.   GOODWILL

The Company records the excess of the fair value of the acquisition consideration over the net tangible and intangible assets of acquired companies as goodwill.  The Company performs an annual test for goodwill impairment at the November month end each year and also at any other date when events or changes in circumstances indicate that the carrying value of these assets may exceed their fair value.  The Company has defined its reporting units and performs the impairment testing of goodwill at the operating segment level.  The Company has two reporting units: (1) Siding, Fencing and Stone and (2) Windows and Doors.  Separate valuations are performed for each of these reporting units in order to test for impairment.      

The Company uses the two-step method to determine goodwill impairment.  If the carrying amount of a reporting unit exceeds its fair value (“Step One”), the Company measures the possible goodwill impairment based upon a hypothetical allocation of the fair value estimate of the reporting unit to all of the underlying assets and liabilities of the reporting unit, including previously unrecognized intangible assets (“Step Two”).  The excess of the reporting unit’s fair value over the amounts assigned to its assets and liabilities is the implied fair value of goodwill.  An impairment loss is recognized to the extent that a reporting unit’s recorded goodwill exceeds the implied fair value of goodwill. The Company has elected not to utilize the qualitative Step Zero impairment assessment. There was no goodwill impairment for the year ended December 31, 2015 and no impairment indicators which would trigger an interim impairment test during the three months ended April 2, 2016. However, the Company will continue to evaluate goodwill during future periods and future declines in the residential housing and repair and remodeling markets or the Company's market capitalization could result in goodwill impairments.  

To determine the fair value of its reporting units, the Company equally considers both the income and market valuation methodologies.  The income valuation methodology uses the fair value of the cash flows that the reporting unit can be expected to generate in the future. This method requires management to project revenues, operating expenses, working capital investment, capital spending and cash flows for the reporting unit over a multi-year period as well as determine the weighted average cost of capital to be used as the discount rate.  The Company also utilizes the market valuation method to estimate the fair value of the reporting units by utilizing comparable public company multiples.  These comparable public company multiples are then applied to the reporting unit’s financial performance.  The market approach is more volatile as an indicator of fair value as compared to the income approach as internal forecasts and projections have historically been more stable.  Since each approach has its merits, the Company equally weights the approaches to balance the internal and external factors affecting the Company’s fair value.

The Company’s fair value estimates of its reporting units and goodwill are sensitive to a number of assumptions including discount rates, cash flow projections, operating margins, and comparable market multiples.  In order to accurately forecast future cash flows, the Company estimates single family housing starts and the repair and remodeling market's growth rates.  However, there is no assurance that: (1) valuation multiples will not decline, (2) discount rates will not increase, or (3) the earnings, book values or projected earnings and cash flows of the Company's reporting units will not decline. 

The reporting unit goodwill balances were as follows as of April 2, 2016 and December 31, 2015:

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(Amounts in thousands)
	April 2, 2016		December 31, 2015
Siding, Fencing and Stone	$	349,185	$	347,958
Windows and Doors	130,364		129,781
	$	479,549	$	477,739

The changes in the goodwill balances from December 31, 2015 to April 2, 2016 relate to currency translation. A goodwill rollforward for 2016 is included in the table below:

	Windows and			Siding, Fencing
(Amounts in thousands)	Doors			and Stone
Balance as of December 31, 2015
Goodwill	$	457,554		$	470,185
Accumulated impairment losses	(327,773		)	(122,227		)
	$	129,781		$	347,958
Currency translation adjustments	583			1,227
Balance as of April 2, 2016
Goodwill	458,137			471,412
Accumulated impairment losses	(327,773		)	(122,227		)
	$	130,364		$	349,185

3.   INTANGIBLE ASSETS

The table that follows presents the major components of intangible assets as of April 2, 2016 and December 31, 2015:

(Amounts in thousands)	Average Amortization Period			Accumulated			Net Carrying
	(in Years)	Cost		Amortization			Value
As of April 2, 2016:
Patents	14	$	12,770	$	(11,372	)	$	1,398
Trademarks/Tradenames	12	117,271		(77,917		)	39,354
Customer relationships	13	225,517		(144,994		)	80,523
Other	5	5,367		(3,685		)	1,682
Total intangible assets	12	$	360,925	$	(237,968	)	$	122,957
As of December 31, 2015:
Patents	14	$	12,770	$	(11,136	)	$	1,634
Trademarks/Tradenames	12	116,965		(76,249		)	40,716
Customer relationships	13	217,709		(133,532		)	84,177
Other	5	5,360		(3,503		)	1,857
Total intangible assets	12	$	352,804	$	(224,420	)	$	128,384

Amortization expense for the three months ended April 2, 2016 and April 4, 2015 was $6.4 million and $6.2 million, respectively. Estimated amortization expense for the fiscal years 2016 through 2020 is shown in the following table:

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	Amortization
(Amounts in thousands)	expense
2016 (remainder of year)	$	18,481
2017	20,893
2018	20,058
2019	15,993
2020	11,361

4.  COMPREHENSIVE INCOME (LOSS)

Comprehensive loss, net of tax is comprised of the following:

(Amounts in thousands)	For the three months ended
	April 2, 2016			April 4, 2015
Net loss	$	(27,577	)	$	(48,859	)
Foreign currency translation adjustment	4,773			(7,453		)
Unrealized gain (loss) on derivative instruments	(1,720		)	2,102
Comprehensive loss	$	(24,524	)	$	(54,210	)

5.   LONG-TERM DEBT

Long-term debt in the accompanying condensed consolidated balance sheets at April 2, 2016 and December 31, 2015 consists of the following:

(Amounts in thousands)
	April 2, 2016			December 31, 2015
Senior secured asset based revolving credit facility	$	10,000		$	—
Term Loan due 2021, net of unamortized early tender premium,
discount, and debt issuance costs of $31,294 and $35,106, respectively	360,106			387,369
6.50% Senior notes due 2022, net of unamortized early tender premium,
discount, and debt issuance costs of $55,686 and $57,538, respectively	594,314			592,462
	$	964,420		$	979,831
Less current portion of long-term debt	(4,300		)	(4,300		)
	$	960,120		$	975,531

2015 Debt Transaction

On November 5, 2015, Ply Gem Industries entered into a second amended and restated ABL Facility. Among other things, the second amended and restated ABL Facility: (i) increased the overall facility to $350.0 million, (ii) provided an accordion feature of $50.0 million, and (iii) established the applicable margin for borrowings under the ABL Facility to a range of 1.25% to 2.00% for Eurodollar rate loans, depending on availability. All outstanding loans under the second amended and restated ABL Facility are due and payable in full on November 5, 2020.

6.50% Senior Notes due 2022

On January 30, 2014, Ply Gem Industries issued $500.0 million aggregate principal amount of 6.50% Senior Notes due 2022 (the "6.50% Senior Notes") at par. On September 19, 2014, Ply Gem Industries issued an additional $150.0 million aggregate principal amount of 6.50% Senior Notes (the "Senior Tack-on Notes") at an issue price of 93.25%. Interest accrues at 6.50% per annum and is paid semi-annually on February 1 and August 1 of each year. All issued and outstanding 6.50% Senior Notes are registered under the Securities Act. The 6.50% Senior Notes will mature on February 1, 2022.

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Prior to February 1, 2017, Ply Gem Industries may redeem up to 40% of aggregate principal amount of the 6.50% Senior Notes with the net cash proceeds from certain equity offerings at a redemption price equal to 106.50% of the aggregate principal amount of the 6.50% Senior Notes to be redeemed, plus accrued and unpaid interest, if any, provided that at least 50% of the aggregate principal amount of the 6.50% Senior Notes remains outstanding after the redemption. Prior to February 1, 2017, Ply Gem Industries may redeem the 6.50% Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus a “make-whole” premium plus accrued and unpaid interest, if any. At any time on or after February 1, 2017, Ply Gem Industries may redeem the 6.50% Senior Notes, in whole or in part, at declining redemption prices set forth in the indenture governing the 6.50% Senior Notes plus, in each case, accrued and unpaid interest, if any, to the redemption date. The effective interest rate for the 6.50% Senior Notes is 8.39% after considering each of the different interest expense components of this instrument, including the coupon payment and the deferred debt issuance costs.

The 6.50% Senior Notes are fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by Ply Gem Holdings and all of the wholly-owned domestic subsidiaries of Ply Gem Industries (the “Guarantors”).  The indenture governing the 6.50% Senior Notes contains certain covenants that limit the ability of Ply Gem Industries and its restricted subsidiaries to incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem their stock, make loans and investments, sell assets, incur certain liens, enter into agreements restricting their ability to pay dividends, enter into transactions with affiliates, and consolidate, merge or sell assets.  In particular, Ply Gem Industries and its restricted subsidiaries may not incur additional debt (other than permitted debt (as defined in the indenture) in limited circumstances) unless, after giving effect to such incurrence, the consolidated interest coverage ratio of Ply Gem Industries would be at least 2.00 to 1.00.  

In the absence of satisfying the consolidated interest coverage ratio test, Ply Gem Industries and its restricted subsidiaries may only incur additional debt under certain circumstances, including, but not limited to, debt under credit facilities (as defined in the indenture) (x) in an amount not to exceed the greater of (a) $350.0 million and (b) the borrowing base (as defined in the indenture) and (y) in an amount not to exceed the greater of (A) $575.0 million and (B) the aggregate amount of indebtedness (as defined in the indenture) that that would cause the consolidated secured debt ratio (as defined in the indenture) to be equal to 4.00 to 1.00; purchase money indebtedness in an aggregate amount not to exceed the greater of (x) $35.0 million and (y) 10% of consolidated net tangible assets (as defined in the indenture) at any one time outstanding; debt of foreign subsidiaries in an aggregate amount not to exceed the greater of (x) $60.0 million and (y) 15% of consolidated net tangible assets (as defined in the indenture) at any one time outstanding; debt pursuant to a general basket in an aggregate amount at any one time outstanding not to exceed the greater of (x) $75.0 million and (y) 20% of consolidated net tangible assets; and the refinancing of debt under certain circumstances.

Term Loan Facility due 2021

On January 30, 2014, Ply Gem Industries entered into a credit agreement governing the terms of its $430.0 million Term Loan Facility. Ply Gem Industries originally borrowed $430.0 million under the Term Loan Facility on January 30, 2014, with an original discount of approximately $2.2 million, yielding proceeds of approximately $427.9 million. The Term Loan Facility will mature on January 30, 2021. The Term Loan Facility requires scheduled quarterly payments in an aggregate annual amount equal to 1.00% of the original aggregate principal amount of the Term Loan Facility with the balance due at maturity. Interest on outstanding borrowings under the Term Loan Facility is paid quarterly.

Borrowings under the Term Loan Facility bear interest at a rate equal to, at Ply Gem Industries’ option, either (a) a base rate determined by reference to the highest of (i) the prime rate of the administrative agent under the credit agreement, (ii) the federal funds rate plus 0.50% and (iii) the adjusted LIBO rate for a one-month interest period plus 1.00% or (b) a LIBO rate determined by reference to the cost of funds for eurocurrency deposits in dollars for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a 1.00% floor, plus, in each case, an applicable margin of 3.00% for any eurocurrency loan and 2.00% for any alternate base rate loan. As of April 2, 2016, the Company's interest rate on the Term Loan Facility was 4.00%. The effective interest rate for the Term Loan is 7.24% after considering each of the different interest expense components of this instrument, including the coupon payment, the deferred debt issuance costs and the original issue discount.

The Term Loan Facility allows Ply Gem Industries to request one or more incremental term loan facilities in an aggregate amount not to exceed the greater of (x) $140.0 million and (y) an amount such that Ply Gem Industries’ consolidated senior secured debt ratio (as defined in the credit agreement), on a pro forma basis, does not exceed 3.75 to 1.00, in each case, subject to certain conditions and receipt of commitments by existing or additional financial institutions or institutional lenders.

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The Term Loan Facility requires Ply Gem Industries to prepay outstanding term loans, subject to certain exceptions, with: (i) 50% (which percentage will be reduced to 25% if our consolidated senior secured debt ratio is equal or less than 2.50 to 1.00 but greater than 2.00 to 1.00 and to 0% if our consolidated senior secured debt ratio is equal to or less than 2.00 to 1.00) of our annual excess cash flow (as defined in the credit agreement), to the extent such excess cash flow exceeds $15.0 million; (ii) 100% of the net cash proceeds of certain non-ordinary course asset sales or certain insurance and condemnation proceeds, in each case subject to certain exceptions and reinvestment rights; and (iii) 100% of the net cash proceeds of certain issuances of debt, other than proceeds from debt permitted under the Term Loan Facility. Ply Gem Industries may voluntarily repay outstanding loans under the Term Loan Facility at any time without premium or penalty, other than customary “breakage” costs with respect to LIBOR loans. As of and for the year ended December 31, 2015, the Company's consolidated senior secured debt ratio was 1.97 and as a result no excess cash flow payment under the Term Loan Facility was required. However, the Company elected on March 10, 2016 to voluntarily prepay $30.0 million on the Term Loan Facility to reduce its outstanding indebtedness.

The Term Loan Facility is secured on a first-priority lien basis by the stock of Ply Gem Industries and by substantially all of the assets (other than the assets securing the obligations under the ABL Facility, which primarily consist of accounts receivable, inventory, cash, deposit accounts, securities accounts, chattel paper, contract rights, instruments, documents related thereto and proceeds of the foregoing) of Ply Gem Industries and the Guarantors that are subsidiaries of Ply Gem Industries and on a second-priority lien basis by the assets that secure the ABL Facility.

The Term Loan Facility includes negative covenants, subject to certain exceptions, that are substantially the same as the negative covenants in the 6.50% Senior Notes but does not contain any restrictive financial covenants. The Term Loan Facility also restricts the ability of Ply Gem Industries’ subsidiaries to enter into agreements restricting their ability to grant liens to secure the Term Loan Facility and contains a restriction on changes in fiscal year.

Senior Secured Asset Based Revolving Credit Facility due 2020

On November 5, 2015, Ply Gem Holdings, Inc., Ply Gem Industries, Inc., Gienow Canada Inc., and Mitten Inc. (together with Gienow, the “Canadian Borrowers”) entered into a second amended and restated credit agreement governing the ABL Facility. Among other things, the second amendment and restatement of the credit agreement governing the ABL Facility: (i) increased the overall facility to $350.0 million from $300.0 million, (ii) established an accordion feature of $50.0 million, (iii) reduced the applicable margin for borrowings under the ABL Facility to a range from 1.25% to 2.00% for Eurodollar rate loans, depending on availability, and (iv) extended the maturity until November 5, 2020. Under the ABL Facility, $300.0 million is available to Ply Gem Industries and $50.0 million is available to the Canadian Borrowers. The following summary describes the ABL Facility after giving effect to the second amendment and restatement. As a result of the November 2015 ABL Facility amendment in which the loan syndication consisted of previous members who either maintained or increased their position as well as new syndication members, the Company capitalized new debt issuance costs of $1.5 million and will amortize these costs through 2020.

Borrowings under the ABL Facility bear interest at a rate per annum equal to, at Ply Gem Industries’ option, either (a) a base rate determined by reference to the higher of (1) the corporate base rate of the administrative agent under the ABL Facility and (2) the federal funds rate plus 0.5% or (b) a Eurodollar rate determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, in each case plus an applicable margin.  The initial applicable margin for borrowings under the ABL Facility was 0.50% for base rate loans and 1.50% for Eurodollar rate loans.  The applicable margin for borrowings under the ABL Facility is subject to step ups and step downs based on average excess availability under the ABL Facility.  Swingline loans bear interest at a rate per annum equal to the base rate plus the applicable margin.

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In addition to paying interest on outstanding principal under the ABL Facility, Ply Gem Industries is required to pay a commitment fee in respect of the unutilized commitments thereunder, which fee will be determined based on utilization of the ABL Facility (increasing when utilization is low and decreasing when utilization is high) multiplied by a commitment fee rate determined by reference to average excess availability under the ABL Facility. The commitment fee rate during any fiscal quarter is 0.375% when average excess availability is greater than $100.0 million for the preceding fiscal quarter and 0.25% when average availability is less than or equal to $100.0 million for the preceding fiscal quarter.  Ply Gem Industries must also pay customary letter of credit fees equal to the applicable margin on Eurodollar loans and agency fees.   As of April 2, 2016, the Company’s interest rate on the ABL Facility was approximately 1.89%.  The ABL Facility requires that if (a) excess availability is less than the greater of (x) 10.0% of the lower of the borrowing base and the aggregate commitments and (y) $25.0 million or (b) any event of default has occurred and is continuing, Ply Gem Industries must comply with a minimum fixed charge coverage ratio test of 1.0 to 1.0.  If the excess availability under the ABL Facility is less than the greater of (a) 12.5% of the lesser of the borrowing base and the aggregate commitments and (b) $30.0 million ($27.5 million for the months of January, February, March and April) for a period of 5 consecutive days or an event of default has occurred and is continuing, all cash from Ply Gem Industries material deposit accounts (including all concentration accounts) will be swept daily into a collection account controlled by the administrative agent under the ABL Facility and used to repay outstanding loans and cash collateralize letters of credit.

All obligations under the ABL Facility are unconditionally guaranteed by Ply Gem Holdings and substantially all of Ply Gem Industries’ existing and future, direct and indirect, wholly owned domestic subsidiaries.  All obligations under the ABL Facility, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of the assets of Ply Gem Industries and the guarantors, including a first-priority security interest in personal property consisting of accounts receivable, inventory, cash, deposit accounts, and certain related assets and proceeds of the foregoing and a second-priority security interest in, and mortgages on, substantially all of Ply Gem Industries’ and the Guarantors’ material owned real property and equipment and all assets that secure the Term Loan Facility on a first-priority basis.  In addition to being secured by the collateral securing the obligations of Ply Gem Industries under the domestic collateral package, the obligations of the Canadian Borrowers, which are borrowers under the Canadian sub-facility under the ABL Facility, are also secured by a first-priority security interest in substantially all of the assets of such Canadian subsidiaries, plus additional mortgages in Canada, and a pledge by Ply Gem Industries of the remaining 35% of the equity interests of the Canadian Borrowers pledged only to secure the Canadian sub-facility.

The ABL Facility contains certain covenants that limit Ply Gem Industries’ ability and the ability of Ply Gem Industries’ subsidiaries to incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem their stock, make loans and investments, sell assets, incur certain liens, enter into transactions with affiliates, and consolidate, merge or sell assets.  

As of April 2, 2016, Ply Gem Industries had approximately $329.4 million of contractual availability and approximately $208.4 million of borrowing base availability under the ABL Facility, reflecting $10.0 million of borrowings outstanding and approximately $10.6 million of letters of credit and priority payables reserves.

Loss on debt modification or extinguishment

During March 2016, the Company made a voluntarily prepayment of $30.0 million on the Term Loan Facility to reduce its outstanding indebtedness as allowable under the terms of the Term Loan Facility. The Company performed an analysis to determine the proper accounting treatment for this voluntary prepayment by evaluating the change in cash flows and determined that there were no changes in the creditors as a result of the prepayment. Consequently, the Company recognized a loss on debt modification or extinguishment of approximately $2.4 million for the three months ended April 2, 2016 reflecting the proportionate write-off of the related debt discount and debt issuance costs associated with the $30.0 million payment, as summarized in the table below.

(Amounts in thousands)	For the three months ended
	April 2, 2016		April 4, 2015
Loss on modification of debt:
Term Loan Facility unamortized discount	$	1,915	—
Term Loan Facility unamortized debt issuance costs	484		—
	2,399		—
Total loss on modification or extinguishment of debt	$	2,399	$	—

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6.   PENSION PLANS

The Company has two pension plans, the Ply Gem Group Pension Plan and the MW Manufacturers, Inc. Retirement Plan. The Company’s net periodic benefit expense for the combined plans for the periods indicated consists of the following components:

(Amounts in thousands)	For the three months ended
	April 2, 2016			April 4, 2015
Service cost	$	—		$	—
Interest cost	486			502
Expected return on plan assets	(545		)	(577		)
Amortization of loss	354			296
Net periodic benefit expense	$	295		$	221

7.   COMMITMENTS AND CONTINGENCIES

Indemnifications

In connection with the Ply Gem acquisition, in which Ply Gem Industries was acquired from Nortek, Inc. (“Nortek”) in February 2004, Nortek has agreed to indemnify the Company for certain liabilities as set forth in the stock purchase agreement governing the Ply Gem acquisition.  In the event Nortek is unable to satisfy amounts due under these indemnifications, the Company would be liable.  The Company believes that Nortek has the financial capacity to honor its indemnification staobligations and therefore does not anticipate incurring any losses related to liabilities indemnified by Nortek under the stock purchase agreement.  A receivable related to this indemnification has been recorded in other long-term assets of approximately $1.6 million and $1.8 million at April 2, 2016 and December 31, 2015, respectively.  As of April 2, 2016 and December 31, 2015, the Company has recorded liabilities related to these indemnifications of approximately $0.5 million and $0.5 million, respectively, in current liabilities and $1.1 million and $1.3 million, respectively, in long-term liabilities, consisting of the following:

(Amounts in thousands)	April 2, 2016		December 31, 2015
Product claim liabilities	$	138	$	138
Multi-employer pension plan withdrawal liability	884		960
Other	531		664
	$	1,553	$	1,762

Warranty claims

The Company sells a number of products and offers a number of warranties.  The specific terms and conditions of these warranties vary depending on the product sold.  The Company estimates the costs that may be incurred under their warranties and records a liability for such costs at the time of sale.  Factors that affect the Company’s warranty liabilities include the number of units sold, historical and anticipated rates of warranty claims, cost per claim and new product introduction.  The Company assesses the adequacy of the recorded warranty claims and adjusts the amounts as necessary.  As of April 2, 2016 and December 31, 2015, warranty liabilities of approximately $17.1 million and $16.6 million, respectively, have been recorded in current liabilities and approximately $60.4 million and $59.9 million, respectively, have been recorded in long term liabilities.

Changes in the Company’s short-term and long-term warranty liabilities are as follows:

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	For the three months ended
(Amounts in thousands)	April 2, 2016			April 4, 2015
Balance, beginning of period	$	76,562		$	84,423
Warranty expense during period	5,512			5,027
Settlements made during period	(4,613		)	(5,169		)
Balance, end of period	$	77,461		$	84,281

Environmental

The Company is subject to United States and Canadian federal, state, provincial and local laws and regulations relating to pollution and the protection of the environment, including those governing emissions to air, discharges to water, use, storage and transport of hazardous materials, storage, treatment and disposal of waste, remediation of contaminated sites, and protection of worker health and safety. From time to time, the Company's facilities are subject to investigation by governmental regulators. In addition, the Company has been identified as one of many potentially responsible parties for contamination present at certain offsite locations to which it or its predecessors are alleged to have sent hazardous materials for recycling or disposal. The Company may be held liable, or incur fines or penalties, in connection with such requirements or liabilities for, among other things, releases of hazardous substances occurring on or emanating from current or formerly owned or operated properties or any associated offsite disposal location, or for known or newly-discovered contamination at any of the Company's properties from activities conducted by us or previous occupants. The amount of any liability, fine or penalty may be material, and certain environmental laws impose strict, and under certain circumstances joint and several, liability for the cost of addressing releases of hazardous substances upon certain classes of persons, including site owners or operators and persons that disposed or arranged for the disposal of hazardous substances at contaminated sites.

MW Manufacturers Inc. (“MW”), a subsidiary of MWM Holding, Inc., entered into an Administrative Order on Consent (the “Consent Order”), effective September 12, 2011, with the United States Environmental Protection Agency (“EPA”), Region III, under Section 3008(h) of the Resource Conservation and Recovery Act ("RCRA"), with respect to its Rocky Mount, Virginia property.  During 2011, as part of the Consent Order, MW provided the EPA, among other things, a RCRA Facility Investigation Workplan (the “Workplan”) as well as a preliminary cost estimate of approximately $1.8 million for the predicted assessment, remediation and monitoring activities to be conducted pursuant to the Consent Order over the remediation period, which is currently estimated through 2023. During 2012, the EPA approved the Workplan, and MW is currently implementing the Workplan. The Company has recorded approximately $0.3 million of this environmental liability within current liabilities and approximately $1.2 million within other long-term liabilities in the Company’s condensed consolidated balance sheet at April 2, 2016 and December 31, 2015.  The Company will adjust this environmental remediation liability in future periods, if necessary, as further information develops or circumstances change.

Certain liabilities with respect to this contamination relate to the previous closure of an underground storage tank and were assumed by U.S. Industries, Inc., pursuant to its indemnity obligation under the stock purchase agreement dated August 11, 1995, whereby U.S. Industries, Inc. sold the stock of MW to FPI Acquisition Corp. (“Fenway Partners”). As the successor-in-interest of Fenway Partners, the Company is similarly indemnified by U.S. Industries, Inc. Notwithstanding this indemnity, however, under applicable Federal and State laws, MW, and the Company as its parent, could be held liable for all or part of the costs associated with the matter under certain circumstances. Moreover, the Company’s ability to seek indemnification from U.S. Industries, Inc. is limited by the terms and limits of the indemnity as well as the strength of U.S. Industries, Inc. is, however, limited by the terms and limits of the indemnity as well as the strength of U.S. Industries, Inc.’s financial condition, which could change in the future.  As of April 2, 2016, no recovery has been recognized on the Company’s condensed consolidated balance sheet, but the Company will actively pursue this indemnity in future periods and will recognize future recoveries in the period in which they become probable.

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The State of Nebraska is investigating certain groundwater contamination in northern York, Nebraska, comprised primarily of volatile organic compounds (VOC) (predominantly trichloroethene (TCE)). In December 2013, the EPA announced its proposal to add this groundwater contamination site to the Superfund National Priorities List (NPL) after it was referred to the EPA by the State of Nebraska. Sampling was conducted at the Kroy Building Products, Inc. (“Kroy”) facility in York, Nebraska during the first quarter of 2010. In February 2015, the EPA sent a request for information pursuant to Section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), and Kroy has responded to this request for information. Given the preliminary stage of this matter, the Company has not recorded a liability for this matter in its condensed consolidated balance sheet as of April 2, 2016. Alcan Aluminum Corporation (“Alcan”) has assumed the obligation to indemnify the Company with respect to certain liabilities for environmental contamination of the Kroy facility occurring prior to 1994. Notwithstanding this indemnity, however, under applicable Federal and State laws, Kroy, and Ply Gem as its parent, could be held liable for all or part of the costs associated with the matter under certain circumstances. Moreover, the ability of Kroy and Ply Gem to seek indemnification may be limited by the terms and limits of the indemnity as well as the strength of Alcan’s financial condition, which could change in the future.

The Company is currently involved in environmental proceedings involving Gienow Canada Inc. (f/k/a Ply Gem Canada, Inc.) and Alberta Environment (arising from subsurface contamination discovered at our Calgary, Alberta property) for which the Company has a $0.1 million liability included in its condensed consolidated balance sheet, and the Company may in the future be subject to environmental proceedings involving Thermal-Gard, Inc. (arising from groundwater contamination in Punxsutawney, Pennsylvania), Mastic Home Exteriors, Inc. (“MHE”) (relating to a closed landfill site in Sidney, Ohio as well as participating as a potentially responsible party in nine contaminated sites in Indiana, Ohio and South Carolina), and Simonton (relating to closed lagoons and certain contamination in Paris, Illinois as well as certain contamination associated with certain 7-Eleven convenience food stores). Under the stock purchase agreement governing the MHE acquisition, Alcoa Securities Corporation and Alcoa, Inc. are to indemnify the Company for certain environmental liabilities in excess of $2.5 million including liabilities relating to the landfill site in Sidney, Ohio and the nine contaminated sites in Indiana, Ohio and South Carolina. Under the stock purchase agreement governing the Simonton acquisition, Fortune Brands Windows & Doors, Inc., is to indemnify the Company for any environmental claims associated with the 7-Eleven convenience food stores. The Company's ability to seek indemnification or enforce these and other obligations is, however, limited by the strength of the financial condition of the indemnitor or responsible party, which could change in the future, as well as the terms and limits of any such indemnities or obligations.

Based on current information, the Company is not aware of any compliance obligations, claims, releases or investigations that will have a material adverse effect on our results of operations, cash flows or financial position except as otherwise disclosed in the Company's condensed consolidated financial statements. However, there can be no guarantee that previously known or newly-discovered matters or any inability to enforce our available indemnification rights against previous owners of the Company, its subsidiaries, or their businesses or properties will not result in material costs or liabilities. While the purchase agreements governing certain of our acquisitions provide that the sellers will indemnify us, subject to certain limitations, for certain environmental liabilities, our ability to seek indemnification from the respective sellers is limited by various factors, including the financial condition of the indemnitor or responsible party as well as by the terms and limits of such indemnities or obligations. As a result, there can be no assurance that we could receive any indemnification from the sellers, and any related environmental liabilities, costs or penalties could have a material adverse effect on our financial condition and results of operations.

Self-insured risks

The Company maintains a broad range of insurance policies which include general liability insurance coverage and workers compensation. These insurance policies protect the Company against a portion of the risk of loss from claims. However, the Company retains a portion of the overall risk for such claims through its self-insured per occurrence and aggregate retentions, deductibles, and claims in excess of available insurance policy limits. The Company's general liability insurance includes coverage for certain damages arising out of product design and manufacturing defects. The Company's insurance coverage is generally subject to a per occurrence retention.

The Company reserves for costs associated with claims, as well as incurred but not reported losses (“IBNR”), based on an outside actuarial analysis of its historical claims. These estimates make up a significant portion of the Company's liability and are subject to a high degree of uncertainty due to a variety of factors, including changes in type of claims, claims reporting and resolution patterns, frequency and timing of claims, third party recoveries, estimates of claim values, claims management expenses (including legal fees and expert fees), insurance industry practices, the regulatory environment, and legal precedent. Adjustments to estimated reserves are recorded in the period in which the change in estimate occurs.

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Litigation

During the past several years, the Company incurred increased litigation expense primarily related to the claims discussed below. The Company believes it has valid defenses to the outstanding claims discussed below and will vigorously defend all such claims; however, litigation is subject to many uncertainties and there cannot be any assurance that the Company will ultimately prevail or, in the event of an unfavorable outcome or settlement of litigation, that the ultimate liability would not be material and would not have a material adverse effect on the business, results of operations, cash flows or financial position of the Company.

In John Gulbankian v. MW Manufacturers, Inc. (“Gulbankian”), a purported class action filed in March 2010 in the United States District Court for the District of Massachusetts, plaintiffs, on behalf of themselves and all others similarly situated, alleged damages as a result of the defective design and manufacture of certain MW vinyl clad windows. In Eric Hartshorn and Bethany Perry v. MW Manufacturers, Inc. (“Hartshorn”), a purported class action filed in July 2012 in the District Court, plaintiffs, on behalf of themselves and all others similarly situated, alleged damages as a result of the defective design and manufacture of certain MW vinyl clad windows. On April 22, 2014, plaintiffs in both the Gulbankian and Hartshorn cases filed a Consolidated Amended Class Action Complaint, making similar claims against all MW vinyl clad windows.

MW entered into a settlement agreement with plaintiffs as of April 18, 2014 to settle both the Gulbankian and Hartshorn cases on a nationwide basis (the “Vinyl Clad Settlement Agreement”). The Vinyl Clad Settlement Agreement provides that this settlement applies to any and all MW vinyl clad windows manufactured from January 1, 1987 through May 23, 2014, and provides for a cash payment for eligible consumers submitting qualified claims showing, among other requirements, certain damage to their MW vinyl clad windows. The period for submitting qualified claims is the later of: (i) May 28, 2016, or (ii) the last day of the warranty period for the applicable window. On December 29, 2014, the District Court granted final approval of this settlement, as well as MW’s payment of attorneys' fees and costs to plaintiffs' counsel in the amount of $2.5 million, issuing a Final Approval Order, Final Judgment, and Order of Dismissal with Prejudice (the "Final Approval Order"). A notice of appeal of the Final Approval Order (the “Appeal”) was given by certain objectors to the settlement, and on May 6, 2015, MW entered into a settlement agreement with, among others, the objectors to fully and finally resolve their claims, including the dismissal of Karl Memari v. Ply Gem Prime Holdings, Inc. et al., another lawsuit seeking class certification with respect to MW's vinyl clad windows, making the Vinyl Clad Settlement Agreement final and binding on the parties. The Company and MW deny all liability in the settlements and with respect to the facts and claims alleged. The Company, however, is aware of the substantial burden, expense, inconvenience and distraction of continued litigation, and therefore agreed to settle these matters.

As a result of the Vinyl Clad Settlement Agreement, the Company recognized a $5.0 million expense during the year ended December 31, 2014 within selling, general, and administrative expenses in the Company’s consolidated statement of operations and comprehensive income (loss) in the Company's Windows and Doors segment. It is possible that the Company may incur costs in excess of the recorded amounts; however, the Company currently expects that the total net cost will not exceed $5.0 million. As of April 2, 2016, approximately $1.5 million of this liability is currently outstanding with $0.7 million as a current liability within accrued expenses and $0.8 million as a noncurrent liability within other long-term liabilities in the Company’s condensed consolidated balance sheet.

In Anthony Pagliaroni et al. v. Mastic Home Exteriors, Inc. and Deceuninck North America, LLC, a purported class action filed in January 2012 in the United States District Court for the District of Massachusetts, plaintiffs, on behalf of themselves and all others similarly situated, allege damages as a result of the defective design and manufacture of Oasis composite deck and railing, which was manufactured by Deceuninck North America, LLC (“Deceuninck”) and sold by Mastic Home Exteriors, Inc. (“MHE”). The plaintiffs seek a variety of relief, including (i) economic and compensatory damages, (ii) treble damages, (iii) punitive damages, and (iv) attorneys' fees and costs of litigation. The damages sought in this action have not yet been quantified. The hearing regarding plaintiffs’ motion for class certification was held on March 10, 2015, and the District Court denied plaintiffs’ motion for class certification on September 22, 2015. On October, 6, 2015, plaintiffs filed a petition for interlocutory appeal of the denial of class certification to the U.S. Court of Appeals for the First Circuit, and on April 12, 2016, the Court of Appeals denied this petition for appeal. Deceuninck, as the manufacturer of Oasis deck and railing, has agreed to indemnify MHE for certain liabilities related to this claim pursuant to the sales and distribution agreement, as amended, between Deceuninck and MHE. MHE's ability to seek indemnification from Deceuninck is, however, limited by the terms and limits of the indemnity as well as the strength of Deceuninck's financial condition, which could change in the future.

In The Muhler Company, Inc. v. Ply Gem Prime Holdings, Inc. et al., a lawsuit filed in April 2011 in the United States District Court for the District of South Carolina, Charleston Division, plaintiff alleges unfair competition and trade practices.

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The plaintiff seeks a variety of relief, including (i) consequential damages, (ii) treble damages, (iii) punitive damages, and (iv) attorneys' fees and costs of litigation. In April 2013, the District Court granted the Company's motion for summary judgment with respect to the federal Lanham Act claims. In May 2013, the plaintiff filed a notice of appeal to the U.S. Court of Appeals for the Fourth Circuit with respect to the summary judgment granted on the federal Lanham Act claims, and the Fourth Circuit denied interlocutory appeal. With the summary judgment granted on the federal Lanham Act claims, only state unfair competition and trade practices claims remain. In April 2015, the District Court heard arguments on the Company's motion for summary judgment with respect to such claims, and on July 13, 2015, the District Court granted the Company’s motion. On July 27, 2015, the plaintiff filed an appeal with the U.S. Court of Appeals for the Fourth Circuit with respect to the District Court’s ruling, and on February 10, 2016, the U.S. Court of Appeals for the Fourth Circuit affirmed the District Court’s ruling. On February 24, 2016, the plaintiff filed a petition for rehearing, which was denied by the Court of Appeals on March 15, 2016. The damages sought in this action have not yet been quantified.

In rePly Gem Holdings, Inc. Securities Litigation isa purported federal securities class action filed on May 19, 2014 in the United States District Court for the Southern District of New York against Ply Gem Holdings, Inc., several of its directors and officers, and the underwriters associated with the Company’s IPO. It is filed on behalf of all persons or entities, other than the defendants, who purchased the common shares of the Company pursuant and/or traceable to the Company’s IPO and seeks remedies under Sections 11 and 15 of the Securities Act of 1933, alleging that the Company’s Form S-1 registration statement was negligently prepared and materially inaccurate, containing untrue statements of material fact and omitting material information which was required to be disclosed. The plaintiffs seek a variety of relief, including (i) damages together with interest thereon and (ii) attorneys’ fees and costs of litigation. On October 14, 2014, Strathclyde Pension Fund was certified as lead plaintiff, and class counsel was appointed. On February 13, 2015, the defendants filed their motion to dismiss the complaint. On September 29, 2015, the District Court granted defendants’ motion to dismiss, but ruled that plaintiff could file an amended complaint. On November 6, 2015, plaintiff filed an amended complaint, and on January 13, 2016, the defendants filed their motion to dismiss this amended complaint. The District Court has not yet ruled on this motion. The damages sought in this action have not yet been quantified. Pursuant to the Underwriting Agreement, dated May 22, 2013, entered into in connection with the IPO, the Company has agreed to reimburse the underwriters for the legal fees and other expenses reasonably incurred by the underwriters’ law firm in its representation of the underwriters in connection with this matter. Pursuant to Indemnification Agreements, dated as of May 22, 2013, between the Company and each of the directors and officers named in this action, the Company has agreed to assume the defense of such directors and officers. We believe the purported federal securities class action is without merit and will vigorously defend the lawsuit.

In Raul Carrillo-Hueso and Chec Xiong v. Ply Gem Industries, Inc. and Ply Gem Pacific Windows Corporation, a purported class action filed on November 25, 2015 in the Superior Court of the State of California, County of Alameda, plaintiffs, on behalf of themselves and all others similarly situated, allege damages as a result of, among other things, the defendants’ failure to provide (i) statutorily required meal breaks at the Sacramento, California facility, (ii) accurate wage statements to employees in California, and (iii) all wages due on termination in California. The plaintiffs seek a variety of relief, including (i) economic and compensatory damages, (ii) statutory damages, (iii) penalties, (iv) pre- and post-judgment interest, and (v) attorneys' fees and costs of litigation. The damages sought in this action have not yet been quantified.

In Tina Morgan v. Ply Gem Industries, Inc. and Simonton Industries, Inc., a purported class action filed on December 11, 2015 in the Superior Court of the State of California, County of Solano, plaintiff, on behalf of herself and all others similarly situated, alleges damages as a result of, among other things, the defendants’ failure at the Vacaville, California facility to (i) pay overtime wages, (ii) provide statutorily required meal breaks, (iii) provide accurate wage statements, and (iv) pay all wages owed upon termination. The plaintiff seeks a variety of relief, including (i) economic and compensatory damages, (ii) statutory damages, (iii) penalties, (iv) pre- and post-judgment interest, and (v) attorneys' fees and costs of litigation. The damages sought in this action have not yet been quantified.

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Other contingencies

The Company is subject to other contingencies, including legal proceedings and claims arising out of its operations and businesses that cover a wide range of matters, including, among others, environmental, contract, employment, intellectual property, securities, personal injury, property damage, product liability, warranty, and modification, adjustment or replacement of component parts or units sold, which may include product recalls.  Product liability, environmental and other legal proceedings also include matters with respect to businesses previously owned.  The Company has used various substances in their products and manufacturing operations, which have been or may be deemed to be hazardous or dangerous, and the extent of its potential liability, if any, under environmental, product liability and workers’ compensation statutes, rules, regulations and case law is unclear.  Further, due to the lack of adequate information and the potential impact of present regulations and any future regulations, there are certain circumstances in which no range of potential exposure may be reasonably estimated.  Also, it is not possible to ascertain the ultimate legal and financial liability with respect to certain contingent liabilities, including lawsuits, and therefore no such estimate has been made as of April 2, 2016.

8.   ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES

Accrued expenses consist of the following at April 2, 2016 and December 31, 2015:

(Amounts in thousands)	April 2, 2016		December 31, 2015
Insurance	$	9,465	$	9,347
Employee compensation and benefits	13,781		20,381
Sales and marketing	33,835		50,405
Product warranty	17,119		16,619
Accrued freight	1,519		1,445
Accrued interest	7,150		17,808
Accrued environmental liability	437		430
Accrued pension	647		647
Accrued sales returns and discounts	4,728		3,368
Accrued taxes	5,436		5,575
Litigation accrual	700		700
Other	22,446		26,237
	$	117,263	$	152,962

Other long-term liabilities consist of the following at April 2, 2016 and December 31, 2015:

(Amounts in thousands)	April 2, 2016		December 31, 2015
Insurance	$	1,302	$	1,237
Pension liabilities	14,827		15,033
Multi-employer pension withdrawal liability	884		960
Product warranty	60,442		59,943
Long-term product claim liability	138		138
Long-term environmental liability	1,196		1,211
Liabilities for tax uncertainties	2,928		2,866
Litigation accrual	810		829
Other	7,243		8,676
	$	89,770	$	90,893

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Long-term incentive plan

The Company has a long-term incentive plan (“LTIP”) for certain employees. The long-term incentive plan was implemented to retain and incentivize key employees. During the three months ended April 2, 2016 and April 4, 2015, the Company recognized a LTIP expense of $1.7 million and $0.7 million, respectively, which has been recorded within selling, general, and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss). The LTIP liability was $4.4 million and $5.9 million as of April 2, 2016 and December 31, 2015, respectively, of which $3.4 million and $3.1 million has been recorded within accrued expenses and $1.0 million and $2.8 million in other long-term liabilities in the condensed consolidated balance sheets as of April 2, 2016 and December 31, 2015, respectively.

Other liabilities

During the three months ended April 2, 2016 and April 4, 2015, the Company made approximately $0.7 million and $0.5 million, in cash payments on restructuring liabilities, respectively. These payments were for a restructuring and integration program implemented in Western Canada and general back office centralization efforts incurred as well as product simplification costs incurred for the entire Windows and Doors segment.

9.   INCOME TAXES

Effective tax rate

Under FASB Accounting Standards Codification 740-270, Income Taxes - Interim Reporting, each interim period is considered an integral part of the annual period and tax expense is measured using an estimated annual effective rate. Estimates of the annual effective tax rate at the end of interim periods are, of necessity, based on evaluation of possible future events and transactions and may be subjevact to subsequent refinement or revision. The Company calculates its quarterly tax provision consistent with the guidance provided by ASC 740-270, whereby the Company forecasts its estimated annual effective tax rate then applies that rate to its year-to-date pre-tax book income (loss). In addition, we exclude jurisdictions with a projected loss for the year or the year-to-date loss where we cannot recognize a tax benefit from our estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections. In addition to the tax resulting from applying the estimated annual effective tax rate to pre-tax income (loss), the Company includes certain items treated as discrete events to arrive at an estimated effective tax rate. Future changes in the forecasted annual income (loss) projections, tax rate changes, or discrete tax items could result in significant adjustments to quarterly income tax expense (benefit) in future periods in accordance with ASC 740-270.

For the three months endedApril 2, 2016, the Company's estimated effective income tax rate was approximately 5.4%, which varied from the statutory rate primarily due to state income tax expense, valuation allowances, and foreign income taxes. The effective tax rate including discrete items was 5.1%. The tax benefit for the three months ended April 2, 2016 and April 4, 2015 was approximately $1.5 million and $2.4 million, respectively.

Valuation allowance

As of April 2, 2016, a full valuation allowance has been provided against certain deferred tax assets as it is presently deemed more likely than not that the benefit of such net tax assets will not be utilized. All of the Company's subsidiaries, excluding Mitten, are in a full valuation allowance position as of April 2, 2016.

Due to recent cumulative losses incurred by the Company, management did not rely upon projections of future taxable income in assessing the recoverability of deferred tax assets. The Company currently has book goodwill of approximately $28.0 million that is not amortized, which results in a deferred tax liability of approximately $6.9 million at April 2, 2016. Therefore, the reversal of deferred tax liabilities related to this goodwill is not considered a source of future taxable income in assessing the realization of its deferred tax assets. The Company continues to evaluate its ability to realize the net deferred tax assets and its estimates are subject to change.

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For the year ending December 31, 2016, the Company may achieve a three-year cumulative income position on a consolidated basis. If the Company achieves this income position during 2016, the Company will evaluate the need for a full, or partial valuation allowance. All of the factors the Company considers in evaluating whether and when to release all or a portion of the deferred tax asset valuation allowance involve significant judgment. For example, there are many different interpretations of "cumulative losses in recent years" which can be used. Also, significant judgment is involved in making projections of future financial and taxable income, since the Company's financial results are significantly dependent upon industry trends, including the new construction and repair and remodeling markets. Most of the markets in which the Company participates are currently in varying states of recovery from the historic downturn experienced in recent years; however, it is not possible to accurately predict whether recovery will continue, and if it does, at what rate and for how long. The Company anticipates any reversal of the valuation allowance during 2016 may favorably impact our results of operations in the period of reversal.

Tax uncertainties

Despite the Company’s belief that its tax return positions are consistent with applicable tax laws, the Company believes that certain positions could be challenged by taxing authorities. The Company’s tax reserves reflect the difference between the tax benefit claimed on tax returns and the amount recognized in the condensed consolidated financial statements. These reserves have been established based on management’s assessment as to potential exposure attributable to permanent differences and interest applicable to both permanent and temporary differences. The tax reserves are reviewed periodically and adjusted in light of changing facts and circumstances, such as progress of tax audits, lapse of applicable statutes of limitations and changes in tax law. Certain income tax returns are currently under examination by various taxing authorities. During the three months endedApril 2, 2016, approximately $0.1 million of interest expense was recorded on the remaining uncertain tax positions. The Company made no adjustments to the tax reserves during the three months endedApril 2, 2016.

The liability for unrecognized tax benefits as of April 2, 2016 was approximately $2.9 million and is recorded in other long-term liabilities in the accompanying condensed consolidated balance sheet. The corresponding amount of gross unrecognized tax benefit was approximately $15.9 million. The difference between the total unrecognized tax benefits and the amount of the liability for unrecognized tax benefits represents unrecognized tax benefits that have been netted against deferred tax assets related to net operating losses in accordance with ASC 740 in addition to accrued penalties and interest.

Tax Receivable Agreement

On May 22, 2013, the Company entered into a Tax Receivable Agreement (the “Tax Receivable Agreement”) with PG ITR Holdco, L.P. (the “Tax Receivable Entity”). The Tax Receivable Agreement generally provides for the payment by the Company to the Tax Receivable Entity of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that the Company actually realizes in periods ending after the IPO as a result of (i) net operating loss ("NOL") carryovers from periods (or portions thereof) ending before January 1, 2013, (ii) deductible expenses attributable to the transactions related to the IPO and (iii) deductions related to imputed interest deemed to be paid by the Company as a result of or attributable to payments under the Tax Receivable Agreement. The term of the Tax Receivable Agreement will continue until all such benefits have been utilized or expired. The Company will retain the benefit of the remaining 15% of these tax savings. The Tax Receivable Agreement will obligate the Company to make payments to the Tax Receivable Entity generally equal to 85% of the applicable cash savings that is actually realized as a result of utilizing NOL carryovers once the tax returns are filed for that respective tax year.

The Company estimates that the total anticipated amount of future payments under the Tax Receivable Agreement could be up to approximately $100.0 million assuming no material changes in the relevant tax law, that the Company earns sufficient taxable income to utilize the net operating loss carry forwards, and that utilization of such tax attributes is not subject to limitation under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code") as the result of an “ownership change”. It is possible that future transactions or events or changes in estimates could increase or decrease the actual tax benefits realized from these tax attributes and the corresponding Tax Receivable Agreement payments and liability. Future changes in the Company's full valuation allowance position including the reversal of all or a portion of the Company's valuation allowance could accelerate the expense recognition for the Tax Receivable Agreement liability up to the approximate $100.0 million estimate.

As of April 2, 2016 and December 31, 2015, the Company had a long-term liability of approximately $39.0 million and $20.8 million, respectively, and a current portion of $3.0 million and $3.0 million, respectively for the amount due pursuant to the Tax Receivable Agreement related to NOL carryovers. The Company recognized a $18.2 million and $17.2 million expense for this liability during the three months ended April 2, 2016 and April 4, 2015, respectively.

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Other

As of April 2, 2016, the Company has not established U.S. deferred taxes on unremitted earnings of the Company’s foreign subsidiaries. Notwithstanding the provisions within the American Jobs Creation Act of 2004, the Company continues to consider these amounts to be permanently reinvested.

10.   STOCK-BASED COMPENSATION

A rollforward of stock options outstanding during the three months endedApril 2, 2016 is presented below: 

	Stock Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Balance at January 1, 2016	2,613,793	$	13.75	5.22
Granted	—	—		—
Exercised	—	—		—
Forfeited or expired	—	—		—
Balance at April 2, 2016	2,613,793	$	13.75	4.96

As of April 2, 2016, 2,334,356 options were 100% vested.  At April 2, 2016, the Company had approximately $1.0 million of total unrecognized compensation expense that will be recognized over a weighted average period of 1.65 years.  The Company recorded compensation expense of $0.3 million and $0.5 million for the three months ended April 2, 2016 and April 4, 2015, respectively, related to stock option grants.

Restricted stock

During December 2014, the Company issued an aggregate of 23,944 restricted shares of common stock in an equal number to each of the four independent members of the Board of Directors.  These shares vested over the 2015 calendar period and the Company expensed these items as compensation expense, ratably during 2015. During the three months ended April 4, 2015, the Company expensed approximately $0.1 million related to these grants in selling, general, and administrative expenses within the condensed consolidated statement of operations and comprehensive income (loss).

During December 2015, the Company issued an aggregate of 25,664 restricted shares of common stock in an equal number to each of the four independent members of the Board of Directors.  These shares will vest over the 2016 calendar year and the Company will expense these items as compensation expense ratably during 2016. During the three months ended April 2, 2016, the Company expensed approximately $0.1 million related to these grants in selling, general, and administrative expenses within the condensed consolidated statement of operations and comprehensive income (loss).

11.   SEGMENT INFORMATION

The Company defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by management in deciding how to allocate resources and in assessing performance.  The Company has two reportable segments:  (1) Siding, Fencing and Stone and (2) Windows and Doors.

The income before income taxes of each segment includes the revenue generated on transactions involving products within that segment less identifiable expenses.  Unallocated income and expenses include items which are not directly attributed to or allocated to either of the Company’s reporting segments.  Such items include interest, legal costs, corporate payroll, and unallocated finance, and accounting expenses. Unallocated corporate assets include cash and certain receivables.  Interest expense is presented net of interest income.

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Following is a summary of the Company’s segment information:

	For the three months ended
(Amounts in thousands)	April 2, 2016			April 4, 2015
Net sales
Siding, Fencing and Stone	$	176,376		$	156,442
Windows and Doors	232,238			219,606
	$	408,614		$	376,048
Operating earnings (loss)
Siding, Fencing and Stone	$	20,374		$	10,322
Windows and Doors	(1,250		)	(16,408		)
Unallocated	(9,548		)	(7,964		)
	$	9,576		$	(14,050	)
	Total assets as of
	April 2, 2016			December 31, 2015
Total assets
Siding, Fencing and Stone	$	672,389		$	664,053
Windows and Doors	497,510			498,994
Unallocated	40,954			103,525
	$	1,210,853		$	1,266,572

12.  RELATED PARTY TRANSACTIONS

During March 2015, the Company entered into new retention agreements with the Company's Chief Executive Officer and Chief Financial Officer for $3.0 million and $1.3 million, respectively. These retention agreements incentivize these individuals for three years and will require the Company to make cumulative payments of $4.3 million on December 31, 2017, if both individuals remain employed in their current positions on that date.

13.   GUARANTOR/NON-GUARANTOR

The 6.50% Senior Notes were issued by our direct 100% owned subsidiary, Ply Gem Industries, and are fully and unconditionally guaranteed on a joint and several basis by the Company and certain of Ply Gem Industries’ 100% owned subsidiaries.  Ply Gem Industries is a 100% owned subsidiary of Ply Gem Holdings. Accordingly, the following guarantor and non-guarantor information is presented as of April 2, 2016 and December 31, 2015, and for the three months ended April 2, 2016 and April 4, 2015.  The non-guarantor information presented represents our Canadian subsidiaries: Gienow and Mitten.

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Three months ended April 2, 2016
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Net sales	$	—		$	—		$	369,514		$	39,100		$	—		$	408,614
Cost of products sold	—			—			289,872			32,041			—			321,913
Gross profit	—			—			79,642			7,059			—			86,701
Operating expenses:
Selling, general and
administrative expenses	—			9,548			49,022			12,165			—			70,735
Intercompany administrative
charges	—			—			7,772			1,673			(9,445		)	—
Amortization of intangible assets	—			—			5,360			1,030			—			6,390
Total operating expenses	—			9,548			62,154			14,868			(9,445		)	77,125
Operating earnings (loss)	—			(9,548		)	17,488			(7,809		)	9,445			9,576
Foreign currency gain	—			—			—			584			—			584
Intercompany interest	—			15,933			(15,550		)	(383		)	—			—
Interest expense	—			(18,691		)	—			(1		)	—			(18,692		)
Interest income	—			2			2			6			—			10
Loss on modification or
extinguishment of debt	—			(2,399		)	—			—			—			(2,399		)
Tax receivable agreement liability adjustment	—			(18,150		)	—			—			—			(18,150		)
Intercompany administrative income	—			9,445			—			—			(9,445		)	—
Income (loss) before equity in
subsidiaries' income (loss)	—			(23,408		)	1,940			(7,603		)	—			(29,071		)
Equity in subsidiaries' income (loss)	(27,577		)	(4,169		)	—			—			31,746			—
Income (loss) before benefit
for income taxes	(27,577		)	(27,577		)	1,940			(7,603		)	31,746			(29,071		)
Benefit for income taxes	—			—			(527		)	(967		)	—			(1,494		)
Net income (loss)	$	(27,577	)	$	(27,577	)	$	2,467		$	(6,636	)	$	31,746		$	(27,577	)
Other comprehensive income (loss):
Foreign currency translation adjustments	—			—			—			4,773			—			4,773
Unrealized loss on derivative instrument	—			—			—			(1,720		)	—			(1,720		)
Total comprehensive income (loss)	$	(27,577	)	$	(27,577	)	$	2,467		$	(3,583	)	$	31,746		$	(24,524	)

27

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Three months ended April 4, 2015
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
Net sales	$	—		$	—		$	327,391		$	48,657		$	—		$	376,048
Cost of products sold	—			—			276,444			39,323			—			315,767
Gross profit	—			—			50,947			9,334			—			60,281
Operating expenses:
Selling, general and
administrative expenses	—			7,964			45,905			14,263			—			68,132
Intercompany administrative
charges	—			—			8,755			1,150			(9,905		)	—
Amortization of intangible assets	—			—			5,061			1,138			—			6,199
Total operating expenses	—			7,964			59,721			16,551			(9,905		)	74,331
Operating loss	—			(7,964		)	(8,774		)	(7,217		)	9,905			(14,050		)
Foreign currency loss	—			—			—			(934		)	—			(934		)
Intercompany interest	—			15,778			(13,929		)	(1,849		)	—			—
Interest expense	—			(19,080		)	(4		)	(9		)	—			(19,093		)
Interest income	—			1			2			6			—			9
Tax receivable agreement liability adjustment	—			(17,185		)	—			—			—			(17,185		)
Intercompany administrative income	—			9,905			—			—			(9,905		)	—
Loss before equity in
subsidiaries' loss	—			(18,545		)	(22,705		)	(10,003		)	—			(51,253		)
Equity in subsidiaries' loss	(48,859		)	(30,314		)	—			—			79,173			—
Loss before benefit
for income taxes	(48,859		)	(48,859		)	(22,705		)	(10,003		)	79,173			(51,253		)
Benefit for income taxes	—			—			(1,580		)	(814		)	—			(2,394		)
Net loss	$	(48,859	)	$	(48,859	)	$	(21,125	)	$	(9,189	)	$	79,173		$	(48,859	)
Other comprehensive income (loss):
Foreign currency translation adjustments	—			—			—			(7,453		)	—			(7,453		)
Unrealized gain on derivative instrument	—			—			—			2,102			—			2,102
Total comprehensive loss	$	(48,859	)	$	(48,859	)	$	(21,125	)	$	(14,540	)	$	79,173		$	(54,210	)

28

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
As of April 2, 2016
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
ASSETS	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Current Assets:
Cash and cash equivalents	$	—		$	31,687		$	(6,952	)	$	9,606		$	—		$	34,341
Accounts receivable, net	—			—			182,854			21,305			—			204,159
Inventories:
Raw materials	—			—			63,500			5,835			—			69,335
Work in process	—			—			22,420			2,049			—			24,469
Finished goods	—			—			52,733			14,869			—			67,602
Total inventory	—			—			138,653			22,753			—			161,406
Prepaid expenses and other
current assets	—			1,437			18,446			4,317			—			24,200
Deferred income taxes	—			—			14,202			—			—			14,202
Total current assets	—			33,124			347,203			57,981			—			438,308
Investments in subsidiaries	(101,001		)	(248,594		)	—			—			349,595			—
Property and Equipment, at cost:
Land	—			—			7,436			786			—			8,222
Buildings and improvements	—			—			62,458			4,719			—			67,177
Machinery and equipment	—			5,175			368,643			18,309			—			392,127
	—			5,175			438,537			23,814			—			467,526
Less accumulated depreciation	—			(1,816		)	(293,909		)	(10,024		)	—			(305,749		)
Total property and equipment, net	—			3,359			144,628			13,790			—			161,777
Other Assets:
Intangible assets, net	—			—			106,840			16,117			—			122,957
Goodwill	—			—			449,366			30,183			—			479,549
Intercompany note receivable	—			1,135,073			—			—			(1,135,073		)	—
Other	—			4,471			3,791			—			—			8,262
Total other assets	—			1,139,544			559,997			46,300			(1,135,073		)	610,768
	$	(101,001	)	$	927,433		$	1,051,828		$	118,071		$	(785,478	)	$	1,210,853
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	—		$	181		$	62,488		$	11,124		$	—		$	73,793
Accrued expenses	—			13,470			89,679			14,114			—			117,263
Current portion of payable to related
parties pursuant to tax receivable agreement	—			3,005			—			—			—			3,005
Current portion of long-term debt	—			4,300			—			—			—			4,300
Total current liabilities	—			20,956			152,167			25,238			—			198,361
Deferred income taxes	—			—			20,483			4,159			—			24,642
Intercompany note payable	—			—			1,027,543			107,530			(1,135,073		)	—
Long-term portion of payable to related
parties pursuant to tax receivable agreement	—			38,961			—			—			—			38,961
Other long-term liabilities	—			8,397			77,386			3,987			—			89,770
Long-term debt, less current portion	—			960,120			—			—			—			960,120
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	—			—			—			—			—			—
Common stock	681			681			—			—			(681		)	681
Additional paid-in-capital	749,633			749,633			372,720			26,854			(1,149,207		)	749,633
(Accumulated deficit) retained earnings	(817,801		)	(817,801		)	(582,497		)	(32,182		)	1,432,480			(817,801		)
Accumulated other
comprehensive loss	(33,514		)	(33,514		)	(15,974		)	(17,515		)	67,003			(33,514		)
Total stockholders' (deficit) equity	(101,001		)	(101,001		)	(225,751		)	(22,843		)	349,595			(101,001		)
	$	(101,001	)	$	927,433		$	1,051,828		$	118,071		$	(785,478	)	$	1,210,853

29

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2015
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	—		$	94,692		$	(4,944	)	$	19,677		$	—		$	109,425
Accounts receivable, net	—			—			172,560			22,605			—			195,165
Inventories:
Raw materials	—			—			58,400			5,602			—			64,002
Work in process	—			—			23,126			2,193			—			25,319
Finished goods	—			—			47,946			13,136			—			61,082
Total inventory	—			—			129,472			20,931			—			150,403
Prepaid expenses and other
current assets	—			944			20,310			3,393			—			24,647
Deferred income taxes	—			—			11,255			6			—			11,261
Total current assets	—			95,636			328,653			66,612			—			490,901
Investments in subsidiaries	(76,813		)	(245,265		)	—			—			322,078			—
Property and Equipment, at cost:
Land	—			—			7,436			739			—			8,175
Buildings and improvements	—			—			61,883			4,438			—			66,321
Machinery and equipment	—			4,813			364,093			16,844			—			385,750
	—			4,813			433,412			22,021			—			460,246
Less accumulated depreciation	—			(1,755		)	(288,542		)	(8,946		)	—			(299,243		)
Total property and equipment, net	—			3,058			144,870			13,075			—			161,003
Other Assets:
Intangible assets, net	—			—			112,173			16,211			—			128,384
Goodwill	—			—			449,366			28,373			—			477,739
Intercompany note receivable	—			1,104,510			—			—			(1,104,510		)	—
Other	—			4,831			3,714			—			—			8,545
Total other assets	—			1,109,341			565,253			44,584			(1,104,510		)	614,668
	$	(76,813	)	$	962,770		$	1,038,776		$	124,271		$	(782,432	)	$	1,266,572
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	—		$	235		$	60,655		$	13,606		$	—		$	74,496
Accrued expenses	—			24,512			113,051			15,399			—			152,962
Current portion of payable to related
parties pursuant to tax receivable agreement	—			3,005			—			—			—			3,005
Current portion of long-term debt	—			4,300			—			—			—			4,300
Total current liabilities	—			32,052			173,706			29,005			—			234,763
Deferred income taxes	—			—			17,470			3,917			—			21,387
Intercompany note payable	—			—			1,002,447			102,063			(1,104,510		)	—
Long-term portion of payable to related
parties pursuant to tax receivable agreement	—			20,811			—			—			—			20,811
Other long-term liabilities	—			11,189			75,911			3,793			—			90,893
Long-term debt	—			975,531			—			—			—			975,531
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	—			—			—			—			—			—
Common stock	681			681			—			—			(681		)	681
Additional paid-in-capital	749,296			749,296			370,180			31,611			(1,151,087		)	749,296
(Accumulated deficit) retained earnings	(790,224		)	(790,224		)	(584,964		)	(25,546		)	1,400,734			(790,224		)
Accumulated other
comprehensive income (loss)	(36,566		)	(36,566		)	(15,974		)	(20,572		)	73,112			(36,566		)
Total stockholders' (deficit) equity	(76,813		)	(76,813		)	(230,758		)	(14,507		)	322,078			(76,813		)
	$	(76,813	)	$	962,770		$	1,038,776		$	124,271		$	(782,432	)	$	1,266,572

30

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the three months ended April 2, 2016
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(27,577	)	$	(27,577	)	$	2,467		$	(6,636	)	$	31,746		$	(27,577	)
Adjustments to reconcile net income (loss)
to cash provided by (used in) operating activities:
Depreciation and amortization expense	—			61			12,379			1,590			—			14,030
Non-cash restructuring costs	—			—			—			566			—			566
Non-cash interest expense, net	—			3,416			—			—			—			3,416
Gain on foreign currency transactions	—			—			—			(584		)	—			(584		)
Loss on modification or extinguishment of debt	—			2,399			—			—			—			2,399
Stock based compensation	—			337			—			—			—			337
Deferred income taxes	—			—			65			—			—			65
Tax receivable agreement liability adjustment	—			18,150			—			—			—			18,150
Increase in tax uncertainty,
net of valuation allowance	—			—			62			—			—			62
Equity in subsidiaries' net income (loss)	27,577			4,169			—			—			(31,746		)	—
Other	—			—			138			—			—			138
Changes in operating assets and liabilities:
Accounts receivable, net	—			—			(11,718		)	2,584			—			(9,134		)
Inventories	—			—			(10,511		)	(467		)	—			(10,978		)
Prepaid expenses and other assets	—			(285		)	(68		)	98			—			(255		)
Accounts payable	—			(54		)	(3,995		)	3,174			—			(875		)
Accrued expenses	—			(13,833		)	(25,802		)	1,860			—			(37,775		)
Cash payments on restructuring liabilities	—			—			(112		)	(556		)	—			(668		)
Other	—			—			139			(2		)	—			137
Net cash provided by (used in)
operating activities	—			(13,217		)	(36,956		)	1,627			—			(48,546		)
Cash flows from investing activities:
Capital expenditures	—			(362		)	(6,946		)	(424		)	—			(7,732		)
Proceeds from sale of assets	—			—			76			—			—			76
Net cash used in
investing activities	—			(362		)	(6,870		)	(424		)	—			(7,656		)
Cash flows from financing activities:
Net revolver borrowings	—			10,000			—			—			—			10,000
Payments on long-term debt	—			(31,075		)	—			—			—			(31,075		)
Proceeds from intercompany
investment	—			(28,351		)	41,818			(13,467		)	—			—
Net cash provided by (used in)
financing activities	—			(49,426		)	41,818			(13,467		)	—			(21,075		)
Impact of exchange rate movements on cash	—			—			—			2,193			—			2,193
Net decrease in cash
and cash equivalents	—			(63,005		)	(2,008		)	(10,071		)	—			(75,084		)
Cash and cash equivalents at the
beginning of the period	—			94,692			(4,944		)	19,677			—			109,425
Cash and cash equivalents at the end
of the period	$	—		$	31,687		$	(6,952	)	$	9,606		$	—		$	34,341

31

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the three months ended April 4, 2015
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
Cash flows from operating activities:
Net loss	$	(48,859	)	$	(48,859	)	$	(21,125	)	$	(9,189	)	$	79,173		$	(48,859	)
Adjustments to reconcile net loss
to cash used in operating activities:
Depreciation and amortization expense	—			150			12,840			1,831			—			14,821
Non-cash restructuring expense	—			—			—			46			—			46
Non-cash interest expense, net	—			3,419			—			—			—			3,419
Loss on foreign currency transactions	—			—			—			934			—			934
Stock based compensation	—			586			—			—			—			586
Deferred income taxes	—			—			1,019			—			—			1,019
Tax receivable agreement liability adjustment	—			17,185			—			—			—			17,185
Increase in tax uncertainty,
net of valuation allowance	—			—			73			—			—			73
Equity in subsidiaries' net loss	48,859			30,314			—			—			(79,173		)	—
Other	—			—			(13		)	—			—			(13		)
Changes in operating assets and liabilities:
Accounts receivable, net	—			—			(6,729		)	765			—			(5,964		)
Inventories	—			—			2,304			(1,835		)	—			469
Prepaid expenses and other assets	—			755			4,161			(123		)	—			4,793
Accounts payable	—			(57		)	(8,736		)	992			—			(7,801		)
Accrued expenses	—			(16,211		)	(26,275		)	2,729			—			(39,757		)
Cash payments on restructuring liabilities	—			—			(44		)	(429		)	—			(473		)
Other	—			—			(1,469		)	—			—			(1,469		)
Net cash used in
operating activities	—			(12,718		)	(43,994		)	(4,279		)	—			(60,991		)
Cash flows from investing activities:
Capital expenditures	—			(67		)	(6,026		)	(978		)	—			(7,071		)
Proceeds from sale of assets	—			—			25			—			—			25
Net cash used in
investing activities	—			(67		)	(6,001		)	(978		)	—			(7,046		)
Cash flows from financing activities:
Net revolver borrowings	—			60,000			—			—			—			60,000
Payments on long-term debt	—			(1,075		)	—			—			—			(1,075		)
Proceeds from exercises of employee stock options	—			182			—			—			—			182
Proceeds from intercompany
investment	—			(42,081		)	44,417			(2,336		)	—			—
Net cash provided by (used in)
financing activities	—			17,026			44,417			(2,336		)	—			59,107
Impact of exchange rate movement
on cash	—			—			—			(1,788		)	—			(1,788		)
Net increase (decrease) in cash
and cash equivalents	—			4,241			(5,578		)	(9,381		)	—			(10,718		)
Cash and cash equivalents at the
beginning of the period	—			23,555			(5,845		)	15,452			—			33,162
Cash and cash equivalents at the end
of the period	$	—		$	27,796		$	(11,423	)	$	6,071		$	—		$	22,444

32

Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information contained in this discussion and in the unaudited condensed consolidated financial statements and accompanying notes presented in this Quarterly Report on Form 10-Q should be read in conjunction with information set forth in Ply Gem Holdings’ Annual Report on Form 10-K for the year ended December 31, 2015.  Certain statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are “forward-looking statements”.  See “Special Note Regarding Forward-Looking Statements.”  As used in this Quarterly Report on Form 10-Q, the “Company”, “we”, “us”, and “our” refer to Ply Gem Holdings and its subsidiaries, except where the context otherwise requires or as otherwise indicated.

Overview

We are a leading manufacturer of exterior building products in North America, operating in two reportable segments: (i) Siding, Fencing and Stone and (ii) Windows and Doors, which comprised approximately 43% and 57% of our net sales, respectively, for the three months ended April 2, 2016.  These two segments produce a comprehensive product line of vinyl siding, designer accents, cellular PVC trim, vinyl fencing, vinyl railing, stone veneer, roofing, and vinyl windows and doors used in both the new construction market and the home repair and remodeling market in the United States and Canada.  Vinyl building products have the leading share of sales volume in siding and windows in the United States.  We also manufacture vinyl and aluminum soffit and siding accessories, aluminum trim coil, wood windows, aluminum windows, vinyl and aluminum-clad windows and steel and fiberglass doors, enabling us to bundle complementary and color-matched products and accessories with our core products.  We believe that our comprehensive product portfolio and geographically diverse, low cost manufacturing platform allow us to better serve our customers and provide us with a competitive advantage over other exterior building products suppliers.  

Since Ply Gem incorporated in 2004, we have acquired ten additional businesses to complement and expand our product portfolio and geographic diversity, including one acquisition during 2014 and one during 2015.  On September 19, 2014, we acquired all of the issued and outstanding shares of common stock of Fortune Brands Windows, Inc. ("Simonton"), a manufacturer of windows, for a purchase price of $130.0 million. On May 29, 2015, we acquired substantially all of the assets of Canyon Stone, Inc. (“Canyon Stone”), a manufacturer of stone veneer, for a purchase price of $21.0 million. Simonton is included in our Windows and Doors segment while Canyon Stone is included in our Siding, Fencing, and Stone segment.

Prior to January 11, 2010, Ply Gem Holdings was a wholly owned subsidiary of Ply Gem Investment Holdings, which was a wholly owned subsidiary of Ply Gem Prime.  On January 11, 2010, Ply Gem Investment Holdings was merged with and into Ply Gem Prime, with Ply Gem Prime being the surviving corporation.  In May 2013, the Company issued 18,157,895 shares of common stock at an initial public offering and received gross proceeds of approximately $381.3 million in an IPO of its common stock.

We are a holding company with no operations or assets of our own other than the capital stock of our subsidiaries. The terms of Ply Gem Industries' $350.0 million ABL Facility and the credit agreement governing the terms of its $430.0 million Term Loan Facility place restrictions on the ability of Ply Gem Industries and our other subsidiaries to pay dividends and otherwise transfer assets to us.  Further, the terms of the indenture governing Ply Gem Industries' $650.0 million 6.50% Senior Notes place restrictions on the ability of Ply Gem Industries and our other subsidiaries to pay dividends and otherwise transfer assets to us.

Financial statement presentation

Net Sales.  Net sales represent the fixed selling price of our products plus certain shipping charges less applicable provisions for discounts and allowances.  Allowances include cash discounts, volume rebates and returns.

Cost of products sold.  Cost of products sold includes direct material and manufacturing costs, manufacturing depreciation, third-party and in-house delivery costs and product warranty expense.

Selling, general and administrative expenses.  Selling, general and administrative expenses (“SG&A expense”) includes all non-product related operating expenses, including selling, marketing, research and development costs, information technology, and other general and administrative expenses.

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Operating earnings (loss).  Operating earnings (loss) represents net sales less cost of products sold, SG&A expense and amortization of intangible assets.

Impact of commodity pricing

PVC resin and aluminum are major components in the production of our products and changes in PVC resin and aluminum prices have a direct impact on our cost of products sold.  Historically, we have been able to pass on a substantial portion of significant price increases to our customers.  The results of operations for individual quarters can be negatively impacted by a delay between the time of raw material cost increases and price increases that we implement in our products, or conversely can be positively impacted by a delay between the time of a raw material price decrease and competitive pricing moves that we implement accordingly.

Impact of weather

Since our building products are intended for exterior use, our sales and operating earnings tend to be lower during periods of inclement weather.  Weather conditions in the first and fourth quarters of each calendar year historically result in these quarters producing significantly less sales revenue than in any other period of the year.  As a result, we have historically had lower profits or higher losses in the first quarter, and reduced profits in the fourth quarter of each calendar year due to the weather.  Our results of operations for individual quarters in the future may be impacted by adverse weather conditions. In addition, favorable or unfavorable weather conditions may influence the comparability of our results from year to year or from quarter to quarter.

Critical Accounting Policies

Our discussion and analysis of financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP.  The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities.  We base these estimates on our historical experience and on various other assumptions that we believe to be reasonable under the circumstances, and these estimates form the basis for our judgments concerning the carrying values of assets and liabilities that are not readily apparent from other sources.  By their nature, these estimates and judgments are subject to an inherent degree of uncertainty.  We periodically evaluate these estimates and judgments based on available information and experience.  Actual results could differ from our estimates under different assumptions and conditions.  If actual results significantly differ from our estimates, our financial condition and results of operations could be materially impacted.  For more information regarding our critical accounting policies and estimates please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies contained in our Annual Report on Form 10-K for the year ended December 31, 2015 and Note 1 to our condensed consolidated financial statements. There have been no material changes to the critical accounting policies previously disclosed in that report.

Results of Operations

The following table summarizes net sales and operating earnings (loss) by segment and is derived from the accompanying condensed consolidated statements of operations and comprehensive income (loss) included in this report.

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	For the three months ended
(Amounts in thousands)	April 2, 2016			April 4, 2015
	(unaudited)			(unaudited)
Net sales
Siding, Fencing and Stone	$	176,376		$	156,442
Windows and Doors	232,238			219,606
Operating earnings (loss)
Siding, Fencing and Stone	20,374			10,322
Windows and Doors	(1,250		)	(16,408		)
Unallocated	(9,548		)	(7,964		)
Foreign currency gain (loss)
Siding, Fencing and Stone	74			(253		)
Windows and Doors	510			(681		)
Interest income (expense), net
Siding, Fencing and Stone	5			(11		)
Windows and Doors	2			6
Unallocated	(18,689		)	(19,079		)
Income tax benefit
Unallocated	1,494			2,394
Tax Receivable Agreement liability adjustment
Unallocated	(18,150		)	(17,185		)
Loss on modification or
extinguishment of debt
Unallocated	(2,399		)	—
Net loss	$	(27,577	)	$	(48,859	)

Our business is seasonal and the results of operations for the periods presented are not necessarily indicative of the results for a full fiscal year or any future period.

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This review of performance is organized by business segment, reflecting the way we manage our business.  Each business group leader is responsible for operating results down to operating earnings.  We use operating earnings as a performance measure as it captures the income and expenses within the management control of our business leaders.  Corporate management is responsible for making all financing decisions.  Therefore, each segment discussion focuses on the factors affecting operating earnings, while interest expense and income taxes and certain other unallocated expenses are separately discussed at the corporate level.

The following tables set forth our results of operations based on the amounts and the percentage relationship of the items listed to net sales for the periods indicated.  However, our results of operations set forth in the tables below may not necessarily be representative of our future operating results.

Siding, Fencing and Stone Segment

	For the three months ended
(Amounts in thousands)	April 2, 2016				April 4, 2015
	(unaudited)				(unaudited)
Statement of operations data:
Net sales	$	176,376	100.0	%	$	156,442		100.0	%
Gross profit	46,264		26.2	%	34,771			22.2	%
SG&A expense	22,589		12.8	%	21,373			13.7	%
Amortization of intangible assets	3,301		1.9	%	3,076			2.0	%
Operating earnings	20,374		11.6	%	10,322			6.6	%
Currency transaction gain (loss)	74		—	%	(253		)	(0.2	)%

Net Sales

Net sales for the three months ended April 2, 2016 increased $19.9 million or 12.7% as compared to the three months ended April 4, 2015. The net sales increase for the three months ended April 2, 2016 was driven by improved U.S. market demand for our products, new business wins and $6.4 million of sales attributed to our Canyon Stone acquisition, which was completed on May 29, 2015. These positive factors were partially offset by weaker market demand in Canada and $2.0 million of negative foreign currency attributed to our Canadian net sales. In addition, our sales growth that resulted from increased unit shipments were dampened by lower average selling prices of approximately 4.7% that were reduced in response to decreases in certain raw material input costs. Finally, our net sales for the three months ended April 2, 2016 were negatively impacted $2.2 million by the timing of the Company’s fiscal calendar which provided one less shipping day during the three months ended April 2, 2016 as compared to the three months ended April 4, 2015.

Our building products are typically installed on a new construction home 90 to 120 days after the start of the home, therefore, single family housing starts commencing in the period from September 2015 to December of 2015 directly impacts the demand for our products in the three months ended April 2, 2016. According to the U.S. Census Bureau, single family housing starts increased 7.8% during this lag affected time period reflecting improved market conditions while our heavy vinyl siding markets in the Northeast and Midwest increased 18.0% and 1.6%, respectively on a lag effected basis. In addition to the new construction market improvement, remodeling activity, according to the Leading Indicator of Remodeling Activity (“LIRA”), reflected the 2016 first quarter trailing twelve months increasing 4.7% compared to the prior year period. We believe the improved market conditions and milder and more favorable weather conditions during the first three months of 2016 relative to the same period in 2015 benefited our net sales for the three months ended April 2, 2016.

The improved U.S. market conditions accounted for the majority of the 12.7% net sales increase during the three months ended April 2, 2016, however our sales also benefited from our new business wins which we believe is demonstrated by the improvement in our U.S. market position in vinyl siding which increased from 38.5% to 39.4% for the comparable three month period, while our share of the Canadian vinyl siding market improved from 22.9% to 25.3% for the comparable three month period.

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For the three months ended April 2, 2016 and April 4, 2015, the percentage of net sales in vinyl siding and metal accessories represented approximately 58.2% and 24.6% and 61.4% and 25.1%, respectively, with our net sales of other products comprising approximately 17.2% and 13.5%. The net sales increase in other products resulted from the Canyon Stone acquisition which specializes in manufactured stone and contributed net sales of $6.4 million during the three months ended April 2, 2016.

Gross Profit

Gross profit for the three months ended April 2, 2016 increased $11.5 million or 33.1% as compared to the three months ended April 4, 2015. The gross profit increase for the three months ended April 2, 2016 resulted from the 12.7% net sales increase and included approximately $1.8 million of gross profit from our Canyon Stone acquisition, which was completed on May 29, 2015. The higher sales volumes experienced during the three months ended April 2, 2016 enabled us to increase our operating leverage and cover fixed manufacturing costs relative to the lower volumes experienced during the three months ended April 4, 2015. This operating leverage combined with lower freight expenses and favorable material cost pricing experienced during the three months ended April 2, 2016 relative to the three months ended April 4, 2015 improved our gross profit. The cost for our key raw materials, PVC resin and aluminum, decreased by 0.9% and 25.7%, respectively, during the three months ended April 2, 2016 relative to the three months ended April 4, 2015. However, the favorable movement in material and freight costs were partially offset by decreases in our average sales price that resulted from these lower costs.

As a percentage of net sales, gross profit increased from 22.2% for the three months ended April 4, 2015 to 26.2% for the three months ended April 2, 2016. The 400 basis point increase for the three months ended April 2, 2016 resulted from improved operating leverage from the 12.7% net sales increase as well as favorable material cost pricing and freight expense partially offset by lower average sales prices and an unfavorable foreign currency impact from a weakening Canadian dollar.

Selling, general and administrative expenses

SG&A expense for the three months ended April 2, 2016 increased $1.2 million or 5.7% as compared to the three months ended April 4, 2015. The increase in SG&A expense was attributable to the Canyon Stone acquisition, which was completed on May 29, 2015 and contributed SG&A expense of $1.6 million for the three months ended April 2, 2016.

As a percentage of net sales excluding Canyon Stone, SG&A expense decreased from 13.7% for the three months ended April 4, 2015 to 12.4% for the three months ended April 2, 2016. The decrease reflects improved leverage on the fixed component of our SG&A expenses relative to the net sales increase.

Amortization of intangible assets

Amortization expense for the three months ended April 2, 2016 increased $0.2 million or 7.3% compared to the three months ended April 4, 2015. Excluding Canyon Stone and $0.3 million of amortization expense attributed to this acquisition, amortization expense decreased a nominal $0.1 million or 3.9% for the three months ended April 2, 2016 as compared to the three months ended April 4, 2015.

Currency transaction gain

The currency transaction gain for the three months ended April 2, 2016 was $0.1 million resulting from the impact of the Canadian dollar fluctuation. The currency transaction loss for the three months ended April 4, 2015 was $0.3 million resulting from the fluctuation in the Canadian dollar during the period.

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Windows and Doors Segment

	For the three months ended
(Amounts in thousands)	April 2, 2016					April 4, 2015
	(unaudited)					(unaudited)
Statement of operations data:
Net sales	$	232,238		100.0	%	$	219,606		100.0	%
Gross profit	40,437			17.4	%	25,510			11.6	%
SG&A expense	38,598			16.6	%	38,795			17.7	%
Amortization of intangible assets	3,089			1.3	%	3,123			1.4	%
Operating loss	(1,250		)	(0.5	)%	(16,408		)	(7.5	)%
Currency transaction gain (loss)	510			0.2	%	(681		)	(0.3	)%

Net Sales

Net sales for the three months ended April 2, 2016 increased $12.6 million or 5.8% as compared to the three months ended April 4, 2015. The net sales increase for the three months ended April 2, 2016 can be attributed to the improved U.S. market conditions favorably impacting both our new construction business as well as our repair and remodeling business. In addition, our net sales were favorably impacted by selling prices increases of approximately 5.0% that we implemented for both our new construction and repair and remodeling windows. These favorable factors were partially offset by declining industry conditions in Western Canada where our net sales decreased $9.5 million. The net sales decrease in Western Canada can be attributed to housing market demand softness due to declining world oil prices on this heavily dependent energy industrial area. In addition to demand softness, the deteriorating Canadian dollar negatively impacted our net sales by approximately $2.1 million during the three months ended April 2, 2016. Finally, our net sales were negatively impacted $3.3 million by the timing of the Company’s fiscal calendar which provided one less shipping day during the three months ended April 2, 2016 as compared to the three months ended April 4, 2015.

The improved U.S. market conditions combined with our improved selling prices resulted in a net sales increase of $18.6 million and $3.5 million for our U.S. new construction and repair and remodeling window products, respectively. Our building products are typically installed on a new construction home 90 to 120 days after the start of the home, therefore single family housing starts commencing in the period from September 2015 to December of 2015 directly impacts the demand for our products in the three months ended April 2, 2016. According to the U.S. Census Bureau, single family housing starts increased 7.8% during this lag affected time period which resulted in higher net sales for our new construction products. The repair and remodeling net sales increase of $3.5 million can be attributed to the improvement in the repair and remodeling market. According to LIRA, remodeling activity for the 2016 first quarter trailing twelve months increased 4.7% compared to the prior year period. We believe that the improved market conditions and our first quarter sales benefited from milder and more favorable weather conditions during the first three months of 2016 relative to the same period in 2015.

Gross Profit

Gross profit for the three months ended April 2, 2016 increased $14.9 million or 58.5% as compared to the three months ended April 4, 2015. The gross profit increase can be attributed to the continued improvement in our new construction and repair and remodeling businesses partially offset by our Canadian operations. Gross profit for our U.S. new construction and repair and remodeling windows increased $11.3 million and $4.9 million, respectively. This improvement was driven by increased selling price of approximately 5.0%, favorable product mix and lower raw material and freight costs. In addition, our gross profit continues to benefit from our cost savings and synergies that we are realizing from our Simonton acquisition and our Enterprise Lean initiative. These gross profit improvements were partially offset by our Western Canadian business which experienced weaker market demand as previously discussed and negative foreign currency impact resulting from the weakening of the Canadian dollar as well as a softening in the Western Canadian housing market due to depressed economic conditions.

As a percentage of net sales, gross profit increased from 11.6% for the three months ended April 4, 2015 to 17.4% for the three months ended April 2, 2016. The 580 basis point margin increase reflects improvement for both our U.S. new construction and repair and remodeling window products partially offset by a modest 20 basis point decrease for Western Canada that resulted from unfavorable foreign currency and lower market demand.

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Selling, general and administrative expenses

SG&A expense for the three months ended April 2, 2016 decreased a nominal $0.2 million or 0.5% compared to the three months ended April 4, 2015. SG&A expense was consistent with the prior year comparable period. SG&A expense as a percentage of sales decreased from 17.7% for the three months ended April 4, 2015 to 16.6% for the three months ended April 2, 2016 as we gained leverage on the fixed component of our SG&A expense on the 5.8% net sales increase for the three months ended April 2, 2016.

Amortization of intangible assets

Amortization expense for the three months ended April 2, 2016 was materially consistent with the prior year period. As a percentage of net sales, amortization expense was consistent at 1.3% for the three months ended April 2, 2016 compared to 1.4% for the three months ended April 4, 2015.

Currency transaction gain (loss)

The currency transaction gain of approximately $0.5 million for the three months ended April 2, 2016 compared to a currency transaction loss of approximately $0.7 million during the three months ended April 4, 2015. This change is due to the fluctuation in the Canadian dollar relative to the U.S. dollar during the three months ended April 2, 2016 as compared to the three months ended April 4, 2015.

Unallocated Operating Earnings, Interest, and Benefit for Income Taxes

	For the three months ended
(Amounts in thousands)	April 2, 2016			April 4, 2015
	(unaudited)			(unaudited)
Statement of operations data:
SG&A expense	$	(9,548	)	$	(7,964	)
Operating loss	(9,548		)	(7,964		)
Interest expense	(18,691		)	(19,080		)
Interest income	2			1
Tax receivable agreement liability adjustment	(18,150		)	(17,185		)
Loss on modification or extinguishment of debt	(2,399		)	—
Income tax benefit for income taxes	$	1,494		$	2,394

Operating loss

Unallocated losses include items which are not directly attributed to or allocated to either of our reporting segments.  Such items include legal costs, corporate payroll, and unallocated finance and accounting expenses.  The unallocated operating loss for the three months ended April 2, 2016 increased by $1.6 million or 19.9% compared to the same period in 2015 due primarily to increased incentive compensation of approximately $1.7 million.

Interest expense

Interest expense for the three months ended April 2, 2016 decreased by approximately $0.4 million or 2.0% compared to the same period in 2015 as a result of the reduction in the Term Loan Facility principal balance period over period. During March 2016, we made a $30.0 million voluntary prepayment on the Term Loan Facility in addition to our normal quarterly amortization payments of $1.1 million, or $4.3 million annually, which reduced our outstanding borrowings and our quarterly interest expense.

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Tax receivable agreement ("TRA") liability adjustment

As a result of the Company’s full tax valuation allowance position, the Company’s methodology for calculating the TRA liability considers expectations regarding (i) current year taxable income only (due to the uncertainty of future taxable income associated with the Company’s cumulative loss position) and (ii) future income due to the expected reversals of deferred tax liabilities. During the three months ended April 2, 2016, the Company estimated its projected taxable income for the full year ending December 31, 2016. However, the Company’s methodology to estimate the TRA liability excludes forecasts for fiscal years subsequent to 2016 because such future forecasts and projections cannot be relied upon based on the negative evidence from the Company’s three year cumulative loss position. For fiscal year 2016, the Company estimated to be in a taxable income position; however, this taxable income estimate was not currently sufficient to outweigh the negative evidence or alleviate the Company’s three year cumulative loss position as of April 2, 2016. In addition to projecting the Company’s current year taxable income estimate, the Company considered the reversals of deferred tax assets and deferred tax liabilities. The resulting taxable income (loss) from deferred taxes was then combined with the Company’s current year taxable income estimate to determine the cumulative NOLs that are expected to be utilized in 2016 and the TRA liability was accordingly adjusted using the 85% TRA rate.

The $18.2 million increase for the TRA liability for the three months ended April 2, 2016 resulted primarily from increases in taxable income estimates for 2016. The increase in the 2016 estimated taxable income resulted from the industry increasing their projections of single family housing starts (“SFHS”) for 2016 by 12.3% compared to 2015 actual SFHS of 714 which increased our forecasts and estimates for 2016 taxable income. Furthermore, we have estimated an increase in repair and remodeling which also increased our forecasts and estimates for 2016 taxable income. In addition to these projected favorable market conditions, our 2016 taxable income increased from acquisition synergies of approximately $9.0 million that we will realize in connection with our recent Simonton and Canyon Stone acquisitions. All of these factors increased our 2016 taxable income estimate and therefore increased the TRA liability accordingly during the three months ended April 2, 2016.

Loss on modification or extinguishment of debt

During March 2016, we voluntarily prepaid $30.0 million on the Term Loan Facility to reduce our outstanding indebtedness as allowable under the terms of the agreement governing the Term Loan Facility. We performed an analysis to determine the proper accounting treatment for this voluntary prepayment by evaluating the change in cash flows and determining that there were no changes in the creditors as a result of the prepayment. Consequently, we recognized a loss on debt modification or extinguishment of approximately $2.4 million for the three months ended April 2, 2016 consisting of the proportionate write off of the related debt issuance costs and debt discount.

Income taxes

The income tax benefit for the three months ended April 2, 2016 decreased by approximately $0.9 million compared to the same period in 2015.  Our pre-tax loss for the three months ended April 2, 2016 was approximately $29.1 million including the $18.2 million tax receivable agreement liability adjustment compared to a pre-tax loss of $51.3 million including the $17.2 million tax receivable agreement liability adjustment for the three months ended April 4, 2015.  For the three months ended April 2, 2016, the decrease in the income tax benefit resulted primarily from the decrease in pre-tax losses in addition to pre-tax losses in some entities for which no tax benefit was recognized.    

Liquidity and Capital Resources

During the three months endedApril 2, 2016, cash decreased by approximately $75.1 million compared to a decrease of approximately $10.7 million during the three months endedApril 4, 2015.  The decrease in cash during the comparative three month period was primarily driven by the $30.0 prepayment on the Term Loan Facility and a $50.0 million decrease in borrowings under the ABL Facility offset by the $23.6 million improvement in operating earnings period over period.

Two of the largest changes in operating cash flows during the three months endedApril 2, 2016 were the movement in accounts receivable and inventory. The approximate $9.0 million accounts receivable increase and $11.0 million inventory increase from December 31, 2015 to April 2, 2016 can be attributed to the seasonality of our business. Net sales in the final month of each respective quarter drove this receivables increase and the requirement for increased inventory as aging profiles were relatively consistent. Net sales for March 2016 were approximately $170.9 million, versus approximately $133.8 million for December 2015, an increase of $37.1 million. The improvement in March's net sales reflects the Company’s normal seasonal business as the weather in March is generally improved compared to December, which allows for further construction activity, increasing the Company’s sales with a corresponding increase in accounts receivable and inventory.

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Our business is seasonal because inclement weather during the winter months typically reduces the level of building and remodeling activity in both the home repair and remodeling and new home construction sectors, especially in the Northeast and Midwest regions of the United States and Canada.  As a result, our liquidity typically increases during the second and third quarters as our ABL Facility borrowing base increases, reaching a peak early in the fourth quarter, and decreases late in the fourth quarter and throughout the first quarter.

Our primary cash needs are for working capital, capital expenditures, and debt service.  As of April 2, 2016, our annual cash interest charges for debt service for the year ending December 31, 2016, including the ABL Facility, is estimated to be approximately $59.8 million.  We do not have any scheduled debt maturities until 2020.  The specific debt instruments and their corresponding terms and due dates are described in the following sections.  Our capital expenditures have historically been approximately 1.5% to 2.0% of net sales on an annual basis.  Historically, we have been able to manage our capital expenditures based on market conditions for the new construction and repair and remodeling markets during any given fiscal year. As of April 2, 2016, our purchase commitments for inventory are approximately $52.9 million.  We finance these cash requirements, including payments under the Tax Receivable Agreement through internally generated cash flow and funds borrowed under the ABL Facility.

Our outstanding indebtedness will mature in 2020 (ABL Facility), 2021 (Term Loan Facility), and 2022 (6.50% Senior Notes).  Although we expect to refinance or pay off such indebtedness, we may not be successful in refinancing, extending the maturity or otherwise amending the terms of such indebtedness because of market conditions, disruptions in the debt markets, our financial performance or other reasons. Furthermore, the terms of any refinancing, extension or amendment may not be as favorable as the current terms of our indebtedness. If we are not successful in refinancing our indebtedness or extending its maturity, we and our subsidiaries could face substantial liquidity problems and may be forced to reduce or delay capital expenditures, sell assets, seek additional capital or restructure our indebtedness.

Our specific cash flow movement for the three months endedApril 2, 2016 and April 4, 2015 is summarized below:

Cash used in operating activities

Net cash used in operating activities for the three months endedApril 2, 2016 was approximately $48.5 million as compared to approximately $61.0 million used in operations for the three months endedApril 4, 2015. The net cash used in operating activities was impacted by the increase in operating earnings of approximately $23.6 million which was driven by improved operating performance for our U.S. windows business of approximately $15.2 million and $10.1 million operating earnings improvement in the Siding, Fencing and Stone segment based on improved U.S. housing market conditions for new construction and repair and remodeling. These improved housing conditions resulted in an unfavorable $7.7 million impact in our primary working capital for the three months ended April 2, 2016 compared to the three months ended April 4, 2015.

Cash used in investing activities

Net cash used in investing activities for the three months endedApril 2, 2016 and April 4, 2015 was approximately $7.7 million and $7.0 million, respectively, primarily used for capital expenditures on various ongoing capital projects. Capital expenditures for 2016 were higher than 2015 but were relatively consistent as a percentage of net sales at 1.9% for both 2016 and 2015, which is comparably to our historical average of 1.5% to 2.0%.

Cash provided by financing activities

Net cash used in financing activities for the three months endedApril 2, 2016 was approximately $21.1 million, primarily from the $30.0 million Term Loan Facility prepayment and net revolver borrowings of $10.0 million. Net cash provided by financing activities for the three months endedApril 4, 2015 was approximately $59.1 million, primarily from net revolver borrowings of $60.0 million. The decrease in borrowings under the revolver for 2016 related to improved operating performance during the three months ended April 2, 2016 relative to the three months ended April 4, 2015 as well as the $109.4 million cash balance carried forward from December 31, 2015.

Our specific debt instruments and terms are described below:

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2015 Debt Transaction

On November 5, 2015, Ply Gem Industries entered into a second amended and restated ABL Facility. Among other things, the second amended and restated ABL Facility: (i) increased the overall facility to $350.0 million, (ii) provided an accordion feature of $50.0 million, and (iii) established the applicable margin for borrowings under the ABL Facility to a range of 1.25% to 2.00% for Eurodollar rate loans, depending on availability. All outstanding loans under the second amended and restated ABL Facility are due and payable in full on November 5, 2020.

6.50% Senior Notes due 2022

On January 30, 2014, Ply Gem Industries issued $500.0 million aggregate principal amount of 6.50% Senior Notes due 2022 (the "6.50% Senior Notes") at par. On September 19, 2014, Ply Gem Industries issued an additional $150.0 million aggregate principal amount of 6.50% Senior Notes (the "Senior Tack-on Notes") at an issue price of 93.25%. Interest accrues at 6.50% per annum and is paid semi-annually on February 1 and August 1 of each year. All issued and outstanding 6.50% Senior Notes are registered under the Securities Act. The 6.50% Senior Notes will mature on February 1, 2022.

Prior to February 1, 2017, Ply Gem Industries may redeem up to 40% of aggregate principal amount of the 6.50% Senior Notes with the net cash proceeds from certain equity offerings at a redemption price equal to 106.50% of the aggregate principal amount of the 6.50% Senior Notes to be redeemed, plus accrued and unpaid interest, if any, provided that at least 50% of the aggregate principal amount of the 6.50% Senior Notes remains outstanding after the redemption. Prior to February 1, 2017, Ply Gem Industries may redeem the 6.50% Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus a “make-whole” premium plus accrued and unpaid interest, if any. At any time on or after February 1, 2017, Ply Gem Industries may redeem the 6.50% Senior Notes, in whole or in part, at declining redemption prices set forth in the indenture governing the 6.50% Senior Notes plus, in each case, accrued and unpaid interest, if any, to the redemption date. The effective interest rate for the 6.50% Senior Notes is 8.39% after considering each of the different interest expense components of this instrument, including the coupon payment and the deferred debt issuance costs.

The 6.50% Senior Notes are fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by Ply Gem Holdings and all of the wholly-owned domestic subsidiaries of Ply Gem Industries (the “Guarantors”).  The indenture governing the 6.50% Senior Notes contains certain covenants that limit the ability of Ply Gem Industries and its restricted subsidiaries to incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem their stock, make loans and investments, sell assets, incur certain liens, enter into agreements restricting their ability to pay dividends, enter into transactions with affiliates, and consolidate, merge or sell assets.  In particular, Ply Gem Industries and its restricted subsidiaries may not incur additional debt (other than permitted debt (as defined in the indenture) in limited circumstances) unless, after giving effect to such incurrence, the consolidated interest coverage ratio of Ply Gem Industries would be at least 2.00 to 1.00.  

In the absence of satisfying the consolidated interest coverage ratio test, Ply Gem Industries and its restricted subsidiaries may only incur additional debt under certain circumstances, including, but not limited to, debt under credit facilities (as defined in the indenture) (x) in an amount not to exceed the greater of (a) $350.0 million and (b) the borrowing base (as defined in the indenture) and (y) in an amount not to exceed the greater of (A) $575.0 million and (B) the aggregate amount of indebtedness (as defined in the indenture) that that would cause the consolidated secured debt ratio (as defined in the indenture) to be equal to 4.00 to 1.00; purchase money indebtedness in an aggregate amount not to exceed the greater of (x) $35.0 million and (y) 10% of consolidated net tangible assets (as defined in the indenture) at any one time outstanding; debt of foreign subsidiaries in an aggregate amount not to exceed the greater of (x) $60.0 million and (y) 15% of consolidated net tangible assets (as defined in the indenture) at any one time outstanding; debt pursuant to a general basket in an aggregate amount at any one time outstanding not to exceed the greater of (x) $75.0 million and (y) 20% of consolidated net tangible assets; and the refinancing of debt under certain circumstances.

Term Loan Facility due 2021

On January 30, 2014, Ply Gem Industries entered into a credit agreement governing the terms of its $430.0 million Term Loan Facility. Ply Gem Industries originally borrowed $430.0 million under the Term Loan Facility on January 30, 2014, with an original discount of approximately $2.2 million, yielding proceeds of approximately $427.9 million. The Term Loan Facility will mature on January 30, 2021. The Term Loan Facility requires scheduled quarterly payments in an aggregate annual amount equal to 1.00% of the original aggregate principal amount of the Term Loan Facility with the balance due at maturity. Interest on outstanding borrowings under the Term Loan Facility is paid quarterly.

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Borrowings under the Term Loan Facility bear interest at a rate equal to, at Ply Gem Industries’ option, either (a) a base rate determined by reference to the highest of (i) the prime rate of the administrative agent under the credit agreement, (ii) the federal funds rate plus 0.50% and (iii) the adjusted LIBO rate for a one-month interest period plus 1.00% or (b) a LIBO rate determined by reference to the cost of funds for eurocurrency deposits in dollars for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a 1.00% floor, plus, in each case, an applicable margin of 3.00% for any eurocurrency loan and 2.00% for any alternate base rate loan. As of April 2, 2016, the Company's interest rate on the Term Loan Facility was 4.00%. The effective interest rate for the Term Loan is 7.24% after considering each of the different interest expense components of this instrument, including the coupon payment, the deferred debt issuance costs and the original issue discount.

The Term Loan Facility allows Ply Gem Industries to request one or more incremental term loan facilities in an aggregate amount not to exceed the greater of (x) $140.0 million and (y) an amount such that Ply Gem Industries’ consolidated senior secured debt ratio (as defined in the credit agreement), on a pro forma basis, does not exceed 3.75 to 1.00, in each case, subject to certain conditions and receipt of commitments by existing or additional financial institutions or institutional lenders.

The Term Loan Facility requires Ply Gem Industries to prepay outstanding term loans, subject to certain exceptions, with: (i) 50% (which percentage will be reduced to 25% if our consolidated senior secured debt ratio is equal or less than 2.50 to 1.00 but greater than 2.00 to 1.00 and to 0% if our consolidated senior secured debt ratio is equal to or less than 2.00 to 1.00) of our annual excess cash flow (as defined in the credit agreement), to the extent such excess cash flow exceeds $15.0 million; (ii) 100% of the net cash proceeds of certain non-ordinary course asset sales or certain insurance and condemnation proceeds, in each case subject to certain exceptions and reinvestment rights; and (iii) 100% of the net cash proceeds of certain issuances of debt, other than proceeds from debt permitted under the Term Loan Facility. Ply Gem Industries may voluntarily repay outstanding loans under the Term Loan Facility at any time without premium or penalty, other than customary “breakage” costs with respect to LIBOR loans. As of and for the year ended December 31, 2015, the Company's consolidated senior secured debt ratio was 1.97 and as a result no excess cash flow payment under the Term Loan Facility was required. However, the Company elected on March 10, 2016 to voluntarily prepay $30.0 million on the Term Loan Facility to reduce its outstanding indebtedness.

The Term Loan Facility is secured on a first-priority lien basis by the stock of Ply Gem Industries and by substantially all of the assets (other than the assets securing the obligations under the ABL Facility, which primarily consist of accounts receivable, inventory, cash, deposit accounts, securities accounts, chattel paper, contract rights, instruments, documents related thereto and proceeds of the foregoing) of Ply Gem Industries and the Guarantors that are subsidiaries of Ply Gem Industries and on a second-priority lien basis by the assets that secure the ABL Facility.

The Term Loan Facility includes negative covenants, subject to certain exceptions, that are substantially the same as the negative covenants in the 6.50% Senior Notes but does not contain any restrictive financial covenants. The Term Loan Facility also restricts the ability of Ply Gem Industries’ subsidiaries to enter into agreements restricting their ability to grant liens to secure the Term Loan Facility and contains a restriction on changes in fiscal year.

Senior Secured Asset Based Revolving Credit Facility due 2020

On November 5, 2015, Ply Gem Holdings, Inc., Ply Gem Industries, Inc., Gienow Canada Inc., and Mitten Inc. (together with Gienow, the “Canadian Borrowers”) entered into a second amended and restated credit agreement governing the ABL Facility. Among other things, the second amendment and restatement of the credit agreement governing the ABL Facility: (i) increased the overall facility to $350.0 million from $300.0 million, (ii) established an accordion feature of $50.0 million, (iii) reduced the applicable margin for borrowings under the ABL Facility to a range from 1.25% to 2.00% for Eurodollar rate loans, depending on availability, and (iv) extended the maturity until November 5, 2020. Under the ABL Facility, $300.0 million is available to Ply Gem Industries and $50.0 million is available to the Canadian Borrowers. The following summary describes the ABL Facility after giving effect to the second amendment and restatement. As a result of the November 2015 ABL Facility amendment in which the loan syndication consisted of previous members who either maintained or increased their position as well as new syndication members, the Company capitalized new debt issuance costs of $1.5 million and will amortize these costs through 2020.

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Borrowings under the ABL Facility bear interest at a rate per annum equal to, at Ply Gem Industries’ option, either (a) a base rate determined by reference to the higher of (1) the corporate base rate of the administrative agent under the ABL Facility and (2) the federal funds rate plus 0.5% or (b) a Eurodollar rate determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, in each case plus an applicable margin.  The initial applicable margin for borrowings under the ABL Facility was 0.50% for base rate loans and 1.50% for Eurodollar rate loans.  The applicable margin for borrowings under the ABL Facility is subject to step ups and step downs based on average excess availability under the ABL Facility.  Swingline loans bear interest at a rate per annum equal to the base rate plus the applicable margin.

In addition to paying interest on outstanding principal under the ABL Facility, Ply Gem Industries is required to pay a commitment fee in respect of the unutilized commitments thereunder, which fee will be determined based on utilization of the ABL Facility (increasing when utilization is low and decreasing when utilization is high) multiplied by a commitment fee rate determined by reference to average excess availability under the ABL Facility. The commitment fee rate during any fiscal quarter is 0.375% when average excess availability is greater than $100.0 million for the preceding fiscal quarter and 0.25% when average availability is less than or equal to $100.0 million for the preceding fiscal quarter.  Ply Gem Industries must also pay customary letter of credit fees equal to the applicable margin on Eurodollar loans and agency fees.   As of April 2, 2016, the Company’s interest rate on the ABL Facility was approximately 1.89%.  The ABL Facility requires that if (a) excess availability is less than the greater of (x) 10.0% of the lower of the borrowing base and the aggregate commitments and (y) $25.0 million or (b) any event of default has occurred and is continuing, Ply Gem Industries must comply with a minimum fixed charge coverage ratio test of 1.0 to 1.0.  If the excess availability under the ABL Facility is less than the greater of (a) 12.5% of the lesser of the borrowing base and the aggregate commitments and (b) $30.0 million ($27.5 million for the months of January, February, March and April) for a period of 5 consecutive days or an event of default has occurred and is continuing, all cash from Ply Gem Industries material deposit accounts (including all concentration accounts) will be swept daily into a collection account controlled by the administrative agent under the ABL Facility and used to repay outstanding loans and cash collateralize letters of credit.

All obligations under the ABL Facility are unconditionally guaranteed by Ply Gem Holdings and substantially all of Ply Gem Industries’ existing and future, direct and indirect, wholly owned domestic subsidiaries.  All obligations under the ABL Facility, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of the assets of Ply Gem Industries and the guarantors, including a first-priority security interest in personal property consisting of accounts receivable, inventory, cash, deposit accounts, and certain related assets and proceeds of the foregoing and a second-priority security interest in, and mortgages on, substantially all of Ply Gem Industries’ and the Guarantors’ material owned real property and equipment and all assets that secure the Term Loan Facility on a first-priority basis.  In addition to being secured by the collateral securing the obligations of Ply Gem Industries under the domestic collateral package, the obligations of the Canadian Borrowers, which are borrowers under the Canadian sub-facility under the ABL Facility, are also secured by a first-priority security interest in substantially all of the assets of such Canadian subsidiaries, plus additional mortgages in Canada, and a pledge by Ply Gem Industries of the remaining 35% of the equity interests of the Canadian Borrowers pledged only to secure the Canadian sub-facility.

The ABL Facility contains certain covenants that limit Ply Gem Industries’ ability and the ability of Ply Gem Industries’ subsidiaries to incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem their stock, make loans and investments, sell assets, incur certain liens, enter into transactions with affiliates, and consolidate, merge or sell assets.  

As of April 2, 2016, Ply Gem Industries had approximately $329.4 million of contractual availability and approximately $208.4 million of borrowing base availability under the ABL Facility, reflecting $10.0 million of borrowings outstanding and approximately $10.6 million of letters of credit and priority payables reserves.

Loss on debt modification or extinguishment

During March 2016, we made a voluntarily prepayment of $30.0 million on the Term Loan Facility to reduce its outstanding indebtedness as allowable under the terms of the Term Loan Facility. We performed an analysis to determine the proper accounting treatment for this voluntary prepayment by evaluating the change in cash flows and determined that there were no changes in the creditors as a result of the prepayment. Consequently, we recognized a loss on debt modification or extinguishment of approximately $2.4 million for the three months ended April 2, 2016 reflecting the proportionate write-off of the related debt discount and debt issuance costs associated with the $30.0 million payment, as summarized in the table below.

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(Amounts in thousands)	For the three months ended
	April 2, 2016		April 4, 2015
Loss on modification of debt:
Term Loan Facility unamortized discount	$	1,915	—
Term Loan Facility unamortized debt issuance costs	484		—
	2,399		—
Total loss on modification or extinguishment of debt	$	2,399	$	—

Liquidity requirements

We intend to fund our ongoing capital and working capital requirements, including our internal growth, through a combination of cash flows from operations and, if necessary, from borrowings under our ABL Facility.  We believe that we will continue to meet our liquidity requirements over the next 12 months.  We believe that our operating units are positive cash flow generating units and will continue to sustain their operations without any significant liquidity concerns.  The performance of these operating units is significantly impacted by the performance of the housing industry, specifically single family housing starts and the repair and remodeling activity.  Any unforeseen or unanticipated downturn in the housing industry could have a negative impact on our liquidity position.

Management anticipates that our current liquidity position, as well as expected cash flows from our operations, should be sufficient to meet ongoing operational cash flow needs, capital expenditures, debt service obligations, and other fees payable under other contractual obligations for the foreseeable future.  As of April 2, 2016, we had cash and cash equivalents of approximately $34.3 million, approximately $329.4 million of contractual availability under the ABL Facility and approximately $208.4 million of borrowing base availability.  

In order to further supplement our operating cash flow, we have from time to time opportunistically accessed capital markets based on prevailing economic and financial conditions.  Based on market conditions, we may elect to pursue additional financing alternatives in the future. 

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Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Contractual Obligations

In addition to the items listed in the Contractual Obligations table presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, we have a potential obligation related to certain tax matters of approximately $2.9 million, including interest and penalties of approximately $1.2 million.  The timing of the potential tax payments is unknown.

As of April 2, 2016, the Company had inventory purchase commitments of approximately $52.9 million.

Inflation; Seasonality

Our performance is dependent to a significant extent upon the levels of home repair and remodeling and new home construction spending, all of which are affected by such factors as interest rates, inflation, consumer confidence and unemployment.  We do not believe that inflation has had a material impact on our business, financial condition or results of operations during the past three fiscal years.

The demand for our products is seasonal, particularly in the Northeast and Midwest regions of the United States and Canada where inclement weather conditions during the winter months usually reduces the level of building and remodeling activity in both the home repair and remodeling and the new home construction sectors.  Our sales in both segments are usually lower during the first and fourth quarters.  Since a portion of our manufacturing overhead and operating expenses are relatively fixed throughout the year, operating income and net earnings tend to be lower in quarters with lower sales levels.  In addition, the demand for cash to fund our working capital is greater from late in the fourth quarter through the first quarter.

Recent Accounting Pronouncements

See Note 1 – Summary of Significant Accounting Policies to the condensed consolidated financial statements, regarding the impact of certain recent accounting pronouncements on our condensed consolidated financial statements.

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Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements relate to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology.  These statements are only predictions.  Actual events or results may differ materially.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements.  All written and oral forward-looking statements made in connection with this Quarterly Report on Form 10-Q that are attributable to us or persons acting on our behalf are expressly qualified in their entirety by the Risk Factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and other cautionary statements included therein and herein.

There can be no assurance that other factors will not affect the accuracy of these forward-looking statements or that our actual results will not differ materially from the results anticipated in such forward-looking statements. While it is impossible to identify all such factors, factors which could cause actual results to differ materially from those estimated by us include, but are not limited to, those factors or conditions described under Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and the following:

• our high degree of leverage and significant debt service obligations;

• restrictions under the indenture governing the 6.50% Senior Notes and the restrictions under our Term Loan Facility and ABL Facility;

• the competitive nature of our industry;

• changes in interest rates, and general economic, home repair and remodeling and new home construction market conditions;

• changes in the price and availability of raw materials; and

• changes in our relationships with our significant customers.

Other factors that could cause actual results to differ from those implied by the forward-looking statements contained in this Quarterly Report on Form 10-Q include those set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015.  We undertake no obligation to update the forward-looking statements in this report.

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Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our principal interest rate exposure relates to the loans outstanding under our Term Loan Facility and our ABL Facility, which provides for borrowings of $430.0 million on the Term Loan and up to $350.0 million on the ABL, bearing interest at a variable rate, based on an adjusted LIBOR rate plus an applicable interest margin or the base rate plus an applicable interest margin.  Each quarter point increase or decrease in the interest rate would change our interest expense by approximately $1.1 million per year for the Term Loan Facility.  Assuming the ABL Facility is fully drawn, each quarter point increase or decrease in the interest rate would change our interest expense by approximately $0.9 million per year. At April 2, 2016, we were not party to any interest rate swaps or caps to manage our interest rate risk. In the future, we may enter into interest rate swaps or interest rate caps, involving exchange of floating for fixed rate interest payments, to reduce our exposure to interest rate volatility.

Foreign Currency Risk

Our results of operations are affected by fluctuations in the value of the U.S. dollar as compared to the value of the Canadian dollar.  For the three months ended April 2, 2016, the net impact of foreign currency changes to our results of operations was a gain of approximately $0.6 million. The impact of foreign currency changes related to translation resulted in an decrease in stockholders' deficit of approximately $4.8 million for the three months endedApril 2, 2016. The revenue or expense reported by us as a result of currency fluctuations will be greater in times of U.S. dollar devaluation and less in times of U.S. dollar appreciation. During 2015 and 2016, we entered into forward contracts to mitigate the exposure risk of currency fluctuation against the Canadian dollar.  At April 2, 2016, our foreign currency hedging contract had a fair value of $0.9 million and is recorded as a increase in stockholders' deficit as of April 2, 2016.

Commodity pricing risk

We are subject to significant market risk with respect to the pricing of our principal raw materials, which include PVC resin, aluminum, and wood.  If prices of these raw materials were to increase dramatically, we may not be able to pass such increases on to our customers and, as a result, gross margins could decline significantly.  We manage the exposure to commodity pricing risk by increasing our selling prices for corresponding material cost increases, continuing to diversify our product mix, strategic buying programs and vendor partnering. The Midwest Ingot price of aluminum decreased approximately 25.7% for the three months ended April 2, 2016 compared to the three months ended April 4, 2015. The average market price for PVC resin was estimated to have decreased approximately 0.9% for the three months ended April 2, 2016 compared to the three months ended April 4, 2015.

Inflation

We do not believe that inflation, net of our corresponding price increases for material cost, has had a material effect on our business, financial condition or results of operations.  Our lease payments related to our sale/leaseback agreement include an annual increase based on the Consumer Price Index, which could expose us to potential higher costs in years with high inflation. The CPI increase for the twelve months ended March 2016 was approximately 0.9%.

Labor force risk

Our manufacturing process is highly engineered but involves manual assembly, fabrication, and manufacturing processes. We believe that our success depends upon our ability to employ, train, and retain qualified personnel with the ability to design, utilize and enhance these services and products. In addition, our ability to expand our operations depends in part on our ability to increase our labor force as the U.S. housing market recovers and minimize labor inefficiencies. A significant increase in the wages paid by competing employers could result in a reduction of our labor force, increases in the wage rates that we must pay, or both. If either of these events were to occur, our cost structure could increase, our margins could decrease and any growth potential could be impaired. Historically, the Company has believed that the lag period between breaking ground on a new housing start and the utilization of our products on the exterior of a home is between 90 to 120 days.

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Item 4.     CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding the required disclosure.

Our management is responsible for establishing and maintaining our disclosure controls and procedures. Our Chief Executive Officer and Chief Financial Officer participated with our management in evaluating the effectiveness of our disclosure controls and procedures as of April 2, 2016.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of April 2, 2016 were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding the required disclosure.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the three months ended April 2, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our Chief Executive Officer and Chief Financial Officer have each concluded that the consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, the financial position, results of operations and cash flows of the Company and its subsidiaries in conformity with GAAP.

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PART II – OTHER INFORMATION

Item 6.                                                 EXHIBITS

(a)   Exhibits

Exhibit No.Description of Exhibits

31.1 *	Certification by President, Chief Executive Officer, and Chairman pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 *	Certification by Executive Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 *	Certification by President, Chief Executive Officer, and Chairman pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 *	Certification by Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*	The following financial statements from Ply Gem Holdings, Inc. Quarterly Report on Form 10-Q for the quarter ended April 2, 2016, filed on May 9, 2016, were formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss); (iii) Condensed Consolidated Statements of Cash Flows; (iv) the Notes to Condensed Consolidated Financial Statements.

*  Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PLY GEM HOLDINGS, INC.

(Registrant)

Date:  May 9, 2016

By:	/s/ Gary E. Robinette
	Gary E. Robinette
	President, Chief Executive Officer, and Chairman of the Board

Date:  May 9, 2016

By:	/s/ Shawn K. Poe
	Shawn K. Poe
	Executive Vice President, Chief Financial Officer, and Secretary

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EX-31.1

Exhibit 31.1

Certification Pursuant To

Section 302 of the Sarbanes-Oxley Act of 2002

I, Gary E. Robinette, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Ply Gem Holdings, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)  all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

Date: May 9, 2016

	/s/ Gary E. Robinette
Name:	Gary E. Robinette
Title:	President, Chief Executive Officer, and Chairman of the Board

EX-31.2

Exhibit 31.2

Certification Pursuant To

Section 302 of the Sarbanes-Oxley Act of 2002

I, Shawn K. Poe, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Ply Gem Holdings, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)  all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2016

	/s/ Shawn K. Poe
Name:	Shawn K. Poe
Title:	Executive Vice President, Chief Financial Officer, Treasurer and Secretary

EX-32.1

Exhibit 32.1

Certification Pursuant to

18 U.S.C. Section 1350

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report on Form 10-Q of Ply Gem Holdings, Inc., a Delaware corporation (the “Company”), for the quarterly period ended April 2, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.           the Report fully complies, in all material respects, with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.           the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  May 9, 2016	/s/ Gary E. Robinette
	Gary E. Robinette
	President, Chief Executive Officer, and Chairman of the Board

EX-32.2

Exhibit 32.2

Certification Pursuant to

18 U.S.C. Section 1350

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report on Form 10-Q of Ply Gem Holdings, Inc., a Delaware corporation (the “Company”), for the quarterly period ended April 2, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.           the Report fully complies, in all material respects, with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.           the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  May 9, 2016	/s/ Shawn K. Poe
	Shawn K. Poe
	Executive Vice President, Chief Financial Officer, and Secretary

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Document and Entity Information - shares	3 Months Ended
	Apr. 02, 2016	May. 09, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	PLY GEM HOLDINGS INC
Entity Central Index Key	0001284807
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Apr. 02, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Trading Symbol	PGEM
Amendment Flag	false
Entity Common Stock, Shares Outstanding		68,143,681

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Net sales	$ 408,614	$ 376,048
Cost of products sold	321,913	315,767
Gross profit	86,701	60,281
Operating expenses:
Selling, general and administrative expenses	70,735	68,132
Amortization of intangible assets	6,390	6,199
Total operating expenses	77,125	74,331
Operating earnings	9,576	(14,050)
Foreign currency (loss) gain	584	(934)
Interest expense	(18,692)	(19,093)
Interest income	10	9
Tax receivable agreement liability adjustment	18,150	17,185
Gains (Losses) on Extinguishment of Debt	(2,399)	0
Income (Loss) before provision (benefit) for income taxes	(29,071)	(51,253)
Provision (benefit) for income taxes	(1,494)	(2,394)
Net income (loss)	(27,577)	(48,859)
Comprehensive income (loss)	$ (24,524)	$ (54,210)
Earnings Per Share, Basic and Diluted	$ (0.40)	$ (0.72)
Weighted Average Number of Shares Outstanding, Basic and Diluted	68,127,491	67,923,707

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Apr. 02, 2016	Dec. 31, 2015	Apr. 04, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 34,341	$ 109,425	$ 22,444	$ 33,162
Accounts receivable, less allowances of $3,477 and $3,588, respectively	204,159	195,165
Inventories:
Raw materials	69,335	64,002
Work in process	24,469	25,319
Finished goods	67,602	61,082
Total inventory	161,406	150,403
Prepaid expenses and other current assets	24,200	24,647
Deferred income taxes	14,202	11,261
Total current assets	438,308	490,901
Property and Equipment, at cost:
Land	8,222	8,175
Buildings and improvements	67,177	66,321
Machinery and equipment	392,127	385,750
Total property and equipment	467,526	460,246
Less accumulated depreciation	(305,749)	(299,243)
Total property and equipment, net	161,777	161,003
Other Assets:
Intangible assets, net	122,957	128,384
Goodwill	479,549	477,739
Other	8,262	8,545
Total other assets	610,768	614,668
Total Assets	1,210,853	1,266,572
Current Liabilities:
Accounts payable	73,793	74,496
Accrued expenses	117,263	152,962
Tax receivable agreement payable - current	3,005	3,005
Less current portion of long-term debt	4,300	4,300
Total current liabilities	198,361	234,763
Deferred income taxes	24,642	21,387
Tax receivable agreement payable - noncurrent	38,961	20,811
Other long-term liabilities	89,770	90,893
Long-term debt, less current portion	$ 960,120	$ 975,531
Commitments and contingencies
Stockholders' Deficit:
Preferred stock $0.01 par, 50,000,000 shares authorized, none issued and outstanding	$ 0	$ 0
Common stock $0.01 par, 250,000,000 shares authorized, 68,127,491 issued and outstanding	681	681
Additional paid-in-capital	749,633	749,296
Accumulated deficit	(817,801)	(790,224)
Accumulated other comprehensive loss	(33,514)	(36,566)
Total stockholders' deficit	(101,001)	(76,813)
Total Liabilities and Stockholder's Deficit	$ 1,210,853	$ 1,266,572

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Apr. 02, 2016	Dec. 31, 2015
Current Assets:
Allowance for Doubtful Accounts Receivable, Current	$ 3,477	$ 3,588
Stockholders' Deficit:
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Common stock, shares issued (in shares)	68,127,491	68,127,491
Common stock, shares outstanding (in shares)	68,127,491	68,127,491

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Cash flows from operating activities:
Net income (loss)	$ (27,577)	$ (48,859)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization expense	14,030	14,821
Restructuring Costs	566	46
Non-cash interest expense, net	3,416	3,419
(Gain) loss on foreign currency transactions	(584)	934
Business Acquisition, Contingent Consideration [Line Items]
Gains (Losses) on Extinguishment of Debt	2,399	0
Stock based compensation	337	586
Deferred income taxes	65	1,019
Tax receivable agreement liability adjustment	18,150	17,185
Increase in tax uncertainty, net of valuation allowance	62	73
Other	138	(13)
Changes in operating assets and liabilities:
Accounts receivable, net	(9,134)	(5,964)
Inventories	(10,978)	469
Prepaid expenses and other assets	(255)	4,793
Accounts payable	(875)	(7,801)
Accrued expenses	(37,775)	(39,757)
Cash payments on restructuring liabilities	(668)	(473)
Other	137	(1,469)
Net cash used in operating activities	(48,546)	(60,991)
Cash flows from investing activities:
Capital expenditures	(7,732)	(7,071)
Proceeds from sale of assets	76	25
Net cash used in investing activities	(7,656)	(7,046)
Cash flows from financing activities:
Net revolver borrowings	10,000	60,000
Payments of long-term debt	(31,075)	(1,075)
Proceeds from Stock Options Exercised	0	182
Net cash provided by (used in) financing activities	(21,075)	59,107
Impact of exchange rate movements on cash	2,193	(1,788)
Net decrease in cash and cash equivalents	(75,084)	(10,718)
Cash and cash equivalents at the beginning of the period	109,425	33,162
Cash and cash equivalents at the end of the period	$ 34,341	$ 22,444

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Apr. 02, 2016

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Ply Gem Holdings, Inc. and its subsidiaries (referred to herein as “Ply Gem Holdings”, “Ply Gem”, the “Company”, “we”, “us”, or “our”) have been prepared in accordance with U.S. generally accepted accounting principles as described in the consolidated financial statements and related notes included in our 2015 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2016.  These statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles and should be read in conjunction with our 2015 Annual Report on Form 10-K.  In management’s opinion, all normal and recurring adjustments considered necessary for a fair presentation have been included.  Operating results for the period from January 1, 2016 through April 2, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

The condensed consolidated balance sheet at December 31, 2015 has been derived from the audited consolidated financial statements of Ply Gem Holdings at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

The Company’s fiscal quarters are based on periods ending on the Saturday of the last week in the quarter.  Therefore, the financial results of certain fiscal quarters will not be comparable to the prior and subsequent fiscal quarters.  The accompanying financial statements include the Company’s condensed consolidated statements of operations and comprehensive income (loss) for the three months ended April 2, 2016 and April 4, 2015, the condensed consolidated statements of cash flows for the three months endedApril 2, 2016 and April 4, 2015, and the condensed consolidated balance sheets as of April 2, 2016 and December 31, 2015.

Ply Gem is a diversified manufacturer of residential and commercial building products, which are sold primarily in the United States and Canada, and include a wide variety of products for the residential and commercial construction, the do-it-yourself and the professional remodeling and renovation markets.  The demand for the Company’s products is seasonal, particularly in the Northeast and Midwest regions of the United States and Canada where inclement weather during the winter months usually reduces the level of building and remodeling activity in both the home repair and remodeling and new home construction sectors.  The Company’s sales are usually lower during the first and fourth quarters.

To a significant extent our performance is dependent upon the levels of home repair and remodeling and new home construction spending, all of which are affected by such factors as interest rates, inflation, consumer confidence, unemployment, and availability of consumer credit.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Ply Gem Holdings and its subsidiaries, all of which are wholly owned.  All intercompany accounts and transactions have been eliminated.

Reclassifications

Due to the adoption of ASU No. 2015-03, Interest-Imputation of Interest, certain balance sheet amounts in the prior fiscal year have been reclassified to conform to the presentation adopted in the current fiscal year, with no effect on net income (loss), accumulated deficit, or net cash provided by/used in operating, investing, and financing activities. Refer to Note 5, Long-Term Debt, for the presentation impact on net debt.

Accounting Policies and Use of Estimates

The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles involves estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of income and expense during the reporting periods.  Certain of the Company’s accounting policies require the application of judgment in selecting the appropriate assumptions for calculating financial estimates.  By their nature, these judgments are subject to an inherent degree of uncertainty.  The Company periodically evaluates the judgments and estimates used in their critical accounting policies to ensure that such judgments and estimates are reasonable.  Such estimates include the allowance for doubtful accounts receivable, rebates, pensions, valuation of inventories, warranty reserves, insurance reserves, legal contingencies, assumptions used in the calculation of income taxes and the tax receivable agreement liability, projected cash flows used in the goodwill and intangible asset impairment tests, and environmental accruals and other contingencies.  These judgments are based on the Company’s historical experience, current trends and information available from other sources, and are based on management’s best estimates and judgments.  The Company adjusts such estimates and assumptions when facts and circumstances dictate.  Volatile equity markets, foreign currency, and litigation risk have combined to increase the uncertainty inherent in such estimates and assumptions.  If different conditions result from those assumptions used in the Company’s judgments, actual results could be materially different from the Company’s estimates.

Cash and Cash Equivalents

Cash equivalents consist of short-term highly liquid investments with original maturities of three months or less and which are readily convertible into cash.

Accounts Receivable

Accounts receivable-trade are recorded at their net realizable value.  The allowance for doubtful accounts was $3.5 million at April 2, 2016 and $3.6 million at December 31, 2015.  The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company estimates the allowance for doubtful accounts based on a variety of factors including the length of time receivables are past due, the financial health of its customers, unusual macroeconomic conditions and historical experience. If the financial condition of its customers deteriorates or other circumstances occur that result in an impairment of customers’ ability to make payments, the Company records additional allowances as needed. The Company writes off uncollectible trade accounts receivable against the allowance for doubtful accounts when collection efforts have been exhausted and/or any legal action taken by the Company has concluded.

Inventories

Inventories in the accompanying condensed consolidated balance sheets are valued at the lower of cost or market and are determined primarily by the first-in, first-out (FIFO) method.  The Company records provisions, as appropriate, to write-down obsolete and excess inventory to estimated net realizable value.  The process for evaluating obsolete and excess inventory often requires the Company to make subjective judgments and estimates concerning future sales levels, quantities and prices at which such inventory will be able to be sold in the normal course of business.  Accelerating the disposal process or incorrect estimates of future sales potential may cause actual results to differ from the estimates at the time such inventory is disposed or sold. As of April 2, 2016, the Company had inventory purchase commitments of approximately $52.9 million.

Inventory reserves were approximately $9.0 million at April 2, 2016, increasing during the three months endedApril 2, 2016 by $0.7 million compared to the December 31, 2015 reserve balance of approximately $8.3 million.

Property and Equipment

Property and equipment are presented at cost.  Depreciation of property and equipment are provided on a straight-line basis over estimated useful lives, which are generally as follows: 

Buildings and improvements	10-37 years
Machinery and equipment, including leases	3-15 years
Leasehold improvements	Term of lease or useful life, whichever is shorter

Expenditures for maintenance and repairs are expensed when incurred. Expenditures for renewals and betterments are capitalized.  When assets are sold, or otherwise disposed, the cost and related accumulated depreciation are eliminated and the resulting gain or loss is recognized in operations.  

Intangible Assets, Goodwill and Other Long-lived Assets

Acquisitions

On May 29, 2015, Ply Gem completed an acquisition for cash consideration of approximately $21.0 million to acquire substantially all of the assets of Canyon Stone Inc. ("Canyon Stone"), a manufacturer and distributor of stone veneer and accessories in the United States. Canyon Stone has manufacturing facilities in Olathe, Kansas and Youngsville, North Carolina. The purchase agreement also includes contingent consideration in the form of potential earn-out payments of up to $1.0 million based on Canyon Stone's earnings for fiscal years 2015 through 2017. This acquisition expanded the Company's stone veneer manufacturing footprint across the United States as it complements the existing Ply Gem Stone manufacturing facility in Middleburg, Pennsylvania. The Company accounted for the transaction as an acquisition in accordance with the provisions of Accounting Standards Codification 805, Business Combinations, which results in a new valuation for the assets and liabilities of Canyon Stone based upon fair values as of the acquisition date.

Since the acquisition was completed on May 29, 2015, the final acquisition accounting allocation remains subject to further adjustments. The specific accounts subject to ongoing purchase accounting adjustments include accounts receivable, inventories, prepaid expenses and other current assets, property and equipment, goodwill, intangibles, accounts payable, accrued expenses, and other liabilities. Therefore, the measurement date remains open as of April 2, 2016, and the preliminary acquisition accounting allocation detailed below is subject to adjustment. The Company anticipates completing these acquisition accounting adjustments during 2016.

The Company determined the fair value of the tangible and intangible assets and the liabilities acquired, and recorded goodwill based on the excess of fair value of the acquisition consideration over such fair values, as follows:

(Amounts in thousands)
Accounts receivable	$	3,559
Inventories	712
Prepaid expenses and other current assets	41
Property and equipment	2,019
Intangible assets	9,300
Goodwill	7,642
Accounts payable, accrued expenses and other long-term liabilities	(2,273		)
	$	21,000

The $7.6 million of goodwill was allocated to the Siding, Fencing and Stone segment and the goodwill is expected to be deductible for tax purposes. The Company has recognized a liability of approximately $0.8 million as the estimated acquisition date fair value of the earn-out as of April 2, 2016 and December 31, 2015. This amount is included within other long-term liabilities in the condensed consolidated balance sheets. Any change in the fair value of the contingent consideration subsequent to the acquisition date will be recognized in earnings in the period of change.

Long-lived assets

The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.  The Company performs an undiscounted operating cash flow analysis to determine if impairment exists.  If an impairment is determined to exist, any related impairment loss is calculated based on the asset’s fair value and the discounted cash flows.

The Company tests for long-lived asset impairment at the following asset group levels: (i) the combined U.S. Siding, Fencing and Stone companies in the Siding, Fencing and Stone segment (“Siding”), (ii) the combined U.S. Windows companies in the Windows and Doors segment (“U.S. Windows”), (iii) the combined Simonton windows companies in the Windows and Doors segment, (iv) Gienow Canada Inc. ("Gienow Canada") (a combined Western Canadian company created by the January 2014 amalgamation of the Company's legacy Western Canadian business and the Gienow entity acquired in April 2013) in the Windows and Doors segment, and (v) Mitten in the Siding, Fencing and Stone segment. For purposes of recognition and measurement of an impairment loss, a long-lived asset or asset group should represent the lowest level for which an entity can separately identify cash flows that are largely independent of the cash flows of other assets and liabilities.  There were no indicators of impairment during the three months ended April 2, 2016.

Goodwill and other intangible assets

The Company evaluates goodwill for impairment on an annual basis and whenever events or business conditions warrant.  All other intangible assets are amortized over their estimated useful lives and are assessed for impairment as necessary.  The Company assesses goodwill for impairment at the November month end each year and also at any other date when events or changes in circumstances indicate that the carrying value of these assets may exceed their fair value.  To evaluate goodwill for impairment, the Company estimates the fair value of reporting units considering such factors as discounted cash flows and valuation multiples for comparable publicly traded companies.  A significant reduction in projected sales and earnings, which would lead to a reduction in future cash flows, could indicate potential impairment.  There were no indicators of impairment during the three months ended April 2, 2016 that would trigger an interim impairment test.  The Company will continue to evaluate goodwill during future periods and future declines in the residential housing and repair and remodeling markets could result in goodwill impairments.

Debt Issuance Costs

Debt issuance costs, composed of facility, agency, and certain legal fees associated with issuing new debt financing, are amortized over the contractual term of the related agreement using the effective interest method.  Net debt issuance costs totaled approximately $20.9 million and $22.2 million as of April 2, 2016 and December 31, 2015, respectively, and have been recorded within long-term debt ($18.2 million at April 2, 2016 and $19.3 million at December 31, 2015) and other non-current assets ($2.7 million at April 2, 2016 and $2.9 million at December 31, 2015) in the accompanying condensed consolidated balance sheets. The debt issuance costs included in other long term assets relate to the ABL Facility. Amortization of debt issuance costs for the three months ended April 2, 2016 and April 4, 2015 was approximately $0.8 million and $0.8 million, respectively. Amortization of debt issuance costs is recorded in interest expense in the accompanying condensed consolidated statements of operations and comprehensive income (loss).

Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes which requires that deferred tax assets and liabilities be recorded to reflect the future tax consequences of temporary differences between the book and tax basis of various assets and liabilities.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect of changes in tax rates on deferred tax assets and liabilities is recognized as income or expense in the period in which the rate change occurs.  A valuation allowance is established to offset any deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Estimates are required with respect to, among other things, the appropriate state income tax rates used in the various states that the Company and its subsidiaries are required to file, the potential utilization of operating and capital loss carry-forwards for both federal and state income tax purposes and valuation allowances required, if any, for tax assets that may not be realized in the future.  The Company establishes reserves when, despite our belief that our tax return positions are fully supportable, certain positions could be challenged, and the positions may not be fully sustained.  The Company along with its U.S. subsidiaries file a consolidated federal income tax return, separate state income tax returns, combined state returns, and unitary state returns. Gienow Canada and Mitten both file separate Canadian federal income tax returns and separate provincial returns.

Tax receivable agreement ("TRA") liability

As a result of the Company’s full tax valuation allowance position, the Company’s methodology for calculating the TRA liability considers expectations regarding (i) current year taxable income only (due to the uncertainty of future taxable income associated with the Company’s cumulative loss position) and (ii) future income due to the expected reversals of deferred tax liabilities. During the three months ended April 2, 2016, the Company estimated its projected taxable income for the full year ending December 31, 2016 based on the Company’s estimates. However, the Company’s methodology to estimate the TRA liability excludes forecasts for fiscal years subsequent to 2016 because such future forecasts and projections cannot be relied upon based on the negative evidence from the Company’s three year cumulative loss position. For fiscal year 2016, the Company estimated to be in a taxable income position; however, this taxable income estimate was currently not sufficient to outweigh the negative evidence or alleviate the Company’s three year cumulative loss position. In addition to projecting the Company’s current year taxable income estimate, the Company considered the reversals of deferred tax assets and deferred tax liabilities.

Environmental

The Company accrues for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable. Environmental remediation obligation accruals are adjusted as further information develops or circumstances change.  Costs of future expenditures for environmental remediation obligations are not discounted to their present value.  Recoveries of environmental remediation costs from other parties are recorded as assets when their receipt is deemed probable.

Commitments and Contingencies

The Company accrues for all direct costs associated with the estimated resolution of contingencies at the earliest date at which it is deemed probable that a liability has been incurred and the amount of such liability can be reasonably estimated.  Costs accrued have been estimated based upon an analysis of potential results, assuming a combination of litigation and settlement strategies and outcomes. Insurance recoveries are recorded as assets when their receipt is deemed probable.

Foreign Currency

Gienow Canada and Mitten, the Company’s Canadian subsidiaries, utilize the Canadian dollar as their functional currency.  For reporting purposes, the Company translates the assets and liabilities of its foreign entities at the exchange rates in effect at period-end.  Net sales and expenses are translated using average exchange rates in effect during the period.  Gains and losses from foreign currency translation are credited or charged to accumulated other comprehensive income or loss in the accompanying condensed consolidated balance sheets.

The Company recorded a gain from foreign currency transactions of approximately $0.6 million for the three months ended April 2, 2016 and a loss of approximately $0.9 million for the three months ended April 4, 2015. During the three months ended April 2, 2016 accumulated other comprehensive income (loss) included a currency translation gain of approximately $4.8 million and a loss of approximately $7.5 million for the three months ended April 4, 2015.

Derivative Financial Instruments

As of April 2, 2016, the Company had entered into a foreign currency forward contract agreements to hedge approximately $27.8 million of its 2016 non-functional currency inventory purchases to protect the Company from variability in cash flows attributable to changes in the U.S. dollar relative to the Canadian dollar.

The Company has designated these forward contracts as cash flow hedges. As a cash flow hedge, unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. These forward contract agreements are highly correlated to the changes in foreign currency rates to which the Company is exposed. Unrealized gains and losses on these agreements are designated as effective or ineffective. The effective portion of such gains or losses is recorded as a component of accumulated other comprehensive income or loss, while the ineffective portion of such gains or losses is recorded as a component of cost of goods sold. Future realized gains and losses in connection with each inventory purchase will be reclassified from accumulated other comprehensive income or loss to cost of goods sold.

The changes in fair values of derivatives that have been designated and qualify as cash flow hedges are recorded in accumulated other comprehensive income or loss and are reclassified into cost of goods sold in the same period the hedged item affects earnings. Due to the high degree of effectiveness between the hedging instruments and the underlying exposures being hedged, fluctuations in the value of the derivative instrument are generally offset by changes in the fair value or cash flows of the underlying exposures being hedged. The changes in the fair value of derivatives that do not qualify as effective are immediately recognized in earnings.

The gains and losses on derivative contracts that are reclassified from accumulated other comprehensive income or loss to current period earnings are included in the line item in which the hedged item is recorded in the same period the forecasted transaction affects earnings. As of April 2, 2016, approximately $0.9 million of the deferred net liability on derivative instruments included in accumulated other comprehensive loss is expected to be reclassified to cost of goods sold during the next four months. This expectation is based on the expected timing of the occurrence of the hedged forecasted transactions. During the three months ended April 2, 2016, the Company recognized $0.4 million within earnings as a reduction of cost of goods sold in the condensed consolidated statement of operations. During the three months ended April 4, 2015, the Company recognized $1.1 million within earnings as a reduction of cost of goods sold in the condensed consolidated statement of operations.

The fair value of the foreign currency forward contract agreements are estimated using industry standard valuation models using market-based observable inputs, including spot rates, forward points, interest rates and volatility inputs (Level 2). A summary of the recorded asset and liability included in the accompanying condensed consolidated balance sheets is as follows:

(Amounts in thousands)	April 2, 2016			December 31, 2015
Foreign currency hedge included in other current assets/(liabilities)	$	(891	)	$	829

Fair Value Measurement

The accounting standard for fair value discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flows), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The standard utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

• Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

• Level 3: Inputs that reflect the reporting entity’s own assumptions.

The hierarchy requires the use of observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.  The fair value of the long-term debt instruments was determined by utilizing available market information.  The carrying value of the Company’s other assets and liabilities approximates their fair value. The Company’s population of recurring financial assets and liabilities subject to fair value measurements and the necessary disclosures are as follows:

					Quoted Prices in Active Markets		Significant Other		Significant
(Amounts in thousands)			Fair		for Identical		Observable		Unobservable
	Carrying		Value		Assets		Inputs		Inputs
Description	Value		Total		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Senior Notes-6.50%	$	650,000	$	635,375	$	635,375	$	—	$	—
Term Loan Facility	391,400		380,637		—		380,637		—
As of April 2, 2016:	$	1,041,400	$	1,016,012	$	635,375	$	380,637	$	—
Liabilities:
Senior Notes-6.50%	$	650,000	$	585,000	$	585,000	$	—	$	—
Term Loan Facility	422,475		411,913		—		411,913		—
As of December 31, 2015	$	1,072,475	$	996,913	$	585,000	$	411,913	$	—

Earnings (Loss) Per Common Share

Basic earnings (loss) per share ("EPS") is computed based upon weighted-average shares outstanding during the period. Dilutive earnings per share is computed consistently with the basic computation while giving effect to all dilutive potential common shares and common share equivalents that were outstanding during the period. Ply Gem Holdings uses the treasury stock method to reflect the potential dilutive effect of unvested stock awards and unexercised options.

The Company was in a net loss position for the three months ended April 2, 2016 and April 4, 2015 and therefore the impact of stock options and unvested restricted stock were excluded from the computation of diluted earnings (loss) per share for those specific periods, as the inclusion of such amounts would be anti-dilutive.

The computation of the dilutive effect of other potential common shares excluded options and unvested restricted stock representing approximately 0.1 million shares of common stock for the three months ended April 2, 2016. The computation of the dilutive effect of other potential common shares excluded options and unvested restricted stock representing approximately 0.1 million shares of common stock for the three months ended April 4, 2015.

New Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. The amendments in this updated guidance include changes to simplify the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. The Company is in the process of evaluating the potential impacts of this new guidance on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This update provides guidance on recording revenue on a gross basis versus a net basis based on the determination of whether an entity is a principal or an agent when another party is involved in providing goods or services to a customer. The amendments in this update affect the guidance in ASU No. 2014-09 and are effective in the same timeframe as ASU No. 2014-09 as discussed below.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The core principal of the guidance is that an entity should recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. The standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal years. Early adoption is permitted. The guidance is to be applied using a modified retrospective transition method with the option to elect a package of practical expedients. The Company is currently evaluating the impact of the adoption of this accounting standard update on its internal processes, operating results and financial reporting. The impact is currently not known or reasonably estimable.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which completes the joint effort by the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and improve financial reporting by creating common revenue recognition guidance for U.S. generally accepted accounting principles ("GAAP") and International Financial Reporting Standards ("IFRS"). ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using IFRS and GAAP. The core principle of this update is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB finalized a one-year deferral of the effective date of the new revenue recognition standard. The new standard will become effective for Ply Gem beginning with the first quarter of 2018 and can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. The method of adoption has not been determined yet by the Company. The Company is currently reviewing the revised guidance and assessing the potential impact on the consolidated financial statements.

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GOODWILL

3 Months Ended

Apr. 02, 2016

Goodwill [Abstract]

GOODWILL

The Company records the excess of the fair value of the acquisition consideration over the net tangible and intangible assets of acquired companies as goodwill.  The Company performs an annual test for goodwill impairment at the November month end each year and also at any other date when events or changes in circumstances indicate that the carrying value of these assets may exceed their fair value.  The Company has defined its reporting units and performs the impairment testing of goodwill at the operating segment level.  The Company has two reporting units: (1) Siding, Fencing and Stone and (2) Windows and Doors.  Separate valuations are performed for each of these reporting units in order to test for impairment.      

The Company uses the two-step method to determine goodwill impairment.  If the carrying amount of a reporting unit exceeds its fair value (“Step One”), the Company measures the possible goodwill impairment based upon a hypothetical allocation of the fair value estimate of the reporting unit to all of the underlying assets and liabilities of the reporting unit, including previously unrecognized intangible assets (“Step Two”).  The excess of the reporting unit’s fair value over the amounts assigned to its assets and liabilities is the implied fair value of goodwill.  An impairment loss is recognized to the extent that a reporting unit’s recorded goodwill exceeds the implied fair value of goodwill. The Company has elected not to utilize the qualitative Step Zero impairment assessment. There was no goodwill impairment for the year ended December 31, 2015 and no impairment indicators which would trigger an interim impairment test during the three months ended April 2, 2016. However, the Company will continue to evaluate goodwill during future periods and future declines in the residential housing and repair and remodeling markets or the Company's market capitalization could result in goodwill impairments.  

To determine the fair value of its reporting units, the Company equally considers both the income and market valuation methodologies.  The income valuation methodology uses the fair value of the cash flows that the reporting unit can be expected to generate in the future. This method requires management to project revenues, operating expenses, working capital investment, capital spending and cash flows for the reporting unit over a multi-year period as well as determine the weighted average cost of capital to be used as the discount rate.  The Company also utilizes the market valuation method to estimate the fair value of the reporting units by utilizing comparable public company multiples.  These comparable public company multiples are then applied to the reporting unit’s financial performance.  The market approach is more volatile as an indicator of fair value as compared to the income approach as internal forecasts and projections have historically been more stable.  Since each approach has its merits, the Company equally weights the approaches to balance the internal and external factors affecting the Company’s fair value.

The Company’s fair value estimates of its reporting units and goodwill are sensitive to a number of assumptions including discount rates, cash flow projections, operating margins, and comparable market multiples.  In order to accurately forecast future cash flows, the Company estimates single family housing starts and the repair and remodeling market's growth rates.  However, there is no assurance that: (1) valuation multiples will not decline, (2) discount rates will not increase, or (3) the earnings, book values or projected earnings and cash flows of the Company's reporting units will not decline. 

The reporting unit goodwill balances were as follows as of April 2, 2016 and December 31, 2015:

(Amounts in thousands)
	April 2, 2016		December 31, 2015
Siding, Fencing and Stone	$	349,185	$	347,958
Windows and Doors	130,364		129,781
	$	479,549	$	477,739

The changes in the goodwill balances from December 31, 2015 to April 2, 2016 relate to currency translation. A goodwill rollforward for 2016 is included in the table below:

	Windows and			Siding, Fencing
(Amounts in thousands)	Doors			and Stone
Balance as of December 31, 2015
Goodwill	$	457,554		$	470,185
Accumulated impairment losses	(327,773		)	(122,227		)
	$	129,781		$	347,958
Currency translation adjustments	583			1,227
Balance as of April 2, 2016
Goodwill	458,137			471,412
Accumulated impairment losses	(327,773		)	(122,227		)
	$	130,364		$	349,185

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INTANGIBLE ASSETS

3 Months Ended

Apr. 02, 2016

Finite-Lived Intangible Assets, Net [Abstract]

INTANGIBLE ASSETS, NET

The table that follows presents the major components of intangible assets as of April 2, 2016 and December 31, 2015:

(Amounts in thousands)	Average Amortization Period			Accumulated			Net Carrying
	(in Years)	Cost		Amortization			Value
As of April 2, 2016:
Patents	14	$	12,770	$	(11,372	)	$	1,398
Trademarks/Tradenames	12	117,271		(77,917		)	39,354
Customer relationships	13	225,517		(144,994		)	80,523
Other	5	5,367		(3,685		)	1,682
Total intangible assets	12	$	360,925	$	(237,968	)	$	122,957
As of December 31, 2015:
Patents	14	$	12,770	$	(11,136	)	$	1,634
Trademarks/Tradenames	12	116,965		(76,249		)	40,716
Customer relationships	13	217,709		(133,532		)	84,177
Other	5	5,360		(3,503		)	1,857
Total intangible assets	12	$	352,804	$	(224,420	)	$	128,384

Amortization expense for the three months ended April 2, 2016 and April 4, 2015 was $6.4 million and $6.2 million, respectively. Estimated amortization expense for the fiscal years 2016 through 2020 is shown in the following table:

	Amortization
(Amounts in thousands)	expense
2016 (remainder of year)	$	18,481
2017	20,893
2018	20,058
2019	15,993
2020	11,361

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COMPREHENSIVE INCOME (LOSS)

3 Months Ended

Apr. 02, 2016

Equity [Abstract]

COMPREHENSIVE INCOME (LOSS)

Comprehensive loss, net of tax is comprised of the following:

(Amounts in thousands)	For the three months ended
	April 2, 2016			April 4, 2015
Net loss	$	(27,577	)	$	(48,859	)
Foreign currency translation adjustment	4,773			(7,453		)
Unrealized gain (loss) on derivative instruments	(1,720		)	2,102
Comprehensive loss	$	(24,524	)	$	(54,210	)

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LONG-TERM DEBT

3 Months Ended

Apr. 02, 2016

Debt Instrument [Line Items]

Long-term Debt [Text Block]

LONG-TERM DEBT

Long-term debt in the accompanying condensed consolidated balance sheets at April 2, 2016 and December 31, 2015 consists of the following:

(Amounts in thousands)
	April 2, 2016			December 31, 2015
Senior secured asset based revolving credit facility	$	10,000		$	—
Term Loan due 2021, net of unamortized early tender premium,
discount, and debt issuance costs of $31,294 and $35,106, respectively	360,106			387,369
6.50% Senior notes due 2022, net of unamortized early tender premium,
discount, and debt issuance costs of $55,686 and $57,538, respectively	594,314			592,462
	$	964,420		$	979,831
Less current portion of long-term debt	(4,300		)	(4,300		)
	$	960,120		$	975,531

2015 Debt Transaction

On November 5, 2015, Ply Gem Industries entered into a second amended and restated ABL Facility. Among other things, the second amended and restated ABL Facility: (i) increased the overall facility to $350.0 million, (ii) provided an accordion feature of $50.0 million, and (iii) established the applicable margin for borrowings under the ABL Facility to a range of 1.25% to 2.00% for Eurodollar rate loans, depending on availability. All outstanding loans under the second amended and restated ABL Facility are due and payable in full on November 5, 2020.

6.50% Senior Notes due 2022

On January 30, 2014, Ply Gem Industries issued $500.0 million aggregate principal amount of 6.50% Senior Notes due 2022 (the "6.50% Senior Notes") at par. On September 19, 2014, Ply Gem Industries issued an additional $150.0 million aggregate principal amount of 6.50% Senior Notes (the "Senior Tack-on Notes") at an issue price of 93.25%. Interest accrues at 6.50% per annum and is paid semi-annually on February 1 and August 1 of each year. All issued and outstanding 6.50% Senior Notes are registered under the Securities Act. The 6.50% Senior Notes will mature on February 1, 2022.

Prior to February 1, 2017, Ply Gem Industries may redeem up to 40% of aggregate principal amount of the 6.50% Senior Notes with the net cash proceeds from certain equity offerings at a redemption price equal to 106.50% of the aggregate principal amount of the 6.50% Senior Notes to be redeemed, plus accrued and unpaid interest, if any, provided that at least 50% of the aggregate principal amount of the 6.50% Senior Notes remains outstanding after the redemption. Prior to February 1, 2017, Ply Gem Industries may redeem the 6.50% Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus a “make-whole” premium plus accrued and unpaid interest, if any. At any time on or after February 1, 2017, Ply Gem Industries may redeem the 6.50% Senior Notes, in whole or in part, at declining redemption prices set forth in the indenture governing the 6.50% Senior Notes plus, in each case, accrued and unpaid interest, if any, to the redemption date. The effective interest rate for the 6.50% Senior Notes is 8.39% after considering each of the different interest expense components of this instrument, including the coupon payment and the deferred debt issuance costs.

The 6.50% Senior Notes are fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by Ply Gem Holdings and all of the wholly-owned domestic subsidiaries of Ply Gem Industries (the “Guarantors”).  The indenture governing the 6.50% Senior Notes contains certain covenants that limit the ability of Ply Gem Industries and its restricted subsidiaries to incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem their stock, make loans and investments, sell assets, incur certain liens, enter into agreements restricting their ability to pay dividends, enter into transactions with affiliates, and consolidate, merge or sell assets.  In particular, Ply Gem Industries and its restricted subsidiaries may not incur additional debt (other than permitted debt (as defined in the indenture) in limited circumstances) unless, after giving effect to such incurrence, the consolidated interest coverage ratio of Ply Gem Industries would be at least 2.00 to 1.00.  

In the absence of satisfying the consolidated interest coverage ratio test, Ply Gem Industries and its restricted subsidiaries may only incur additional debt under certain circumstances, including, but not limited to, debt under credit facilities (as defined in the indenture) (x) in an amount not to exceed the greater of (a) $350.0 million and (b) the borrowing base (as defined in the indenture) and (y) in an amount not to exceed the greater of (A) $575.0 million and (B) the aggregate amount of indebtedness (as defined in the indenture) that that would cause the consolidated secured debt ratio (as defined in the indenture) to be equal to 4.00 to 1.00; purchase money indebtedness in an aggregate amount not to exceed the greater of (x) $35.0 million and (y) 10% of consolidated net tangible assets (as defined in the indenture) at any one time outstanding; debt of foreign subsidiaries in an aggregate amount not to exceed the greater of (x) $60.0 million and (y) 15% of consolidated net tangible assets (as defined in the indenture) at any one time outstanding; debt pursuant to a general basket in an aggregate amount at any one time outstanding not to exceed the greater of (x) $75.0 million and (y) 20% of consolidated net tangible assets; and the refinancing of debt under certain circumstances.

Term Loan Facility due 2021

On January 30, 2014, Ply Gem Industries entered into a credit agreement governing the terms of its $430.0 million Term Loan Facility. Ply Gem Industries originally borrowed $430.0 million under the Term Loan Facility on January 30, 2014, with an original discount of approximately $2.2 million, yielding proceeds of approximately $427.9 million. The Term Loan Facility will mature on January 30, 2021. The Term Loan Facility requires scheduled quarterly payments in an aggregate annual amount equal to 1.00% of the original aggregate principal amount of the Term Loan Facility with the balance due at maturity. Interest on outstanding borrowings under the Term Loan Facility is paid quarterly.

Borrowings under the Term Loan Facility bear interest at a rate equal to, at Ply Gem Industries’ option, either (a) a base rate determined by reference to the highest of (i) the prime rate of the administrative agent under the credit agreement, (ii) the federal funds rate plus 0.50% and (iii) the adjusted LIBO rate for a one-month interest period plus 1.00% or (b) a LIBO rate determined by reference to the cost of funds for eurocurrency deposits in dollars for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a 1.00% floor, plus, in each case, an applicable margin of 3.00% for any eurocurrency loan and 2.00% for any alternate base rate loan. As of April 2, 2016, the Company's interest rate on the Term Loan Facility was 4.00%. The effective interest rate for the Term Loan is 7.24% after considering each of the different interest expense components of this instrument, including the coupon payment, the deferred debt issuance costs and the original issue discount.

The Term Loan Facility allows Ply Gem Industries to request one or more incremental term loan facilities in an aggregate amount not to exceed the greater of (x) $140.0 million and (y) an amount such that Ply Gem Industries’ consolidated senior secured debt ratio (as defined in the credit agreement), on a pro forma basis, does not exceed 3.75 to 1.00, in each case, subject to certain conditions and receipt of commitments by existing or additional financial institutions or institutional lenders.

The Term Loan Facility requires Ply Gem Industries to prepay outstanding term loans, subject to certain exceptions, with: (i) 50% (which percentage will be reduced to 25% if our consolidated senior secured debt ratio is equal or less than 2.50 to 1.00 but greater than 2.00 to 1.00 and to 0% if our consolidated senior secured debt ratio is equal to or less than 2.00 to 1.00) of our annual excess cash flow (as defined in the credit agreement), to the extent such excess cash flow exceeds $15.0 million; (ii) 100% of the net cash proceeds of certain non-ordinary course asset sales or certain insurance and condemnation proceeds, in each case subject to certain exceptions and reinvestment rights; and (iii) 100% of the net cash proceeds of certain issuances of debt, other than proceeds from debt permitted under the Term Loan Facility. Ply Gem Industries may voluntarily repay outstanding loans under the Term Loan Facility at any time without premium or penalty, other than customary “breakage” costs with respect to LIBOR loans. As of and for the year ended December 31, 2015, the Company's consolidated senior secured debt ratio was 1.97 and as a result no excess cash flow payment under the Term Loan Facility was required. However, the Company elected on March 10, 2016 to voluntarily prepay $30.0 million on the Term Loan Facility to reduce its outstanding indebtedness.

The Term Loan Facility is secured on a first-priority lien basis by the stock of Ply Gem Industries and by substantially all of the assets (other than the assets securing the obligations under the ABL Facility, which primarily consist of accounts receivable, inventory, cash, deposit accounts, securities accounts, chattel paper, contract rights, instruments, documents related thereto and proceeds of the foregoing) of Ply Gem Industries and the Guarantors that are subsidiaries of Ply Gem Industries and on a second-priority lien basis by the assets that secure the ABL Facility.

The Term Loan Facility includes negative covenants, subject to certain exceptions, that are substantially the same as the negative covenants in the 6.50% Senior Notes but does not contain any restrictive financial covenants. The Term Loan Facility also restricts the ability of Ply Gem Industries’ subsidiaries to enter into agreements restricting their ability to grant liens to secure the Term Loan Facility and contains a restriction on changes in fiscal year.

Senior Secured Asset Based Revolving Credit Facility due 2020

On November 5, 2015, Ply Gem Holdings, Inc., Ply Gem Industries, Inc., Gienow Canada Inc., and Mitten Inc. (together with Gienow, the “Canadian Borrowers”) entered into a second amended and restated credit agreement governing the ABL Facility. Among other things, the second amendment and restatement of the credit agreement governing the ABL Facility: (i) increased the overall facility to $350.0 million from $300.0 million, (ii) established an accordion feature of $50.0 million, (iii) reduced the applicable margin for borrowings under the ABL Facility to a range from 1.25% to 2.00% for Eurodollar rate loans, depending on availability, and (iv) extended the maturity until November 5, 2020. Under the ABL Facility, $300.0 million is available to Ply Gem Industries and $50.0 million is available to the Canadian Borrowers. The following summary describes the ABL Facility after giving effect to the second amendment and restatement. As a result of the November 2015 ABL Facility amendment in which the loan syndication consisted of previous members who either maintained or increased their position as well as new syndication members, the Company capitalized new debt issuance costs of $1.5 million and will amortize these costs through 2020.

Borrowings under the ABL Facility bear interest at a rate per annum equal to, at Ply Gem Industries’ option, either (a) a base rate determined by reference to the higher of (1) the corporate base rate of the administrative agent under the ABL Facility and (2) the federal funds rate plus 0.5% or (b) a Eurodollar rate determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, in each case plus an applicable margin.  The initial applicable margin for borrowings under the ABL Facility was 0.50% for base rate loans and 1.50% for Eurodollar rate loans.  The applicable margin for borrowings under the ABL Facility is subject to step ups and step downs based on average excess availability under the ABL Facility.  Swingline loans bear interest at a rate per annum equal to the base rate plus the applicable margin.

In addition to paying interest on outstanding principal under the ABL Facility, Ply Gem Industries is required to pay a commitment fee in respect of the unutilized commitments thereunder, which fee will be determined based on utilization of the ABL Facility (increasing when utilization is low and decreasing when utilization is high) multiplied by a commitment fee rate determined by reference to average excess availability under the ABL Facility. The commitment fee rate during any fiscal quarter is 0.375% when average excess availability is greater than $100.0 million for the preceding fiscal quarter and 0.25% when average availability is less than or equal to $100.0 million for the preceding fiscal quarter.  Ply Gem Industries must also pay customary letter of credit fees equal to the applicable margin on Eurodollar loans and agency fees.   As of April 2, 2016, the Company’s interest rate on the ABL Facility was approximately 1.89%.  The ABL Facility requires that if (a) excess availability is less than the greater of (x) 10.0% of the lower of the borrowing base and the aggregate commitments and (y) $25.0 million or (b) any event of default has occurred and is continuing, Ply Gem Industries must comply with a minimum fixed charge coverage ratio test of 1.0 to 1.0.  If the excess availability under the ABL Facility is less than the greater of (a) 12.5% of the lesser of the borrowing base and the aggregate commitments and (b) $30.0 million ($27.5 million for the months of January, February, March and April) for a period of 5 consecutive days or an event of default has occurred and is continuing, all cash from Ply Gem Industries material deposit accounts (including all concentration accounts) will be swept daily into a collection account controlled by the administrative agent under the ABL Facility and used to repay outstanding loans and cash collateralize letters of credit.

All obligations under the ABL Facility are unconditionally guaranteed by Ply Gem Holdings and substantially all of Ply Gem Industries’ existing and future, direct and indirect, wholly owned domestic subsidiaries.  All obligations under the ABL Facility, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of the assets of Ply Gem Industries and the guarantors, including a first-priority security interest in personal property consisting of accounts receivable, inventory, cash, deposit accounts, and certain related assets and proceeds of the foregoing and a second-priority security interest in, and mortgages on, substantially all of Ply Gem Industries’ and the Guarantors’ material owned real property and equipment and all assets that secure the Term Loan Facility on a first-priority basis.  In addition to being secured by the collateral securing the obligations of Ply Gem Industries under the domestic collateral package, the obligations of the Canadian Borrowers, which are borrowers under the Canadian sub-facility under the ABL Facility, are also secured by a first-priority security interest in substantially all of the assets of such Canadian subsidiaries, plus additional mortgages in Canada, and a pledge by Ply Gem Industries of the remaining 35% of the equity interests of the Canadian Borrowers pledged only to secure the Canadian sub-facility.

The ABL Facility contains certain covenants that limit Ply Gem Industries’ ability and the ability of Ply Gem Industries’ subsidiaries to incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem their stock, make loans and investments, sell assets, incur certain liens, enter into transactions with affiliates, and consolidate, merge or sell assets.  

As of April 2, 2016, Ply Gem Industries had approximately $329.4 million of contractual availability and approximately $208.4 million of borrowing base availability under the ABL Facility, reflecting $10.0 million of borrowings outstanding and approximately $10.6 million of letters of credit and priority payables reserves.

Loss on debt modification or extinguishment

During March 2016, the Company made a voluntarily prepayment of $30.0 million on the Term Loan Facility to reduce its outstanding indebtedness as allowable under the terms of the Term Loan Facility. The Company performed an analysis to determine the proper accounting treatment for this voluntary prepayment by evaluating the change in cash flows and determined that there were no changes in the creditors as a result of the prepayment. Consequently, the Company recognized a loss on debt modification or extinguishment of approximately $2.4 million for the three months ended April 2, 2016 reflecting the proportionate write-off of the related debt discount and debt issuance costs associated with the $30.0 million payment, as summarized in the table below.

(Amounts in thousands)	For the three months ended
	April 2, 2016		April 4, 2015
Loss on modification of debt:
Term Loan Facility unamortized discount	$	1,915	—
Term Loan Facility unamortized debt issuance costs	484		—
	2,399		—
Total loss on modification or extinguishment of debt	$	2,399	$	—

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PENSION PLANS

3 Months Ended

Apr. 02, 2016

Compensation and Retirement Disclosure [Abstract]

PENSION PLANS

PENSION PLANS

The Company has two pension plans, the Ply Gem Group Pension Plan and the MW Manufacturers, Inc. Retirement Plan. The Company’s net periodic benefit expense for the combined plans for the periods indicated consists of the following components:

(Amounts in thousands)	For the three months ended
	April 2, 2016			April 4, 2015
Service cost	$	—		$	—
Interest cost	486			502
Expected return on plan assets	(545		)	(577		)
Amortization of loss	354			296
Net periodic benefit expense	$	295		$	221

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Apr. 02, 2016

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Indemnifications

In connection with the Ply Gem acquisition, in which Ply Gem Industries was acquired from Nortek, Inc. (“Nortek”) in February 2004, Nortek has agreed to indemnify the Company for certain liabilities as set forth in the stock purchase agreement governing the Ply Gem acquisition.  In the event Nortek is unable to satisfy amounts due under these indemnifications, the Company would be liable.  The Company believes that Nortek has the financial capacity to honor its indemnification staobligations and therefore does not anticipate incurring any losses related to liabilities indemnified by Nortek under the stock purchase agreement.  A receivable related to this indemnification has been recorded in other long-term assets of approximately $1.6 million and $1.8 million at April 2, 2016 and December 31, 2015, respectively.  As of April 2, 2016 and December 31, 2015, the Company has recorded liabilities related to these indemnifications of approximately $0.5 million and $0.5 million, respectively, in current liabilities and $1.1 million and $1.3 million, respectively, in long-term liabilities, consisting of the following:

(Amounts in thousands)	April 2, 2016		December 31, 2015
Product claim liabilities	$	138	$	138
Multi-employer pension plan withdrawal liability	884		960
Other	531		664
	$	1,553	$	1,762

Warranty claims

The Company sells a number of products and offers a number of warranties.  The specific terms and conditions of these warranties vary depending on the product sold.  The Company estimates the costs that may be incurred under their warranties and records a liability for such costs at the time of sale.  Factors that affect the Company’s warranty liabilities include the number of units sold, historical and anticipated rates of warranty claims, cost per claim and new product introduction.  The Company assesses the adequacy of the recorded warranty claims and adjusts the amounts as necessary.  As of April 2, 2016 and December 31, 2015, warranty liabilities of approximately $17.1 million and $16.6 million, respectively, have been recorded in current liabilities and approximately $60.4 million and $59.9 million, respectively, have been recorded in long term liabilities.

Changes in the Company’s short-term and long-term warranty liabilities are as follows:

	For the three months ended
(Amounts in thousands)	April 2, 2016			April 4, 2015
Balance, beginning of period	$	76,562		$	84,423
Warranty expense during period	5,512			5,027
Settlements made during period	(4,613		)	(5,169		)
Balance, end of period	$	77,461		$	84,281

Environmental

The Company is subject to United States and Canadian federal, state, provincial and local laws and regulations relating to pollution and the protection of the environment, including those governing emissions to air, discharges to water, use, storage and transport of hazardous materials, storage, treatment and disposal of waste, remediation of contaminated sites, and protection of worker health and safety. From time to time, the Company's facilities are subject to investigation by governmental regulators. In addition, the Company has been identified as one of many potentially responsible parties for contamination present at certain offsite locations to which it or its predecessors are alleged to have sent hazardous materials for recycling or disposal. The Company may be held liable, or incur fines or penalties, in connection with such requirements or liabilities for, among other things, releases of hazardous substances occurring on or emanating from current or formerly owned or operated properties or any associated offsite disposal location, or for known or newly-discovered contamination at any of the Company's properties from activities conducted by us or previous occupants. The amount of any liability, fine or penalty may be material, and certain environmental laws impose strict, and under certain circumstances joint and several, liability for the cost of addressing releases of hazardous substances upon certain classes of persons, including site owners or operators and persons that disposed or arranged for the disposal of hazardous substances at contaminated sites.

MW Manufacturers Inc. (“MW”), a subsidiary of MWM Holding, Inc., entered into an Administrative Order on Consent (the “Consent Order”), effective September 12, 2011, with the United States Environmental Protection Agency (“EPA”), Region III, under Section 3008(h) of the Resource Conservation and Recovery Act ("RCRA"), with respect to its Rocky Mount, Virginia property.  During 2011, as part of the Consent Order, MW provided the EPA, among other things, a RCRA Facility Investigation Workplan (the “Workplan”) as well as a preliminary cost estimate of approximately $1.8 million for the predicted assessment, remediation and monitoring activities to be conducted pursuant to the Consent Order over the remediation period, which is currently estimated through 2023. During 2012, the EPA approved the Workplan, and MW is currently implementing the Workplan. The Company has recorded approximately $0.3 million of this environmental liability within current liabilities and approximately $1.2 million within other long-term liabilities in the Company’s condensed consolidated balance sheet at April 2, 2016 and December 31, 2015.  The Company will adjust this environmental remediation liability in future periods, if necessary, as further information develops or circumstances change.

Certain liabilities with respect to this contamination relate to the previous closure of an underground storage tank and were assumed by U.S. Industries, Inc., pursuant to its indemnity obligation under the stock purchase agreement dated August 11, 1995, whereby U.S. Industries, Inc. sold the stock of MW to FPI Acquisition Corp. (“Fenway Partners”). As the successor-in-interest of Fenway Partners, the Company is similarly indemnified by U.S. Industries, Inc. Notwithstanding this indemnity, however, under applicable Federal and State laws, MW, and the Company as its parent, could be held liable for all or part of the costs associated with the matter under certain circumstances. Moreover, the Company’s ability to seek indemnification from U.S. Industries, Inc. is limited by the terms and limits of the indemnity as well as the strength of U.S. Industries, Inc. is, however, limited by the terms and limits of the indemnity as well as the strength of U.S. Industries, Inc.’s financial condition, which could change in the future.  As of April 2, 2016, no recovery has been recognized on the Company’s condensed consolidated balance sheet, but the Company will actively pursue this indemnity in future periods and will recognize future recoveries in the period in which they become probable.

The State of Nebraska is investigating certain groundwater contamination in northern York, Nebraska, comprised primarily of volatile organic compounds (VOC) (predominantly trichloroethene (TCE)). In December 2013, the EPA announced its proposal to add this groundwater contamination site to the Superfund National Priorities List (NPL) after it was referred to the EPA by the State of Nebraska. Sampling was conducted at the Kroy Building Products, Inc. (“Kroy”) facility in York, Nebraska during the first quarter of 2010. In February 2015, the EPA sent a request for information pursuant to Section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), and Kroy has responded to this request for information. Given the preliminary stage of this matter, the Company has not recorded a liability for this matter in its condensed consolidated balance sheet as of April 2, 2016. Alcan Aluminum Corporation (“Alcan”) has assumed the obligation to indemnify the Company with respect to certain liabilities for environmental contamination of the Kroy facility occurring prior to 1994. Notwithstanding this indemnity, however, under applicable Federal and State laws, Kroy, and Ply Gem as its parent, could be held liable for all or part of the costs associated with the matter under certain circumstances. Moreover, the ability of Kroy and Ply Gem to seek indemnification may be limited by the terms and limits of the indemnity as well as the strength of Alcan’s financial condition, which could change in the future.

The Company is currently involved in environmental proceedings involving Gienow Canada Inc. (f/k/a Ply Gem Canada, Inc.) and Alberta Environment (arising from subsurface contamination discovered at our Calgary, Alberta property) for which the Company has a $0.1 million liability included in its condensed consolidated balance sheet, and the Company may in the future be subject to environmental proceedings involving Thermal-Gard, Inc. (arising from groundwater contamination in Punxsutawney, Pennsylvania), Mastic Home Exteriors, Inc. (“MHE”) (relating to a closed landfill site in Sidney, Ohio as well as participating as a potentially responsible party in nine contaminated sites in Indiana, Ohio and South Carolina), and Simonton (relating to closed lagoons and certain contamination in Paris, Illinois as well as certain contamination associated with certain 7-Eleven convenience food stores). Under the stock purchase agreement governing the MHE acquisition, Alcoa Securities Corporation and Alcoa, Inc. are to indemnify the Company for certain environmental liabilities in excess of $2.5 million including liabilities relating to the landfill site in Sidney, Ohio and the nine contaminated sites in Indiana, Ohio and South Carolina. Under the stock purchase agreement governing the Simonton acquisition, Fortune Brands Windows & Doors, Inc., is to indemnify the Company for any environmental claims associated with the 7-Eleven convenience food stores. The Company's ability to seek indemnification or enforce these and other obligations is, however, limited by the strength of the financial condition of the indemnitor or responsible party, which could change in the future, as well as the terms and limits of any such indemnities or obligations.

Based on current information, the Company is not aware of any compliance obligations, claims, releases or investigations that will have a material adverse effect on our results of operations, cash flows or financial position except as otherwise disclosed in the Company's condensed consolidated financial statements. However, there can be no guarantee that previously known or newly-discovered matters or any inability to enforce our available indemnification rights against previous owners of the Company, its subsidiaries, or their businesses or properties will not result in material costs or liabilities. While the purchase agreements governing certain of our acquisitions provide that the sellers will indemnify us, subject to certain limitations, for certain environmental liabilities, our ability to seek indemnification from the respective sellers is limited by various factors, including the financial condition of the indemnitor or responsible party as well as by the terms and limits of such indemnities or obligations. As a result, there can be no assurance that we could receive any indemnification from the sellers, and any related environmental liabilities, costs or penalties could have a material adverse effect on our financial condition and results of operations.

Self-insured risks

The Company maintains a broad range of insurance policies which include general liability insurance coverage and workers compensation. These insurance policies protect the Company against a portion of the risk of loss from claims. However, the Company retains a portion of the overall risk for such claims through its self-insured per occurrence and aggregate retentions, deductibles, and claims in excess of available insurance policy limits. The Company's general liability insurance includes coverage for certain damages arising out of product design and manufacturing defects. The Company's insurance coverage is generally subject to a per occurrence retention.

The Company reserves for costs associated with claims, as well as incurred but not reported losses (“IBNR”), based on an outside actuarial analysis of its historical claims. These estimates make up a significant portion of the Company's liability and are subject to a high degree of uncertainty due to a variety of factors, including changes in type of claims, claims reporting and resolution patterns, frequency and timing of claims, third party recoveries, estimates of claim values, claims management expenses (including legal fees and expert fees), insurance industry practices, the regulatory environment, and legal precedent. Adjustments to estimated reserves are recorded in the period in which the change in estimate occurs.

Litigation

During the past several years, the Company incurred increased litigation expense primarily related to the claims discussed below. The Company believes it has valid defenses to the outstanding claims discussed below and will vigorously defend all such claims; however, litigation is subject to many uncertainties and there cannot be any assurance that the Company will ultimately prevail or, in the event of an unfavorable outcome or settlement of litigation, that the ultimate liability would not be material and would not have a material adverse effect on the business, results of operations, cash flows or financial position of the Company.

In John Gulbankian v. MW Manufacturers, Inc. (“Gulbankian”), a purported class action filed in March 2010 in the United States District Court for the District of Massachusetts, plaintiffs, on behalf of themselves and all others similarly situated, alleged damages as a result of the defective design and manufacture of certain MW vinyl clad windows. In Eric Hartshorn and Bethany Perry v. MW Manufacturers, Inc. (“Hartshorn”), a purported class action filed in July 2012 in the District Court, plaintiffs, on behalf of themselves and all others similarly situated, alleged damages as a result of the defective design and manufacture of certain MW vinyl clad windows. On April 22, 2014, plaintiffs in both the Gulbankian and Hartshorn cases filed a Consolidated Amended Class Action Complaint, making similar claims against all MW vinyl clad windows.

MW entered into a settlement agreement with plaintiffs as of April 18, 2014 to settle both the Gulbankian and Hartshorn cases on a nationwide basis (the “Vinyl Clad Settlement Agreement”). The Vinyl Clad Settlement Agreement provides that this settlement applies to any and all MW vinyl clad windows manufactured from January 1, 1987 through May 23, 2014, and provides for a cash payment for eligible consumers submitting qualified claims showing, among other requirements, certain damage to their MW vinyl clad windows. The period for submitting qualified claims is the later of: (i) May 28, 2016, or (ii) the last day of the warranty period for the applicable window. On December 29, 2014, the District Court granted final approval of this settlement, as well as MW’s payment of attorneys' fees and costs to plaintiffs' counsel in the amount of $2.5 million, issuing a Final Approval Order, Final Judgment, and Order of Dismissal with Prejudice (the "Final Approval Order"). A notice of appeal of the Final Approval Order (the “Appeal”) was given by certain objectors to the settlement, and on May 6, 2015, MW entered into a settlement agreement with, among others, the objectors to fully and finally resolve their claims, including the dismissal of Karl Memari v. Ply Gem Prime Holdings, Inc. et al., another lawsuit seeking class certification with respect to MW's vinyl clad windows, making the Vinyl Clad Settlement Agreement final and binding on the parties. The Company and MW deny all liability in the settlements and with respect to the facts and claims alleged. The Company, however, is aware of the substantial burden, expense, inconvenience and distraction of continued litigation, and therefore agreed to settle these matters.

As a result of the Vinyl Clad Settlement Agreement, the Company recognized a $5.0 million expense during the year ended December 31, 2014 within selling, general, and administrative expenses in the Company’s consolidated statement of operations and comprehensive income (loss) in the Company's Windows and Doors segment. It is possible that the Company may incur costs in excess of the recorded amounts; however, the Company currently expects that the total net cost will not exceed $5.0 million. As of April 2, 2016, approximately $1.5 million of this liability is currently outstanding with $0.7 million as a current liability within accrued expenses and $0.8 million as a noncurrent liability within other long-term liabilities in the Company’s condensed consolidated balance sheet.

In Anthony Pagliaroni et al. v. Mastic Home Exteriors, Inc. and Deceuninck North America, LLC, a purported class action filed in January 2012 in the United States District Court for the District of Massachusetts, plaintiffs, on behalf of themselves and all others similarly situated, allege damages as a result of the defective design and manufacture of Oasis composite deck and railing, which was manufactured by Deceuninck North America, LLC (“Deceuninck”) and sold by Mastic Home Exteriors, Inc. (“MHE”). The plaintiffs seek a variety of relief, including (i) economic and compensatory damages, (ii) treble damages, (iii) punitive damages, and (iv) attorneys' fees and costs of litigation. The damages sought in this action have not yet been quantified. The hearing regarding plaintiffs’ motion for class certification was held on March 10, 2015, and the District Court denied plaintiffs’ motion for class certification on September 22, 2015. On October, 6, 2015, plaintiffs filed a petition for interlocutory appeal of the denial of class certification to the U.S. Court of Appeals for the First Circuit, and on April 12, 2016, the Court of Appeals denied this petition for appeal. Deceuninck, as the manufacturer of Oasis deck and railing, has agreed to indemnify MHE for certain liabilities related to this claim pursuant to the sales and distribution agreement, as amended, between Deceuninck and MHE. MHE's ability to seek indemnification from Deceuninck is, however, limited by the terms and limits of the indemnity as well as the strength of Deceuninck's financial condition, which could change in the future.

In The Muhler Company, Inc. v. Ply Gem Prime Holdings, Inc. et al., a lawsuit filed in April 2011 in the United States District Court for the District of South Carolina, Charleston Division, plaintiff alleges unfair competition and trade practices. The plaintiff seeks a variety of relief, including (i) consequential damages, (ii) treble damages, (iii) punitive damages, and (iv) attorneys' fees and costs of litigation. In April 2013, the District Court granted the Company's motion for summary judgment with respect to the federal Lanham Act claims. In May 2013, the plaintiff filed a notice of appeal to the U.S. Court of Appeals for the Fourth Circuit with respect to the summary judgment granted on the federal Lanham Act claims, and the Fourth Circuit denied interlocutory appeal. With the summary judgment granted on the federal Lanham Act claims, only state unfair competition and trade practices claims remain. In April 2015, the District Court heard arguments on the Company's motion for summary judgment with respect to such claims, and on July 13, 2015, the District Court granted the Company’s motion. On July 27, 2015, the plaintiff filed an appeal with the U.S. Court of Appeals for the Fourth Circuit with respect to the District Court’s ruling, and on February 10, 2016, the U.S. Court of Appeals for the Fourth Circuit affirmed the District Court’s ruling. On February 24, 2016, the plaintiff filed a petition for rehearing, which was denied by the Court of Appeals on March 15, 2016. The damages sought in this action have not yet been quantified.

In rePly Gem Holdings, Inc. Securities Litigation isa purported federal securities class action filed on May 19, 2014 in the United States District Court for the Southern District of New York against Ply Gem Holdings, Inc., several of its directors and officers, and the underwriters associated with the Company’s IPO. It is filed on behalf of all persons or entities, other than the defendants, who purchased the common shares of the Company pursuant and/or traceable to the Company’s IPO and seeks remedies under Sections 11 and 15 of the Securities Act of 1933, alleging that the Company’s Form S-1 registration statement was negligently prepared and materially inaccurate, containing untrue statements of material fact and omitting material information which was required to be disclosed. The plaintiffs seek a variety of relief, including (i) damages together with interest thereon and (ii) attorneys’ fees and costs of litigation. On October 14, 2014, Strathclyde Pension Fund was certified as lead plaintiff, and class counsel was appointed. On February 13, 2015, the defendants filed their motion to dismiss the complaint. On September 29, 2015, the District Court granted defendants’ motion to dismiss, but ruled that plaintiff could file an amended complaint. On November 6, 2015, plaintiff filed an amended complaint, and on January 13, 2016, the defendants filed their motion to dismiss this amended complaint. The District Court has not yet ruled on this motion. The damages sought in this action have not yet been quantified. Pursuant to the Underwriting Agreement, dated May 22, 2013, entered into in connection with the IPO, the Company has agreed to reimburse the underwriters for the legal fees and other expenses reasonably incurred by the underwriters’ law firm in its representation of the underwriters in connection with this matter. Pursuant to Indemnification Agreements, dated as of May 22, 2013, between the Company and each of the directors and officers named in this action, the Company has agreed to assume the defense of such directors and officers. We believe the purported federal securities class action is without merit and will vigorously defend the lawsuit.

In Raul Carrillo-Hueso and Chec Xiong v. Ply Gem Industries, Inc. and Ply Gem Pacific Windows Corporation, a purported class action filed on November 25, 2015 in the Superior Court of the State of California, County of Alameda, plaintiffs, on behalf of themselves and all others similarly situated, allege damages as a result of, among other things, the defendants’ failure to provide (i) statutorily required meal breaks at the Sacramento, California facility, (ii) accurate wage statements to employees in California, and (iii) all wages due on termination in California. The plaintiffs seek a variety of relief, including (i) economic and compensatory damages, (ii) statutory damages, (iii) penalties, (iv) pre- and post-judgment interest, and (v) attorneys' fees and costs of litigation. The damages sought in this action have not yet been quantified.

In Tina Morgan v. Ply Gem Industries, Inc. and Simonton Industries, Inc., a purported class action filed on December 11, 2015 in the Superior Court of the State of California, County of Solano, plaintiff, on behalf of herself and all others similarly situated, alleges damages as a result of, among other things, the defendants’ failure at the Vacaville, California facility to (i) pay overtime wages, (ii) provide statutorily required meal breaks, (iii) provide accurate wage statements, and (iv) pay all wages owed upon termination. The plaintiff seeks a variety of relief, including (i) economic and compensatory damages, (ii) statutory damages, (iii) penalties, (iv) pre- and post-judgment interest, and (v) attorneys' fees and costs of litigation. The damages sought in this action have not yet been quantified.

Other contingencies

The Company is subject to other contingencies, including legal proceedings and claims arising out of its operations and businesses that cover a wide range of matters, including, among others, environmental, contract, employment, intellectual property, securities, personal injury, property damage, product liability, warranty, and modification, adjustment or replacement of component parts or units sold, which may include product recalls.  Product liability, environmental and other legal proceedings also include matters with respect to businesses previously owned.  The Company has used various substances in their products and manufacturing operations, which have been or may be deemed to be hazardous or dangerous, and the extent of its potential liability, if any, under environmental, product liability and workers’ compensation statutes, rules, regulations and case law is unclear.  Further, due to the lack of adequate information and the potential impact of present regulations and any future regulations, there are certain circumstances in which no range of potential exposure may be reasonably estimated.  Also, it is not possible to ascertain the ultimate legal and financial liability with respect to certain contingent liabilities, including lawsuits, and therefore no such estimate has been made as of April 2, 2016.

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ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES

3 Months Ended

Apr. 02, 2016

Payables and Accruals [Abstract]

ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES

ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES

Accrued expenses consist of the following at April 2, 2016 and December 31, 2015:

(Amounts in thousands)	April 2, 2016		December 31, 2015
Insurance	$	9,465	$	9,347
Employee compensation and benefits	13,781		20,381
Sales and marketing	33,835		50,405
Product warranty	17,119		16,619
Accrued freight	1,519		1,445
Accrued interest	7,150		17,808
Accrued environmental liability	437		430
Accrued pension	647		647
Accrued sales returns and discounts	4,728		3,368
Accrued taxes	5,436		5,575
Litigation accrual	700		700
Other	22,446		26,237
	$	117,263	$	152,962

Other long-term liabilities consist of the following at April 2, 2016 and December 31, 2015:

(Amounts in thousands)	April 2, 2016		December 31, 2015
Insurance	$	1,302	$	1,237
Pension liabilities	14,827		15,033
Multi-employer pension withdrawal liability	884		960
Product warranty	60,442		59,943
Long-term product claim liability	138		138
Long-term environmental liability	1,196		1,211
Liabilities for tax uncertainties	2,928		2,866
Litigation accrual	810		829
Other	7,243		8,676
	$	89,770	$	90,893

Long-term incentive plan

The Company has a long-term incentive plan (“LTIP”) for certain employees. The long-term incentive plan was implemented to retain and incentivize key employees. During the three months ended April 2, 2016 and April 4, 2015, the Company recognized a LTIP expense of $1.7 million and $0.7 million, respectively, which has been recorded within selling, general, and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss). The LTIP liability was $4.4 million and $5.9 million as of April 2, 2016 and December 31, 2015, respectively, of which $3.4 million and $3.1 million has been recorded within accrued expenses and $1.0 million and $2.8 million in other long-term liabilities in the condensed consolidated balance sheets as of April 2, 2016 and December 31, 2015, respectively.

Other liabilities

During the three months ended April 2, 2016 and April 4, 2015, the Company made approximately $0.7 million and $0.5 million, in cash payments on restructuring liabilities, respectively. These payments were for a restructuring and integration program implemented in Western Canada and general back office centralization efforts incurred as well as product simplification costs incurred for the entire Windows and Doors segment.

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INCOME TAXES

3 Months Ended

Apr. 02, 2016

Income Tax Disclosure [Abstract]

INCOME TAXES

 INCOME TAXES

Effective tax rate

Under FASB Accounting Standards Codification 740-270, Income Taxes - Interim Reporting, each interim period is considered an integral part of the annual period and tax expense is measured using an estimated annual effective rate. Estimates of the annual effective tax rate at the end of interim periods are, of necessity, based on evaluation of possible future events and transactions and may be subjevact to subsequent refinement or revision. The Company calculates its quarterly tax provision consistent with the guidance provided by ASC 740-270, whereby the Company forecasts its estimated annual effective tax rate then applies that rate to its year-to-date pre-tax book income (loss). In addition, we exclude jurisdictions with a projected loss for the year or the year-to-date loss where we cannot recognize a tax benefit from our estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections. In addition to the tax resulting from applying the estimated annual effective tax rate to pre-tax income (loss), the Company includes certain items treated as discrete events to arrive at an estimated effective tax rate. Future changes in the forecasted annual income (loss) projections, tax rate changes, or discrete tax items could result in significant adjustments to quarterly income tax expense (benefit) in future periods in accordance with ASC 740-270.

For the three months endedApril 2, 2016, the Company's estimated effective income tax rate was approximately 5.4%, which varied from the statutory rate primarily due to state income tax expense, valuation allowances, and foreign income taxes. The effective tax rate including discrete items was 5.1%. The tax benefit for the three months ended April 2, 2016 and April 4, 2015 was approximately $1.5 million and $2.4 million, respectively.

Valuation allowance

As of April 2, 2016, a full valuation allowance has been provided against certain deferred tax assets as it is presently deemed more likely than not that the benefit of such net tax assets will not be utilized. All of the Company's subsidiaries, excluding Mitten, are in a full valuation allowance position as of April 2, 2016.

Due to recent cumulative losses incurred by the Company, management did not rely upon projections of future taxable income in assessing the recoverability of deferred tax assets. The Company currently has book goodwill of approximately $28.0 million that is not amortized, which results in a deferred tax liability of approximately $6.9 million at April 2, 2016. Therefore, the reversal of deferred tax liabilities related to this goodwill is not considered a source of future taxable income in assessing the realization of its deferred tax assets. The Company continues to evaluate its ability to realize the net deferred tax assets and its estimates are subject to change.

For the year ending December 31, 2016, the Company may achieve a three-year cumulative income position on a consolidated basis. If the Company achieves this income position during 2016, the Company will evaluate the need for a full, or partial valuation allowance. All of the factors the Company considers in evaluating whether and when to release all or a portion of the deferred tax asset valuation allowance involve significant judgment. For example, there are many different interpretations of "cumulative losses in recent years" which can be used. Also, significant judgment is involved in making projections of future financial and taxable income, since the Company's financial results are significantly dependent upon industry trends, including the new construction and repair and remodeling markets. Most of the markets in which the Company participates are currently in varying states of recovery from the historic downturn experienced in recent years; however, it is not possible to accurately predict whether recovery will continue, and if it does, at what rate and for how long. The Company anticipates any reversal of the valuation allowance during 2016 may favorably impact our results of operations in the period of reversal.

Tax uncertainties

Despite the Company’s belief that its tax return positions are consistent with applicable tax laws, the Company believes that certain positions could be challenged by taxing authorities. The Company’s tax reserves reflect the difference between the tax benefit claimed on tax returns and the amount recognized in the condensed consolidated financial statements. These reserves have been established based on management’s assessment as to potential exposure attributable to permanent differences and interest applicable to both permanent and temporary differences. The tax reserves are reviewed periodically and adjusted in light of changing facts and circumstances, such as progress of tax audits, lapse of applicable statutes of limitations and changes in tax law. Certain income tax returns are currently under examination by various taxing authorities. During the three months endedApril 2, 2016, approximately $0.1 million of interest expense was recorded on the remaining uncertain tax positions. The Company made no adjustments to the tax reserves during the three months endedApril 2, 2016.

The liability for unrecognized tax benefits as of April 2, 2016 was approximately $2.9 million and is recorded in other long-term liabilities in the accompanying condensed consolidated balance sheet. The corresponding amount of gross unrecognized tax benefit was approximately $15.9 million. The difference between the total unrecognized tax benefits and the amount of the liability for unrecognized tax benefits represents unrecognized tax benefits that have been netted against deferred tax assets related to net operating losses in accordance with ASC 740 in addition to accrued penalties and interest.

Tax Receivable Agreement

On May 22, 2013, the Company entered into a Tax Receivable Agreement (the “Tax Receivable Agreement”) with PG ITR Holdco, L.P. (the “Tax Receivable Entity”). The Tax Receivable Agreement generally provides for the payment by the Company to the Tax Receivable Entity of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that the Company actually realizes in periods ending after the IPO as a result of (i) net operating loss ("NOL") carryovers from periods (or portions thereof) ending before January 1, 2013, (ii) deductible expenses attributable to the transactions related to the IPO and (iii) deductions related to imputed interest deemed to be paid by the Company as a result of or attributable to payments under the Tax Receivable Agreement. The term of the Tax Receivable Agreement will continue until all such benefits have been utilized or expired. The Company will retain the benefit of the remaining 15% of these tax savings. The Tax Receivable Agreement will obligate the Company to make payments to the Tax Receivable Entity generally equal to 85% of the applicable cash savings that is actually realized as a result of utilizing NOL carryovers once the tax returns are filed for that respective tax year.

The Company estimates that the total anticipated amount of future payments under the Tax Receivable Agreement could be up to approximately $100.0 million assuming no material changes in the relevant tax law, that the Company earns sufficient taxable income to utilize the net operating loss carry forwards, and that utilization of such tax attributes is not subject to limitation under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code") as the result of an “ownership change”. It is possible that future transactions or events or changes in estimates could increase or decrease the actual tax benefits realized from these tax attributes and the corresponding Tax Receivable Agreement payments and liability. Future changes in the Company's full valuation allowance position including the reversal of all or a portion of the Company's valuation allowance could accelerate the expense recognition for the Tax Receivable Agreement liability up to the approximate $100.0 million estimate.

As of April 2, 2016 and December 31, 2015, the Company had a long-term liability of approximately $39.0 million and $20.8 million, respectively, and a current portion of $3.0 million and $3.0 million, respectively for the amount due pursuant to the Tax Receivable Agreement related to NOL carryovers. The Company recognized a $18.2 million and $17.2 million expense for this liability during the three months ended April 2, 2016 and April 4, 2015, respectively.

Other

As of April 2, 2016, the Company has not established U.S. deferred taxes on unremitted earnings of the Company’s foreign subsidiaries. Notwithstanding the provisions within the American Jobs Creation Act of 2004, the Company continues to consider these amounts to be permanently reinvested.

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STOCK-BASED COMPENSATION

3 Months Ended

Apr. 02, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

A rollforward of stock options outstanding during the three months endedApril 2, 2016 is presented below: 

	Stock Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Balance at January 1, 2016	2,613,793	$	13.75	5.22
Granted	—	—		—
Exercised	—	—		—
Forfeited or expired	—	—		—
Balance at April 2, 2016	2,613,793	$	13.75	4.96

As of April 2, 2016, 2,334,356 options were 100% vested.  At April 2, 2016, the Company had approximately $1.0 million of total unrecognized compensation expense that will be recognized over a weighted average period of 1.65 years.  The Company recorded compensation expense of $0.3 million and $0.5 million for the three months ended April 2, 2016 and April 4, 2015, respectively, related to stock option grants.

Restricted stock

During December 2014, the Company issued an aggregate of 23,944 restricted shares of common stock in an equal number to each of the four independent members of the Board of Directors.  These shares vested over the 2015 calendar period and the Company expensed these items as compensation expense, ratably during 2015. During the three months ended April 4, 2015, the Company expensed approximately $0.1 million related to these grants in selling, general, and administrative expenses within the condensed consolidated statement of operations and comprehensive income (loss).

During December 2015, the Company issued an aggregate of 25,664 restricted shares of common stock in an equal number to each of the four independent members of the Board of Directors.  These shares will vest over the 2016 calendar year and the Company will expense these items as compensation expense ratably during 2016. During the three months ended April 2, 2016, the Company expensed approximately $0.1 million related to these grants in selling, general, and administrative expenses within the condensed consolidated statement of operations and comprehensive income (loss).

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SEGMENT INFORMATION

3 Months Ended

Apr. 02, 2016

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Company defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by management in deciding how to allocate resources and in assessing performance.  The Company has two reportable segments:  (1) Siding, Fencing and Stone and (2) Windows and Doors.

The income before income taxes of each segment includes the revenue generated on transactions involving products within that segment less identifiable expenses.  Unallocated income and expenses include items which are not directly attributed to or allocated to either of the Company’s reporting segments.  Such items include interest, legal costs, corporate payroll, and unallocated finance, and accounting expenses. Unallocated corporate assets include cash and certain receivables.  Interest expense is presented net of interest income.

Following is a summary of the Company’s segment information:

	For the three months ended
(Amounts in thousands)	April 2, 2016			April 4, 2015
Net sales
Siding, Fencing and Stone	$	176,376		$	156,442
Windows and Doors	232,238			219,606
	$	408,614		$	376,048
Operating earnings (loss)
Siding, Fencing and Stone	$	20,374		$	10,322
Windows and Doors	(1,250		)	(16,408		)
Unallocated	(9,548		)	(7,964		)
	$	9,576		$	(14,050	)
	Total assets as of
	April 2, 2016			December 31, 2015
Total assets
Siding, Fencing and Stone	$	672,389		$	664,053
Windows and Doors	497,510			498,994
Unallocated	40,954			103,525
	$	1,210,853		$	1,266,572

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RELATED PARTY TRANSACTIONS

3 Months Ended

Apr. 02, 2016

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

During March 2015, the Company entered into new retention agreements with the Company's Chief Executive Officer and Chief Financial Officer for $3.0 million and $1.3 million, respectively. These retention agreements incentivize these individuals for three years and will require the Company to make cumulative payments of $4.3 million on December 31, 2017, if both individuals remain employed in their current positions on that date.

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GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION

3 Months Ended

Apr. 02, 2016

GUARANTOR / NON GUARANTOR FINANCIAL INFORMATION [Abstract]

GUARANTOR / NON-GUARANTOR FINANCIAL INFORMATION

13.   GUARANTOR/NON-GUARANTOR

The 6.50% Senior Notes were issued by our direct 100% owned subsidiary, Ply Gem Industries, and are fully and unconditionally guaranteed on a joint and several basis by the Company and certain of Ply Gem Industries’ 100% owned subsidiaries.  Ply Gem Industries is a 100% owned subsidiary of Ply Gem Holdings. Accordingly, the following guarantor and non-guarantor information is presented as of April 2, 2016 and December 31, 2015, and for the three months ended April 2, 2016 and April 4, 2015.  The non-guarantor information presented represents our Canadian subsidiaries: Gienow and Mitten.

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Three months ended April 2, 2016
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Net sales	$	—		$	—		$	369,514		$	39,100		$	—		$	408,614
Cost of products sold	—			—			289,872			32,041			—			321,913
Gross profit	—			—			79,642			7,059			—			86,701
Operating expenses:
Selling, general and
administrative expenses	—			9,548			49,022			12,165			—			70,735
Intercompany administrative
charges	—			—			7,772			1,673			(9,445		)	—
Amortization of intangible assets	—			—			5,360			1,030			—			6,390
Total operating expenses	—			9,548			62,154			14,868			(9,445		)	77,125
Operating earnings (loss)	—			(9,548		)	17,488			(7,809		)	9,445			9,576
Foreign currency gain	—			—			—			584			—			584
Intercompany interest	—			15,933			(15,550		)	(383		)	—			—
Interest expense	—			(18,691		)	—			(1		)	—			(18,692		)
Interest income	—			2			2			6			—			10
Loss on modification or
extinguishment of debt	—			(2,399		)	—			—			—			(2,399		)
Tax receivable agreement liability adjustment	—			(18,150		)	—			—			—			(18,150		)
Intercompany administrative income	—			9,445			—			—			(9,445		)	—
Income (loss) before equity in
subsidiaries' income (loss)	—			(23,408		)	1,940			(7,603		)	—			(29,071		)
Equity in subsidiaries' income (loss)	(27,577		)	(4,169		)	—			—			31,746			—
Income (loss) before benefit
for income taxes	(27,577		)	(27,577		)	1,940			(7,603		)	31,746			(29,071		)
Benefit for income taxes	—			—			(527		)	(967		)	—			(1,494		)
Net income (loss)	$	(27,577	)	$	(27,577	)	$	2,467		$	(6,636	)	$	31,746		$	(27,577	)
Other comprehensive income (loss):
Foreign currency translation adjustments	—			—			—			4,773			—			4,773
Unrealized loss on derivative instrument	—			—			—			(1,720		)	—			(1,720		)
Total comprehensive income (loss)	$	(27,577	)	$	(27,577	)	$	2,467		$	(3,583	)	$	31,746		$	(24,524	)

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Three months ended April 4, 2015
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
Net sales	$	—		$	—		$	327,391		$	48,657		$	—		$	376,048
Cost of products sold	—			—			276,444			39,323			—			315,767
Gross profit	—			—			50,947			9,334			—			60,281
Operating expenses:
Selling, general and
administrative expenses	—			7,964			45,905			14,263			—			68,132
Intercompany administrative
charges	—			—			8,755			1,150			(9,905		)	—
Amortization of intangible assets	—			—			5,061			1,138			—			6,199
Total operating expenses	—			7,964			59,721			16,551			(9,905		)	74,331
Operating loss	—			(7,964		)	(8,774		)	(7,217		)	9,905			(14,050		)
Foreign currency loss	—			—			—			(934		)	—			(934		)
Intercompany interest	—			15,778			(13,929		)	(1,849		)	—			—
Interest expense	—			(19,080		)	(4		)	(9		)	—			(19,093		)
Interest income	—			1			2			6			—			9
Tax receivable agreement liability adjustment	—			(17,185		)	—			—			—			(17,185		)
Intercompany administrative income	—			9,905			—			—			(9,905		)	—
Loss before equity in
subsidiaries' loss	—			(18,545		)	(22,705		)	(10,003		)	—			(51,253		)
Equity in subsidiaries' loss	(48,859		)	(30,314		)	—			—			79,173			—
Loss before benefit
for income taxes	(48,859		)	(48,859		)	(22,705		)	(10,003		)	79,173			(51,253		)
Benefit for income taxes	—			—			(1,580		)	(814		)	—			(2,394		)
Net loss	$	(48,859	)	$	(48,859	)	$	(21,125	)	$	(9,189	)	$	79,173		$	(48,859	)
Other comprehensive income (loss):
Foreign currency translation adjustments	—			—			—			(7,453		)	—			(7,453		)
Unrealized gain on derivative instrument	—			—			—			2,102			—			2,102
Total comprehensive loss	$	(48,859	)	$	(48,859	)	$	(21,125	)	$	(14,540	)	$	79,173		$	(54,210	)

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
As of April 2, 2016
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
ASSETS	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Current Assets:
Cash and cash equivalents	$	—		$	31,687		$	(6,952	)	$	9,606		$	—		$	34,341
Accounts receivable, net	—			—			182,854			21,305			—			204,159
Inventories:
Raw materials	—			—			63,500			5,835			—			69,335
Work in process	—			—			22,420			2,049			—			24,469
Finished goods	—			—			52,733			14,869			—			67,602
Total inventory	—			—			138,653			22,753			—			161,406
Prepaid expenses and other
current assets	—			1,437			18,446			4,317			—			24,200
Deferred income taxes	—			—			14,202			—			—			14,202
Total current assets	—			33,124			347,203			57,981			—			438,308
Investments in subsidiaries	(101,001		)	(248,594		)	—			—			349,595			—
Property and Equipment, at cost:
Land	—			—			7,436			786			—			8,222
Buildings and improvements	—			—			62,458			4,719			—			67,177
Machinery and equipment	—			5,175			368,643			18,309			—			392,127
	—			5,175			438,537			23,814			—			467,526
Less accumulated depreciation	—			(1,816		)	(293,909		)	(10,024		)	—			(305,749		)
Total property and equipment, net	—			3,359			144,628			13,790			—			161,777
Other Assets:
Intangible assets, net	—			—			106,840			16,117			—			122,957
Goodwill	—			—			449,366			30,183			—			479,549
Intercompany note receivable	—			1,135,073			—			—			(1,135,073		)	—
Other	—			4,471			3,791			—			—			8,262
Total other assets	—			1,139,544			559,997			46,300			(1,135,073		)	610,768
	$	(101,001	)	$	927,433		$	1,051,828		$	118,071		$	(785,478	)	$	1,210,853
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	—		$	181		$	62,488		$	11,124		$	—		$	73,793
Accrued expenses	—			13,470			89,679			14,114			—			117,263
Current portion of payable to related
parties pursuant to tax receivable agreement	—			3,005			—			—			—			3,005
Current portion of long-term debt	—			4,300			—			—			—			4,300
Total current liabilities	—			20,956			152,167			25,238			—			198,361
Deferred income taxes	—			—			20,483			4,159			—			24,642
Intercompany note payable	—			—			1,027,543			107,530			(1,135,073		)	—
Long-term portion of payable to related
parties pursuant to tax receivable agreement	—			38,961			—			—			—			38,961
Other long-term liabilities	—			8,397			77,386			3,987			—			89,770
Long-term debt, less current portion	—			960,120			—			—			—			960,120
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	—			—			—			—			—			—
Common stock	681			681			—			—			(681		)	681
Additional paid-in-capital	749,633			749,633			372,720			26,854			(1,149,207		)	749,633
(Accumulated deficit) retained earnings	(817,801		)	(817,801		)	(582,497		)	(32,182		)	1,432,480			(817,801		)
Accumulated other
comprehensive loss	(33,514		)	(33,514		)	(15,974		)	(17,515		)	67,003			(33,514		)
Total stockholders' (deficit) equity	(101,001		)	(101,001		)	(225,751		)	(22,843		)	349,595			(101,001		)
	$	(101,001	)	$	927,433		$	1,051,828		$	118,071		$	(785,478	)	$	1,210,853

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2015
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	—		$	94,692		$	(4,944	)	$	19,677		$	—		$	109,425
Accounts receivable, net	—			—			172,560			22,605			—			195,165
Inventories:
Raw materials	—			—			58,400			5,602			—			64,002
Work in process	—			—			23,126			2,193			—			25,319
Finished goods	—			—			47,946			13,136			—			61,082
Total inventory	—			—			129,472			20,931			—			150,403
Prepaid expenses and other
current assets	—			944			20,310			3,393			—			24,647
Deferred income taxes	—			—			11,255			6			—			11,261
Total current assets	—			95,636			328,653			66,612			—			490,901
Investments in subsidiaries	(76,813		)	(245,265		)	—			—			322,078			—
Property and Equipment, at cost:
Land	—			—			7,436			739			—			8,175
Buildings and improvements	—			—			61,883			4,438			—			66,321
Machinery and equipment	—			4,813			364,093			16,844			—			385,750
	—			4,813			433,412			22,021			—			460,246
Less accumulated depreciation	—			(1,755		)	(288,542		)	(8,946		)	—			(299,243		)
Total property and equipment, net	—			3,058			144,870			13,075			—			161,003
Other Assets:
Intangible assets, net	—			—			112,173			16,211			—			128,384
Goodwill	—			—			449,366			28,373			—			477,739
Intercompany note receivable	—			1,104,510			—			—			(1,104,510		)	—
Other	—			4,831			3,714			—			—			8,545
Total other assets	—			1,109,341			565,253			44,584			(1,104,510		)	614,668
	$	(76,813	)	$	962,770		$	1,038,776		$	124,271		$	(782,432	)	$	1,266,572
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	—		$	235		$	60,655		$	13,606		$	—		$	74,496
Accrued expenses	—			24,512			113,051			15,399			—			152,962
Current portion of payable to related
parties pursuant to tax receivable agreement	—			3,005			—			—			—			3,005
Current portion of long-term debt	—			4,300			—			—			—			4,300
Total current liabilities	—			32,052			173,706			29,005			—			234,763
Deferred income taxes	—			—			17,470			3,917			—			21,387
Intercompany note payable	—			—			1,002,447			102,063			(1,104,510		)	—
Long-term portion of payable to related
parties pursuant to tax receivable agreement	—			20,811			—			—			—			20,811
Other long-term liabilities	—			11,189			75,911			3,793			—			90,893
Long-term debt	—			975,531			—			—			—			975,531
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	—			—			—			—			—			—
Common stock	681			681			—			—			(681		)	681
Additional paid-in-capital	749,296			749,296			370,180			31,611			(1,151,087		)	749,296
(Accumulated deficit) retained earnings	(790,224		)	(790,224		)	(584,964		)	(25,546		)	1,400,734			(790,224		)
Accumulated other
comprehensive income (loss)	(36,566		)	(36,566		)	(15,974		)	(20,572		)	73,112			(36,566		)
Total stockholders' (deficit) equity	(76,813		)	(76,813		)	(230,758		)	(14,507		)	322,078			(76,813		)
	$	(76,813	)	$	962,770		$	1,038,776		$	124,271		$	(782,432	)	$	1,266,572

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the three months ended April 2, 2016
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(27,577	)	$	(27,577	)	$	2,467		$	(6,636	)	$	31,746		$	(27,577	)
Adjustments to reconcile net income (loss)
to cash provided by (used in) operating activities:
Depreciation and amortization expense	—			61			12,379			1,590			—			14,030
Non-cash restructuring costs	—			—			—			566			—			566
Non-cash interest expense, net	—			3,416			—			—			—			3,416
Gain on foreign currency transactions	—			—			—			(584		)	—			(584		)
Loss on modification or extinguishment of debt	—			2,399			—			—			—			2,399
Stock based compensation	—			337			—			—			—			337
Deferred income taxes	—			—			65			—			—			65
Tax receivable agreement liability adjustment	—			18,150			—			—			—			18,150
Increase in tax uncertainty,
net of valuation allowance	—			—			62			—			—			62
Equity in subsidiaries' net income (loss)	27,577			4,169			—			—			(31,746		)	—
Other	—			—			138			—			—			138
Changes in operating assets and liabilities:
Accounts receivable, net	—			—			(11,718		)	2,584			—			(9,134		)
Inventories	—			—			(10,511		)	(467		)	—			(10,978		)
Prepaid expenses and other assets	—			(285		)	(68		)	98			—			(255		)
Accounts payable	—			(54		)	(3,995		)	3,174			—			(875		)
Accrued expenses	—			(13,833		)	(25,802		)	1,860			—			(37,775		)
Cash payments on restructuring liabilities	—			—			(112		)	(556		)	—			(668		)
Other	—			—			139			(2		)	—			137
Net cash provided by (used in)
operating activities	—			(13,217		)	(36,956		)	1,627			—			(48,546		)
Cash flows from investing activities:
Capital expenditures	—			(362		)	(6,946		)	(424		)	—			(7,732		)
Proceeds from sale of assets	—			—			76			—			—			76
Net cash used in
investing activities	—			(362		)	(6,870		)	(424		)	—			(7,656		)
Cash flows from financing activities:
Net revolver borrowings	—			10,000			—			—			—			10,000
Payments on long-term debt	—			(31,075		)	—			—			—			(31,075		)
Proceeds from intercompany
investment	—			(28,351		)	41,818			(13,467		)	—			—
Net cash provided by (used in)
financing activities	—			(49,426		)	41,818			(13,467		)	—			(21,075		)
Impact of exchange rate movements on cash	—			—			—			2,193			—			2,193
Net decrease in cash
and cash equivalents	—			(63,005		)	(2,008		)	(10,071		)	—			(75,084		)
Cash and cash equivalents at the
beginning of the period	—			94,692			(4,944		)	19,677			—			109,425
Cash and cash equivalents at the end
of the period	$	—		$	31,687		$	(6,952	)	$	9,606		$	—		$	34,341

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the three months ended April 4, 2015
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
Cash flows from operating activities:
Net loss	$	(48,859	)	$	(48,859	)	$	(21,125	)	$	(9,189	)	$	79,173		$	(48,859	)
Adjustments to reconcile net loss
to cash used in operating activities:
Depreciation and amortization expense	—			150			12,840			1,831			—			14,821
Non-cash restructuring expense	—			—			—			46			—			46
Non-cash interest expense, net	—			3,419			—			—			—			3,419
Loss on foreign currency transactions	—			—			—			934			—			934
Stock based compensation	—			586			—			—			—			586
Deferred income taxes	—			—			1,019			—			—			1,019
Tax receivable agreement liability adjustment	—			17,185			—			—			—			17,185
Increase in tax uncertainty,
net of valuation allowance	—			—			73			—			—			73
Equity in subsidiaries' net loss	48,859			30,314			—			—			(79,173		)	—
Other	—			—			(13		)	—			—			(13		)
Changes in operating assets and liabilities:
Accounts receivable, net	—			—			(6,729		)	765			—			(5,964		)
Inventories	—			—			2,304			(1,835		)	—			469
Prepaid expenses and other assets	—			755			4,161			(123		)	—			4,793
Accounts payable	—			(57		)	(8,736		)	992			—			(7,801		)
Accrued expenses	—			(16,211		)	(26,275		)	2,729			—			(39,757		)
Cash payments on restructuring liabilities	—			—			(44		)	(429		)	—			(473		)
Other	—			—			(1,469		)	—			—			(1,469		)
Net cash used in
operating activities	—			(12,718		)	(43,994		)	(4,279		)	—			(60,991		)
Cash flows from investing activities:
Capital expenditures	—			(67		)	(6,026		)	(978		)	—			(7,071		)
Proceeds from sale of assets	—			—			25			—			—			25
Net cash used in
investing activities	—			(67		)	(6,001		)	(978		)	—			(7,046		)
Cash flows from financing activities:
Net revolver borrowings	—			60,000			—			—			—			60,000
Payments on long-term debt	—			(1,075		)	—			—			—			(1,075		)
Proceeds from exercises of employee stock options	—			182			—			—			—			182
Proceeds from intercompany
investment	—			(42,081		)	44,417			(2,336		)	—			—
Net cash provided by (used in)
financing activities	—			17,026			44,417			(2,336		)	—			59,107
Impact of exchange rate movement
on cash	—			—			—			(1,788		)	—			(1,788		)
Net increase (decrease) in cash
and cash equivalents	—			4,241			(5,578		)	(9,381		)	—			(10,718		)
Cash and cash equivalents at the
beginning of the period	—			23,555			(5,845		)	15,452			—			33,162
Cash and cash equivalents at the end
of the period	$	—		$	27,796		$	(11,423	)	$	6,071		$	—		$	22,444

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Apr. 02, 2016

Accounting Policies [Abstract]

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The Company determined the fair value of the tangible and intangible assets and the liabilities acquired, and recorded goodwill based on the excess of fair value of the acquisition consideration over such fair values, as follows:

(Amounts in thousands)
Accounts receivable	$	3,559
Inventories	712
Prepaid expenses and other current assets	41
Property and equipment	2,019
Intangible assets	9,300
Goodwill	7,642
Accounts payable, accrued expenses and other long-term liabilities	(2,273		)
	$	21,000

Business Combinations Policy [Policy Text Block]

Acquisitions

On May 29, 2015, Ply Gem completed an acquisition for cash consideration of approximately $21.0 million to acquire substantially all of the assets of Canyon Stone Inc. ("Canyon Stone"), a manufacturer and distributor of stone veneer and accessories in the United States. Canyon Stone has manufacturing facilities in Olathe, Kansas and Youngsville, North Carolina. The purchase agreement also includes contingent consideration in the form of potential earn-out payments of up to $1.0 million based on Canyon Stone's earnings for fiscal years 2015 through 2017. This acquisition expanded the Company's stone veneer manufacturing footprint across the United States as it complements the existing Ply Gem Stone manufacturing facility in Middleburg, Pennsylvania. The Company accounted for the transaction as an acquisition in accordance with the provisions of Accounting Standards Codification 805, Business Combinations, which results in a new valuation for the assets and liabilities of Canyon Stone based upon fair values as of the acquisition date.

Since the acquisition was completed on May 29, 2015, the final acquisition accounting allocation remains subject to further adjustments. The specific accounts subject to ongoing purchase accounting adjustments include accounts receivable, inventories, prepaid expenses and other current assets, property and equipment, goodwill, intangibles, accounts payable, accrued expenses, and other liabilities. Therefore, the measurement date remains open as of April 2, 2016, and the preliminary acquisition accounting allocation detailed below is subject to adjustment. The Company anticipates completing these acquisition accounting adjustments during 2016.

The Company determined the fair value of the tangible and intangible assets and the liabilities acquired, and recorded goodwill based on the excess of fair value of the acquisition consideration over such fair values, as follows:

(Amounts in thousands)
Accounts receivable	$	3,559
Inventories	712
Prepaid expenses and other current assets	41
Property and equipment	2,019
Intangible assets	9,300
Goodwill	7,642
Accounts payable, accrued expenses and other long-term liabilities	(2,273		)
	$	21,000

The $7.6 million of goodwill was allocated to the Siding, Fencing and Stone segment and the goodwill is expected to be deductible for tax purposes. The Company has recognized a liability of approximately $0.8 million as the estimated acquisition date fair value of the earn-out as of April 2, 2016 and December 31, 2015. This amount is included within other long-term liabilities in the condensed consolidated balance sheets. Any change in the fair value of the contingent consideration subsequent to the acquisition date will be recognized in earnings in the period of change.

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Ply Gem Holdings, Inc. and its subsidiaries (referred to herein as “Ply Gem Holdings”, “Ply Gem”, the “Company”, “we”, “us”, or “our”) have been prepared in accordance with U.S. generally accepted accounting principles as described in the consolidated financial statements and related notes included in our 2015 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2016.  These statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles and should be read in conjunction with our 2015 Annual Report on Form 10-K.  In management’s opinion, all normal and recurring adjustments considered necessary for a fair presentation have been included.  Operating results for the period from January 1, 2016 through April 2, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

The condensed consolidated balance sheet at December 31, 2015 has been derived from the audited consolidated financial statements of Ply Gem Holdings at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

The Company’s fiscal quarters are based on periods ending on the Saturday of the last week in the quarter.  Therefore, the financial results of certain fiscal quarters will not be comparable to the prior and subsequent fiscal quarters.  The accompanying financial statements include the Company’s condensed consolidated statements of operations and comprehensive income (loss) for the three months ended April 2, 2016 and April 4, 2015, the condensed consolidated statements of cash flows for the three months endedApril 2, 2016 and April 4, 2015, and the condensed consolidated balance sheets as of April 2, 2016 and December 31, 2015.

Ply Gem is a diversified manufacturer of residential and commercial building products, which are sold primarily in the United States and Canada, and include a wide variety of products for the residential and commercial construction, the do-it-yourself and the professional remodeling and renovation markets.  The demand for the Company’s products is seasonal, particularly in the Northeast and Midwest regions of the United States and Canada where inclement weather during the winter months usually reduces the level of building and remodeling activity in both the home repair and remodeling and new home construction sectors.  The Company’s sales are usually lower during the first and fourth quarters.

To a significant extent our performance is dependent upon the levels of home repair and remodeling and new home construction spending, all of which are affected by such factors as interest rates, inflation, consumer confidence, unemployment, and availability of consumer credit.

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Ply Gem Holdings and its subsidiaries, all of which are wholly owned.  All intercompany accounts and transactions have been eliminated.

Reclassifications [Text Block]

Reclassifications

Due to the adoption of ASU No. 2015-03, Interest-Imputation of Interest, certain balance sheet amounts in the prior fiscal year have been reclassified to conform to the presentation adopted in the current fiscal year, with no effect on net income (loss), accumulated deficit, or net cash provided by/used in operating, investing, and financing activities.

Accounting Policies and Use of Estimates

Accounting Policies and Use of Estimates

The preparation of these condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles involves estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of income and expense during the reporting periods.  Certain of the Company’s accounting policies require the application of judgment in selecting the appropriate assumptions for calculating financial estimates.  By their nature, these judgments are subject to an inherent degree of uncertainty.  The Company periodically evaluates the judgments and estimates used in their critical accounting policies to ensure that such judgments and estimates are reasonable.  Such estimates include the allowance for doubtful accounts receivable, rebates, pensions, valuation of inventories, warranty reserves, insurance reserves, legal contingencies, assumptions used in the calculation of income taxes and the tax receivable agreement liability, projected cash flows used in the goodwill and intangible asset impairment tests, and environmental accruals and other contingencies.  These judgments are based on the Company’s historical experience, current trends and information available from other sources, and are based on management’s best estimates and judgments.  The Company adjusts such estimates and assumptions when facts and circumstances dictate.  Volatile equity markets, foreign currency, and litigation risk have combined to increase the uncertainty inherent in such estimates and assumptions.  If different conditions result from those assumptions used in the Company’s judgments, actual results could be materially different from the Company’s estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash equivalents consist of short-term highly liquid investments with original maturities of three months or less and which are readily convertible into cash.

Accounts Receivable

Accounts Receivable

Accounts receivable-trade are recorded at their net realizable value.  The allowance for doubtful accounts was $3.5 million at April 2, 2016 and $3.6 million at December 31, 2015.  The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company estimates the allowance for doubtful accounts based on a variety of factors including the length of time receivables are past due, the financial health of its customers, unusual macroeconomic conditions and historical experience. If the financial condition of its customers deteriorates or other circumstances occur that result in an impairment of customers’ ability to make payments, the Company records additional allowances as needed. The Company writes off uncollectible trade accounts receivable against the allowance for doubtful accounts when collection efforts have been exhausted and/or any legal action taken by the Company has concluded.

Inventories

Inventories

Inventories in the accompanying condensed consolidated balance sheets are valued at the lower of cost or market and are determined primarily by the first-in, first-out (FIFO) method.  The Company records provisions, as appropriate, to write-down obsolete and excess inventory to estimated net realizable value.  The process for evaluating obsolete and excess inventory often requires the Company to make subjective judgments and estimates concerning future sales levels, quantities and prices at which such inventory will be able to be sold in the normal course of business.  Accelerating the disposal process or incorrect estimates of future sales potential may cause actual results to differ from the estimates at the time such inventory is disposed or sold. As of April 2, 2016, the Company had inventory purchase commitments of approximately $52.9 million.

Inventory reserves were approximately $9.0 million at April 2, 2016, increasing during the three months endedApril 2, 2016 by $0.7 million compared to the December 31, 2015 reserve balance of approximately $8.3 million.

Property and Equipment

Property and Equipment

Property and equipment are presented at cost.  Depreciation of property and equipment are provided on a straight-line basis over estimated useful lives, which are generally as follows: 

Buildings and improvements	10-37 years
Machinery and equipment, including leases	3-15 years
Leasehold improvements	Term of lease or useful life, whichever is shorter

Expenditures for maintenance and repairs are expensed when incurred. Expenditures for renewals and betterments are capitalized.  When assets are sold, or otherwise disposed, the cost and related accumulated depreciation are eliminated and the resulting gain or loss is recognized in operations.  

Long-lived assets

Long-lived assets

The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.  The Company performs an undiscounted operating cash flow analysis to determine if impairment exists.  If an impairment is determined to exist, any related impairment loss is calculated based on the asset’s fair value and the discounted cash flows.

The Company tests for long-lived asset impairment at the following asset group levels: (i) the combined U.S. Siding, Fencing and Stone companies in the Siding, Fencing and Stone segment (“Siding”), (ii) the combined U.S. Windows companies in the Windows and Doors segment (“U.S. Windows”), (iii) the combined Simonton windows companies in the Windows and Doors segment, (iv) Gienow Canada Inc. ("Gienow Canada") (a combined Western Canadian company created by the January 2014 amalgamation of the Company's legacy Western Canadian business and the Gienow entity acquired in April 2013) in the Windows and Doors segment, and (v) Mitten in the Siding, Fencing and Stone segment. For purposes of recognition and measurement of an impairment loss, a long-lived asset or asset group should represent the lowest level for which an entity can separately identify cash flows that are largely independent of the cash flows of other assets and liabilities.  There were no indicators of impairment during the three months ended April 2, 2016.

Goodwill and other intangible assets

Goodwill and other intangible assets

The Company evaluates goodwill for impairment on an annual basis and whenever events or business conditions warrant.  All other intangible assets are amortized over their estimated useful lives and are assessed for impairment as necessary.  The Company assesses goodwill for impairment at the November month end each year and also at any other date when events or changes in circumstances indicate that the carrying value of these assets may exceed their fair value.  To evaluate goodwill for impairment, the Company estimates the fair value of reporting units considering such factors as discounted cash flows and valuation multiples for comparable publicly traded companies.  A significant reduction in projected sales and earnings, which would lead to a reduction in future cash flows, could indicate potential impairment.  There were no indicators of impairment during the three months ended April 2, 2016 that would trigger an interim impairment test.  The Company will continue to evaluate goodwill during future periods and future declines in the residential housing and repair and remodeling markets could result in goodwill impairments.

Debt Issuance Costs

Debt Issuance Costs

Debt issuance costs, composed of facility, agency, and certain legal fees associated with issuing new debt financing, are amortized over the contractual term of the related agreement using the effective interest method.  Net debt issuance costs totaled approximately $20.9 million and $22.2 million as of April 2, 2016 and December 31, 2015, respectively, and have been recorded within long-term debt ($18.2 million at April 2, 2016 and $19.3 million at December 31, 2015) and other non-current assets ($2.7 million at April 2, 2016 and $2.9 million at December 31, 2015) in the accompanying condensed consolidated balance sheets. The debt issuance costs included in other long term assets relate to the ABL Facility. Amortization of debt issuance costs for the three months ended April 2, 2016 and April 4, 2015 was approximately $0.8 million and $0.8 million, respectively. Amortization of debt issuance costs is recorded in interest expense in the accompanying condensed consolidated statements of operations and comprehensive income (loss).

Income Taxes

Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes which requires that deferred tax assets and liabilities be recorded to reflect the future tax consequences of temporary differences between the book and tax basis of various assets and liabilities.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect of changes in tax rates on deferred tax assets and liabilities is recognized as income or expense in the period in which the rate change occurs.  A valuation allowance is established to offset any deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Estimates are required with respect to, among other things, the appropriate state income tax rates used in the various states that the Company and its subsidiaries are required to file, the potential utilization of operating and capital loss carry-forwards for both federal and state income tax purposes and valuation allowances required, if any, for tax assets that may not be realized in the future.  The Company establishes reserves when, despite our belief that our tax return positions are fully supportable, certain positions could be challenged, and the positions may not be fully sustained.  The Company along with its U.S. subsidiaries file a consolidated federal income tax return, separate state income tax returns, combined state returns, and unitary state returns. Gienow Canada and Mitten both file separate Canadian federal income tax returns and separate provincial returns.

Tax receivable agreement ("TRA") liability

As a result of the Company’s full tax valuation allowance position, the Company’s methodology for calculating the TRA liability considers expectations regarding (i) current year taxable income only (due to the uncertainty of future taxable income associated with the Company’s cumulative loss position) and (ii) future income due to the expected reversals of deferred tax liabilities. During the three months ended April 2, 2016, the Company estimated its projected taxable income for the full year ending December 31, 2016 based on the Company’s estimates. However, the Company’s methodology to estimate the TRA liability excludes forecasts for fiscal years subsequent to 2016 because such future forecasts and projections cannot be relied upon based on the negative evidence from the Company’s three year cumulative loss position. For fiscal year 2016, the Company estimated to be in a taxable income position; however, this taxable income estimate was currently not sufficient to outweigh the negative evidence or alleviate the Company’s three year cumulative loss position. In addition to projecting the Company’s current year taxable income estimate, the Company considered the reversals of deferred tax assets and deferred tax liabilities.

Environmental

Environmental

The Company accrues for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable. Environmental remediation obligation accruals are adjusted as further information develops or circumstances change.  Costs of future expenditures for environmental remediation obligations are not discounted to their present value.  Recoveries of environmental remediation costs from other parties are recorded as assets when their receipt is deemed probable.

Commitments and Contingencies, Policy

Commitments and Contingencies

The Company accrues for all direct costs associated with the estimated resolution of contingencies at the earliest date at which it is deemed probable that a liability has been incurred and the amount of such liability can be reasonably estimated.  Costs accrued have been estimated based upon an analysis of potential results, assuming a combination of litigation and settlement strategies and outcomes. Insurance recoveries are recorded as assets when their receipt is deemed probable.

Foreign Currency

Foreign Currency

Gienow Canada and Mitten, the Company’s Canadian subsidiaries, utilize the Canadian dollar as their functional currency.  For reporting purposes, the Company translates the assets and liabilities of its foreign entities at the exchange rates in effect at period-end.  Net sales and expenses are translated using average exchange rates in effect during the period.  Gains and losses from foreign currency translation are credited or charged to accumulated other comprehensive income or loss in the accompanying condensed consolidated balance sheets.

The Company recorded a gain from foreign currency transactions of approximately $0.6 million for the three months ended April 2, 2016 and a loss of approximately $0.9 million for the three months ended April 4, 2015. During the three months ended April 2, 2016 accumulated other comprehensive income (loss) included a currency translation gain of approximately $4.8 million and a loss of approximately $7.5 million for the three months ended

Derivatives, Policy [Policy Text Block]

Derivative Financial Instruments

As of April 2, 2016, the Company had entered into a foreign currency forward contract agreements to hedge approximately $27.8 million of its 2016 non-functional currency inventory purchases to protect the Company from variability in cash flows attributable to changes in the U.S. dollar relative to the Canadian dollar.

The Company has designated these forward contracts as cash flow hedges. As a cash flow hedge, unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. These forward contract agreements are highly correlated to the changes in foreign currency rates to which the Company is exposed. Unrealized gains and losses on these agreements are designated as effective or ineffective. The effective portion of such gains or losses is recorded as a component of accumulated other comprehensive income or loss, while the ineffective portion of such gains or losses is recorded as a component of cost of goods sold. Future realized gains and losses in connection with each inventory purchase will be reclassified from accumulated other comprehensive income or loss to cost of goods sold.

The changes in fair values of derivatives that have been designated and qualify as cash flow hedges are recorded in accumulated other comprehensive income or loss and are reclassified into cost of goods sold in the same period the hedged item affects earnings. Due to the high degree of effectiveness between the hedging instruments and the underlying exposures being hedged, fluctuations in the value of the derivative instrument are generally offset by changes in the fair value or cash flows of the underlying exposures being hedged. The changes in the fair value of derivatives that do not qualify as effective are immediately recognized in earnings.

The gains and losses on derivative contracts that are reclassified from accumulated other comprehensive income or loss to current period earnings are included in the line item in which the hedged item is recorded in the same period the forecasted transaction affects earnings. As of April 2, 2016, approximately $0.9 million of the deferred net liability on derivative instruments included in accumulated other comprehensive loss is expected to be reclassified to cost of goods sold during the next four months. This expectation is based on the expected timing of the occurrence of the hedged forecasted transactions. During the three months ended April 2, 2016, the Company recognized $0.4 million within earnings as a reduction of cost of goods sold in the condensed consolidated statement of operations. During the three months ended April 4, 2015, the Company recognized $1.1 million within earnings as a reduction of cost of goods sold in the condensed consolidated statement of operations.

The fair value of the foreign currency forward contract agreements are estimated using industry standard valuation models using market-based observable inputs, including spot rates, forward points, interest rates and volatility inputs (Level 2).

Fair Value Measurement

Fair Value Measurement

The accounting standard for fair value discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flows), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The standard utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

• Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

• Level 3: Inputs that reflect the reporting entity’s own assumptions.

The hierarchy requires the use of observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.  The fair value of the long-term debt instruments was determined by utilizing available market information.  The carrying value of the Company’s other assets and liabilities approximates their fair value.

Earnings (loss) per common share

Earnings (Loss) Per Common Share

Basic earnings (loss) per share ("EPS") is computed based upon weighted-average shares outstanding during the period. Dilutive earnings per share is computed consistently with the basic computation while giving effect to all dilutive potential common shares and common share equivalents that were outstanding during the period. Ply Gem Holdings uses the treasury stock method to reflect the potential dilutive effect of unvested stock awards and unexercised options.

The Company was in a net loss position for the three months ended April 2, 2016 and April 4, 2015 and therefore the impact of stock options and unvested restricted stock were excluded from the computation of diluted earnings (loss) per share for those specific periods, as the inclusion of such amounts would be anti-dilutive.

The computation of the dilutive effect of other potential common shares excluded options and unvested restricted stock representing approximately 0.1 million shares of common stock for the three months ended April 2, 2016. The computation of the dilutive effect of other potential common shares excluded options and unvested restricted stock representing approximately 0.1 million shares of common stock for the three months ended April 4, 2015.

New accounting pronouncements

New Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. The amendments in this updated guidance include changes to simplify the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. The Company is in the process of evaluating the potential impacts of this new guidance on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This update provides guidance on recording revenue on a gross basis versus a net basis based on the determination of whether an entity is a principal or an agent when another party is involved in providing goods or services to a customer. The amendments in this update affect the guidance in ASU No. 2014-09 and are effective in the same timeframe as ASU No. 2014-09 as discussed below.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The core principal of the guidance is that an entity should recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. The standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal years. Early adoption is permitted. The guidance is to be applied using a modified retrospective transition method with the option to elect a package of practical expedients. The Company is currently evaluating the impact of the adoption of this accounting standard update on its internal processes, operating results and financial reporting. The impact is currently not known or reasonably estimable.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which completes the joint effort by the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and improve financial reporting by creating common revenue recognition guidance for U.S. generally accepted accounting principles ("GAAP") and International Financial Reporting Standards ("IFRS"). ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using IFRS and GAAP. The core principle of this update is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB finalized a one-year deferral of the effective date of the new revenue recognition standard. The new standard will become effective for Ply Gem beginning with the first quarter of 2018 and can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. The method of adoption has not been determined yet by the Company. The Company is currently reviewing the revised guidance and assessing the potential impact on the consolidated financial statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Apr. 02, 2016

Accounting Policies [Abstract]

Schedule of property and equpiment

 Depreciation of property and equipment are provided on a straight-line basis over estimated useful lives, which are generally as follows: 

Buildings and improvements	10-37 years
Machinery and equipment, including leases	3-15 years
Leasehold improvements	Term of lease or useful life, whichever is shorter

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

A summary of the recorded asset and liability included in the accompanying condensed consolidated balance sheets is as follows:

(Amounts in thousands)	April 2, 2016			December 31, 2015
Foreign currency hedge included in other current assets/(liabilities)	$	(891	)	$	829

Summary of fair value liabilities

The Company’s population of recurring financial assets and liabilities subject to fair value measurements and the necessary disclosures are as follows:

					Quoted Prices in Active Markets		Significant Other		Significant
(Amounts in thousands)			Fair		for Identical		Observable		Unobservable
	Carrying		Value		Assets		Inputs		Inputs
Description	Value		Total		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Senior Notes-6.50%	$	650,000	$	635,375	$	635,375	$	—	$	—
Term Loan Facility	391,400		380,637		—		380,637		—
As of April 2, 2016:	$	1,041,400	$	1,016,012	$	635,375	$	380,637	$	—
Liabilities:
Senior Notes-6.50%	$	650,000	$	585,000	$	585,000	$	—	$	—
Term Loan Facility	422,475		411,913		—		411,913		—
As of December 31, 2015	$	1,072,475	$	996,913	$	585,000	$	411,913	$	—

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ACQUISITIONS (Tables)

3 Months Ended

Apr. 02, 2016

Business Acquisition [Line Items]

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The Company determined the fair value of the tangible and intangible assets and the liabilities acquired, and recorded goodwill based on the excess of fair value of the acquisition consideration over such fair values, as follows:

(Amounts in thousands)
Accounts receivable	$	3,559
Inventories	712
Prepaid expenses and other current assets	41
Property and equipment	2,019
Intangible assets	9,300
Goodwill	7,642
Accounts payable, accrued expenses and other long-term liabilities	(2,273		)
	$	21,000

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GOODWILL (Tables)

3 Months Ended

Apr. 02, 2016

Goodwill [Line Items]

Schedule of Goodwill [Table Text Block]

A goodwill rollforward for 2016 is included in the table below:

	Windows and			Siding, Fencing
(Amounts in thousands)	Doors			and Stone
Balance as of December 31, 2015
Goodwill	$	457,554		$	470,185
Accumulated impairment losses	(327,773		)	(122,227		)
	$	129,781		$	347,958
Currency translation adjustments	583			1,227
Balance as of April 2, 2016
Goodwill	458,137			471,412
Accumulated impairment losses	(327,773		)	(122,227		)
	$	130,364		$	349,185

Schedule of reporting unit goodwill balances

The reporting unit goodwill balances were as follows as of April 2, 2016 and December 31, 2015:

(Amounts in thousands)
	April 2, 2016		December 31, 2015
Siding, Fencing and Stone	$	349,185	$	347,958
Windows and Doors	130,364		129,781
	$	479,549	$	477,739

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INTANGIBLE ASSETS (Tables)

3 Months Ended

Apr. 02, 2016

Finite-Lived Intangible Assets, Net [Abstract]

Components of intangible assets

The table that follows presents the major components of intangible assets as of April 2, 2016 and December 31, 2015:

(Amounts in thousands)	Average Amortization Period			Accumulated			Net Carrying
	(in Years)	Cost		Amortization			Value
As of April 2, 2016:
Patents	14	$	12,770	$	(11,372	)	$	1,398
Trademarks/Tradenames	12	117,271		(77,917		)	39,354
Customer relationships	13	225,517		(144,994		)	80,523
Other	5	5,367		(3,685		)	1,682
Total intangible assets	12	$	360,925	$	(237,968	)	$	122,957
As of December 31, 2015:
Patents	14	$	12,770	$	(11,136	)	$	1,634
Trademarks/Tradenames	12	116,965		(76,249		)	40,716
Customer relationships	13	217,709		(133,532		)	84,177
Other	5	5,360		(3,503		)	1,857
Total intangible assets	12	$	352,804	$	(224,420	)	$	128,384

Schedule of expected amortization expense

Estimated amortization expense for the fiscal years 2016 through 2020 is shown in the following table:

	Amortization
(Amounts in thousands)	expense
2016 (remainder of year)	$	18,481
2017	20,893
2018	20,058
2019	15,993
2020	11,361

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COMPREHENSIVE INCOME (LOSS) (Tables)

3 Months Ended

Apr. 02, 2016

Equity [Abstract]

Schedule of comprehensive income (loss)

Comprehensive loss, net of tax is comprised of the following:

(Amounts in thousands)	For the three months ended
	April 2, 2016			April 4, 2015
Net loss	$	(27,577	)	$	(48,859	)
Foreign currency translation adjustment	4,773			(7,453		)
Unrealized gain (loss) on derivative instruments	(1,720		)	2,102
Comprehensive loss	$	(24,524	)	$	(54,210	)

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LONG-TERM DEBT (Tables)

3 Months Ended

Apr. 02, 2016

Extinguishment of Debt [Line Items]

Schedule of Long-term Debt Instruments

Long-term debt in the accompanying condensed consolidated balance sheets at April 2, 2016 and December 31, 2015 consists of the following:

(Amounts in thousands)
	April 2, 2016			December 31, 2015
Senior secured asset based revolving credit facility	$	10,000		$	—
Term Loan due 2021, net of unamortized early tender premium,
discount, and debt issuance costs of $31,294 and $35,106, respectively	360,106			387,369
6.50% Senior notes due 2022, net of unamortized early tender premium,
discount, and debt issuance costs of $55,686 and $57,538, respectively	594,314			592,462
	$	964,420		$	979,831
Less current portion of long-term debt	(4,300		)	(4,300		)
	$	960,120		$	975,531

Schedule of Extinguishment and Modification of Debt [Table Text Block]

Loss on debt modification or extinguishment

During March 2016, the Company made a voluntarily prepayment of $30.0 million on the Term Loan Facility to reduce its outstanding indebtedness as allowable under the terms of the Term Loan Facility. The Company performed an analysis to determine the proper accounting treatment for this voluntary prepayment by evaluating the change in cash flows and determined that there were no changes in the creditors as a result of the prepayment. Consequently, the Company recognized a loss on debt modification or extinguishment of approximately $2.4 million for the three months ended April 2, 2016 reflecting the proportionate write-off of the related debt discount and debt issuance costs associated with the $30.0 million payment, as summarized in the table below.

(Amounts in thousands)	For the three months ended
	April 2, 2016		April 4, 2015
Loss on modification of debt:
Term Loan Facility unamortized discount	$	1,915	—
Term Loan Facility unamortized debt issuance costs	484		—
	2,399		—
Total loss on modification or extinguishment of debt	$	2,399	$	—

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PENSION PLANS (Tables)

3 Months Ended

Apr. 02, 2016

Compensation and Retirement Disclosure [Abstract]

Net periodic benefit expense

The Company’s net periodic benefit expense for the combined plans for the periods indicated consists of the following components:

(Amounts in thousands)	For the three months ended
	April 2, 2016			April 4, 2015
Service cost	$	—		$	—
Interest cost	486			502
Expected return on plan assets	(545		)	(577		)
Amortization of loss	354			296
Net periodic benefit expense	$	295		$	221

XML

COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Apr. 02, 2016

Commitments and Contingencies Disclosure [Abstract]

Components of the indemnification

the Company has recorded liabilities related to these indemnifications of approximately $0.5 million and $0.5 million, respectively, in current liabilities and $1.1 million and $1.3 million, respectively, in long-term liabilities, consisting of the following:

(Amounts in thousands)	April 2, 2016		December 31, 2015
Product claim liabilities	$	138	$	138
Multi-employer pension plan withdrawal liability	884		960
Other	531		664
	$	1,553	$	1,762

Changes in the Company's warranty liabilities

Changes in the Company’s short-term and long-term warranty liabilities are as follows:

	For the three months ended
(Amounts in thousands)	April 2, 2016			April 4, 2015
Balance, beginning of period	$	76,562		$	84,423
Warranty expense during period	5,512			5,027
Settlements made during period	(4,613		)	(5,169		)
Balance, end of period	$	77,461		$	84,281

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ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES (Tables)

3 Months Ended

Apr. 02, 2016

Payables and Accruals [Abstract]

Accrued expenses and other long term liabilities

Accrued expenses consist of the following at April 2, 2016 and December 31, 2015:

(Amounts in thousands)	April 2, 2016		December 31, 2015
Insurance	$	9,465	$	9,347
Employee compensation and benefits	13,781		20,381
Sales and marketing	33,835		50,405
Product warranty	17,119		16,619
Accrued freight	1,519		1,445
Accrued interest	7,150		17,808
Accrued environmental liability	437		430
Accrued pension	647		647
Accrued sales returns and discounts	4,728		3,368
Accrued taxes	5,436		5,575
Litigation accrual	700		700
Other	22,446		26,237
	$	117,263	$	152,962

Other long-term liabilities consist of the following at April 2, 2016 and December 31, 2015:

(Amounts in thousands)	April 2, 2016		December 31, 2015
Insurance	$	1,302	$	1,237
Pension liabilities	14,827		15,033
Multi-employer pension withdrawal liability	884		960
Product warranty	60,442		59,943
Long-term product claim liability	138		138
Long-term environmental liability	1,196		1,211
Liabilities for tax uncertainties	2,928		2,866
Litigation accrual	810		829
Other	7,243		8,676
	$	89,770	$	90,893

XML

STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Apr. 02, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Rollforward of stock options outstanding

A rollforward of stock options outstanding during the three months endedApril 2, 2016 is presented below: 

	Stock Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)
Balance at January 1, 2016	2,613,793	$	13.75	5.22
Granted	—	—		—
Exercised	—	—		—
Forfeited or expired	—	—		—
Balance at April 2, 2016	2,613,793	$	13.75	4.96

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SEGMENT INFORMATION (Tables)

3 Months Ended

Apr. 02, 2016

Segment Reporting [Abstract]

Summary of the Company's segment information

Following is a summary of the Company’s segment information:

	For the three months ended
(Amounts in thousands)	April 2, 2016			April 4, 2015
Net sales
Siding, Fencing and Stone	$	176,376		$	156,442
Windows and Doors	232,238			219,606
	$	408,614		$	376,048
Operating earnings (loss)
Siding, Fencing and Stone	$	20,374		$	10,322
Windows and Doors	(1,250		)	(16,408		)
Unallocated	(9,548		)	(7,964		)
	$	9,576		$	(14,050	)
	Total assets as of
	April 2, 2016			December 31, 2015
Total assets
Siding, Fencing and Stone	$	672,389		$	664,053
Windows and Doors	497,510			498,994
Unallocated	40,954			103,525
	$	1,210,853		$	1,266,572

XML

GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION (Tables)

3 Months Ended

Apr. 02, 2016

GUARANTOR / NON GUARANTOR FINANCIAL INFORMATION [Abstract]

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Three months ended April 2, 2016
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Net sales	$	—		$	—		$	369,514		$	39,100		$	—		$	408,614
Cost of products sold	—			—			289,872			32,041			—			321,913
Gross profit	—			—			79,642			7,059			—			86,701
Operating expenses:
Selling, general and
administrative expenses	—			9,548			49,022			12,165			—			70,735
Intercompany administrative
charges	—			—			7,772			1,673			(9,445		)	—
Amortization of intangible assets	—			—			5,360			1,030			—			6,390
Total operating expenses	—			9,548			62,154			14,868			(9,445		)	77,125
Operating earnings (loss)	—			(9,548		)	17,488			(7,809		)	9,445			9,576
Foreign currency gain	—			—			—			584			—			584
Intercompany interest	—			15,933			(15,550		)	(383		)	—			—
Interest expense	—			(18,691		)	—			(1		)	—			(18,692		)
Interest income	—			2			2			6			—			10
Loss on modification or
extinguishment of debt	—			(2,399		)	—			—			—			(2,399		)
Tax receivable agreement liability adjustment	—			(18,150		)	—			—			—			(18,150		)
Intercompany administrative income	—			9,445			—			—			(9,445		)	—
Income (loss) before equity in
subsidiaries' income (loss)	—			(23,408		)	1,940			(7,603		)	—			(29,071		)
Equity in subsidiaries' income (loss)	(27,577		)	(4,169		)	—			—			31,746			—
Income (loss) before benefit
for income taxes	(27,577		)	(27,577		)	1,940			(7,603		)	31,746			(29,071		)
Benefit for income taxes	—			—			(527		)	(967		)	—			(1,494		)
Net income (loss)	$	(27,577	)	$	(27,577	)	$	2,467		$	(6,636	)	$	31,746		$	(27,577	)
Other comprehensive income (loss):
Foreign currency translation adjustments	—			—			—			4,773			—			4,773
Unrealized loss on derivative instrument	—			—			—			(1,720		)	—			(1,720		)
Total comprehensive income (loss)	$	(27,577	)	$	(27,577	)	$	2,467		$	(3,583	)	$	31,746		$	(24,524	)

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Three months ended April 4, 2015
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
Net sales	$	—		$	—		$	327,391		$	48,657		$	—		$	376,048
Cost of products sold	—			—			276,444			39,323			—			315,767
Gross profit	—			—			50,947			9,334			—			60,281
Operating expenses:
Selling, general and
administrative expenses	—			7,964			45,905			14,263			—			68,132
Intercompany administrative
charges	—			—			8,755			1,150			(9,905		)	—
Amortization of intangible assets	—			—			5,061			1,138			—			6,199
Total operating expenses	—			7,964			59,721			16,551			(9,905		)	74,331
Operating loss	—			(7,964		)	(8,774		)	(7,217		)	9,905			(14,050		)
Foreign currency loss	—			—			—			(934		)	—			(934		)
Intercompany interest	—			15,778			(13,929		)	(1,849		)	—			—
Interest expense	—			(19,080		)	(4		)	(9		)	—			(19,093		)
Interest income	—			1			2			6			—			9
Tax receivable agreement liability adjustment	—			(17,185		)	—			—			—			(17,185		)
Intercompany administrative income	—			9,905			—			—			(9,905		)	—
Loss before equity in
subsidiaries' loss	—			(18,545		)	(22,705		)	(10,003		)	—			(51,253		)
Equity in subsidiaries' loss	(48,859		)	(30,314		)	—			—			79,173			—
Loss before benefit
for income taxes	(48,859		)	(48,859		)	(22,705		)	(10,003		)	79,173			(51,253		)
Benefit for income taxes	—			—			(1,580		)	(814		)	—			(2,394		)
Net loss	$	(48,859	)	$	(48,859	)	$	(21,125	)	$	(9,189	)	$	79,173		$	(48,859	)
Other comprehensive income (loss):
Foreign currency translation adjustments	—			—			—			(7,453		)	—			(7,453		)
Unrealized gain on derivative instrument	—			—			—			2,102			—			2,102
Total comprehensive loss	$	(48,859	)	$	(48,859	)	$	(21,125	)	$	(14,540	)	$	79,173		$	(54,210	)

CONDENSED CONSOLIDATING BALANCE SHEET

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
As of April 2, 2016
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
ASSETS	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Current Assets:
Cash and cash equivalents	$	—		$	31,687		$	(6,952	)	$	9,606		$	—		$	34,341
Accounts receivable, net	—			—			182,854			21,305			—			204,159
Inventories:
Raw materials	—			—			63,500			5,835			—			69,335
Work in process	—			—			22,420			2,049			—			24,469
Finished goods	—			—			52,733			14,869			—			67,602
Total inventory	—			—			138,653			22,753			—			161,406
Prepaid expenses and other
current assets	—			1,437			18,446			4,317			—			24,200
Deferred income taxes	—			—			14,202			—			—			14,202
Total current assets	—			33,124			347,203			57,981			—			438,308
Investments in subsidiaries	(101,001		)	(248,594		)	—			—			349,595			—
Property and Equipment, at cost:
Land	—			—			7,436			786			—			8,222
Buildings and improvements	—			—			62,458			4,719			—			67,177
Machinery and equipment	—			5,175			368,643			18,309			—			392,127
	—			5,175			438,537			23,814			—			467,526
Less accumulated depreciation	—			(1,816		)	(293,909		)	(10,024		)	—			(305,749		)
Total property and equipment, net	—			3,359			144,628			13,790			—			161,777
Other Assets:
Intangible assets, net	—			—			106,840			16,117			—			122,957
Goodwill	—			—			449,366			30,183			—			479,549
Intercompany note receivable	—			1,135,073			—			—			(1,135,073		)	—
Other	—			4,471			3,791			—			—			8,262
Total other assets	—			1,139,544			559,997			46,300			(1,135,073		)	610,768
	$	(101,001	)	$	927,433		$	1,051,828		$	118,071		$	(785,478	)	$	1,210,853
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	—		$	181		$	62,488		$	11,124		$	—		$	73,793
Accrued expenses	—			13,470			89,679			14,114			—			117,263
Current portion of payable to related
parties pursuant to tax receivable agreement	—			3,005			—			—			—			3,005
Current portion of long-term debt	—			4,300			—			—			—			4,300
Total current liabilities	—			20,956			152,167			25,238			—			198,361
Deferred income taxes	—			—			20,483			4,159			—			24,642
Intercompany note payable	—			—			1,027,543			107,530			(1,135,073		)	—
Long-term portion of payable to related
parties pursuant to tax receivable agreement	—			38,961			—			—			—			38,961
Other long-term liabilities	—			8,397			77,386			3,987			—			89,770
Long-term debt, less current portion	—			960,120			—			—			—			960,120
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	—			—			—			—			—			—
Common stock	681			681			—			—			(681		)	681
Additional paid-in-capital	749,633			749,633			372,720			26,854			(1,149,207		)	749,633
(Accumulated deficit) retained earnings	(817,801		)	(817,801		)	(582,497		)	(32,182		)	1,432,480			(817,801		)
Accumulated other
comprehensive loss	(33,514		)	(33,514		)	(15,974		)	(17,515		)	67,003			(33,514		)
Total stockholders' (deficit) equity	(101,001		)	(101,001		)	(225,751		)	(22,843		)	349,595			(101,001		)
	$	(101,001	)	$	927,433		$	1,051,828		$	118,071		$	(785,478	)	$	1,210,853

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2015
	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
(Amounts in thousands)	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	—		$	94,692		$	(4,944	)	$	19,677		$	—		$	109,425
Accounts receivable, net	—			—			172,560			22,605			—			195,165
Inventories:
Raw materials	—			—			58,400			5,602			—			64,002
Work in process	—			—			23,126			2,193			—			25,319
Finished goods	—			—			47,946			13,136			—			61,082
Total inventory	—			—			129,472			20,931			—			150,403
Prepaid expenses and other
current assets	—			944			20,310			3,393			—			24,647
Deferred income taxes	—			—			11,255			6			—			11,261
Total current assets	—			95,636			328,653			66,612			—			490,901
Investments in subsidiaries	(76,813		)	(245,265		)	—			—			322,078			—
Property and Equipment, at cost:
Land	—			—			7,436			739			—			8,175
Buildings and improvements	—			—			61,883			4,438			—			66,321
Machinery and equipment	—			4,813			364,093			16,844			—			385,750
	—			4,813			433,412			22,021			—			460,246
Less accumulated depreciation	—			(1,755		)	(288,542		)	(8,946		)	—			(299,243		)
Total property and equipment, net	—			3,058			144,870			13,075			—			161,003
Other Assets:
Intangible assets, net	—			—			112,173			16,211			—			128,384
Goodwill	—			—			449,366			28,373			—			477,739
Intercompany note receivable	—			1,104,510			—			—			(1,104,510		)	—
Other	—			4,831			3,714			—			—			8,545
Total other assets	—			1,109,341			565,253			44,584			(1,104,510		)	614,668
	$	(76,813	)	$	962,770		$	1,038,776		$	124,271		$	(782,432	)	$	1,266,572
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	—		$	235		$	60,655		$	13,606		$	—		$	74,496
Accrued expenses	—			24,512			113,051			15,399			—			152,962
Current portion of payable to related
parties pursuant to tax receivable agreement	—			3,005			—			—			—			3,005
Current portion of long-term debt	—			4,300			—			—			—			4,300
Total current liabilities	—			32,052			173,706			29,005			—			234,763
Deferred income taxes	—			—			17,470			3,917			—			21,387
Intercompany note payable	—			—			1,002,447			102,063			(1,104,510		)	—
Long-term portion of payable to related
parties pursuant to tax receivable agreement	—			20,811			—			—			—			20,811
Other long-term liabilities	—			11,189			75,911			3,793			—			90,893
Long-term debt	—			975,531			—			—			—			975,531
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	—			—			—			—			—			—
Common stock	681			681			—			—			(681		)	681
Additional paid-in-capital	749,296			749,296			370,180			31,611			(1,151,087		)	749,296
(Accumulated deficit) retained earnings	(790,224		)	(790,224		)	(584,964		)	(25,546		)	1,400,734			(790,224		)
Accumulated other
comprehensive income (loss)	(36,566		)	(36,566		)	(15,974		)	(20,572		)	73,112			(36,566		)
Total stockholders' (deficit) equity	(76,813		)	(76,813		)	(230,758		)	(14,507		)	322,078			(76,813		)
	$	(76,813	)	$	962,770		$	1,038,776		$	124,271		$	(782,432	)	$	1,266,572

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the three months ended April 2, 2016
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(27,577	)	$	(27,577	)	$	2,467		$	(6,636	)	$	31,746		$	(27,577	)
Adjustments to reconcile net income (loss)
to cash provided by (used in) operating activities:
Depreciation and amortization expense	—			61			12,379			1,590			—			14,030
Non-cash restructuring costs	—			—			—			566			—			566
Non-cash interest expense, net	—			3,416			—			—			—			3,416
Gain on foreign currency transactions	—			—			—			(584		)	—			(584		)
Loss on modification or extinguishment of debt	—			2,399			—			—			—			2,399
Stock based compensation	—			337			—			—			—			337
Deferred income taxes	—			—			65			—			—			65
Tax receivable agreement liability adjustment	—			18,150			—			—			—			18,150
Increase in tax uncertainty,
net of valuation allowance	—			—			62			—			—			62
Equity in subsidiaries' net income (loss)	27,577			4,169			—			—			(31,746		)	—
Other	—			—			138			—			—			138
Changes in operating assets and liabilities:
Accounts receivable, net	—			—			(11,718		)	2,584			—			(9,134		)
Inventories	—			—			(10,511		)	(467		)	—			(10,978		)
Prepaid expenses and other assets	—			(285		)	(68		)	98			—			(255		)
Accounts payable	—			(54		)	(3,995		)	3,174			—			(875		)
Accrued expenses	—			(13,833		)	(25,802		)	1,860			—			(37,775		)
Cash payments on restructuring liabilities	—			—			(112		)	(556		)	—			(668		)
Other	—			—			139			(2		)	—			137
Net cash provided by (used in)
operating activities	—			(13,217		)	(36,956		)	1,627			—			(48,546		)
Cash flows from investing activities:
Capital expenditures	—			(362		)	(6,946		)	(424		)	—			(7,732		)
Proceeds from sale of assets	—			—			76			—			—			76
Net cash used in
investing activities	—			(362		)	(6,870		)	(424		)	—			(7,656		)
Cash flows from financing activities:
Net revolver borrowings	—			10,000			—			—			—			10,000
Payments on long-term debt	—			(31,075		)	—			—			—			(31,075		)
Proceeds from intercompany
investment	—			(28,351		)	41,818			(13,467		)	—			—
Net cash provided by (used in)
financing activities	—			(49,426		)	41,818			(13,467		)	—			(21,075		)
Impact of exchange rate movements on cash	—			—			—			2,193			—			2,193
Net decrease in cash
and cash equivalents	—			(63,005		)	(2,008		)	(10,071		)	—			(75,084		)
Cash and cash equivalents at the
beginning of the period	—			94,692			(4,944		)	19,677			—			109,425
Cash and cash equivalents at the end
of the period	$	—		$	31,687		$	(6,952	)	$	9,606		$	—		$	34,341

PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the three months ended April 4, 2015
(Amounts in thousands)	Guarantor			Issuer						Non-
	Ply Gem			Ply Gem			Guarantor			Guarantor			Consolidating
	Holdings, Inc.			Industries, Inc.			Subsidiaries			Subsidiary			Adjustments			Consolidated
Cash flows from operating activities:
Net loss	$	(48,859	)	$	(48,859	)	$	(21,125	)	$	(9,189	)	$	79,173		$	(48,859	)
Adjustments to reconcile net loss
to cash used in operating activities:
Depreciation and amortization expense	—			150			12,840			1,831			—			14,821
Non-cash restructuring expense	—			—			—			46			—			46
Non-cash interest expense, net	—			3,419			—			—			—			3,419
Loss on foreign currency transactions	—			—			—			934			—			934
Stock based compensation	—			586			—			—			—			586
Deferred income taxes	—			—			1,019			—			—			1,019
Tax receivable agreement liability adjustment	—			17,185			—			—			—			17,185
Increase in tax uncertainty,
net of valuation allowance	—			—			73			—			—			73
Equity in subsidiaries' net loss	48,859			30,314			—			—			(79,173		)	—
Other	—			—			(13		)	—			—			(13		)
Changes in operating assets and liabilities:
Accounts receivable, net	—			—			(6,729		)	765			—			(5,964		)
Inventories	—			—			2,304			(1,835		)	—			469
Prepaid expenses and other assets	—			755			4,161			(123		)	—			4,793
Accounts payable	—			(57		)	(8,736		)	992			—			(7,801		)
Accrued expenses	—			(16,211		)	(26,275		)	2,729			—			(39,757		)
Cash payments on restructuring liabilities	—			—			(44		)	(429		)	—			(473		)
Other	—			—			(1,469		)	—			—			(1,469		)
Net cash used in
operating activities	—			(12,718		)	(43,994		)	(4,279		)	—			(60,991		)
Cash flows from investing activities:
Capital expenditures	—			(67		)	(6,026		)	(978		)	—			(7,071		)
Proceeds from sale of assets	—			—			25			—			—			25
Net cash used in
investing activities	—			(67		)	(6,001		)	(978		)	—			(7,046		)
Cash flows from financing activities:
Net revolver borrowings	—			60,000			—			—			—			60,000
Payments on long-term debt	—			(1,075		)	—			—			—			(1,075		)
Proceeds from exercises of employee stock options	—			182			—			—			—			182
Proceeds from intercompany
investment	—			(42,081		)	44,417			(2,336		)	—			—
Net cash provided by (used in)
financing activities	—			17,026			44,417			(2,336		)	—			59,107
Impact of exchange rate movement
on cash	—			—			—			(1,788		)	—			(1,788		)
Net increase (decrease) in cash
and cash equivalents	—			4,241			(5,578		)	(9,381		)	—			(10,718		)
Cash and cash equivalents at the
beginning of the period	—			23,555			(5,845		)	15,452			—			33,162
Cash and cash equivalents at the end
of the period	$	—		$	27,796		$	(11,423	)	$	6,071		$	—		$	22,444

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Textuals (Details) - USD ($) $ in Thousands, shares in Millions		3 Months Ended
	May. 29, 2015	Apr. 02, 2016	Apr. 04, 2015	Dec. 31, 2015
Initial Public Offering [Line Items]
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	$ 1,000
Goodwill		$ 479,549		$ 477,739
Impaired Intangible Asset, Facts and Circumstances Leading to Impairment		no indicators
Tax receivable agreement adjustment		$ 18,150	$ 17,185
Foreign Currency Cash Flow Hedge Liability at Fair Value		891		829
Unamortized Debt Issuance Expense		$ 20,900		22,200
Goodwill, Impaired, Facts and Circumstances Leading to Impairment		no indicators
Business Combination, Contingent Consideration, Liability		$ 800
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount		0.1	0.1
Purchase Commitment, Remaining Minimum Amount Committed		$ 52,900
Inventory Valuation Reserves		9,000		8,300
Decrease (increase) in inventory reserve		(700)
Amortization of debt issuance costs		800	$ 800
Foreign Currency Transaction Gain (Loss), Realized		584	(934)
Currency translation adjustment		4,773	$ (7,453)
Canyon Stone [Member]
Initial Public Offering [Line Items]
Business Combination, Consideration Transferred	21,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables	3,559
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory	712
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets	41
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	2,019
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	9,300
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities	2,273
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net	21,000
Siding, Fencing and Stone [Member]
Initial Public Offering [Line Items]
Goodwill		349,185		347,958
Siding, Fencing and Stone [Member] | Canyon Stone [Member]
Initial Public Offering [Line Items]
Goodwill	$ 7,642
Other Noncurrent Assets [Member]
Initial Public Offering [Line Items]
Unamortized Debt Issuance Expense		2,700		2,900
Long-term Debt [Member]
Initial Public Offering [Line Items]
Unamortized Debt Issuance Expense		$ 18,200		$ 19,300

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable (Details) - USD ($) $ in Thousands	Apr. 02, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
Allowance for Doubtful Accounts Receivable, Current	$ 3,477	$ 3,588

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventory (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 02, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
Purchase Commitment, Remaining Minimum Amount Committed	$ 52.9
Inventory Valuation Reserves	9.0	$ 8.3
Decrease (increase) in inventory reserve	$ 0.7

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 02, 2016	May. 29, 2015
Building and improvements [Member] | Minimum [Member]
Property and Equipment [Line Items]
Estimated useful life	10 years
Building and improvements [Member] | Maximum [Member]
Property and Equipment [Line Items]
Estimated useful life	37 years
Machinery and equipment, including leases [Member] | Minimum [Member]
Property and Equipment [Line Items]
Estimated useful life	3 years
Machinery and equipment, including leases [Member] | Maximum [Member]
Property and Equipment [Line Items]
Estimated useful life	15 years
Leasehold improvements [Member]
Property and Equipment [Line Items]
Property plant and equipment useful life description	Term of lease or useful life, whichever is shorter
Canyon Stone [Member]
Property and Equipment [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables		$ 3,559
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities		2,273
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net		$ 21,000

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Disclosure (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015	Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign Currency Cash Flow Hedge Liability at Fair Value	$ (891)		$ (829)
Foreign Currency Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net	400	$ 1,100
Quoted Prices in Active Markets (Level 1) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	635,375		585,000
Quoted Prices in Active Markets (Level 1) [Member] | Six Point Five Senior Notes due 2022 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	635,375		585,000
Quoted Prices in Active Markets (Level 1) [Member] | Term Loan Facility due 2021 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	0		0
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	380,637		411,913
Significant Other Observable Inputs (Level 2) [Member] | Six Point Five Senior Notes due 2022 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	0		0
Significant Other Observable Inputs (Level 2) [Member] | Term Loan Facility due 2021 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	380,637		411,913
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	0		0
Significant Unobservable Inputs (Level 3) [Member] | Six Point Five Senior Notes due 2022 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	0		0
Significant Unobservable Inputs (Level 3) [Member] | Term Loan Facility due 2021 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	0		0
Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	1,041,400		1,072,475
Carrying Value [Member] | Six Point Five Senior Notes due 2022 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	650,000		650,000
Carrying Value [Member] | Term Loan Facility due 2021 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	391,400		422,475
Fair Value Total [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	1,016,012		996,913
Fair Value Total [Member] | Six Point Five Senior Notes due 2022 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	635,375		585,000
Fair Value Total [Member] | Term Loan Facility due 2021 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities	$ 380,637		$ 411,913

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign Currency (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Accounting Policies [Abstract]
Foreign Currency Transaction Gain (Loss), Realized	$ 584	$ (934)
Derivative [Line Items]
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	$ 4,773	$ (7,453)

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015	Dec. 31, 2015
Derivatives, Fair Value [Line Items]
Foreign Currency Cash Flow Hedge Liability at Fair Value	$ (891)		$ (829)
Foreign Currency Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net	400	$ 1,100
Foreign Exchange Forward [Member]
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	$ 27,800

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Earnings per share (Details) - shares shares in Millions	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Accounting Policies [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0.1	0.1

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ACQUSITIONS (Details) - USD ($) $ in Thousands		3 Months Ended
	May. 29, 2015	Apr. 02, 2016	Apr. 04, 2015	Dec. 31, 2015
Business Acquisition [Line Items]
Goodwill		$ 479,549		$ 477,739
Business Combination, Contingent Consideration, Liability		800
Net sales		408,614	$ 376,048
Net loss		(27,577)	(48,859)
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	$ 1,000
Canyon Stone [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory	712
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets	41
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	2,019
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	9,300
Business Combination, Consideration Transferred	21,000
Siding, Fencing and Stone [Member]
Business Acquisition [Line Items]
Goodwill		349,185		$ 347,958
Net sales		$ 176,376	$ 156,442
Siding, Fencing and Stone [Member] | Canyon Stone [Member]
Business Acquisition [Line Items]
Goodwill	$ 7,642

XML

GOODWILL (Details)	3 Months Ended		12 Months Ended
	Apr. 02, 2016 USD ($) reporting_unit	Apr. 04, 2015 reporting_unit	Dec. 31, 2015 USD ($)	May. 29, 2015 USD ($)
Goodwill [Line Items]
Goodwill, Impaired, Facts and Circumstances Leading to Impairment	no indicators
Number of reporting units | reporting_unit	2	2
Goodwill impairment			$ 0
Goodwill	$ 479,549,000		477,739,000
Siding, Fencing and Stone [Member]
Goodwill [Line Items]
Goodwill, Gross	471,412,000		470,185,000
Goodwill, Impaired, Accumulated Impairment Loss	(122,227,000)		(122,227,000)
Goodwill	349,185,000		347,958,000
Goodwill, Translation Adjustments	1,227,000
Windows and Doors [Member]
Goodwill [Line Items]
Goodwill, Gross	458,137,000		457,554,000
Goodwill, Impaired, Accumulated Impairment Loss	(327,773,000)		(327,773,000)
Goodwill	130,364,000		$ 129,781,000
Goodwill, Translation Adjustments	$ 583,000
Canyon Stone [Member] | Siding, Fencing and Stone [Member]
Goodwill [Line Items]
Goodwill				$ 7,642,000

XML

INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Apr. 02, 2016	Apr. 04, 2015	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Impaired Intangible Asset, Facts and Circumstances Leading to Impairment	no indicators
Goodwill, Impaired, Facts and Circumstances Leading to Impairment	no indicators
Amortization of Intangible Assets	$ 6,390	$ 6,199
Average Amortization Period (in years)	12 years		12 years
Cost	$ 360,925		$ 352,804
Accumulated Amortization	(237,968)		(224,420)
Net Carrying Value	122,957		$ 128,384
Estimated future amortization [Abstract]
2016 (remainder of year)	18,481
2016	20,893
2017	20,058
2018	15,993
2019	$ 11,361
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Average Amortization Period (in years)	14 years		14 years
Cost	$ 12,770		$ 12,770
Accumulated Amortization	(11,372)		(11,136)
Net Carrying Value	$ 1,398		$ 1,634
Trademarks/Tradenames [Member]
Finite-Lived Intangible Assets [Line Items]
Average Amortization Period (in years)	12 years		12 years
Cost	$ 117,271		$ 116,965
Accumulated Amortization	(77,917)		(76,249)
Net Carrying Value	$ 39,354		$ 40,716
Customer relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Average Amortization Period (in years)	13 years		13 years
Cost	$ 225,517		$ 217,709
Accumulated Amortization	(144,994)		(133,532)
Net Carrying Value	$ 80,523		$ 84,177
Other [Member]
Finite-Lived Intangible Assets [Line Items]
Average Amortization Period (in years)	5 years		5 years
Cost	$ 5,367		$ 5,360
Accumulated Amortization	(3,685)		(3,503)
Net Carrying Value	$ 1,682		$ 1,857

XML

COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net income (loss)	$ (27,577)	$ (48,859)
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	4,773	(7,453)
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	(1,720)	2,102
Total comprehensive loss	$ (24,524)	$ (54,210)

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LONG-TERM DEBT - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Apr. 02, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Long-term debt	$ 964,420	$ 979,831
Less current portion of long-term debt	4,300	4,300
Long-term debt, less current portion	960,120	975,531
Six Point Five Senior Notes due 2022 [Member]
Debt Instrument [Line Items]
Debt Instrument, Unamortized Discount	55,686	57,538
Term Loan Facility due 2021 [Member]
Debt Instrument [Line Items]
Long-term debt	360,106	387,369
Debt Instrument, Unamortized Discount	31,294	35,106
Six Point Five Senior Notes due 2022 [Member]
Debt Instrument [Line Items]
Long-term debt	$ 594,314	$ 592,462

XML

LONG-TERM DEBT - 2014 Debt Transactions (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015	Nov. 05, 2015	Jan. 23, 2015	Sep. 05, 2014
Debt Instrument [Line Items]
Repayments of long-term debt	$ 31,075	$ 1,075
Six Point Five Senior Notes due 2022 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount					$ 500,000
Six Point Five Senior Notes tack on due 2022 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount				$ 150,000
Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			$ 350,000

XML

LONG-TERM DEBT - 6.50% Senior Notes due 2022 (Details) - USD ($)	3 Months Ended
	Apr. 02, 2016	Jan. 23, 2015	Sep. 05, 2014	Jan. 30, 2014
Six Point Five Senior Notes tack on due 2022 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 150,000,000
Six Point Five Senior Notes due 2022 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount			$ 500,000,000
Debt Instrument, Maturity Date	Feb. 01, 2022
Debt Instrument, Interest Rate, Effective Percentage				8.39%
Long-term Debt, Required Interest Coverage Ratio	2.00
Debt Instrument, Minimum Interest Coverage Ratio Required for Incurring Additional Debt	4.00
Prior to February 1, 2017 [Member] | Six Point Five Senior Notes due 2022 [Member]
Debt Instrument [Line Items]
Long-term Debt, Redemption Price, Percentage of Outstanding Principal	100.00%
Prior to February 1, 2017 [Member] | Six Point Five Senior Notes due 2022 [Member] | Debt Instrument, Redemption, Period One [Member]
Debt Instrument [Line Items]
Long-term Debt, Redemption Price Plus Premium, Percentage of Outstanding Principal	106.50%
Prior to February 1, 2017 [Member] | Maximum [Member] | Six Point Five Senior Notes due 2022 [Member]
Debt Instrument [Line Items]
Long-term Debt, Authorized Redemption Amount, Percentage of Outstanding Principal at 106 Point 50 Redemption Price	40.00%
equity offering threshold [Member] | Prior to February 1, 2017 [Member] | Six Point Five Senior Notes due 2022 [Member] | Debt Instrument, Redemption, Period One [Member]
Debt Instrument [Line Items]
Long-term Debt, Required Remaining Amount Outstanding for Redemption at 106 Point 50 Percent	50.00%
Debt Limitation One [Member] | Six Point Five Senior Notes due 2022 [Member]
Debt Instrument [Line Items]
Maximum borrowing threshold on credit facility under six point five percent notes	$ 350,000,000
Maximum indebtedness under six point five percent notes	575,000,000
Purchase Money Indebtedness [Member] | Debt Limitation Two [Member] | Six Point Five Senior Notes due 2022 [Member]
Debt Instrument [Line Items]
Purchase money indebtedness threshold under six point five percent notes	35,000,000
Purchase Money Indebtedness [Member] | Debt Limitation Three [Member] | Six Point Five Senior Notes due 2022 [Member]
Debt Instrument [Line Items]
Purchase money indebtedness threshold under six point five percent notes	0.10
Debt of Foreign Subsidiaries [Member] | Debt Limitation Two [Member] | Six Point Five Senior Notes due 2022 [Member]
Debt Instrument [Line Items]
foreign debt threshold under the six point five percent notes	60,000,000
Debt of Foreign Subsidiaries [Member] | Debt Limitation Three [Member] | Six Point Five Senior Notes due 2022 [Member]
Debt Instrument [Line Items]
foreign debt threshold under the six point five percent notes	0.15
General debt basket [Member] | Debt Limitation Two [Member] | Six Point Five Senior Notes due 2022 [Member]
Debt Instrument [Line Items]
general debt basket threshold under the six point five percent notes	75,000,000
General debt basket [Member] | Debt Limitation Three [Member] | Six Point Five Senior Notes due 2022 [Member]
Debt Instrument [Line Items]
general debt basket threshold under the six point five percent notes	$ 0.20

XML

LONG-TERM DEBT - Term Loan Facility due 2021 (Details)		3 Months Ended
	Jan. 30, 2014 USD ($)	Apr. 02, 2016 USD ($)	Apr. 04, 2015 USD ($)	Dec. 31, 2015
Debt Instrument [Line Items]
Gains (Losses) on Extinguishment of Debt		$ (2,399,000)	$ 0
Term Loan Facility due 2021 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 430,000,000
Debt Instrument, Unamortized Discount	2,200,000
Proceeds from Debt, Net of Issuance Costs	$ 427,900,000
Debt Instrument, Maturity Date		Jan. 30, 2021
debt instrument, periodic payment, principal, percentage basis		1.00%
Debt Instrument, Interest Rate, Stated Percentage		4.00%
Debt Instrument, Interest Rate, Effective Percentage	7.24%
Accordion Feature Line Increase, Remaining Availability		$ 140,000,000
accordion feature line increase ratio threshold		3.75
excess cash flow threshold for prepayment		$ 15,000,000
Ply Gem Industries [Member] | Term Loan Facility due 2021 [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		0.50%
Ply Gem Industries [Member] | Term Loan Facility due 2021 [Member] | Libor Rate [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		1.00%
Ply Gem Industries [Member] | Term Loan Facility due 2021 [Member] | Interest Rate Floor [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		1.00%
Ply Gem Industries [Member] | Term Loan Facility due 2021 [Member] | eurocurrency loan [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		3.00%
Ply Gem Industries [Member] | Term Loan Facility due 2021 [Member] | alternate base rate loan [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		2.00%
Option Two [Member] | Ply Gem Industries [Member] | Term Loan Facility due 2021 [Member]
Debt Instrument [Line Items]
Long-term Debt, Required secured debt Ratio		2.00
Option One [Member] | Ply Gem Industries [Member] | Term Loan Facility due 2021 [Member]
Debt Instrument [Line Items]
Long-term Debt, Required secured debt Ratio		2.50
certain non-ordinary course asset sales [Member] | Term Loan Facility due 2021 [Member]
Debt Instrument [Line Items]
excess cash flow subject to prepayment		100.00%
excess cash flow [Member] | Option Two [Member] | Term Loan Facility due 2021 [Member]
Debt Instrument [Line Items]
term loan repayment requirements		25.00%
excess cash flow [Member] | Option One [Member] | Term Loan Facility due 2021 [Member]
Debt Instrument [Line Items]
term loan repayment requirements		50.00%
excess cash flow [Member] | Option Three [Member] [Member] | Term Loan Facility due 2021 [Member]
Debt Instrument [Line Items]
term loan repayment requirements		0.00%
certain issuances of debt [Member] | Term Loan Facility due 2021 [Member]
Debt Instrument [Line Items]
excess cash flow subject to prepayment		100.00%
senior secured debt ratio [Member] | Term Loan Facility due 2021 [Member]
Debt Instrument [Line Items]
Long-term Debt, Required secured debt Ratio				1.97

XML

LONG-TERM DEBT - Senior secured asset based revolving credit facility due 2020 (Details) - USD ($) $ in Millions	3 Months Ended	4 Months Ended	12 Months Ended
	Apr. 02, 2016	Apr. 30, 2014	Dec. 31, 2015	Nov. 05, 2015	Nov. 05, 2014
Senior Secured Asset-Based Revolving Credit Facility due 2016 [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity					$ 300.0
Senior Secured Asset-Based Revolving Credit Facility due 2018 [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity				$ 350.0
Long-term Line of Credit			$ 0.0
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity				350.0
Debt Issuance Cost			$ 1.5
Accordion Feature Line Increase, Amount				50.0
Line of Credit Facility, Current Borrowing Capacity	$ 329.4
Line of Credit Facility, Remaining Borrowing Capacity	208.4
Long-term Line of Credit	10.0
Letters of Credit Outstanding, Amount	10.6
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | Ply Gem Industries [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 300.0
Line of Credit Facility, Interest Rate During Period	1.89%
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | Ply Gem Industries [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.50%
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | Ply Gem Industries [Member] | Eurodollar [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.50%
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | Ply Gem Canada [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 50.0
Percentage of equity guaranteed by parent company	35.00%
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | Minimum [Member] | Ply Gem Industries [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.25%		1.25%
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | Maximum [Member] | Ply Gem Industries [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.00%		2.00%
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | initial base rate [Member] | Ply Gem Industries [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.50%
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | remaining available [Member]
Debt Instrument [Line Items]
Accordion Feature Line Increase, Amount				$ 50.0
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | Threshold for fee calculation [Member] | Ply Gem Industries [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Commitment Fee Amount	$ 100.0
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | Option Two [Member] | Ply Gem Industries [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.25%
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | Option One [Member] | Ply Gem Industries [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.375%
Line of Credit Facility, Commitment Fee Amount	$ 100.0
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | Fixed Charge Coverage Ratio [Member] | Ply Gem Industries [Member]
Debt Instrument [Line Items]
Long-term Debt, Required Interest Coverage Ratio	1.0
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | Option Three [Member] [Member] | Cash Dominion Requirement [Member] | Ply Gem Industries [Member]
Debt Instrument [Line Items]
Debt Instrument, Excess Availability length	5 years
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | Option Two [Member] | Cash Dominion Requirement [Member] | Ply Gem Industries [Member]
Debt Instrument [Line Items]
Debt Instrument, Excess Availability	$ 30.0	$ 27.5
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | Option Two [Member] | Fixed Charge Coverage Ratio [Member] | Ply Gem Industries [Member]
Debt Instrument [Line Items]
Debt Instrument, Excess Availability	$ 25.0
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | Option One [Member] | Cash Dominion Requirement [Member] | Ply Gem Industries [Member]
Debt Instrument [Line Items]
Debt Instrument, thresholds excess availability must exceed	12.50%
Senior Secured Asset-Based Revolving Credit Facility due 2020 [Member] | Option One [Member] | Fixed Charge Coverage Ratio [Member] | Ply Gem Industries [Member]
Debt Instrument [Line Items]
Debt Instrument, thresholds excess availability must exceed	10.00%

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LONG-TERM DEBT - Loss on debt modification or extinguishment (Details) - USD ($)	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015	Mar. 10, 2016	Dec. 31, 2015	Jan. 30, 2014
Debt Instrument [Line Items]
Gains (Losses) on Extinguishment of Debt	$ 2,399,000	$ 0
Unamortized Debt Issuance Expense	20,900,000			$ 22,200,000
Term Loan Facility due 2021 [Member]
Debt Instrument [Line Items]
Debt Instrument, Unamortized Discount	31,294,000			$ 35,106,000
Term Loan Facility due 2021 [Member]
Debt Instrument [Line Items]
Estinguishment of Debt, Unamortized Discount Charged to Expense	1,915,000	0
Write off of Deferred Debt Issuance Cost	$ 484,000	$ 0
Term Loan Facility due 2021 [Member]
Debt Instrument [Line Items]
Long-term Debt, Term Loan Voluntary Repayment			$ 30,000,000.00
Debt Instrument, Unamortized Discount					$ 2,200,000

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PENSION PLANS (Details) $ in Thousands	3 Months Ended
	Apr. 02, 2016 USD ($) pension_plan	Apr. 04, 2015 USD ($) pension_plan
Compensation and Retirement Disclosure [Abstract]
Number of separate pension plans | pension_plan	2	2
Net periodic benefit costs
Service cost	$ 0	$ 0
Interest cost	486	502
Expected return on plan assets	(545)	(577)
Amortization of loss	354	296
Net periodic benefit expense	$ 295	$ 221

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COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Apr. 02, 2016	Apr. 04, 2015	Dec. 31, 2014	Dec. 31, 2011	Dec. 31, 2015
Indemnification [Abstract]
Receivable related to indemnification	$ 1,600				$ 1,800
Current liabilities related to indemnifications	500				500
Long-term liabilities related to indemnifications	1,100				1,300
Product claim liabilities	138				138
Multi-employer pension plan withdrawal liability	884				960
Other	531				664
Liabilities for contingency	1,553				1,762
Warranty claims [Abstract]
Warranty liabilities, Current	17,119				16,619
Warranty liabilities, Noncurrent	60,442				59,943
Environmental [Abstract]
Environmental remediation estimate				$ 1,800
Environmental liability within current liabilities					300
Environmental liability within other long-term liabilities	1,200				1,200
Litigation Settlement, Amount	5,000		$ 5,000
Windows and Doors [Member]
Environmental [Abstract]
Environmental liability within current liabilities	300
Ply Gem Canada [Member]
Environmental [Abstract]
Environmental liability within current liabilities	100
indemnification of liabilities in excess of [Member]
Indemnification [Abstract]
Other	2,500
attorney fees [Member]
Environmental [Abstract]
Litigation Settlement, Amount	(2,500)
Warranty claims [Member]
Change in the Company's warranty liabilities [Roll Forward]
Balance, beginning of period	76,562	$ 84,423
Warranty expense during period	5,512	5,027
Settlements made during period	(4,613)	(5,169)
Balance, end of period	77,461	$ 84,281	$ 84,423
class action settlement [Member]
Environmental [Abstract]
Loss Contingency, Estimate of Possible Loss	1,500
Other Current Liabilities [Member] | class action settlement [Member]
Environmental [Abstract]
Loss Contingency, Estimate of Possible Loss	700				700
Other Noncurrent Liabilities [Member] | class action settlement [Member]
Environmental [Abstract]
Loss Contingency, Estimate of Possible Loss	$ 810				$ 829

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ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015	Dec. 31, 2015
Accrued expenses [Abstract]
Insurance	$ 9,465		$ 9,347
Employee compensation and benefits	13,781		20,381
Sales and marketing	33,835		50,405
Product warranty	17,119		16,619
Accrued freight	1,519		1,445
Accrued interest	7,150		17,808
Accrued environmental liability	437		430
Accrued pension	647		647
Accrued sales returns and discounts	4,728		3,368
Accrued taxes	5,436		5,575
Other	22,446		26,237
Accrued expenses	117,263		152,962
Other long-term liabilities [Abstract]
Insurance	1,302		1,237
Pension liabilities	14,827		15,033
Multi-employer pension plan withdrawal liability	884		960
Product warranty	60,442		59,943
Long-term product claim liability	138		138
Long-term environmental liability	1,196		1,211
Liabilities for tax uncertainties	2,928		2,866
Other	7,243		8,676
Other long-term liabilities	89,770		90,893
Long term incentive plan expense	1,700	$ 700
Long term incentive plan liabilities	4,400		5,900
Other Employee Related Liabilities, Current	3,400		3,100
other employee related liabilities, noncurrent	$ 1,000		$ 2,800

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INCOME TAXES (Details) - USD ($)	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015	Dec. 31, 2015
Income Tax Contingency [Line Items]
Tax receivable agreement payable - current	$ 3,005,000		$ 3,005,000
Estimated effective income tax rate	5.40%
Estimated effective income tax rate including discrete items	5.10%
Tax expense	$ 1,500,000	$ 2,400,000
Deferred tax liability resulting from goodwill	6,900,000
Unrecognized Tax Benefits, Interest on Income Taxes Expense	100,000
Tax receivable agreement adjustment	18,150,000	$ 17,185,000
tax receivable agreement payable	38,961,000		20,811,000
Tax receivable agreement payable - noncurrent	38,961,000		$ 20,811,000
estimate of maximum liability [Member]
Income Tax Contingency [Line Items]
tax receivable agreement payable	100,000,000
eighty five percentage receivable by affiliate [Member]
Income Tax Contingency [Line Items]
Tax receivable agreement adjustment	0.85
fifteen percent retained by Ply Gem [Member]
Income Tax Contingency [Line Items]
Tax receivable agreement adjustment	0.15
foreign jurisdiction [Member]
Income Tax Contingency [Line Items]
Book goodwill not amortized	$ 28,000,000

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INCOME TAXES tax uncertainties (Details) - USD ($) $ in Thousands	Apr. 02, 2016	Dec. 31, 2015
Income Tax Contingency [Line Items]
Liability for Uncertain Tax Positions, Noncurrent	$ 2,928	$ 2,866
Unrecognized Tax Benefits	$ 15,900

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STOCK-BASED COMPENSATION (Details) $ / shares in Units, $ in Thousands			3 Months Ended		12 Months Ended
	Dec. 11, 2015 member_of_board_of_directors shares	Dec. 28, 2014 member_of_board_of_directors shares	Apr. 02, 2016 USD ($) $ / shares shares	Apr. 04, 2015 USD ($)	Dec. 31, 2015 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Vested options (in shares)			2,334,356
Vesting percentage (in hundredths)			100.00%
Total unrecognized compensation expense | $			$ 1,000
Weighted average recognition period of unrecognized compensation expense			1 year 7 months 25 days
Restricted Stock [Abstract]
Compensation expense | $			$ 300	$ 500
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Stock options outstanding at beginning of period (in shares)			2,613,793
Granted			0
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares			$ 0.00
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period			0
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ / shares			$ 0.00
Forfeited or expired (in shares)			0
Stock options outstanding at end of period (in shares)			2,613,793		2,613,793
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Weighted average exercise price at beginning of period (in dollars per share) | $ / shares			$ 13.75
Weighted average exercise price at end of period (in dollars per share) | $ / shares			$ 13.75		$ 13.75
Weighted average remaining contractual term			4 years 11 months 15 days		5 years 2 months 19 days
Restricted Stock [Abstract]
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $ / shares			$ 0.00
Restricted Stock [Member] | Board of Directors [Member]
Restricted Stock [Abstract]
Compensation expense | $			$ 84	$ 84
Restricted Stock [Member] | December Award [Member]
Restricted Stock [Abstract]
Independent members of the Board of Directors receiving award | member_of_board_of_directors	4	4
Restricted Stock [Member] | December Award [Member] | Board of Directors [Member]
Restricted Stock [Abstract]
Restricted shares	25,664	23,944

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SEGMENT INFORMATION (Details) $ in Thousands	3 Months Ended
	Apr. 02, 2016 USD ($) segment	Apr. 04, 2015 USD ($) segment	Dec. 31, 2015 USD ($)
Segment Reporting Information [Line Items]
Reportable segments | segment	2	2
Net sales	$ 408,614	$ 376,048
Operating earnings (loss)	9,576	(14,050)
Total assets	1,210,853		$ 1,266,572
Siding, Fencing and Stone [Member]
Segment Reporting Information [Line Items]
Net sales	176,376	156,442
Operating earnings (loss)	20,374	10,322
Total assets	672,389		664,053
Windows and Doors [Member]
Segment Reporting Information [Line Items]
Net sales	232,238	219,606
Operating earnings (loss)	(1,250)	(16,408)
Total assets	497,510		498,994
Unallocated [Member]
Segment Reporting Information [Line Items]
Operating earnings (loss)	(9,548)	$ (7,964)
Total assets	$ 40,954		$ 103,525

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RELATED PARTY TRANSACTIONS (Details) - 2015 agreement [Member] - USD ($) $ in Millions	Apr. 02, 2016	Apr. 04, 2015
Chief Executive Officer [Member]
Related Party Transaction [Line Items]
Due to Officers or Stockholders		$ 3.0
Chief Financial Officer [Member]
Related Party Transaction [Line Items]
Due to Officers or Stockholders		$ 1.3
All retention payments [Member]
Related Party Transaction [Line Items]
Due to Officers or Stockholders	$ 4.3

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RESTRUCTURING (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Windows and Doors [Member] | Ply Gem Canada [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	$ (0.7)	$ (0.5)

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GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION, Condensed Consolidating Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS [Abstract]
Net sales	$ 408,614	$ 376,048
Cost of products sold	321,913	315,767
Gross profit	86,701	60,281
Operating expenses:
Selling, general and administrative expenses	70,735	68,132
Intercompany administrative charges	0	0
Amortization of intangible assets	6,390	6,199
Total operating expenses	77,125	74,331
Operating earnings	9,576	(14,050)
Foreign currency (loss) gain	584	(934)
Intercompany interest	0	0
Interest expense	(18,692)	(19,093)
Interest income	10	9
Tax receivable agreement liability adjustment	(18,150)	(17,185)
Gains (Losses) on Extinguishment of Debt	2,399	0
Intercompany administrative income	0	0
Equity in subsidiaries' income (loss)	0	0
Income (Loss) before provision (benefit) for income taxes	(29,071)	(51,253)
Provision (benefit) for income taxes	(1,494)	(2,394)
Net income (loss)	(27,577)	(48,859)
Other comprehensive income (loss):
Currency translation adjustment	4,773	(7,453)
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	(1,720)	2,102
Total comprehensive loss	(24,524)	(54,210)
Income (Loss) from Operations before Extraordinary Items	(29,071)	(51,253)
Guarantor Ply Gem Holdings, Inc. [Member]
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS [Abstract]
Net sales	0	0
Cost of products sold	0	0
Gross profit	0	0
Operating expenses:
Selling, general and administrative expenses	0	0
Intercompany administrative charges	0	0
Amortization of intangible assets	0	0
Total operating expenses	0	0
Operating earnings	0	0
Foreign currency (loss) gain	0	0
Intercompany interest	0	0
Interest expense	0	0
Interest income	0	0
Tax receivable agreement liability adjustment	0	0
Gains (Losses) on Extinguishment of Debt	0
Intercompany administrative income	0	0
Equity in subsidiaries' income (loss)	(27,577)	(48,859)
Income (Loss) before provision (benefit) for income taxes	(27,577)	(48,859)
Provision (benefit) for income taxes	0	0
Net income (loss)	(27,577)	(48,859)
Other comprehensive income (loss):
Currency translation adjustment	0	0
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	0	0
Total comprehensive loss	(27,577)	(48,859)
Income (Loss) from Operations before Extraordinary Items	0	0
Issuer Ply Gem Industries, Inc. [Member]
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS [Abstract]
Net sales	0	0
Cost of products sold	0	0
Gross profit	0	0
Operating expenses:
Selling, general and administrative expenses	9,548	7,964
Intercompany administrative charges	0	0
Amortization of intangible assets	0	0
Total operating expenses	9,548	7,964
Operating earnings	(9,548)	(7,964)
Foreign currency (loss) gain	0	0
Intercompany interest	15,933	15,778
Interest expense	(18,691)	(19,080)
Interest income	2	1
Tax receivable agreement liability adjustment	(18,150)	(17,185)
Gains (Losses) on Extinguishment of Debt	2,399
Intercompany administrative income	9,445	9,905
Equity in subsidiaries' income (loss)	(4,169)	(30,314)
Income (Loss) before provision (benefit) for income taxes	(27,577)	(48,859)
Provision (benefit) for income taxes	0	0
Net income (loss)	(27,577)	(48,859)
Other comprehensive income (loss):
Currency translation adjustment	0	0
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	0	0
Total comprehensive loss	(27,577)	(48,859)
Income (Loss) from Operations before Extraordinary Items	(23,408)	(18,545)
Guarantor Subsidiaries [Member]
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS [Abstract]
Net sales	369,514	327,391
Cost of products sold	289,872	276,444
Gross profit	79,642	50,947
Operating expenses:
Selling, general and administrative expenses	49,022	45,905
Intercompany administrative charges	7,772	8,755
Amortization of intangible assets	5,360	5,061
Total operating expenses	62,154	59,721
Operating earnings	17,488	(8,774)
Foreign currency (loss) gain	0	0
Intercompany interest	(15,550)	(13,929)
Interest expense	0	(4)
Interest income	2	2
Tax receivable agreement liability adjustment	0	0
Gains (Losses) on Extinguishment of Debt	0
Intercompany administrative income	0	0
Equity in subsidiaries' income (loss)	0	0
Income (Loss) before provision (benefit) for income taxes	1,940	(22,705)
Provision (benefit) for income taxes	(527)	(1,580)
Net income (loss)	2,467	(21,125)
Other comprehensive income (loss):
Currency translation adjustment	0	0
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	0	0
Total comprehensive loss	2,467	(21,125)
Income (Loss) from Operations before Extraordinary Items	1,940	(22,705)
Non-Guarantor Subsidiary [Member]
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS [Abstract]
Net sales	39,100	48,657
Cost of products sold	32,041	39,323
Gross profit	7,059	9,334
Operating expenses:
Selling, general and administrative expenses	12,165	14,263
Intercompany administrative charges	1,673	1,150
Amortization of intangible assets	1,030	1,138
Total operating expenses	14,868	16,551
Operating earnings	(7,809)	(7,217)
Foreign currency (loss) gain	584	(934)
Intercompany interest	(383)	(1,849)
Interest expense	(1)	(9)
Interest income	6	6
Tax receivable agreement liability adjustment	0	0
Gains (Losses) on Extinguishment of Debt	0
Intercompany administrative income	0	0
Equity in subsidiaries' income (loss)	0	0
Income (Loss) before provision (benefit) for income taxes	(7,603)	(10,003)
Provision (benefit) for income taxes	(967)	(814)
Net income (loss)	(6,636)	(9,189)
Other comprehensive income (loss):
Currency translation adjustment	4,773	(7,453)
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	(1,720)	2,102
Total comprehensive loss	(3,583)	(14,540)
Income (Loss) from Operations before Extraordinary Items	(7,603)	(10,003)
Consolidating Adjustments [Member]
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS [Abstract]
Net sales	0	0
Cost of products sold	0	0
Gross profit	0	0
Operating expenses:
Selling, general and administrative expenses	0	0
Intercompany administrative charges	(9,445)	(9,905)
Amortization of intangible assets	0	0
Total operating expenses	(9,445)	(9,905)
Operating earnings	9,445	9,905
Foreign currency (loss) gain	0	0
Intercompany interest	0	0
Interest expense	0	0
Interest income	0	0
Tax receivable agreement liability adjustment	0	0
Gains (Losses) on Extinguishment of Debt	0
Intercompany administrative income	(9,445)	(9,905)
Equity in subsidiaries' income (loss)	31,746	79,173
Income (Loss) before provision (benefit) for income taxes	31,746	79,173
Provision (benefit) for income taxes	0	0
Net income (loss)	31,746	79,173
Other comprehensive income (loss):
Currency translation adjustment	0	0
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	0	0
Total comprehensive loss	31,746	79,173
Income (Loss) from Operations before Extraordinary Items	$ 0	$ 0

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GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION, Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015	Dec. 31, 2015	Dec. 31, 2014
Proceeds from (Repayments of) Lines of Credit	$ 10,000	$ 60,000
Current Assets:
Cash and cash equivalents	34,341	22,444	$ 109,425	$ 33,162
Accounts receivable, net	204,159		195,165
Inventories:
Raw materials	69,335		64,002
Work in process	24,469		25,319
Finished goods	67,602		61,082
Total inventory	161,406		150,403
Prepaid expenses and other current assets	24,200		24,647
Deferred income taxes	14,202		11,261
Total current assets	438,308		490,901
Investments in subsidiaries	0		0
Property and Equipment, at cost:
Land	8,222		8,175
Buildings and improvements	67,177		66,321
Machinery and equipment	392,127		385,750
Total property and equipment	467,526		460,246
Less accumulated depreciation	(305,749)		(299,243)
Total property and equipment, net	161,777		161,003
Other Assets:
Intangible assets, net	122,957		128,384
Goodwill	479,549		477,739
Intercompany note receivable	0		0
Other	8,262		8,545
Total other assets	610,768		614,668
Total Assets	1,210,853		1,266,572
Current Liabilities:
Less current portion of long-term debt	4,300		4,300
Accounts payable	73,793		74,496
Accrued expenses	117,263		152,962
Tax receivable agreement payable - current	3,005		3,005
Total current liabilities	198,361		234,763
Deferred income taxes	24,642		21,387
Intercompany note payable	0		0
tax receivable agreement payable	38,961		20,811
Other long-term liabilities	89,770		90,893
Long-term debt, less current portion	$ 960,120		$ 975,531
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	$ 0		$ 0
Common stock	681		681
Additional paid-in-capital	749,633		749,296
(Accumulated deficit) retained earnings	(817,801)		(790,224)
Accumulated other comprehensive loss	(33,514)		(36,566)
Total stockholders' deficit	(101,001)		(76,813)
Total Liabilities and Stockholder's Deficit	1,210,853		1,266,572
Guarantor Ply Gem Holdings, Inc. [Member]
Proceeds from (Repayments of) Lines of Credit	0	0
Current Assets:
Cash and cash equivalents	0	0	0	0
Accounts receivable, net	0		0
Inventories:
Raw materials	0		0
Work in process	0		0
Finished goods	0		0
Total inventory	0		0
Prepaid expenses and other current assets	0		0
Deferred income taxes	0		0
Total current assets	0		0
Investments in subsidiaries	(101,001)		(76,813)
Property and Equipment, at cost:
Land	0		0
Buildings and improvements	0		0
Machinery and equipment	0		0
Total property and equipment	0		0
Less accumulated depreciation	0		0
Total property and equipment, net	0		0
Other Assets:
Intangible assets, net	0		0
Goodwill	0		0
Intercompany note receivable	0		0
Other	0		0
Total other assets	0		0
Total Assets	(101,001)		(76,813)
Current Liabilities:
Less current portion of long-term debt	0		0
Accounts payable	0		0
Accrued expenses	0		0
Tax receivable agreement payable - current	0		0
Total current liabilities	0		0
Deferred income taxes	0		0
Intercompany note payable	0		0
tax receivable agreement payable	0		0
Other long-term liabilities	0		0
Long-term debt, less current portion	$ 0		$ 0
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	$ 0		$ 0
Common stock	681		681
Additional paid-in-capital	749,633		749,296
(Accumulated deficit) retained earnings	(817,801)		(790,224)
Accumulated other comprehensive loss	(33,514)		(36,566)
Total stockholders' deficit	(101,001)		(76,813)
Total Liabilities and Stockholder's Deficit	(101,001)		(76,813)
Issuer Ply Gem Industries, Inc. [Member]
Proceeds from (Repayments of) Lines of Credit	10,000	60,000
Current Assets:
Cash and cash equivalents	31,687	27,796	94,692	23,555
Accounts receivable, net	0		0
Inventories:
Raw materials	0		0
Work in process	0		0
Finished goods	0		0
Total inventory	0		0
Prepaid expenses and other current assets	1,437		944
Deferred income taxes	0		0
Total current assets	33,124		95,636
Investments in subsidiaries	(248,594)		(245,265)
Property and Equipment, at cost:
Land	0		0
Buildings and improvements	0		0
Machinery and equipment	5,175		4,813
Total property and equipment	5,175		4,813
Less accumulated depreciation	(1,816)		(1,755)
Total property and equipment, net	3,359		3,058
Other Assets:
Intangible assets, net	0		0
Goodwill	0		0
Intercompany note receivable	1,135,073		1,104,510
Other	4,471		4,831
Total other assets	1,139,544		1,109,341
Total Assets	927,433		962,770
Current Liabilities:
Less current portion of long-term debt	4,300		4,300
Accounts payable	181		235
Accrued expenses	13,470		24,512
Tax receivable agreement payable - current	3,005		3,005
Total current liabilities	20,956		32,052
Deferred income taxes	0		0
Intercompany note payable	0		0
tax receivable agreement payable	38,961		20,811
Other long-term liabilities	8,397		11,189
Long-term debt, less current portion	$ 960,120		$ 975,531
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	$ 0		$ 0
Common stock	681		681
Additional paid-in-capital	749,633		749,296
(Accumulated deficit) retained earnings	(817,801)		(790,224)
Accumulated other comprehensive loss	(33,514)		(36,566)
Total stockholders' deficit	(101,001)		(76,813)
Total Liabilities and Stockholder's Deficit	927,433		962,770
Guarantor Subsidiaries [Member]
Proceeds from (Repayments of) Lines of Credit	0	0
Current Assets:
Cash and cash equivalents	(6,952)	(11,423)	(4,944)	(5,845)
Accounts receivable, net	182,854		172,560
Inventories:
Raw materials	63,500		58,400
Work in process	22,420		23,126
Finished goods	52,733		47,946
Total inventory	138,653		129,472
Prepaid expenses and other current assets	18,446		20,310
Deferred income taxes	14,202		11,255
Total current assets	347,203		328,653
Investments in subsidiaries	0		0
Property and Equipment, at cost:
Land	7,436		7,436
Buildings and improvements	62,458		61,883
Machinery and equipment	368,643		364,093
Total property and equipment	438,537		433,412
Less accumulated depreciation	(293,909)		(288,542)
Total property and equipment, net	144,628		144,870
Other Assets:
Intangible assets, net	106,840		112,173
Goodwill	449,366		449,366
Intercompany note receivable	0		0
Other	3,791		3,714
Total other assets	559,997		565,253
Total Assets	1,051,828		1,038,776
Current Liabilities:
Less current portion of long-term debt	0		0
Accounts payable	62,488		60,655
Accrued expenses	89,679		113,051
Tax receivable agreement payable - current	0		0
Total current liabilities	152,167		173,706
Deferred income taxes	20,483		17,470
Intercompany note payable	1,027,543		1,002,447
tax receivable agreement payable	0		0
Other long-term liabilities	77,386		75,911
Long-term debt, less current portion	$ 0		$ 0
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	$ 0		$ 0
Common stock	0		0
Additional paid-in-capital	372,720		370,180
(Accumulated deficit) retained earnings	(582,497)		(584,964)
Accumulated other comprehensive loss	(15,974)		(15,974)
Total stockholders' deficit	(225,751)		(230,758)
Total Liabilities and Stockholder's Deficit	1,051,828		1,038,776
Non-Guarantor Subsidiary [Member]
Proceeds from (Repayments of) Lines of Credit	0	0
Current Assets:
Cash and cash equivalents	9,606	6,071	19,677	15,452
Accounts receivable, net	21,305		22,605
Inventories:
Raw materials	5,835		5,602
Work in process	2,049		2,193
Finished goods	14,869		13,136
Total inventory	22,753		20,931
Prepaid expenses and other current assets	4,317		3,393
Deferred income taxes	0		6
Total current assets	57,981		66,612
Investments in subsidiaries	0		0
Property and Equipment, at cost:
Land	786		739
Buildings and improvements	4,719		4,438
Machinery and equipment	18,309		16,844
Total property and equipment	23,814		22,021
Less accumulated depreciation	(10,024)		(8,946)
Total property and equipment, net	13,790		13,075
Other Assets:
Intangible assets, net	16,117		16,211
Goodwill	30,183		28,373
Intercompany note receivable	0		0
Other	0		0
Total other assets	46,300		44,584
Total Assets	118,071		124,271
Current Liabilities:
Less current portion of long-term debt	0		0
Accounts payable	11,124		13,606
Accrued expenses	14,114		15,399
Tax receivable agreement payable - current	0		0
Total current liabilities	25,238		29,005
Deferred income taxes	4,159		3,917
Intercompany note payable	107,530		102,063
tax receivable agreement payable	0		0
Other long-term liabilities	3,987		3,793
Long-term debt, less current portion	$ 0		$ 0
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	$ 0		$ 0
Common stock	0		0
Additional paid-in-capital	26,854		31,611
(Accumulated deficit) retained earnings	(32,182)		(25,546)
Accumulated other comprehensive loss	(17,515)		(20,572)
Total stockholders' deficit	(22,843)		(14,507)
Total Liabilities and Stockholder's Deficit	118,071		124,271
Consolidating Adjustments [Member]
Proceeds from (Repayments of) Lines of Credit	0	0
Current Assets:
Cash and cash equivalents	0	$ 0	0	$ 0
Accounts receivable, net	0		0
Inventories:
Raw materials	0		0
Work in process	0		0
Finished goods	0		0
Total inventory	0		0
Prepaid expenses and other current assets	0		0
Deferred income taxes	0		0
Total current assets	0		0
Investments in subsidiaries	349,595		322,078
Property and Equipment, at cost:
Land	0		0
Buildings and improvements	0		0
Machinery and equipment	0		0
Total property and equipment	0		0
Less accumulated depreciation	0		0
Total property and equipment, net	0		0
Other Assets:
Intangible assets, net	0		0
Goodwill	0		0
Intercompany note receivable	(1,135,073)		(1,104,510)
Other	0		0
Total other assets	(1,135,073)		(1,104,510)
Total Assets	(785,478)		(782,432)
Current Liabilities:
Less current portion of long-term debt	0		0
Accounts payable	0		0
Accrued expenses	0		0
Tax receivable agreement payable - current	0		0
Total current liabilities	0		0
Deferred income taxes	0		0
Intercompany note payable	(1,135,073)		(1,104,510)
tax receivable agreement payable	0		0
Other long-term liabilities	0		0
Long-term debt, less current portion	$ 0		$ 0
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock	$ 0		$ 0
Common stock	(681)		(681)
Additional paid-in-capital	(1,149,207)		(1,151,087)
(Accumulated deficit) retained earnings	1,432,480		1,400,734
Accumulated other comprehensive loss	67,003		73,112
Total stockholders' deficit	349,595		322,078
Total Liabilities and Stockholder's Deficit	$ (785,478)		$ (782,432)

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GUARANTOR/NON-GUARANTOR FINANCIAL INFORMATION, Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Apr. 02, 2016	Apr. 04, 2015	Dec. 31, 2014
Payments to Acquire Productive Assets	$ 7,732	$ 7,071
Cash flows from operating activities:
Net income (loss)	(27,577)	(48,859)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization expense	14,030	14,821
Restructuring Costs	566	46
Non-cash interest expense, net	3,416	3,419
(Gain) Loss on foreign currency transactions	584	(934)
Litigation Settlement, Amount	(5,000)		$ (5,000)
Gains (Losses) on Extinguishment of Debt	2,399	0
Stock based compensation	337	586
Deferred income taxes	65	1,019
Tax receivable agreement liability adjustment	(18,150)	(17,185)
(Decrease) increase in tax uncertainty, net of valuation allowance	62	73
Equity Income In Consolidated Subsidiaries	0	0
Other	138	(13)
Changes in operating assets and liabilities:
Accounts receivable, net	(9,134)	(5,964)
Inventories	(10,978)	469
Prepaid expenses and other current assets	(255)	4,793
Accounts payable	(875)	(7,801)
Accrued expenses	(37,775)	(39,757)
Cash payments on restructuring liabilities	(668)	(473)
Other	137	(1,469)
Net cash used in operating activities	(48,546)	(60,991)
Cash flows from financing activities:
Net revolver borrowings	10,000	60,000
Repayments of Senior Debt	(31,075)	(1,075)
Proceeds from Stock Options Exercised	0	182
Proceeds from intercompany investment	0	0
Net cash provided by (used in) financing activities	(21,075)	59,107
Impact of exchange rate movements on cash	2,193	(1,788)
Net decrease in cash and cash equivalents	(75,084)	(10,718)
Cash and cash equivalents at the beginning of the period	109,425	33,162
Cash and cash equivalents at the end of the period	34,341	22,444	33,162
Proceeds from sale of assets	76	25
Net Cash Provided by (Used in) Investing Activities	(7,656)	(7,046)
Guarantor Ply Gem Holdings, Inc. [Member]
Payments to Acquire Productive Assets	0	0
Cash flows from operating activities:
Net income (loss)	(27,577)	(48,859)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization expense	0	0
Restructuring Costs	0	0
Non-cash interest expense, net	0	0
(Gain) Loss on foreign currency transactions	0	0
Gains (Losses) on Extinguishment of Debt	0
Stock based compensation	0	0
Deferred income taxes	0	0
Tax receivable agreement liability adjustment	0	0
(Decrease) increase in tax uncertainty, net of valuation allowance	0	0
Equity Income In Consolidated Subsidiaries	27,577	48,859
Other	0	0
Changes in operating assets and liabilities:
Accounts receivable, net	0	0
Inventories	0	0
Prepaid expenses and other current assets	0	0
Accounts payable	0	0
Accrued expenses	0	0
Cash payments on restructuring liabilities	0	0
Other	0	0
Net cash used in operating activities	0	0
Cash flows from financing activities:
Net revolver borrowings	0	0
Repayments of Senior Debt	0	0
Proceeds from Stock Options Exercised		0
Proceeds from intercompany investment	0	0
Net cash provided by (used in) financing activities	0	0
Impact of exchange rate movements on cash	0	0
Net decrease in cash and cash equivalents	0	0
Cash and cash equivalents at the beginning of the period	0	0
Cash and cash equivalents at the end of the period	0	0	0
Proceeds from sale of assets	0	0
Net Cash Provided by (Used in) Investing Activities	0	0
Issuer Ply Gem Industries, Inc. [Member]
Payments to Acquire Productive Assets	362	67
Cash flows from operating activities:
Net income (loss)	(27,577)	(48,859)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization expense	61	150
Restructuring Costs	0	0
Non-cash interest expense, net	3,416	3,419
(Gain) Loss on foreign currency transactions	0	0
Gains (Losses) on Extinguishment of Debt	2,399
Stock based compensation	337	586
Deferred income taxes	0	0
Tax receivable agreement liability adjustment	(18,150)	(17,185)
(Decrease) increase in tax uncertainty, net of valuation allowance	0	0
Equity Income In Consolidated Subsidiaries	4,169	30,314
Other	0	0
Changes in operating assets and liabilities:
Accounts receivable, net	0	0
Inventories	0	0
Prepaid expenses and other current assets	(285)	755
Accounts payable	(54)	(57)
Accrued expenses	(13,833)	(16,211)
Cash payments on restructuring liabilities	0	0
Other	0	0
Net cash used in operating activities	(13,217)	(12,718)
Cash flows from financing activities:
Net revolver borrowings	10,000	60,000
Repayments of Senior Debt	(31,075)	(1,075)
Proceeds from Stock Options Exercised		182
Proceeds from intercompany investment	(28,351)	(42,081)
Net cash provided by (used in) financing activities	(49,426)	17,026
Impact of exchange rate movements on cash	0	0
Net decrease in cash and cash equivalents	(63,005)	4,241
Cash and cash equivalents at the beginning of the period	94,692	23,555
Cash and cash equivalents at the end of the period	31,687	27,796	23,555
Proceeds from sale of assets	0	0
Net Cash Provided by (Used in) Investing Activities	(362)	(67)
Guarantor Subsidiaries [Member]
Payments to Acquire Productive Assets	6,946	6,026
Cash flows from operating activities:
Net income (loss)	2,467	(21,125)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization expense	12,379	12,840
Restructuring Costs	0	0
Non-cash interest expense, net	0	0
(Gain) Loss on foreign currency transactions	0	0
Gains (Losses) on Extinguishment of Debt	0
Stock based compensation	0	0
Deferred income taxes	65	1,019
Tax receivable agreement liability adjustment	0	0
(Decrease) increase in tax uncertainty, net of valuation allowance	62	73
Equity Income In Consolidated Subsidiaries	0	0
Other	138	(13)
Changes in operating assets and liabilities:
Accounts receivable, net	(11,718)	(6,729)
Inventories	(10,511)	2,304
Prepaid expenses and other current assets	(68)	4,161
Accounts payable	(3,995)	(8,736)
Accrued expenses	(25,802)	(26,275)
Cash payments on restructuring liabilities	(112)	(44)
Other	139	(1,469)
Net cash used in operating activities	(36,956)	(43,994)
Cash flows from financing activities:
Net revolver borrowings	0	0
Repayments of Senior Debt	0	0
Proceeds from Stock Options Exercised		0
Proceeds from intercompany investment	41,818	44,417
Net cash provided by (used in) financing activities	41,818	44,417
Impact of exchange rate movements on cash	0	0
Net decrease in cash and cash equivalents	(2,008)	(5,578)
Cash and cash equivalents at the beginning of the period	(4,944)	(5,845)
Cash and cash equivalents at the end of the period	(6,952)	(11,423)	(5,845)
Proceeds from sale of assets	76	25
Net Cash Provided by (Used in) Investing Activities	(6,870)	(6,001)
Non-Guarantor Subsidiary [Member]
Payments to Acquire Productive Assets	424	978
Cash flows from operating activities:
Net income (loss)	(6,636)	(9,189)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization expense	1,590	1,831
Restructuring Costs	566	46
Non-cash interest expense, net	0	0
(Gain) Loss on foreign currency transactions	584	(934)
Gains (Losses) on Extinguishment of Debt	0
Stock based compensation	0	0
Deferred income taxes	0	0
Tax receivable agreement liability adjustment	0	0
(Decrease) increase in tax uncertainty, net of valuation allowance	0	0
Equity Income In Consolidated Subsidiaries	0	0
Other	0	0
Changes in operating assets and liabilities:
Accounts receivable, net	2,584	765
Inventories	(467)	(1,835)
Prepaid expenses and other current assets	98	(123)
Accounts payable	3,174	992
Accrued expenses	1,860	2,729
Cash payments on restructuring liabilities	(556)	(429)
Other	(2)	0
Net cash used in operating activities	1,627	(4,279)
Cash flows from financing activities:
Net revolver borrowings	0	0
Repayments of Senior Debt	0	0
Proceeds from Stock Options Exercised		0
Proceeds from intercompany investment	(13,467)	(2,336)
Net cash provided by (used in) financing activities	(13,467)	(2,336)
Impact of exchange rate movements on cash	2,193	(1,788)
Net decrease in cash and cash equivalents	(10,071)	(9,381)
Cash and cash equivalents at the beginning of the period	19,677	15,452
Cash and cash equivalents at the end of the period	9,606	6,071	15,452
Proceeds from sale of assets	0	0
Net Cash Provided by (Used in) Investing Activities	(424)	(978)
Consolidating Adjustments [Member]
Payments to Acquire Productive Assets	0	0
Cash flows from operating activities:
Net income (loss)	31,746	79,173
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization expense	0	0
Restructuring Costs	0	0
Non-cash interest expense, net	0	0
(Gain) Loss on foreign currency transactions	0	0
Gains (Losses) on Extinguishment of Debt	0
Stock based compensation	0	0
Deferred income taxes	0	0
Tax receivable agreement liability adjustment	0	0
(Decrease) increase in tax uncertainty, net of valuation allowance	0	0
Equity Income In Consolidated Subsidiaries	(31,746)	(79,173)
Other	0	0
Changes in operating assets and liabilities:
Accounts receivable, net	0	0
Inventories	0	0
Prepaid expenses and other current assets	0	0
Accounts payable	0	0
Accrued expenses	0	0
Cash payments on restructuring liabilities	0	0
Other	0	0
Net cash used in operating activities	0	0
Cash flows from financing activities:
Net revolver borrowings	0	0
Repayments of Senior Debt	0	0
Proceeds from Stock Options Exercised		0
Proceeds from intercompany investment	0	0
Net cash provided by (used in) financing activities	0	0
Impact of exchange rate movements on cash	0	0
Net decrease in cash and cash equivalents	0	0
Cash and cash equivalents at the beginning of the period	0	0
Cash and cash equivalents at the end of the period	0	0	$ 0
Proceeds from sale of assets	0	0
Net Cash Provided by (Used in) Investing Activities	$ 0	$ 0