MILLER TABAK ROBERTS SECURITIES, LLC

331 MADISON AVENUE NEW YORK, NEW YORK 10017 (212) 867-7959 FAX (212) 867-6492 (800) 452-4528 (888) HI-YIELD

www.MTRdirect.com Please refer to the last page of this report for important disclosures

HIGH YIELD RESEARCH

REPORT ________________________________________________________________________

Ply Gem Holdings, Inc. (PLYGEM)

Coupon Description Maturity Mdy's/S&P Amt O/S Bond Price Curr. Yield Spread YTW9.0% Senior Subordinated Notes 2/15/2012 B3/B- $ 360MM 90.50 9.95% 628 11.31%

CUSIP # 729416AG2. Moody's and S&P's outlooks are negative. June 14, 2006 Ronald A. Rich (212) 692-5185 rrich@mtrdirect.com OPINION We initiate coverage of Ply Gem with a BUY recommendation on the 9.0% Senior Subordinated Notes. Faced with an increasingly challenged new home construction market and a volatile raw material cost environment, Ply Gem is positioned to mitigate negative macro trends. We project positive free cash flow generation in the coming years, despite assumptions that incorporate a slowdown in certain of the company’s business lines. While investor concern regarding the residential construction sector may cause further volatility in the bonds and a widening in spreads, we expect the Notes to outperform comparably rated sector peers in the medium-term. Based on our pricing analysis of the bonds of Ply Gem’s peer group, as well as our view to company fundamentals, we find the 9.0% Senior Subordinated Notes currently priced at a 230bp discount to comparable residential construction-related securities. SUMMARY • While Ply Gem has significant exposure to a slowing new home construction market (68% of

net sales), we believe that it is positioned to partially offset this macro trend with new siding business at 84 Lumber; increased Window and Door sales in Alberta, Canada and the southern U.S. (the latter through its February 2006 acquisition of AWC Holding); and cost-side synergies that should be achieved through enhanced purchasing savings and broadened vertical integration.

• With the balance of Ply Gem’s business targeted to the less volatile repair and remodel market, we project a rebound in repair/remodel Windows and Doors unit volumes in 2007, due to improved service levels following product re-launches.

• Ply Gem’s gross margins have material exposure to raw materials that include PVC, aluminum, glass, and fuel used in transportation. While the company has successfully passed through higher resin costs, it is still working to recover higher aluminum costs.

• With pro forma, for its latest acquisition, LTM adjusted EBITDA at $135.5 million for the period ending March 31, 2006, we project adjusted EBITDA to be slightly down from the pro forma figure through 2006 and to increase 7.5% year-over-year in 2007. We anticipate that liquidity will improve to $118.0 million and $133.2 million in the fourth quarters of 2006 and 2007, respectively, from $92.2 million at the end of 2005.

• Future acquisitions and possible dividend recapitalizations place the company’s credit quality at risk, though the company’s near-term acquisition appetite may currently be tempered given the slowing housing market, the ongoing integration of recent acquisitions and the planned retirement of its CEO, Lee Meyer.

2

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

3

Figure 1 PLY GEM HOLDINGS

Business Structure

Distribution Manufacturing 2005Corporate Entity Operating Segments Brands Regions Served Channels Locations Competition PF Net Sales

Variform, Patriot Manufacturing

Siding and Accessories

Georgia-Pacific, Napco, Variform, Durabuilt (Lowe's)

Nationwide

(1) Specialty distributors (1-step),

wholesale distributors (2-step)

Missouri, West Virginia,

Tennessee, Pennsylvania

(metals)

Owens Corning, Alcoa,

CertainTeed, Alside

Kroy Building Products

Fencing, Railing, Decking

Kroy, Assurance, Georgia-Pacific,

Fusion Fence (Lowe's)Nationwide

Fabricators, distributors, retail

home centers, lumberyards

Nebraska, North Carolina

U.S. Fence, Homeland, Westech, Bufftech, Outdoor

Technologies, Royal

Great Lakes Window Windows and Doors Great Lakes East North Central

(2) Building material dealers, distributors Ohio

Napco Window Systems Windows and Doors Napco Mid-Atlantic Building material

dealers, distributors Pennsylvania

CWD Windows and Doors Windows and Doors CWD Calgary, Canada

Builder buying groups, retail lumberyards

Calgary, Canada $ 58.2MM

MW Manufacturers Windows and Doors MW, Patriot, TwinsealMid-Atlantic, East

South Central, South Atlantic

Building material dealers, large

regional chains, builders, retail home

centers

New Jersey, Virginia,

Mississippi$ 292.1MM

AWC Holding Windows and Doors AlencoWest South Central,

South Atlantic, Mountain

Building material dealers

Texas, Georgia, Arizona $ 135.2MM

Source: Company reports and MTR.(1) Specialty distributors sell directly to remodeling contractors and builders. Wholesale distributors sell to retail home centers and lumberyards who, in turn, sell to remodeling contractors, builders and consumers.(2) Building material dealers typically market directly to homeowners or contractors in connection with repair/remodel while distributors concentrate on local independent retailers.

$ 390.9MM

$ 97.6MM

MI Home Products, Silverline, Simonton,

Milgard (Masco), Atrium, Alside

Customers. With 41% of SFDR products sold to BlueLinx (formerly a distribution arm of Georgia-Pacific Corporation) under the GP brand, recent acquisitions have helped to reduce Ply Gem’s exposure to this large customer; the relationship accounted for approximately 16% of pro forma consolidated 2005 net sales, with another 10% of segment sales made to Lowe’s and Home Depot (see Figure 2). Management has recently mentioned that it will be leveraging its strong windows and doors relationship with 84 Lumber to sell more siding, a deal which it expects to account for tens of millions of dollars in sales. Ply Gem Industries’ windows and doors products are sold through a diversified customer base of dealers and distributors (dealers typically market directly to homeowners and contractors). CWD Windows and Doors is the one division of Ply Gem Industries that is discernibly thriving, growing 19.0% in fiscal 2005. Eighty percent of window and door sales in Canada are made to the new construction market, which the Canada Mortgage and Housing Corporation expects to remain robust due to strong demand created by increased oil exploration in Alberta, Canada (see Markets).

4

Figure 2PLY GEM HOLDINGSCustomer Concentration

Ply Gem '05 Rev (a) Co. Sales Growth Customer CompanyCompany Business Dollars % PF '05 2003 2004 2005 End-Markets Regions Served 2005 Sales Notes

BlueLinx Distributor $ 158.7MM 16.3% 7.2% 16.0% 9.4% (b)

50% New Home Construction, 15% Repair/Remodel

Nationwide $ 2.1BN Focusing on specialty product growth.

NVR Homebuilder $ 40.3MM 4.1% 17.7% 18.0% 21.9% (c)

98% New Home Construction, 2% Mortgage Banking

Mid-Atlantic, South Atlantic,

Midwest$ 5.2BN

Washington, DC and Baltimore, MD metro areas

account for 52% of 2005 homebuilding revenue.

Builders FirstSource Distributor $ 34.5MM 3.5% NA 10.3% 14.4% (d)100% New Home

ConstructionSouthern and Eastern U.S. $ 447.5MM Targets production

homebuilders.

Lowe's Distributor $ 29.3MM 3.0% 18.3% 21.8% 23.6% (e) Repair/Remodel Nationwide $ 43.2BN

Stock Building Supply Distributor $ 25.5MM 2.6% 0.0% 30.0% 27.2% (f)87% New

Construction

Nationwide, operating in 30

states$ 2.5BN Subsidiary of Wolseley plc.

Home Depot Distributor $ 9.8MM 1.0% 11.8% 18.6% 10.6% (g) Repair/Remodel

Nationwide, Canada,

Mexico, Puerto Rico

$ 81.5BN

84 Lumber Distr/Manuf NA NA 20.5% 30.6% 13.3% 85% New Home Construction Nationwide $ 3.9BN

Source: Company reports and MTR.(a) Percentages are pro forma of the AWC Holding acquisition.(b) Sales and growth figures reflect specialty products which include vinyl siding, composite decking, moulding, insulation, roofing, hardwood plywood and engineered lumber. Comprised 39.9% of siding, fencing, railing, decking segment.(c) Sales and growth figures reflect homebuilding segment.(d) Sales and growth figures reflect Windows & Doors product category.(e) Ply Gem figures have been estimated. Lowe's sales growth reflects its building materials product category.(f) As reported in the U.S. Building Materials segment of Wolseley plc.(g) Ply Gem figures have been estimated. Home Depot sales growth reflects its building materials, lumber and millwork product category. MW Windows On August 27, 2004, Ply Gem acquired MWM Holding (“MW”) from Investcorp for $320.0 million, at an estimated trailing EBITDA multiple of 8.5x and an estimated post-synergies EBITDA multiple of 7.2x. MW is a leading low-cost, vertically-integrated manufacturer of vinyl, vinyl clad-wood, wood and composite windows that also manufactures vinyl patio doors and marketing steel and fiberglass exterior doors. With fiscal 2005 net sales of $292.1 million and EBITDA of $47.6 million, MW was a very significant addition to Ply Gem’s Windows and Doors segment. Synergies. The acquisition of MW in 2004 provided Ply Gem with the opportunity to leverage a number of sales and cost-side synergies; total cost-side synergies were estimated at $7.0 million at the time of acquisition. On the cost-side, the purchase of MW has allowed Ply Gem to improve raw material purchasing power (PVC, wood, aluminum and glass), source PVC from the siding business for the manufacture of vinyl lineals (used in the construction of the vinyl window frame) at MW, and leverage the vertical integration of MW’s manufacturing capabilities to produce vinyl lineals for the repair/remodel window business (traditionally outsourced). With $2.0 million of cost-side savings achieved in 2005, management expects to phase-in additional savings of $5.0 million beginning in the third quarter of 2006, which are anticipated to be fully realized by the first quarter of 2007. As for sales-side synergies, the acquisition presents the opportunity to exploit economies of scope across markets and customers. Geographic Footprint. With a network of vertically-integrated production and distribution facilities located in New Jersey, North Carolina, Virginia and Mississippi, the acquisition of MW expanded Ply Gem’s footprint to include the Mid-Atlantic and South Atlantic regions. Window distribution is closely tied to proximity to manufacturing facilities, given on-time delivery requirements and the potential for glass breakage. As discussed below in the Markets section, new home construction remains near historical highs in the Northeast, though down significantly in the Southeast; net sales orders of the major home builders have declined materially in both regions.

5

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

6

factors that affect the Company’s product, raw material and geographic markets. The following section will discuss those markets that directly impact Ply Gem and their corresponding drivers. Windows and Doors Pro forma for the Alenco acquisition, Ply Gem’s Windows and Doors segment comprised 61% of 2005 net sales, up from 30% in 2003. While Ply Gem’s product line has historically concentrated on vinyl windows and doors, the purchase of Alenco has increased the Company’s focus on aluminum products, which comprised an estimated $90 million of Alenco’s 2005 net sales. Domestic window and door demand has grown rapidly over the past ten years, driven by growth in remodeling and an increasing trend toward larger homes that require a greater number of windows. The vinyl window’s initial success in the marketplace came at the expense of aluminum, but it is increasingly taking market share from wood. Vinyl’s success in the repair/remodel market stems from the manufacturing flexibility required to produce a wide variety of custom sizes. In 2004, Ducker Research, a market intelligence firm, estimated that vinyl windows accounted for 35.1% of all windows used in new construction and 52.3% of windows used in the repair and remodel market (see Figures 3,4). The Freedonia Group has estimated that window demand for the year-ended 2004 was comprised of 47% vinyl, 41% wood and 10% aluminum, with vinyl window demand growing at a compounded annual rate of 5.0% between 2002 and 2012. Due primarily to the aluminum window’s higher transference of cold air, high strength-to-weight ratio and lower price, the material garners greater market share in warmer climates and coastal areas; Ducker Research determined that aluminum had a 48% market share of Florida window shipments in 2003, while vinyl and wood’s market shares were 28% and 23%, respectively. As for future market share allocation, industry participants expect vinyl to continue to take share from wood and aluminum, except in regions where aluminum has a competitive advantage. Figure 3 Figure 4

Source: Ducker Research Co. from National Fenestration Rating Council Source: Ducker Research Co. from National Fenestration Rating Council

VINYL WINDOW SHARE OF WINDOW MARKET

0.34

0.345

0.35

0.355

2000 2001 2002 2003 2004

New

Con

stru

ctio

n

0.505

0.51

0.515

0.52

0.525

Rep

air/

Rem

odel

Percentage of New Construction Percentage of Repair/Remodel

RESIDENTIAL WINDOW MARKET(In Millions of Units)

22

24

26

28

30

32

2000 2001 2002 2003 2004

Uni

ts

New Construction Repair/Remodel

Siding The National Association of Home Builders expects the exterior cladding market as a whole to be flat through 2006 at 12.0 billion square feet, versus 11.9 billion square feet in 2003. As shown in Figure 5, exterior cladding in the repair/remodel segment is expected to continue to grow to 6.5 billion square feet in 2006, while the new construction market is projected to remain relatively flat at 5.5 billion square feet.

7

Figure 5 Figure 6

Source: NAHB from James Hardie Industries * Data reflects only companies reporting shipments to VSI, except 1991 data.Source: Vinyl Siding Institute from Plastics News

U.S. AND CANADA EXTERIOR CLADDING(In Billions of SF)

5

5.4

5.8

6.2

6.6

2002 2003 2004 2005P 2006P

Squa

re F

eet

New Construction Repair/Remodel

U.S. SHIPMENTS OF VINYL SIDING AND SOFFIT*(In Millions of Squares)

15

20

25

30

35

40

45

1991 1993 1995 1997 1999 2001 2003 2005

Squa

res (

10x1

0SF)

Vinyl siding has grown tremendously over the past twenty years, peaking at an estimated 41.3 million squares (1 square=100 sq.ft. of coverage) in 2004 (see Figure 6). Much of its market share growth has been rooted in its low installation and maintenance costs. Recently, rising resin and micro-ingredient costs have driven the price of vinyl siding higher and closer to that of potential substitutes, such as fiber-cement. Vinyl siding industry unit volumes were down 2.6% year-over-year in 2005, and some industry participants believe that the category has matured. We have had a number of conversations with building materials distributors and extrusion equipment manufacturers, and we believe that fiber-cement siding may very well be taking market share from vinyl siding. New Home Construction New home construction currently accounts for 68% of Ply Gem’s pro forma 2005 net sales. While sales in the new home construction market are lower margin than those in the repair/remodel market, the pursuit of additional new construction business aligns Ply Gem with large, growing customers that are increasing their footprint and acquiring market share from smaller competitors; the increased focus on the new construction market also raises volatility and decreases visibility to future earnings. Since 1991, housing starts have increased at a compounded annual growth rate of 4.9%. Driven by low mortgage interest rates, favorable demographics, increasing immigrant demand for starter homes, and maturing baby boomers seeking second homes, this rate has accelerated to 12.3% over the past two years; new home starts increased from a seasonally adjusted annual rate of 1.7 million units in the first quarter of 2003 to a peak of 2.13 million units in the first quarter of 2006 (see Figure 7). The Homeownership Alliance predicts that these demand drivers will lead to 1.85 million to 2.17 million new U.S. housing starts per year through 2014. The recent decline in new home starts has been driven by softening demand that has resulted from rising mortgage rates. The regional trends in new home construction are distinct, with new home start data for the first four months of 2006 mixed: 1) while down from an exceptionally high January, the Northeast is basically flat at a strong level; 2) the South has declined the most of the four regions, 26.4% down from its January peak; 3) the Midwest has trended sideways with April data higher than that of February and March; and 4) the West is basically flat, though down from the fourth

Figure 7

Source: U.S. Department of Commerce

NATIONAL NEW HOME STARTSSeasonally Adjusted Annual Rate

1,700

1,800

1,900

2,000

2,100

2,200

1Q03

2Q03

3Q03

4Q03

1Q04

2Q04

3Q04

4Q04

1Q05

2Q05

3Q05

4Q05

1Q06

Apr '06

Uni

ts In

Tho

usan

ds

8

quarter of 2005. While Ply Gem’s SFDR business has a national presence and greater representation in the repair/remodel market, the Company’s Windows and Doors business has gradually shifted to the south and west and into the new construction market. Following the acquisitions of MW and Alenco, the Company’s regional manufacturing capacity (on a square foot basis) as a percentage of total manufacturing capacity in the Windows and Doors segment changed from 42% to 20% in the Midwest, 17% to 46% in the Northeast, and 0% to 16% in the South. While expansion into the South has provided Ply Gem with access to larger and faster growing markets, it also exposes the Company to greater volatility and potential decline in sales. Figure 8 Figure 9

Source: U.S. Department of Commerce Source: U.S. Department of Commerce

U.S. REGIONAL NEW HOME STARTSSeasonally Adjusted Annual Rate

140150160170180190200210220

1Q03

2Q03

3Q03

4Q03

1Q04

2Q04

3Q04

4Q04

1Q05

2Q05

3Q05

4Q05

1Q06

Apr '06

Nor

thea

st N

ew H

ome

Star

ts

300320340360380400420

Mid

wes

t New

Hom

e St

arts

Northeast Midwest

U.S. REGIONAL NEW HOME STARTSSeasonally Adjusted Annual Rate

700750800850900950

1,0001,0501,100

1Q03

2Q03

3Q03

4Q03

1Q04

2Q04

3Q04

4Q04

1Q05

2Q05

3Q05

4Q05

1Q06

Apr '06

Sout

h N

ew H

ome

Star

ts

420440460480500520540560

Wes

t New

Hom

e St

arts

South West

The National Association of Home Builders’ chief economist, David Seiders, currently expects overall housing starts to decline 6% to 7% in 2006, down from 2.07 million units in 2005. Mr. Seiders has speculated that a lot of the recent build-up of inventory of new single-family homes represents temporary weather-related factors and is still projecting a “soft landing” for the single-family market in 2006. A likely leading indicator of new home starts, net sales orders (the number of new sales contracts executed with customers, net of cancellations) of the major new homebuilders are in decline across all markets (see Figure 10). The decrease in net sales orders has been attributed to an increase in cancellations and has resulted in an increase in housing inventory. With the supply of new homes rising at a greater rate than demand, many homebuilders are hopeful that a more favorable supply/demand balance will be reached when inventory generated by speculators flows through the channel. This sentiment was affirmed by Robert Toll, CEO of Toll Brothers, during the company’s second quarter fiscal 2006 earnings conference call.

9

Figure 10 NET SALES ORDERS

New Homebuilders (Based on Units)

DR Horton Pulte Lennar Centex KB Beazer Ryland HovnanianLatest Quarter Ending 3/31/06 3/31/06 2/28/06 3/31/06 2/28/06 3/31/06 3/31/06 4/30/06East Qtr Change, Y/Y - - 12.4% - - - - - % of Total - - 32.1% - - - - - Northeast Qtr Change, Y/Y - -29.2% - - - - -21.5% 3.7% % of Total - 8.5% - - - - 25.9% 19.2%Mid-Atlantic Qtr Change, Y/Y 8.7% - - -5.2% - -7.8% - - % of Total 8.8% - - 16.8% - 10.7% - - Midwest Qtr Change, Y/Y -32.4% -13.1% - -13.5% - -16.5% - - % of Total 6.1% 12.6% - 19.0% - 12.3% - - Central Qtr Change, Y/Y - 6.7% 10.9% - -9.7% 27.6% - - % of Total - 13.4% 30.1% - 30.3% 7.7% - - Texas Qtr Change, Y/Y - - - - - - 2.0% - % of Total - - - - - - 19.7% - Southeast Qtr Change, Y/Y 24.1% -9.2% - -26.7% 0.7% -5.0% -17.0% -17.8% % of Total 13.7% 30.8% - 17.9% 22.0% 32.5% 29.7% 31.5%Southwest Qtr Change, Y/Y 12.8% - - -17.8% -30.3% - - 1.1% % of Total 39.2% - - 30.0% 25.5% - - 31.2%West Qtr Change, Y/Y 7.5% -14.6% -9.9% 12.8% -24.7% -46.3% -44.3% -41.0% % of Total 32.3% 34.7% 37.8% 16.4% 22.2% 36.8% 24.7% 18.1%Source: Company reports

Canada. Accounting for 13% of Ply Gem’s windows and doors business, Alberta, Canada posted 19.0% growth in net sales in 2005. In the midst of soaring oil prices, the region has become home to an economic boom driven by oil sands exploration. Oil sands in the region are estimated to hold reserves equivalent to as much as 175 billion barrels of oil. The drive to increase crude production has led to a shortage of workers, which has resulted in rising wages and the importation of labor from the eastern Canadian provinces and Europe. Income growth and population inflow have, in turn, led to a rise in new home starts, which are projected to increase 10.9% to 45,000 in 2006 from 40,600 in 2005 (see Figure 11). With oil sands production at just over one million barrels a day and projected to rise to 2.7 million barrels by 2015, and with residential building permits at record levels, we anticipate that new home starts will remain strong in the region in the medium-term.

Figure 11

Source: Canadian Statistics

ALBERTA, CANADA NEW HOME STARTSSeasonally Adjusted Annual Rate

32343638404244464850

1Q03

2Q03

3Q03

4Q03

1Q04

2Q04

3Q04

4Q04

1Q05

2Q05

3Q05

4Q05

1Q06

Apr '06

In T

hous

ands

10

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

Figure 12

Source: The Conference Board

CONSUMER CONFIDENCEEast North Central Region Spread to Entire U.S.

-

10.0

20.0

30.0

40.0

1Q03

2Q03

3Q03

4Q03

1Q04

2Q04

3Q04

4Q04

1Q05

2Q05

3Q05

4Q05

1Q06

2Q06

ESp

read

11

Figure 13 Figure 14

Source: U.S. Census Bureau Source: U.S. Census Bureau

LTM TOTAL IMPROVEMENTS SPENDINGNot Seasonally Adjusted

20,000

22,000

24,000

26,000

28,000

4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05

Mill

ions

of D

olla

rs

Northeast Midwest

LTM TOTAL IMPROVEMENTS SPENDINGNot Seasonally Adjusted

20,000

25,000

30,000

35,000

40,000

45,000

4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05

Mill

ions

of D

olla

rs

South West

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

Figure 15

Source: Plastics News

PRIME PVC PRICING

354045505560657075

1Q03

2Q03

3Q03

4Q03

1Q04

2Q04

3Q04

4Q04

1Q05

2Q05

3Q05

4Q05

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P3Q

06P

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P

Cen

ts p

er P

ound

12

2006. Currently priced at 66.5 cents per pound, we have forecast PVC pricing to continue to gradually abate to 60 cents per pound in the second quarter of 2007; the decrease will be driven by increased supply due to normalized domestic production capacity following Hurricanes Katrina and Rita, as well as augmented production capacity in China. Aluminum. With the acquisition of Alenco, Ply Gem has increased its exposure to aluminum pricing. In addition to its use in aluminum windows, aluminum is a key raw material in the Company’s metal offerings, including trim coil and flatstock. Since 2003, aluminum has consistently trended upward, increasing 73.8% through the first quarter of 2006 (see Figure 16). According to American Metal Market, many industry sources believe that speculation by investment funds has driven the steep rise of aluminum pricing, given that aluminum supply is not that constrained; it has been estimated that, by the end of 2005, there had been $80 billion invested in commodity index funds, up from $50 billion twelve months earlier. The demand for aluminum will also be affected by its cost differential with copper; as the differential widens, aluminum becomes an increasingly more attractive substitute. Offsetting these demand drivers is the possible start-up of idled smelting capacity, as well as substitute products that become more competitive as aluminum pricing increases. With the base metals market’s recent cooling, it is unclear whether the price of aluminum will continue to move higher in the medium-term. CORPORATE STRUCTURE

Figure 17PLY GEM HOLDINGS, INC.

(no operations)

Guarantees Credit FacilitiesGuarantees Senior Sub Notes

PLY GEM INDUSTRIES, INC.Guarantees Canadian Term Loan

$ 70MM Revolving Credit Facility$ 375MM U.S. Term Loan

$ 360MM 9.0% Senior Sub Notes

U.S. SUBSIDIARIES CWD WINDOWS AND DOORSCanadian subsidiary

Guarantees Credit FacilitiesGuarantees Senior Sub Notes US$ 25MM Canadian Term Loan

Source: Company reports

Figure 16

Source: The London Metal Exchange

ALUMINUM PRICINGAs of June 8, 2006

0.60

0.70

0.80

0.90

1.00

1.10

1.20

1Q03

2Q03

3Q03

4Q03

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13

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

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

Figure 18 PLY GEM HOLDINGS Pro Forma Leverage *

As of March 31, 2006Amount Leverage

($ millions) ThruRevolving Credit Facility 13.2$ Term Loans 400.0 3.0x9.0% Senior Sub Notes 360.3 5.7xTotal Debt 773.5 5.7x

Pro Forma LTM Adj. EBITDA 135.5$ Source: Company reports and MTR estimates.* Pro forma of Alenco acquisiton, not acquisition synergies.

15

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

16

that the cost of PVC has recently been in decline. Subsequent to quarter-end, the Company announced a 4% to 8% price increase on aluminum windows that it expects will become effective in late June. Siding, Fencing, Decking, Railing Net sales increased 27.5% year-over-year to $100.6 million from $78.8 million in the prior year’s quarter; the first quarter of 2005 was an easy comparable period due to a large volume decline that occurred in the period. The increase in volumes in the first quarter of 2006 was aided by the expansion of siding sales to 84 Lumber, a large, existing Windows and Doors customer, part of which is associated with store stocking; the new business opportunity has been estimated at tens of millions of dollars per year. With pricing up a little over 12% year-over-year, gross margins improved 290bps to 18.9% from the first quarter of 2005. SG&A expense as a percentage of net sales decreased 180bps to 8.8%, or $8.8 million, from the prior year’s quarter. As a result of higher volumes and increased pricing, adjusted EBITDA nearly doubled to $12.7 million in the first quarter of 2006. Subsequently, Ply Gem launched an approximate 7% price increase on aluminum siding products that it expects will become effective in May. Figure 19

PLY GEM HOLDINGSAdjusted Historical Quarterly Operating Statement

(In Millions of Dollars)CONSOLIDATED *

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2004 2005 LTMNet Sales 113.4$ 153.0$ 178.7$ 181.4$ 171.7$ 230.3$ 225.5$ 211.3$ 216.3$ 626.6$ 838.9$ 883.4$ Adjusted Cost of Goods Sold 89.5 112.8 132.8 144.3 137.8 174.8 170.5 164.5 173.0 479.5 647.6 682.8 Adjusted Gross Profit 23.8 40.2 46.0 37.1 34.0 55.5 55.0 46.8 43.3 147.1 191.3 200.6 SG&A 17.6 16.4 19.4 22.5 23.0 23.7 21.2 24.8 26.5 75.9 92.7 96.2 Amortization of Intangible Assets 0.6 0.6 2.0 2.9 2.4 2.4 2.4 2.4 2.6 6.1 9.8 9.9 Operating Profit 5.6 23.2 24.6 11.7 8.5 29.3 31.4 19.6 14.2 65.1 88.8 94.5 Depreciation and Amortization 3.1 3.5 5.2 7.3 6.6 6.4 6.5 6.6 7.3 19.1 26.1 26.8 Adjusted EBITDA 8.7$ 26.6$ 29.8$ 19.0$ 15.1$ 35.7$ 37.9$ 26.2$ 21.5$ 84.2$ 114.9$ 121.3$ LTM Adjusted EBITDA - - 84.6 84.2 90.6 99.7 107.8 114.9 121.3

Net Sales Growth, Y/Y - - 14.2% 61.4% 51.5% 50.5% 26.2% 16.5% 25.9% - 33.9% 29.0%Adjusted Gross Margin 21.0% 26.3% 25.7% 20.5% 19.8% 24.1% 24.4% 22.2% 20.0% 23.5% 22.8% 22.7%SG&A as % Net Sales 15.6% 10.7% 10.9% 12.4% 13.4% 10.3% 9.4% 11.7% 12.3% 12.1% 11.1% 10.9%Adjusted EBITDA Margin 7.7% 17.4% 16.7% 10.5% 8.8% 15.5% 16.8% 12.4% 9.9% 13.4% 13.7% 13.7%LTM Adjusted EBITDA Margin - - 15.2% 13.4% 13.2% 13.1% 13.3% 13.7% 13.7%

WINDOWS AND DOORS1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2004 2005 LTM

Net Sales 30.1$ 41.1$ 72.1$ 101.5$ 92.9$ 120.1$ 120.6$ 114.3$ 115.8$ 244.8$ 447.9$ 470.8$ Cost of Goods Sold 23.3 29.4 52.4 76.9 71.5 90.0 89.6 87.5 91.5 182.1 338.6 358.6 Adjusted Gross Profit 6.7 11.7 19.7 24.6 21.3 30.1 31.0 26.9 24.3 62.8 109.3 112.2 SG&A 6.3 5.6 8.7 14.3 13.9 12.9 13.1 15.2 16.3 34.9 55.2 57.6 Amortization of Intangible Assets 0.1 0.1 1.2 2.0 1.6 1.6 1.6 1.6 1.8 3.2 6.5 6.7 Operating Profit 0.4 6.0 9.9 8.4 5.8 15.6 16.2 10.0 6.2 24.7 47.6 48.0 Depreciation and Amortization 0.8 1.0 1.8 2.6 3.3 3.3 3.3 3.3 3.9 6.2 13.2 13.8 Adjusted EBITDA 1.2$ 7.1$ 11.7$ 11.0$ 9.1$ 18.9$ 19.5$ 13.3$ 10.1$ 30.9$ 60.8$ 61.8$ LTM Adjusted EBITDA - - - 30.9 38.9 50.7 58.5 60.8 61.8

Net Sales Growth, Y/Y - - - - 208.7% 192.3% 67.1% 12.6% 24.6% - 83.0% 53.0%Adjusted Gross Margin 22.4% 28.4% 27.4% 24.3% 23.0% 25.1% 25.7% 23.5% 20.9% 25.6% 24.4% 23.8%SG&A as % Net Sales 21.0% 13.6% 12.1% 14.0% 14.9% 10.8% 10.9% 13.3% 14.1% 14.2% 12.3% 12.2%Adjusted EBITDA Margin 3.8% 17.2% 16.2% 10.8% 9.8% 15.7% 16.2% 11.6% 8.8% 12.6% 13.6% 13.1%LTM Adjusted EBITDA Margin - - - 12.6% 12.6% 13.1% 13.4% 13.6% 13.1%

SIDING, FENCING, DECKING, RAILING1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2004 2005 LTM

Net Sales 83.3$ 111.9$ 106.6$ 79.9$ 78.8$ 110.2$ 104.9$ 97.0$ 100.6$ 381.7$ 390.9$ 412.6$ Cost of Goods Sold 66.6 83.4 80.1 67.1 66.2 84.9 80.9 77.3 81.5 297.1 309.2 324.6 Adjusted Gross Profit 16.7 28.6 26.5 12.8 12.6 25.3 24.1 19.7 19.0 84.6 81.7 88.1 SG&A 9.8 9.5 9.4 10.7 8.3 9.1 6.5 9.7 8.8 39.4 33.8 34.2 Amortization of Intangible Assets 0.7 0.7 0.6 1.0 0.8 0.8 0.8 0.8 0.8 3.0 3.2 3.2 Operating Profit 6.1 18.3 16.5 1.2 3.5 15.4 16.7 9.1 9.4 42.2 44.7 50.6 Depreciation and Amortization 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.3 12.4 12.6 12.7 Adjusted EBITDA 9.3$ 21.4$ 19.6$ 4.3$ 6.6$ 18.5$ 19.9$ 12.3$ 12.7$ 54.6$ 57.3$ 63.4$ LTM Adjusted EBITDA - - - 54.6 52.0 49.1 49.3 57.3 63.4

Net Sales Growth, Y/Y - - - - -5.3% -1.6% -1.6% 21.3% 27.5% - 2.4% 9.4%Adjusted Gross Margin 20.0% 25.5% 24.9% 16.1% 16.0% 23.0% 22.9% 20.3% 18.9% 22.2% 20.9% 21.3%SG&A as % Net Sales 11.8% 8.5% 8.8% 13.3% 10.6% 8.3% 6.2% 10.1% 8.8% 10.3% 8.6% 8.3%Adjusted EBITDA Margin 11.1% 19.2% 18.4% 5.4% 8.4% 16.8% 18.9% 12.6% 12.6% 14.3% 14.6% 15.4%LTM Adjusted EBITDA Margin - - - 14.3% 13.8% 13.1% 13.2% 14.6% 15.4%Source: Company reports* Consolidated figures reflect the total of Ply Gem's operating segments, as well as unallocated expenses and non-recurring items, which are not presented herein.

17

OUTLOOK With management guidance limited, our view to Ply Gem’s medium-term financial performance is based upon a number of counter-balancing forces that affect the Company’s business segments. Key factors include exposure to specific regional trends in the new construction market, the Company’s ability to drive new business, as well as the cost of PVC and aluminum. The following section addresses our assumptions for our financial projections (see Figure 20). Windows and Doors Ply Gem Industries, U.S. Given that the repair/remodel market is projected to be flat-to-slightly up, and that it is typically a stable market, we do not foresee exogenous factors driving material change in this business. Recently, volumes have been negatively affected by reduced service levels within Ply Gem Industries’ repair/remodel business; the reduction resulted from product line re-launches, beginning in 2005 that were intended to generate significant material savings at the Company’s Great Lakes division; management does not expect service levels to fully recover until 2007. We project flat volumes in 2006 to rebound by 4.7% in 2007 to sub-2004 levels, following improved service levels, with margins contracting slightly in 2006 and recovering in 2007. Ply Gem Industries, Canada. With projected 2006 new housing starts for Alberta, Canada having recently been adjusted upward by the Canada Mortgage and Housing Corporation, we expect growth in Canadian sales to remain strong as its oil economy continues to boom. We project Company volumes to grow 17% in 2006 and to decline 5% in 2007 to 2005 levels. Our model assumes steady margins. MW Windows. MW’s business is concentrated across the Mid and South Atlantic states. With recent housing start data very weak in the South, it is unclear how the data skews across various sub-markets and how MW will be affected. We project flat volume in 2006 and a 5% decline in 2007. Our figures do not reflect greater pessimism because of MW’s strong end-customer base and potential sale-side synergies. Alenco. While Alenco should drive EBITDA growth, it also has disconcerting geographic and raw material exposure. Having grown at a compounded annual growth rate of 25.5% over the past two years, it possesses significant share in Arizona, Texas and Georgia, and it could face a meaningful slowdown in growth as these markets adjust to more sustainable growth rates. These factors are offset by the division’s potential to penetrate national accounts and additional markets. While we project the rise in aluminum costs to compromise Company margins, demand for Alenco’s aluminum window could increase as homebuilders strive to lower costs and support margins in an increasingly competitive market (assuming a continued pricing difference between aluminum and vinyl). We project volume growth of 9% in 2006 and 5% in 2007, with EBITDA margin declining 30bps year-over-year in 2006 and rebounding to 10.7% in 2007. We project total Windows and Doors segment net sales to increase to $600.6 million and $620.1 million in fiscal 2006 and 2007, respectively, from $447.9 million in 2005 (pre-Alenco), with adjusted EBITDA improving to $76.8 million and $85.3 million over the same periods, respectively, from $60.8 million in 2005. Our consolidated projections incorporate year-over-year cost-side synergy savings of $1.1 million and $6.7 million in 2006 and 2007, respectively. Upside to our projections could be achieved through sales-side synergies, a continuing housing

18

boom in Alberta, Canada, and additional customer acquisitions, while greater downside could occur as a result of a worsening domestic new construction market. Siding, Fencing, Decking, Railing According to the Home Improvement Research Institute, total U.S. home improvement product sales rose to a new record of $291 billion in 2005, 7.5% over 2004 levels, and they are expected to increase another 4.6%, reaching $305 billion, by the end of 2006. With industry and Company siding unit volumes down in 2005, we project unit volumes among Ply Gem’s legacy customers to decrease 3.0% in 2006 and to remain flat in 2007, driven by slowing home improvement product sales growth and industry-wide market share loss to vinyl-competitive materials. We estimate incremental sales from new business with 84 Lumber at $11.2 million and $15.0 million for fiscal 2006 and 2007, respectively. Furthermore, we project year-over-year pricing to be up 10% in 2006, a result of a large price increase in the fourth quarter of 2005; going forward, we expect price givebacks as PVC costs decline and end-market demand softens. SG&A expense is projected to increase slightly from 2005 levels, with adjusted EBITDA increasing to $62.1 million and $62.7 million in 2006 and 2007, respectively, from $57.3 million in fiscal 2005. Consolidated We project net sales to increase 22.9% to $1.03 billion and 2.1% to $1.05 billion in 2006 and 2007, respectively. Gross margin is anticipated to decline 100bps in 2006 and to improve 70bps in 2007, as a result of achieving planned cost-side synergies. SG&A expense as a percentage of net sales is projected at 10.9% and 10.8% for 2006 and 2007, respectively, as compared with 11.1% in 2005. We project adjusted EBITDA at $133.4 million in 2006 and $143.4 million in 2007, as compared with adjusted EBITDA of $129.6 million in 2005, pro forma for the Alenco acquisition.

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Figure 20 PLY GEM HOLDINGS

Adjusted Projected Quarterly Operating Statement (In Millions of Dollars)CONSOLIDATED *

2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 2006 2007Net Sales 286.4$ 289.0$ 239.4$ 235.6$ 289.9$ 288.0$ 239.4$ 1,031.2$ 1,052.9$ Cost of Goods Sold 221.8 222.8 188.2 184.9 222.9 220.5 187.4 805.8 815.7 Adjusted Gross Profit 64.6 66.2 51.2 50.7 66.9 67.6 52.0 225.3 237.2 SG&A 28.1 29.1 28.5 28.2 28.3 29.0 28.4 112.2 113.9 Amortization of Intangible Assets 2.5 2.5 2.5 2.5 2.5 2.5 2.5 10.0 9.8 Operating Profit 34.0 34.7 20.3 20.1 36.2 36.1 21.1 103.2 113.5 Depreciation and Amortization 7.6 7.6 7.6 7.5 7.5 7.5 7.5 30.2 29.9 Adjusted EBITDA 41.7$ 42.3$ 27.9$ 27.5$ 43.7$ 43.6$ 28.6$ 133.4$ 143.4$ LTM Adjusted EBITDA 127.3 131.7 133.4 139.4 141.4 142.7 143.4

Net Sales Growth, Y/Y 24.4% 28.2% 13.3% 8.9% 1.2% -0.3% 0.0% 22.9% 2.1%Adjusted Gross Margin 22.6% 22.9% 21.4% 21.5% 23.1% 23.5% 21.7% 21.9% 22.5%SG&A as % Net Sales 9.8% 10.1% 11.9% 12.0% 9.8% 10.1% 11.9% 10.9% 10.8%Adjusted EBITDA Margin 14.5% 14.6% 11.6% 11.7% 15.1% 15.1% 11.9% 12.9% 13.6%LTM Adjusted EBITDA Margin 13.5% 13.1% 12.9% 13.3% 13.4% 13.6% 13.6%

WINDOWS AND DOORS2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 2006 2007

Net Sales 162.2$ 171.0$ 151.7$ 137.6$ 162.9$ 169.1$ 150.5$ 600.6$ 620.1$ Cost of Goods Sold 123.6 129.1 117.1 105.6 122.2 126.1 115.3 461.3 469.2 Adjusted Gross Profit 38.5 41.9 34.6 32.0 40.7 43.0 35.2 139.3 150.9 SG&A 17.8 18.8 19.7 19.3 17.9 18.6 19.6 72.7 75.4 Amortization of Intangible Assets 1.7 1.7 1.7 1.7 1.7 1.7 1.7 6.7 6.6 Operating Profit 19.1 21.4 13.2 11.0 21.1 22.8 14.0 59.9 68.9 Depreciation and Amortization 4.3 4.3 4.3 4.1 4.1 4.1 4.1 16.8 16.4 Adjusted EBITDA 23.4$ 25.7$ 17.5$ 15.1$ 25.2$ 26.9$ 18.1$ 76.8$ 85.3$ LTM Adjusted EBITDA 66.3 72.5 76.8 81.7 83.6 84.7 85.3

Net Sales Growth, Y/Y 35.0% 41.8% 32.7% 18.9% 0.4% -1.1% -0.8% 34.1% 3.2%Adjusted Gross Margin 23.8% 24.5% 22.8% 23.3% 25.0% 25.4% 23.4% 23.2% 24.3%SG&A as % Net Sales 11.0% 11.0% 13.0% 14.1% 11.0% 11.0% 13.0% 12.1% 12.2%Adjusted EBITDA Margin 14.4% 15.0% 11.6% 11.0% 15.5% 15.9% 12.0% 12.8% 13.8%LTM Adjusted EBITDA Margin 12.9% 12.9% 12.8% 13.1% 13.4% 13.6% 13.8%

SIDING, FENCING, DECKING, RAILING2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 2006 2007

Net Sales 124.2$ 118.0$ 87.7$ 98.0$ 127.0$ 118.9$ 88.9$ 430.5$ 432.8$ Cost of Goods Sold 98.2 93.7 71.2 79.3 100.8 94.4 72.1 344.5 346.6 Adjusted Gross Profit 26.1 24.4 16.6 18.7 26.3 24.5 16.8 86.0 86.3 SG&A 8.3 8.3 8.3 8.4 8.3 8.4 8.4 33.7 33.6 Amortization of Intangible Assets 0.8 0.8 0.8 0.8 0.8 0.8 0.8 3.2 3.2 Operating Profit 17.0 15.3 7.4 9.4 17.1 15.4 7.6 49.1 49.5 Depreciation and Amortization 3.3 3.3 3.3 3.3 3.3 3.3 3.3 13.1 13.2 Adjusted EBITDA 20.2$ 18.5$ 10.7$ 12.8$ 20.4$ 18.7$ 10.9$ 62.2$ 62.7$ LTM Adjusted EBITDA 65.1 63.7 62.2 62.2 62.4 62.6 62.7

Net Sales Growth, Y/Y 12.8% 12.5% -9.5% -2.6% 2.2% 0.8% 1.4% 10.1% 0.5%Adjusted Gross Margin 21.0% 20.6% 18.9% 19.1% 20.7% 20.6% 18.9% 20.0% 19.9%SG&A as % Net Sales 6.7% 7.0% 9.5% 8.6% 6.6% 7.0% 9.5% 7.8% 7.8%Adjusted EBITDA Margin 16.3% 15.7% 12.2% 13.0% 16.1% 15.7% 12.2% 14.4% 14.5%LTM Adjusted EBITDA Margin 15.3% 14.5% 14.4% 14.5% 14.5% 14.5% 14.5%

UNALLOCATED EXPENSES2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 2006 2007

SG&A 2.0$ 2.0$ 0.4$ 0.4$ 2.0$ 2.0$ 0.4$ 5.8$ 4.9$ Depreciation and Amortization 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.3 0.3 Total 2.1 2.1 0.5 0.5 2.1 2.1 0.5 6.1 5.2 Source: MTR analysis* Consolidated figures reflect the total of Ply Gem's operating segments, post-acquisition synergies and unallocated expenses. Liquidity We anticipate that Ply Gem’s liquidity will continue to improve in the medium-term (see Figure 21). With higher adjusted EBITDA in 2006, offset by higher interest expense, income taxes, working capital requirements and capital expenditures, we project liquidity to increase $28.9

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million year-over-year to $101.2 million at the end of the first quarter of 2007. Financial performance in 2007 is projected to produce greater adjusted EBITDA and a liquidity build of $15.2 million. Credit Metrics Given increasing adjusted EBITDA, greater liquidity and debt repayment, Ply Gem credit metrics are projected to improve over time. Assuming no leveraging events, the Company’s net leverage ratio is estimated to decrease to 5.2x and 4.6x in the fourth quarters of fiscal 2006 and 2007, respectively; net leverage through the credit facility is projected at 2.5x and 2.1x during the same period. LTM net interest coverage is projected to decrease to 2.1x at the end of 2006 and to increase to 2.2x in 2007. Figure 21

PLY GEM HOLDINGS Adjusted Projected Quarterly Liquidity Analysis

(In Millions of Dollars)CONSOLIDATED

2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 2006 2007Adjusted EBITDA 41.7$ 42.3$ 27.9$ 27.5$ 43.7$ 43.6$ 28.6$ 133.4$ 143.4$

Cash Interest Expense (7.8) (23.7) (7.5) (23.4) (7.2) (23.4) (7.2) (60.0) (61.3) Cash Income Taxes (6.0) (5.8) (2.5) (3.6) (8.9) (8.9) (4.0) (15.7) (25.4) Working Capital 3.3 (1.5) 19.4 (12.6) (8.1) 0.3 20.0 (0.1) (0.4) Capital Expenditures (4.0) (4.0) (13.0) (3.8) (3.8) (3.8) (10.8) (25.0) (22.0) Total Uses of Cash (14.4) (35.0) (3.7) (43.3) (28.0) (35.8) (1.9) (100.8) (109.1)

CASH FLOW BEFORE FINANCING 27.2$ 7.3$ 24.2$ (15.8)$ 15.6$ 7.8$ 26.7$ 32.6$ 34.4$

Revolver Draw (Repayment) (13.2) - - - - - - - - Term Repayment, scheduled (1.0) (1.0) (1.0) (1.0) (1.0) (1.0) (1.0) (3.0) (4.0) Term Repayment, excess cash flow - - (10.5) - - - (15.1) (10.5) (15.1) Other - - - - - - - 8.7 - NET CHANGE IN CASH 13.1$ 6.3$ 12.8$ (16.8)$ 14.6$ 6.8$ 10.6$ 27.8$ 15.3$

Beginning Cash Balance 17.9 31.0 37.2 50.0 33.2 47.8 54.7 22.2 50.0 Ending Cash Balance 31.0 37.2 50.0 33.2 47.8 54.7 65.2 50.0 65.2

LIQUIDITY2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 2006 2007

Cash Balance 31.0$ 37.2$ 50.0$ 33.2$ 47.8$ 54.7$ 65.2$ 50.0$ 65.2$ Revolver Availability 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 TOTAL LIQUIDITY 99.0$ 105.2$ 118.0$ 101.2$ 115.8$ 122.7$ 133.2$ 118.0$ 133.2$

LC's 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 DEBT BALANCES

2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 2006 2007Revolving Credit Facility -$ -$ -$ -$ -$ -$ -$ -$ -$ Term Loans 399.0 398.0 386.5 385.5 384.5 383.5 367.4 386.5 367.4 9.0% Senior Subordinated Notes 360.3 360.2 360.2 360.2 360.2 360.2 360.2 360.2 360.2 TOTAL DEBT 759.3$ 758.2$ 746.7$ 745.7$ 744.7$ 743.7$ 727.6$ 746.7$ 727.6$

CREDIT METRICS2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 2006 2007

Net Senior Leverage Ratio 2.9x 2.7x 2.5x 2.5x 2.4x 2.3x 2.1x 2.5x 2.1xNet Leverage Ratio 5.7x 5.5x 5.2x 5.1x 4.9x 4.8x 4.6x 5.2x 4.6xNet Interest Coverage 2.2x 2.1x 2.1x 2.1x 2.2x 2.2x 2.2x 2.1x 2.2xSource: MTR analysis RATING AGENCIES On February 7, 2006, Moody’s assigned a B1 rating to Ply Gem Industries’ $121 million incremental term loan, reflecting the Company’s geographic diversification, strong brand names, cost reduction focus, expected synergies and strong management team. Moody’s did, however, change its outlook from Stable to Negative. The change is indicative of Moody’s concern with

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Ply Gem’s underperformance in 2005 and the additional debt associated with the acquisition of Alenco. Other factors included the increase in goodwill, the Company’s acquisition-based growth strategy, volatile raw material costs, and its increased exposure to the potentially down-cycling new housing construction market. Moody’s has stated that a stable B1 rating will require a free cash flow to debt ratio of over 5% by the end of 2006 and visibility to continued credit quality improvement as measured by a free cash flow to debt ratio above 8%, and a leverage ratio of 5.0x or lower by the end of fiscal 2007. Given our projections, we believe there is a possibility that Ply Gem’s credit facility may be downgraded over the next year with lack of visibility to the company meeting the free cash flow to debt ratio. RELATIVE VALUE The following section addresses relative corporate valuation on a going-concern and M&A basis, and a comparable bond valuation. Figure 22 outlines five companies that produce building materials and have significant exposure to the residential construction market. The analysis produced a central EV/EBITDA multiple ranging between 8.5x and 11.5x. Figure 22

PUBLIC COMPARABLES Building Product Manufacturers *

(In Millions of Dollars)LTM LTM EBITDA Enterprise Net Debt / Net Int. EV / EV /

Company Ticker Business Sales EBITDA Margin Net Debt Value EBITDA Coverage Sales EBITDAElkCorp ELK Roofing products 891$ 119$ 13.4% 157$ 741$ 1.3x 9.9x 0.8x 6.2xUniversal Forest Products UFPI Lumber, roof trusses, decking 2,820 172 6.1% 164 1,484 1.0x 11.4x 0.5x 8.6xJames Hardie Industries JHX Fiber-cement siding 1,415 336 23.7% (27) 2,933 NM 52.5x 2.1x 8.7xAdvanced Environ. Rec. Tech. AERTA Composite bldg. materials 95 11 11.4% 18 126 1.7x 5.1x 1.3x 11.7xTrex Company TWP Deck products 310 15 4.8% 78 486 5.2x 4.4x 1.6x 32.4xSource: Company reports and MTR analysis* Financials filed as of May 19, 2006. Stock price as of May 19, 2006. ElkCorp (ELK). With the majority of its net sales derived from its Premium Roofing Products segment, ElkCorp produces premium asphalt roofing products, coated and non-coated non-woven fabrics, decking, railing, marine dock and fencing products, as well as other products. The company has recently experienced some gross margin erosion that has resulted from escalating raw material, energy and transportation costs in its roofing plant operations. LTM sales and EBITDA were $891 million and $119 million, respectively, for the period ending March 31, 2006. Universal Forest Products (UFPI). UFPI is a leading U.S. producer of pressure-treated lumber and roof trusses, serving the site-built, manufactured housing, industrial and do-it-yourself construction markets. Unit volumes and gross margin improved in 2005, led by facilities downsizing and a higher margin product mix. LTM net sales and EBITDA were $2.8 billion and $172 million, respectively, for the period ending March 31, 2006. James Hardie Industries (JHX). Based in Australia, James Hardie has been changing the face of the U.S. exterior cladding market, with increased penetration of its fiber-cement siding product. With the U.S. accounting for the majority of company sales, James Hardie is now attacking those U.S. markets that are currently controlled by vinyl siding. LTM sales for the period ending December 31, 2005 were $1.4 billion, with LTM EBITDA of $336 million, or 23.7% of sales.

22

Advanced Environmental Recycling Technologies (AERTA). AERTA produces composite building materials by combining recycled plastics and wood filler. Its materials are marketed as a substitute for wood and plastic filler materials for standard door components, windowsills, brick mould, fascia board, decking and industrial flooring. LTM sales through the first quarter of 2006 were $95 million, while EBITDA was $11 million. Trex Company (TWP). Trex manufactures wood-polymer composite decking and railing that looks like wood, but requires less long-term maintenance. The company sells mainly to the contractor-installed market through 90 wholesale distribution centers. While sales have increased as a result of price increases, gross profit has declined significantly due to higher raw material costs and higher unit manufacturing costs. LTM net sales and EBITDA for the period ending March 31, 2006 were $310 million and $15 million, respectively. Given the limited number of comparable public companies, we have outlined recent merger and acquisition transactions in Figure 23; most have been sponsored by a private equity firm or the portfolio company of one. In a number of cases, the acquirer paid a higher multiple to EBITDA under the assumption that synergies would be achieved. Applicable Purchase Price/EBITDA multiples range between 7.0x and 9.0x, and Price/Sales multiples range between 0.9x to 1.2x. Figure 23

COMPARABLE M&A TRANSACTIONS *

(In Millions of Dollars)EBITDA Purchase Price / Price /

Target Acquirer Date Sales EBITDA Margin Price Sales EBITDAAWC Holding Ply Gem Holdings 02/24/06 139$ 16$ 11.8% 120$ 0.9x 7.4xSBR (Simonton) Fortune Brands 02/10/06 565 NA NA 630 1.1x NAChampion Window Kenner & Co. 01/26/06 85 NA NA 99 1.2x NAHughes Supply Home Depot 01/10/06 5,185 288 5.6% 3,485 0.7x 12.1xShelter Distribution Beacon Roofing Supply 08/10/05 248 NA NA 152 0.6x NACPG/Vycom AEA Investors 05/13/05 NA 40 NA 355 NA 8.8xMasonite Int'l Stile Acq. (KKR) 04/06/05 2,200 289 13.1% 2,500 1.1x 8.6xC.H.I. Overhead Doors JLL Partners 10/27/04 130 28 21.5% 195 1.5x 7.0xTapco Holdings Headwaters Construction 09/13/04 NA 84 NA 715 NA 8.5xMWM Holding Ply Gem Holdings 08/27/04 275 39 14.3% 320 1.2x 8.2xNortek Holdings Thomas Lee Partners 06/15/04 NA 213 NA 1,750 NA 8.2xEldorado Stone Headwaters Construction 06/02/04 NA 26 NA 203 NA 8.2xPly Gem Industries Caxton-Iseman 02/12/04 531 67 12.6% 570 1.1x 8.5xPGT Industries JLL Partners 01/29/04 223 38 17.1% 275 1.2x 7.2xTherma-Tru Fortune Brands 11/03/03 425 NA NA 925 2.2x NAAtrium Companies Kenner & Co. 10/29/03 682 87 12.8% 610 0.9x 7.0xSource: Windowsanddoors.net, company and news reports, MTR analysis* Many figures have been estimated by industry advisors. On April 13, 2006, Alcoa announced its plan to divest its Alcoa Home Exteriors subsidiary, stating that it is no longer a strategic fit; Alcoa Home is a leading manufacturer of vinyl siding, aluminum trim, and accessories for the U.S. residential construction and remodeling markets (estimated market share of 13%). In addition to strong brand and product lines, the company manages enduring relationships with key players in the building materials wholesale channel. While vinyl siding is a highly competitive, potentially maturing market, Alcoa Home may prove extremely valuable to the right strategic acquirer and could set a high benchmark for siding transactions. In a transaction that will combine the largest wood window manufacturer with one of the nation’s largest, if not the largest, vinyl window manufacturers, Andersen Corp. announced on May 24, 2006, that it agreed to purchase Silver Line Building Products Corp. Forbes magazine

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has estimated Andersen’s 2004 sales at $2.5 billion, while Windows and Doors magazine places Silver Line annual sales between $500 million and $1.0 billion. While the terms of the agreement have not been disclosed, transaction pricing should reflect a premium for industry leadership and strategic synergies. On June 9, 2006, Royal Group Technologies (TSX: RYG), the largest North American manufacturer of vinyl window frames and biggest Canadian maker of vinyl siding, agreed to be acquired by Georgia Gulf Corp., a producer of commodity chemicals, vinyl resins and vinyl compounds. The acquisition is priced at $1.7 billion, or 1.0x LTM net sales, which is in-line with our M&A comparables. Were it not for the financial and operational trouble that Royal Group is currently experiencing, valuation levels would likely have been higher given Royal’s large scale. Figure 24 below delineates the bonds of industry-related companies and their respective yields and spread-to-treasuries. Figure 24

COMPARABLE BOND ANALYSIS Building Material Manufacturers and Home Builders

As of June 13, 2006Company Ticker Mdy's/S&P Business Coupon Security Description Maturity Price YTW SpreadPly Gem Industries PLYGEM B3/B- Windows and Siding 9.000% Senior Sub Notes 02/15/12 90.50 11.31% 628Centex Corp CTX Baa2/BBB Home Builder 7.500% Senior Unsecured 01/15/12 105.83 6.24% 122Lennar Corp LEN Baa2/BBB Home Builder 5.950% Senior Notes 03/01/13 95.18 6.86% 183D.R. Horton DHI Baa3/BBB- Home Builder 5.375% Senior Notes 06/15/12 94.54 6.49% 146MDC Holdings MDC Baa3/BBB- Home Builder 7.000% Senior Unsecured 12/01/12 101.63 6.69% 166NVR Inc. NVR Baa3/BBB- Home Builder 5.000% Senior Unsecured 06/15/10 94.13 6.70% 167Pulte Homes PHM Baa3/BBB Home Builder 6.250% Senior Unsecured 02/15/13 98.21 6.59% 156Ryland Group RYL Baa3/BBB- Home Builder 5.375% Notes 05/15/12 93.45 6.74% 171KB Home KBH Ba1/BB+ Home Builder 6.375% Senior Notes 08/15/11 96.17 7.28% 225Beazer Homes BZH Ba1/BB Home Builder 8.375% Senior Unsecured 04/15/12 101.75 7.83% 279K. Hovnanian HOV Ba2/B+ Home Builder 8.875% Senior Sub Notes 04/01/12 100.25 8.79% 375Standard Pacific SPF Ba3/B+ Home Builder 9.250% Senior Sub Notes 04/15/12 100.25 9.19% 416Nortek NTK Caa1/CCC+ Environ. Control Prod. 8.500% Senior Sub Notes 09/01/14 96.50 9.11% 407Associated Materials SIDE Caa2/CCC Windows and Siding 9.750% Senior Sub Notes 04/15/12 102.25 9.03% 399Nortek NTK Caa2/CCC+ Environ. Control Prod. 0%/10.75% Senior Disc Notes 03/01/14 72.25 10.57% 554Source: Bloomberg Trace* Pricing has been approximated and may have posted prior to June 13, 2006. VALUATION The fundamental value of a building materials manufacturer is a function of how well its products are regarded in the marketplace, the strength of its brands, the nature of its distribution network, the throughput and location of its manufacturing facilities, the strength of its customers, and the robustness of its end-markets. As the building materials sector continues to consolidate, strategic fit becomes increasingly more important, as transaction valuations are justified on a post-synergy basis. Ply Gem’s operating segments are characterized by discrete company and macro dynamics. The windows and doors business is highly fragmented, offering differentiated products in addition to having pricing power and a positive correlation to high home energy costs. Along with increasing industry-

Figure 25 PLY GEM HOLDINGS

Pro Forma LTM Ending March 31, 2006 (In Millions of Dollars)

Adjusted EBITDA EBITDARevenue EBITDA Margin Multiple EV

Windows and Doors 596.6$ 72.0$ 12.1% 7.5x 540.0$ SFDR 412.6 63.5 15.4% 6.8x 428.6 Total 1,009.2$ 135.5$ 13.4% 7.1x 968.6$ Less: Debt 773.5 Plus: Cash 17.9 Total Equity Value 213.0$ Source: Company reports and MTR analysis

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wide unit volumes, Ply Gem’s Windows and Doors segment has grown its volumes both organically and through acquisition. Much of the growth has come from an increased focus on the new home construction business, which is subject to contraction going forward. As would make sense at this point in the housing cycle, companies with a higher concentration of repair/remodel business as opposed to new construction are more highly valued. Using the private M&A transaction multiples in Figure 23 and assuming an acquisition premium of 15%, we have applied a 7.5x EV/EBITDA multiple to Ply Gem’s Windows and Doors segment. While fencing, decking and railing are experiencing strong industry-wide volume growth, the vinyl siding market has weakened. Subject to a potentially maturing market, limited product differentiation and pricing power, high raw material costs, and possible market encroachment from substitute materials, vinyl siding is not growing nearly at the rate of the windows and doors business. However, Ply Gem is a vinyl siding market leader with an estimated 15% market share. While our analysis is intended to reflect a private going-concern valuation, the active building materials M&A market is a relevant backdrop to pricing (see Figure 23); given such, we have used a 6.75x EV/EBITDA multiple to value Ply Gem’s SFDR segment. Currently, Alcoa Home Exteriors is in the process of being sold, and it is speculated that ultimate transaction values could reinforce higher valuation levels as the siding industry undergoes further consolidation. In addition to considering product portfolio as a component in valuation, the distribution channels/customer base is extremely important to strategic buyers who are looking to grow their footprint and to exploit economies of scope and scale. Another future data point for valuation is the initial public offering of PGT Industries, an impact-resistant window and door manufacturer owned by JLL Partners, which is scheduled for 2006. As shown in Figure 25, we calculate an enterprise value of $968.6 million, a weighted-average EBITDA multiple of 7.1x, and an equity value of $213.0 million. RECOMMENDATION We have initiated coverage of Ply Gem’s 9.0% Senior Subordinated Notes with a Buy recommendation. While the Company has significant exposure to a slowing new home construction market, we believe that its medium-term future is not simply macro-dependent and that current bond pricing is cheaper than that of a peer group with similar end-market concentration. Partially offsetting an increasingly more challenged macro environment, Ply Gem should benefit from increased siding sales to 84 Lumber, extended geographic reach through Alenco, a strong housing market in Alberta, Canada, improved service levels in its repair/remodel windows and doors business in 2007, as well as prospective sale and cost-side synergies. Based upon our analysis in Figure 24, we calculate a comparable spread-to-treasuries of 160bps for builder and building material Baa3-rated bonds with similar maturities. Assuming an interpolated credit spread of 237bps between Baa3 and B3-rated bonds, we arrive at an implied comparable YTW of 8.9% for Ply Gem’s 9.0% Notes (see Figure 26). Currently offered at a 11.3% YTW, we find the 9.0% Notes favorably priced. In the event of a downgrade to a bond rating of Caa1, we calculate an implied YTW of 10.0%.

Figure 26PLY GEM HOLDINGSComparable YTW Analysis

BpsBaa3 Bond Comparables Spread 160Credit Curve BBB -> B 178Credit Curve BBB -> CCC 460Interpolated Credit Curve Baa3 -> B3 237Interpolated Credit Curve Baa3 -> Caa1 342Ply Gem 9% Senior Sub NotesComparable Treasury Yield 5.0%Implied YTW at Current Rating (B3) 8.9%Implied YTW at Downgrade (Caa1) 10.0%Source: CreditSights, ML Indices, MTR analysis* Based on high yield credit curve as of June 9, 2006.

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RISKS As outlined in this report, Ply Gem’s business fundamentals face an increasingly challenging macro environment, though the Company still possesses pockets of potential improvement. Given current visibility and assuming no further leveraging acquisitions, we foresee Ply Gem strengthening its credit position in the medium-term. This would clearly change if the residential new construction market declined at a greater-than-expected rate. It is unclear to what extent new home pricing pressure will affect margins across the residential construction supply chain. In light of market uncertainties and changing leadership at Ply Gem, we would hope that Caxton-Iseman and Company management take a wait-and-see approach to additional acquisitions and focus on completing the integration of MW and Alenco in the near-term. The planned retirement of Ply Gem’s CEO certainly adds risk to future Company performance. With the market at a crossroads, strong leadership is especially important. Lee Meyer has stated that he is not placing a deadline on identifying his replacement, which should allow Ply Gem enough time to conduct a thorough executive search. Ply Gem’s credit quality could also be compromised through a private equity sponsored dividend recapitalization. The dividend recapitalization would be limited to available additional indebtedness and would raise Company leverage to 6.8x; it would also potentially place the 9.0% Notes within range of a ratings downgrade. Lastly, bond pricing could be affected by a potentially widening credit curve. As of June 9, 2006, the spread between B and CCC-rated bonds was 282bps, with single-B and triple-CCC paper widening 17bp and 15bp, respectively, month-to-date; to place this in context, the B/CCC spread in 3Q02 approached 1,350bps. Given the minimal risk premium currently priced into the high yield market, spreads could widen at the asset class or industry sector level in the event of greater economic weakness and/or a softening housing sector.

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Figure 27PLY GEM HOLDINGS

Historical Quarterly Balance Sheet (In Millions of Dollars)

3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06Cash and Cash Equivalents 20.5$ 6.8$ 18.5$ 26.6$ 25.8$ 22.2$ 17.9$ Accounts Receivable 92.3 65.2 71.7 95.2 97.9 70.4 101.5 Inventories 62.9 61.5 70.3 68.4 60.2 55.2 70.8 Prepaid Expenses and Other Current 8.2 9.8 11.8 12.5 12.6 9.4 15.1 Deferred Income Taxes 2.5 18.4 18.4 19.2 14.3 13.3 15.0 Total Current Assets 186.4 161.7 190.7 221.9 210.8 170.5 220.2

PP&E, net 114.7 147.0 109.9 108.3 106.8 109.7 117.6 Goodwill 551.6 585.2 584.5 583.8 578.0 579.0 678.3 Intangible Assets, net 156.0 162.7 160.2 157.8 155.3 152.9 168.1 Other Assets 49.5 47.8 42.3 41.0 39.8 37.9 37.8

TOTAL ASSETS 1,058.1$ 1,104.3$ 1,087.6$ 1,112.8$ 1,090.7$ 1,050.0$ 1,222.1$

Current Portion Long-Term Debt 2.4 2.8 1.9 1.9 1.9 1.7 4.0 Accounts Payable 46.0 34.6 47.7 63.2 52.0 42.3 64.9 Accrued Expenses and Taxes 53.4 61.9 41.5 62.7 53.7 64.0 62.8 Total Current Liabilities 101.8 99.3 91.2 127.9 107.7 108.1 131.8

Deferred Income Taxes 34.0 72.4 72.1 71.8 68.1 58.2 64.6 Other Liabilities 31.3 32.4 28.4 27.5 26.5 32.5 35.3 Long-Term Debt 699.6 704.8 704.5 685.5 675.0 635.8 769.5 Stockholders' Equity 191.5 195.4 191.4 200.2 213.5 215.5 221.0

TOTAL LIABS. AND STOCKHOLDERS' EQUITY 1,058.1$ 1,104.3$ 1,087.6$ 1,112.8$ 1,090.7$ 1,050.0$ 1,222.1$

Source: Company reports

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BUY 50.4%HOLD (6%)/No Recommendation (27.6%) 33.6%SELL 16.0%

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The author of this report has not visited material operations of the subject of this report.

Miller Tabak Roberts Securities, LLC observes the fixed-income securities research rules of the NASD, SEC, Ontario Securities Commission, and Investment Dealers Associationof Canada.

The firm and its affiliates have not received compensation from the subject of this report, or persons known by this firm to be affiliates of the subject, in the prior twelve months forthe performance of services. Neither the authoring analyst, nor any supervisory or executive person with the ability to influence the content of this report, nor any member orprincipal officer of the firm, nor any of their respective households or immediate families, has received compensation from the subject of this report in the prior twelve months.

Neither the author of this report, nor any member of the author's household or immediate family, has any financial interest in any of the securities of the subject(s) of this report.Neither the firm nor its affiliates beneficially owns in excess of 1% of any class of the common equity securities of the subject(s) of this report.

Neither the author of this report nor any member of the author's household or immediate family, has served or serves as an officer, director or advisory board member of thesubject(s) of this report.

The firm does no investment banking or investment management business with any person; however, the firm may from time to time act as broker or dealer on the account ofcompanies covered in its research reports. Neither the firm nor the author of this report is aware of any factors or relationships with respect to any personnel of the firm or itsaffiliates which would reasonably be expected to indicate a potential conflict of interest, including, without limitation to matters of compensation, ownership and service as anofficer, director or adviser, except as set forth in detail below.

BUY describes a security that we expect to provide a total return (price appreciation plus yield and any distributions) in excess of securities with a similar risk profile.

HOLD describes a security that we expect to provide a total return (price appreciation plus yield and any distributions) comparable to securities with a similar risk profile.

NO RECOMMENDATION describes a security in which we believe there is insufficient information to support a specific opinion or we have expedited publication to address near-term customer needs for factual information. Absence of an opinion should not be inferred to mean a HOLD.

Although the information contained herein has been obtained from sources Miller Tabak Roberts Securities, LLC believes to be reliable, its accuracy and completeness cannot beguaranteed. This report is for information purposes only and under no circumstances is it to be construed as an offer to sell, or a solicitation to buy, any security. Anyrecommendation contained in this report may not be appropriate for all investors. Additional information is available upon request.

Please see page 23-24 of this report for an explanation of the methods of valuation utilized by the analyst.

Please see page 25 of this report for an explanation of the risks utilized by the analyst.

The firm distributes research by electronic mail and U.S. mail, and at meetings with customers. Our research distribution lists include only employees and our customers, and aresegregated by market segment (convertible, high yield and distressed, and emerging market). From time to time we provide research to prospective customers and employees.We do not provide, or authorize the redistribution, of our research to the general public. We do not seek retail investors as customers.

As of the date of this report, firm makes a market in some or all the fixed income and convertible securities (if any) of the subject(s) of this report. The firm reserves the right tostop, or start, making markets in any securities (including, without limitation, securities subject of this report), at any time, without notice.