Ames Companies 10-Q 2009 Q3 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark one)

þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 27, 2009

OR

o 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 333-118086

AMES TRUE TEMPER, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	22-2335400 (I.R.S. Employer Identification No.)
465 Railroad Avenue, Camp Hill, Pennsylvania	17011
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:
(717) 737-1500

Former name, former address and former fiscal year, if changed since last report:
NOT APPLICABLE

     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.

Yesþ   Noo

     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).

Yeso   Noo

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

Large accelerated filero	Accelerated filero	Non-accelerated filerþ	Smaller reporting companyo
		(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).

Yeso   Noþ

     As of August 5, 2009 the Registrant had 1,000 shares of its common stock, $1.00 par value, outstanding.

ATT HOLDING CO.

TABLE OF CONTENTS

	Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited):
Condensed Consolidated Balance Sheets as of June 27, 2009 and September 27, 2008		1
Condensed Consolidated Statements of Operations for the thirteen week periods ended June 27, 2009 and June 28, 2008		2
Condensed Consolidated Statements of Operations for the thirty-nine week periods ended June 27, 2009 and June 28, 2008		3
Condensed Consolidated Statements of Cash Flows for the thirty-nine week periods ended June 27, 2009 and June 28, 2008		4
Notes to Condensed Consolidated Financial Statements		5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		27
Item 3. Quantitative and Qualitative Disclosures About Market Risk		39
Item 4T. Controls and Procedures		39
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		41
Item 1A. Risk Factors		41
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		41
Item 3. Defaults Upon Senior Securities		41
Item 4. Submission of Matters to a Vote of Security-Holders		41
Item 5. Other Information		41
Item 6. Exhibits		41
Signatures		42
EX-31.1
EX-31.2
EX-32.1
EX-32.2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ATT Holding Co.
Condensed Consolidated Balance Sheets
(Dollars In Thousands Except Per Share Amounts)

(Unaudited)

	June 27,			September 27,
	2009			2008
Assets
Current assets:
Cash and cash equivalents	$	25,635		$	17,159
Trade receivables, net		58,910			59,168
Inventories		96,959			110,891
Assets held for sale		—			1,025
Prepaid expenses and other current assets		5,162			6,156
Total current assets		186,666			194,399
Property, plant and equipment, net		46,752			55,237
Intangibles, net		54,395			56,149
Goodwill		56,594			58,242
Other noncurrent assets		7,245			9,798
Total assets	$	351,652		$	373,825
Liabilities and stockholder’s deficit
Current liabilities:
Trade accounts payable	$	22,284		$	35,691
Accrued interest payable		8,754			6,021
Accrued expenses and other current liabilities		24,492			27,634
Revolving loan		32,015			40,010
Current portion of long-term debt and capital lease obligation		576			554
Total current liabilities		88,121			109,910
Deferred income taxes		11,997			11,348
Long-term debt		299,819			300,130
Accrued retirement benefits		21,256			26,108
Other liabilities		10,896			10,534
Total liabilities		432,089			458,030
Commitments and contingencies
Stockholder’s deficit:
Preferred stock — Series A, $.0001 per share par value; 100,000 shares authorized; 62,495 shares issued and outstanding as of June 27, 2009 and September 27, 2008 (Liquidation preference of $62,495 at June 27, 2009)		—			—
Common stock — Class A, $.0001 per share par value; 1,600,000 shares authorized; 726,556 shares issued and outstanding as of June 27, 2009 and September 27, 2008		—			—
Common stock — Class B, $.0001 per share par value; 300,000 shares authorized; 267,448 shares issued and outstanding as of June 27, 2009 and September 27, 2008		—			—
Additional paid-in capital		110,873			110,500
Predecessor basis adjustment		(13,539	)		(13,539	)
Accumulated deficit		(170,654	)		(172,129	)
Accumulated other comprehensive loss		(7,117	)		(9,037	)
Total stockholder’s deficit		(80,437	)		(84,205	)
Total liabilities and stockholder’s deficit	$	351,652		$	373,825

See accompanying notes.

1

ATT Holding Co.
Condensed Consolidated Statements of Operations
(Dollars In Thousands)

(Unaudited)

	Thirteen Week Period Ended
	June 27,			June 28,
	2009			2008
Net sales	$	130,036		$	162,580
Cost of goods sold		96,362			121,826
Gross profit		33,674			40,754
Selling, general and administrative expenses		21,843			25,821
Loss on disposal of fixed assets		599			32
Amortization of intangible assets		302			340
Impairment charges		451			166
Operating income		10,479			14,395
Interest expense		7,085			8,396
Other income		(6,793	)		(919	)
Income before income taxes		10,187			6,918
Income tax expense		941			952
Net income	$	9,246		$	5,966

See accompanying notes.

2

ATT Holding Co.
Condensed Consolidated Statements of Operations
(Dollars In Thousands)

(Unaudited)

	Thirty-Nine Week Period Ended
	June 27,		June 28,
	2009		2008
Net sales	$	364,663	$	408,504
Cost of goods sold		268,301		302,455
Gross profit		96,362		106,049
Selling, general and administrative expenses		62,143		71,776
Loss on disposal of fixed assets		901		531
Amortization of intangible assets		911		1,023
Impairment charges		927		200
Operating income		31,480		32,519
Interest expense		22,420		25,628
Other expense		5,643		470
Income before income taxes		3,417		6,421
Income tax expense		2,242		910
Net income	$	1,175	$	5,511

See accompanying notes.

3

ATT Holding Co.
Condensed Consolidated Statements of Cash Flows
(Dollars In Thousands)

(Unaudited)

	Thirty-Nine Week Period
	Ended
	June 27,			June 28,
	2009			2008
Operating activities
Net income	$	1,175		$	5,511
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation expense		11,825			11,742
Amortization of intangible assets		911			1,023
Amortization of loan fees included in interest expense		1,665			1,665
Provision for deferred taxes		1,106			3,453
Provision for (benefit from) bad debts		46			(101	)
Noncash interest expense		—			70
Amortization of bond discount		80			80
Loss on disposal of fixed assets		901			531
Unrealized losses		7,047			502
Impairment charges		927			200
Changes in assets and liabilities:
Accounts receivable		(884	)		(47,767	)
Inventories		12,262			11,186
Prepaid expenses and other assets		2,261			(677	)
Accounts payable		(12,593	)		6,247
Accrued expenses and other liabilities		(4,166	)		4,769
Net cash provided by (used in) operating activities		22,563			(1,566	)
Investing activities
Cash paid for property, plant and equipment		(5,016	)		(5,515	)
Proceeds from sale of property, plant and equipment		49			600
Proceeds from state government grant		—			300
Net cash used in investing activities		(4,967	)		(4,615	)
Financing activities
Repayments of long-term debt		(414	)		(522	)
Borrowings on revolver		120,422			126,822
Repayments on revolver		(128,417	)		(108,800	)
Principal payments under capital lease obligation		(3	)		—
Net cash (used in) provided by financing activities		(8,412	)		17,500
Effect of exchange rate changes on cash		(708	)		(47	)
Increase in cash and cash equivalents		8,476			11,272
Cash and cash equivalents at beginning of period		17,159			5,182
Cash and cash equivalents at end of period	$	25,635		$	16,454
Supplemental Cash Flow Information
Cash paid for interest	$	18,128		$	20,818
Cash paid for income taxes	$	274		$	131
Property, plant and equipment in trade accounts payable at end of period	$	216		$	361

See accompanying notes.

4

ATT HOLDING CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

1. Basis of Presentation

     These interim financial statements and the related notes contain the accounts of ATT Holding Co. and its wholly-owned subsidiaries (the “Company”) on a condensed consolidated basis and should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 27, 2008. ATT Holding Co. is a holding company which has no interest, operations or activities other than through its ownership of 100% of Ames True Temper Inc., (“ATT”) and ATT’s wholly-owned subsidiaries.

     The accompanying condensed consolidated financial statements and notes are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). Due to the seasonal nature of our business, the results of operations for the thirteen and thirty-nine week periods ended June 27, 2009 are not necessarily indicative of results to be expected for the entire fiscal year ending October 3, 2009. Certain information and notes normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. In the opinion of management, all adjustments necessary for a fair presentation have been recorded. All adjustments were comprised of normal recurring adjustments. All intercompany transactions have been eliminated in consolidation.

2. Recent Accounting Pronouncements

Adopted

     In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements” (“SFAS 157”), as amended. SFAS 157 defines fair value, establishes a framework for measuring fair value in US GAAP and expands disclosures about fair value measurements. SFAS 157 is effective for financial assets and financial liabilities in fiscal years beginning after November 15, 2007 and for nonfinancial assets and nonfinancial liabilities in fiscal years beginning after November 15, 2008. Effective September 28, 2008, the Company adopted the provisions of SFAS 157 that relate to financial assets and financial liabilities. The adoption of SFAS 157 had no material effect on the Company’s condensed consolidated financial statements. See Note 15 for further information.

     In September 2006, the FASB issued SFAS No. 158,“Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB No. 87, 88, 106, and 132(R)”(“SFAS 158”). SFAS 158 requires an entity to recognize in its statement of financial position an asset for a defined benefit postretirement plan’s overfunded status or a liability for a plan’s underfunded status, measure a defined benefit postretirement plan’s funded status as of the end of the employer’s fiscal year and recognize changes in the funded status of a defined benefit postretirement plan in comprehensive income in the year in which the change occurs. The Company adopted the requirement to recognize the funded status of a defined benefit postretirement plan as of September 29, 2007. Effective September 28, 2008, the Company adopted the requirement to measure the funded status as of the fiscal year end. See Note 7 for further information.

     In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities, Including an Amendment of FASB Statement No. 115” (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS 159 does not affect any existing

5

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

accounting literature that requires certain assets and liabilities to be carried at fair value. The Company has elected not to adopt the fair value option available under SFAS 159.

     In March 2008, the FASB issued SFAS No. 161,“Disclosures about Derivative Instruments and Hedging Activities”(“SFAS 161”). SFAS 161 amends and expands the disclosure requirements of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities”(“SFAS 133”). It requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The Company adopted SFAS 161 in the thirteen week period ended March 28, 2009. See Note 16 for further information.

     In April 2009, the FASB issued Staff Position No. FAS 107-1 and APB 28-1,“Interim Disclosures about Fair Value of Financial Instruments”(“FSP FAS 107-1 and APB 28-1”) which amends SFAS 107,Disclosures about Fair Value of Financial Instruments, to require disclosures about the fair value of financial instruments for interim periods, as well as annual periods. The Company adopted FSP FAS 107-1 and APB 28-1 in the thirteen week period ended June 27, 2009. See Note 17 for further information.

     In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS 165”). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The Company adopted SFAS 165 in the thirteen week period ended June 27, 2009. See Note 19 for further information.

To Be Adopted

     In February 2008, the FASB issued Staff Position No. FAS 157-2, “Effective Date of FASB Statement No. 157” (“FSP No. 157-2”). FSP No. 157-2 defers the effective date of SFAS 157 for one year for certain nonfinancial assets and nonfinancial liabilities. SFAS 157 is effective for certain nonfinancial assets and nonfinancial liabilities for financial statements issued for fiscal years beginning after November 15, 2008. The Company is required to adopt FSP No. 157-2 in the first quarter of fiscal 2010. The Company has not yet assessed the impact of adoption, if any, on its condensed consolidated financial statements.

     In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”(“SFAS 141(R)”). SFAS 141(R) establishes principles and requirements for how an acquirer in a business combination:

• Recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree;

• Recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and

• Determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.

     SFAS 141(R) and related guidance and interpretations is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 and early adoption is not permitted. The Company is required to adopt SFAS 141(R) and related guidance and interpretations in the first quarter of fiscal 2010. The Company has not yet assessed the impact of adoption, if any, on its condensed consolidated financial statements.

     In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51” (“SFAS 160”). SFAS 160 amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It also amends certain of ARB 51’s consolidation procedures for consistency with the requirements of SFAS 141(R). SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company is required to

6

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

adopt SFAS 160 in the first quarter of fiscal 2010. The Company has not yet assessed the impact of adoption, if any, on its condensed consolidated financial statements.

     In June 2009, the FASB issued SFAS No. 168,“The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles”(“SFAS 168”). SFAS 168 replaces SFAS 162,The Hierarchy of Generally Accepted Accounting Principles, and establishes the Codification as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in preparation of financial statements in conformity with GAAP. The Company is required to adopt SFAS 168 in the fourth quarter of fiscal 2009. The Company has not yet assessed the impact of adoption on its disclosures in the condensed consolidated financial statements.

3. Inventories

     Inventories are as follows:

	June 27,		September 27,
	2009		2008
Finished goods	$	55,796	$	69,681
Work in process		14,872		13,564
Raw materials		26,291		27,646
	$	96,959	$	110,891

4. Goodwill and Other Intangibles

     The changes in carrying amount of goodwill for the thirty-nine week period ended June 27, 2009 are as follows:

	United States		Canada			Total
Goodwill at September 27, 2008	$	43,605	$	14,637		$	58,242
Currency translation adjustments		—		(1,648	)		(1,648	)
Goodwill at June 27, 2009	$	43,605	$	12,989		$	56,594

     The following table reflects the components of intangible assets other than goodwill at June 27, 2009:

	Gross Carrying		Accumulated
	Amount		Amortization
Indefinite lived intangible assets:
Trade names	$	48,334	$	—
Finite lived intangible assets:
Technology (patents)		1,356		1,130
Non-compete agreements		976		960
Customer relationships		11,573		5,754
		13,905		7,844
	$	62,239	$	7,844

7

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

     The following table reflects the components of intangible assets other than goodwill at September 27, 2008:

	Gross Carrying		Accumulated
	Amount		Amortization
Indefinite lived intangible assets:
Trade names	$	48,967	$	—
Finite lived intangible assets:
Technology (patents)		1,356		1,095
Non-compete agreements		976		944
Customer relationships		11,775		4,886
		14,107		6,925
	$	63,074	$	6,925

     The cost of intangible assets other than goodwill and indefinite lived intangible assets are amortized on a straight-line basis over the estimated lives of 3 to 19 years. Amortization expense for the remainder of fiscal year 2009 and the next four fiscal years is as follows:

July 2009 – September 2009	$	305
Fiscal 2010		1,211
Fiscal 2011		1,200
Fiscal 2012		1,180
Fiscal 2013		1,166
Thereafter		999
	$	6,061

5. Income Taxes

     The Company determines its income tax provision for each jurisdiction in which it operates. This determination includes making an estimate of the Company’s current income tax payable, effects of temporary differences, net operating loss and credit carryforwards and the need for valuation allowances for deferred tax assets. In assessing whether or not deferred tax assets will be realized, the Company considers whether it is “more likely than not” that some portion or all of its deferred tax assets will not be realized. In making this assessment, historical operating losses, scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies are considered.

     As a result of the history of losses that the Company has incurred in recent years in the U.S., substantially all of the U.S. domestic deferred tax assets, including tax loss carryforwards, net of certain deferred tax liabilities, have been offset with a valuation allowance. The Company expects to maintain a valuation allowance on these deferred tax assets until it can sustain a sufficient level of profits in the applicable tax jurisdictions that will demonstrate the ability to realize these net deferred tax assets at a more likely than not level.

     Income tax expense for the thirteen week period ended June 27, 2009 was primarily due to the recording of federal taxes of $1.1 million, state taxes of $0.1 million, an additional valuation allowance related to intangible assets of $0.3 million, and a foreign income tax benefit of $0.4 million. The Company has accrued $1.2 million of federal and state taxes as an estimate of the expected tax liability that would result from the repatriation of the Company’s unremitted foreign earnings. The unremitted foreign earnings are expected to be taxable in the U.S. as a result of an internal reorganization that is expected to be completed in the fourth quarter of this fiscal year. Income tax expense for the thirteen week period ended June 28, 2008 was primarily due to the recording of additional valuation allowances of $0.4 million and

8

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

deferred taxes related to an unrealized gain of $0.3 million. Income tax expense for the thirty-nine week period ended June 27, 2009 was mainly comprised of additional valuation allowances of $0.8 million, state taxes of $0.2 million, and accrual of federal taxes of $1.1 million. Income tax expense for the thirty-nine week period ended June 28, 2008 was mainly comprised of additional valuation allowances of $1.1 million.

6. Debt Arrangements

     Total indebtedness is as follows:

	June 27,			September 27,
	2009			2008
Revolving Loan	$	32,015		$	40,010
Senior Floating Rate Notes, net of unamortized discount of $268 and $349, respectively		149,732			149,651
Senior Subordinated Notes		150,000			150,000
Term Note		619			1,033
Capital lease obligation		44			—
Total debt		332,410			340,694
Less:
Short-term Revolving Loan		(32,015	)		(40,010	)
Current portion of capital lease obligation		(10	)		—
Current portion of long-term debt		(566	)		(554	)
Long-term debt	$	299,819		$	300,130

					Letters of				(b)
			Borrowing		Credit		(a)		Interest
	Maximum		Base as		Outstanding		Availability		Rate as
	Borrowing		of June		as of June		as of June		of June			Expiration
	Amount		27, 2009		27, 2009		27, 2009		27, 2009			Date
Revolving Loan	$	130,000	$	84,461	$	2,368	$	50,078		2.5	%	Apr 7, 2011

						(d)			(e)
	Original		(c)			Interest		Maturity	Call Option
	Principal		Interest Rate			Payments		Date	Date
Senior Floating Rate Notes	$	150,000	LIBOR + 4%			Jan 15, Apr 15, Jul 15, Oct 15		Jan 15, 2012	Jan 15, 2007
Senior Subordinated Notes		150,000		10	%	Jan 15, Jul 15		Jul 15, 2012	Jul 15, 2008
Term Note		2,700		2.5	%		Monthly	Jul 19, 2010		n/a

(a)	Total amount available is limited by the amount of eligible accounts receivable, inventory, machinery and equipment, and real estate less letters of credit outstanding.
(b)	The interest rate applicable to the loans under the Revolving Loan is either 1) the “Eurodollar Rate” or London Interbank Offered Rate (LIBOR) plus a margin of 1.75% to 2.75%, or 2) the “Base Rate” plus a margin of 0.50% to 1.50%. The Base Rate is calculated at the higher of 1) the prevailing Federal Funds rate plus 50 basis points or 2) the administrative agent’s prime interest rate plus an applicable rate determined by the Company’s consolidated leverage ratio as defined by the Amended and Restated Senior Secured Credit Agreement.
(c)	LIBOR represents the three month London Interbank Offered Rate which resets quarterly. LIBOR was 1.13% as of April 9, 2009. April 9, 2009 is the reset date for the July 15, 2009 interest payment.
(d)	Interest payments are in cash and paid in arrears.
(e)	The Senior Floating Rate Notes do not have a redemption premium. The Senior Subordinated Notes have a redemption price of 102.5% of principal on or after July 15, 2009 and 100% of principal on or after July 15, 2010.

9

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

Interest Rate Swaps

     The Company’s Senior Floating Rate Notes have an interest rate of 3-month LIBOR plus 4%. The Company has entered into interest rate swaps that fix the variable rate portion of the interest rate as follows:

							(a)
							Effective
					Notional		Interest
	Receive	Pay			Amount		Rate
January 16, 2009 through January 15, 2010	3-month LIBOR		4.31	%	$	33,333		8.31	%
January 16, 2009 through January 15, 2010	3-month LIBOR		4.29	%		16,667		8.29	%
January 15, 2009 through January 15, 2010	3-month LIBOR		1.40	%		100,000		5.40	%
January 15, 2010 through January 15, 2011	3-month LIBOR		1.90	%		150,000		5.90	%
January 18, 2011 through January 15, 2012	3-month LIBOR		2.50	%		150,000		6.50	%

(a) Represents the effective interest rate on the respective portion of the Senior Floating Rate Notes including the contractual terms of the interest rate swap for the periods indicated.

7. Pension and Other Post-retirement Benefits

	Pension Benefits						Other Benefits
	Thirteen Week						Thirteen Week
	Period Ended						Period Ended
	June 27,			June 28,			June 27,			June 28,
	2009			2008			2009			2008
Service Cost	$	110		$	767		$	—		$	—
Interest Cost		2,151			2,277			23			23
Expected return on plan assets		(2,588	)		(2,635	)		—			—
Amortization of prior service cost		6			5			—			—
Amortization of unrecognized net loss (gain)		99			(3	)		(30	)		(29	)
Net periodic benefit (credit) cost	$	(222	)	$	411		$	(7	)	$	(6	)

	Pension Benefits						Other Benefits
	Thirty-nine Week						Thirty-nine Week
	Period Ended						Period Ended
	June 27,			June 28,			June 27,			June 28,
	2009			2008			2009			2008
Service Cost	$	328		$	2,291		$	1		$	1
Interest Cost		6,449			6,814			67			69
Expected return on plan assets		(7,758	)		(7,886	)		—			—
Amortization of prior service cost		18			17			—			—
Amortization of unrecognized net loss (gain)		295			(13	)		(89	)		(88	)
Net periodic benefit (credit) cost	$	(668	)	$	1,223		$	(21	)	$	(18	)

     As required by SFAS 158, the Company adopted the provision to measure plan assets and benefit obligations as of the Company’s fiscal year end during the thirteen week period ended December 27, 2008. Two of the Company’s plans previously used a June 30 measurement date. All plans are now measured at September 30, consistent with the Company’s fiscal year end. The non-cash effect of the adoption of the measurement date provision of SFAS 158 resulted in a credit to opening accumulated deficit of $300, a pension liability decrease of $395, and a credit to accumulated other comprehensive loss of $95.

10

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

Employer Contributions

     During the thirteen week periods ended June 27, 2009 and June 28, 2008, the Company contributed $1,352 and $51, respectively, to its defined benefit pension plans. During the thirty-nine week periods ended June 27, 2009 and June 28, 2008 the Company contributed $3,581 and $174, respectively, to its defined benefit pension plans.

     During the thirteen and thirty-nine week periods ended June 27, 2009 and June 28, 2008, the Company made no contributions to its post-retirement benefit plans.

8. Comprehensive Income

	Thirteen Week
	Period Ended
	June 27,			June 28,
	2009			2008
Net income	$	9,246		$	5,966
Other comprehensive income:
Currency translation adjustment		(3,015	)		(487	)
Fair value adjustments of swaps, net of tax		611			1,495
Comprehensive income	$	6,842		$	6,974

	Thirty-nine Week
	Period Ended
	June 27,			June 28,
	2009			2008
Net income	$	1,175		$	5,511
Other comprehensive income:
Currency translation adjustment		2,663			548
Fair value adjustments of swaps, net of tax		(838	)		(1,727	)
Effect of SFAS 158 adoption, net of tax (See Note 7)		95			—
Comprehensive income	$	3,095		$	4,332

9. Segment Information

     The Company has three operating segments, comprised of the United States, Canada and Other. All of the Company’s revenues represent sales of similar products. All intercompany amounts are eliminated in the eliminations column. Segment information for the thirteen and thirty-nine week periods ended June 27, 2009 and June 28, 2008, representing the reportable segments currently utilized by chief operating decision makers was as follows:

	Thirteen Week Period Ended
	June 27, 2009
	United States		Canada		Other			Eliminations			Consolidated
Net sales	$	109,695	$	19,124	$	1,217		$	—		$	130,036
Intersegment sales		3,979		527		483			(4,989	)		—
Operating income (loss)		11,088		590		(1,199	)					10,479
Interest expense												7,085
Other income												(6,793	)
Income before income taxes											$	10,187

11

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

	Thirteen Week Period Ended
	June 28, 2008
	United States		Canada		Other			Eliminations			Consolidated
Net sales	$	136,106	$	24,278	$	2,196		$	—		$	162,580
Intersegment sales		4,493		400		736			(5,629	)		—
Operating income (loss)		11,298		3,121		(24	)					14,395
Interest expense												8,396
Other income												(919	)
Income before income taxes											$	6,918

	Thirty-nine Week Period Ended
	June 27, 2009
	United States		Canada		Other			Eliminations			Consolidated
Net sales	$	293,302	$	67,475	$	3,886		$	—		$	364,663
Intersegment sales		11,118		1,985		1,652			(14,755	)		—
Operating income (loss)		23,604		9,822		(1,946	)					31,480
Interest expense												22,420
Other expense												5,643
Income before income taxes											$	3,417

	Thirty-nine Week Period Ended
	June 28, 2008
	United States		Canada		Other			Eliminations			Consolidated
Net sales	$	330,023	$	72,600	$	5,881		$	—		$	408,504
Intersegment sales		10,845		1,816		2,087			(14,748	)		—
Operating income (loss)		22,693		9,987		(161	)					32,519
Interest expense												25,628
Other income												470
Income before income taxes											$	6,421

     Segment assets as of June 27, 2009 and September 27, 2008 are as follows:

	June 27,		September 27,
	2009		2008
United States	$	223,772	$	250,964
Canada		120,724		114,953
Other		7,156		7,908
Total	$	351,652	$	373,825

     During the thirteen week period ended June 27, 2009, the Company recorded impairment charges and severance costs of $451 and $510, respectively, due to the discontinuance of manufacturing certain products within the Other segment. Impairment charges were mainly related to a manufacturing facility and equipment associated with discontinuing manufacturing certain products.

12

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

10. Other (Income) Expense

     Other (income) expense consists of the following:

	Thirteen Week Period Ended
	June 27,			June 28,
	2009			2008
Unrealized gain	$	(6,530	)	$	(903	)
Realized gain		(263	)		(16	)
Total	$	(6,793	)	$	(919	)

	Thirty-nine Week Period Ended
	June 27,			June 28,
	2009			2008
Unrealized loss	$	7,152		$	502
Realized gain		(1,509	)		(32	)
Total	$	5,643		$	470

     On September 1, 2007, the Company entered into an intercompany financing arrangement whereby one of the Company’s Canadian subsidiaries issued a U.S. dollar denominated intercompany note. The intercompany note is not long-term in nature. As a result, the impact of exchange rate changes on the principal and interest of the note is recorded as an unrealized gain or loss in the condensed consolidated statements of operations. For the thirteen week periods ended June 27, 2009 and June 28, 2008, the Company recorded unrealized gains related to the intercompany note of $7,471 and $867, respectively. For the thirty-nine week periods ended June 27, 2009 and June 28, 2008, the Company recorded unrealized losses related to the intercompany note of $8,793 and $540, respectively. In addition, for the thirteen week period ended June 27, 2009 the Company recorded unrealized foreign currency losses of $605 related to a U.S. dollar bank account held by a Canadian subsidiary and $475 related to foreign currency forward contracts. For the thirty-nine week period ended June 27, 2009, the Company recorded unrealized gains of $1,494 related to a U.S. dollar bank account held by a Canadian subsidiary and $104 related to foreign currency forward contracts. For the thirteen and thirty-nine week periods ended June 27, 2009 the Company also recorded realized gains related to foreign currency forward contracts of $254 and $1,522, respectively.

11. Condensed Guarantor Data

     On December 17, 2007, as a result of certain corporate restructuring activities, ATT entered into supplemental indenture agreements with respect to ATT’s $150,000 Senior Subordinated Notes and $150,000 Senior Floating Rate Notes (collectively, the “Notes”) to include certain domestic subsidiaries as guarantors. The Notes are fully and unconditionally and jointly and severally guaranteed by ATT Holding Co. and certain of its directly or indirectly wholly-owned subsidiaries, namely, Ames True Temper Properties, Inc., Ames Holdings, Inc. and Ames U.S. Holding Corp., (collectively the “Subsidiary Guarantors”). ATT Holding Co. is a holding company which has no interest, operations or activities other than through its ownership of 100% of ATT and ATT’s wholly-owned subsidiaries. The Notes are not guaranteed by any of ATT Holding Co.’s other directly and indirectly wholly-owned subsidiaries.

     The following condensed consolidating information presents, in separate columns, the condensed consolidating balance sheets as of June 27, 2009 and September 27, 2008, the related condensed consolidating statements of operations for the thirteen and thirty-nine week periods ended June 27, 2009 and

13

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

June 28, 2008 and the condensed consolidating statements of cash flows for the thirty-nine week periods ended June 27, 2009 and June 28, 2008 for ATT Holding Co. on a parent-only basis, with its investment in subsidiary recorded under the equity method, the issuer (Ames True Temper Inc.) as a wholly-owned subsidiary, on a parent-only basis, with its investments in subsidiaries recorded under the equity method, the Subsidiary Guarantors on a combined basis, the subsidiary non-guarantors on a combined basis and the Company on a consolidated basis.

14

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

ATT Holding Co.
Condensed Consolidating Balance Sheet
As of June 27, 2009

				Ames
	ATT			True						Subsidiary
	Holding			Temper,			Subsidiary			Non-
	Co.			Inc.			Guarantors			Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—		$	507		$	8		$	25,120	$	—		$	25,635
Trade receivables, net		—			49,847			—			9,063		—			58,910
Inventories		—			75,786			—			21,173		—			96,959
Prepaid expenses and other current assets		—			3,510			—			1,652		—			5,162
Total current assets		—			129,650			8			57,008		—			186,666
Property, plant and equipment, net		—			36,380			—			10,372		—			46,752
Intangibles, net		—			5,363			42,701			6,331		—			54,395
Goodwill		—			43,605			—			12,989		—			56,594
Intercompany receivable		—			29,265			265,535			2,822		(297,622	)		—
Investment in subsidiaries		—			239,388			56,960			171,160		(467,508	)		—
Other noncurrent assets		—			7,245			—			—		—			7,245
Total assets	$	—		$	490,896		$	365,204		$	260,682	$	(765,130	)	$	351,652
Liabilities and stockholder’s (deficit) equity
Current liabilities:
Trade accounts payable	$	—		$	17,620		$	40		$	4,624	$	—		$	22,284
Accrued interest payable		—			8,754			—			—		—			8,754
Accrued expenses and other current liabilities		—			16,103			1,793			6,596		—			24,492
Revolving loan		—			32,015			—			—		—			32,015
Current portion of long-term debt and capital lease obligation		—			566			—			10		—			576
Total current liabilities		—			75,058			1,833			11,230		—			88,121
Deferred income taxes		—			112			10,389			1,496		—			11,997
Long-term debt		—			299,785			—			34		—			299,819
Accrued retirement benefits		—			19,721			—			1,535		—			21,256
Other liabilities		—			9,589			1,264			43		—			10,896
Intercompany payable		—			167,068			—			130,554		(297,622	)		—
Cumulative losses in subsidiaries		80,437			—			—			—		(80,437	)		—
Total liabilities		80,437			571,333			13,486			144,892		(378,059	)		432,089
Commitments and contingencies
Stockholder’s (deficit) equity:
Preferred stock — Series A		—			—			118,249			58,253		(176,502	)		—
Common stock — Class A		—			—			—			—		—			—
Common stock — Class B		—			—			—			—		—			—
Additional paid-in capital		110,873			110,873			154,502			—		(265,375	)		110,873
Predecessor basis adjustment		(13,539	)		(13,539	)		—			—		13,539			(13,539	)
(Accumulated deficit) retained earnings		(170,654	)		(170,654	)		65,961			44,696		59,997			(170,654	)
Accumulated other comprehensive (loss) income		(7,117	)		(7,117	)		13,006			12,841		(18,730	)		(7,117	)
									��
Total stockholder’s (deficit) equity		(80,437	)		(80,437	)		351,718			115,790		(387,071	)		(80,437	)
Total liabilities and stockholder’s (deficit) equity	$	—		$	490,896		$	365,204		$	260,682	$	(765,130	)	$	351,652

15

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

ATT Holding Co.
Condensed Consolidating Balance Sheet
As of September 27, 2008

				Ames
	ATT			True					Subsidiary
	Holding			Temper,			Subsidiary		Non-
	Co.			Inc.			Guarantors		Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—		$	285		$	5	$	16,869	$	—		$	17,159
Trade receivables, net		—			48,413			—		10,755		—			59,168
Inventories		—			91,411			—		19,480		—			110,891
Assets held for sale		—			1,025			—		—		—			1,025
Prepaid expenses and other current assets		—			4,313			—		1,843		—			6,156
Total current assets		—			145,447			5		48,947		—			194,399
Property, plant and equipment, net		—			42,202			—		13,035		—			55,237
Intangibles, net		—			6,162			42,701		7,286		—			56,149
Goodwill		—			43,605			—		14,637		—			58,242
Intercompany receivable		—			27,079			241,936		2,309		(271,324	)		—
Investment in subsidiaries		—			223,202			58,343		157,732		(439,277	)		—
Other noncurrent assets		—			9,798			—		—		—			9,798
Total assets	$	—		$	497,495		$	342,985	$	243,946	$	(710,601	)	$	373,825
Liabilities and stockholder’s (deficit) equity
Current liabilities:
Trade accounts payable	$	—		$	28,172		$	48	$	7,471	$	—		$	35,691
Accrued interest payable		—			6,021			—		—		—			6,021
Accrued expenses and other current liabilities		—			20,174			—		7,460		—			27,634
Revolving loan		—			40,010			—		—		—			40,010
Current portion of long-term debt and capital lease obligation		—			554			—		—		—			554
Total current liabilities		—			94,931			48		14,931		—			109,910
Deferred income taxes		—			112			9,566		1,670		—			11,348
Long-term debt		—			300,130			—		—		—			300,130
Accrued retirement benefits		—			24,508			—		1,600		—			26,108
Other liabilities		—			10,487			—		47		—			10,534
Intercompany payable		—			151,532			—		119,792		(271,324	)		—
Cumulative losses in subsidiaries		84,205			—			—		—		(84,205	)		—
Total liabilities		84,205			581,700			9,614		138,040		(355,529	)		458,030
Commitments and contingencies
Stockholder’s (deficit) equity:
Preferred stock — Series A		—			—			118,249		58,253		(176,502	)		—
Common stock — Class A		—			—			—		—		—			—
Common stock — Class B		—			—			—		—		—			—
Additional paid-in capital		110,500			110,500			154,502		—		(265,002	)		110,500
Predecessor basis adjustment		(13,539	)		(13,539	)		—		—		13,539			(13,539	)
(Accumulated deficit) retained earnings		(172,129	)		(172,129	)		50,548		38,082		83,499			(172,129	)
Accumulated other comprehensive (loss) income		(9,037	)		(9,037	)		10,072		9,571		(10,606	)		(9,037	)
Total stockholder’s (deficit) equity		(84,205	)		(84,205	)		333,371		105,906		(355,072	)		(84,205	)
Total liabilities and stockholder’s (deficit) equity	$	—		$	497,495		$	342,985	$	243,946	$	(710,601	)	$	373,825

16

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

ATT Holding Co.
Condensed Consolidating Statement of Operations
For the Thirteen Week Period Ended June 27, 2009

			Ames
	ATT		True						Subsidiary
	Holding		Temper,			Subsidiary			Non-
	Co.		Inc.			Guarantors			Guarantors			Eliminations			Consolidated
Net sales	$	—	$	112,795		$	—		$	21,703		$	(4,462	)	$	130,036
Cost of goods sold		—		83,650			—			17,174			(4,462	)		96,362
Gross profit		—		29,145			—			4,529			—			33,674
Selling, general and administrative expenses		—		17,228			66			4,549			—			21,843
Loss on disposal of fixed assets		—		599			—			—			—			599
Amortization of intangible assets		—		266			—			36			—			302
Impairment of fixed assets		—		—			—			451			—			451
Operating income (loss)		—		11,052			(66	)		(507	)		—			10,479
Interest expense (income)		—		9,515			(4,993	)		2,563			—			7,085
Other expense (income)		—		2,292			(2,629	)		(6,456	)		—			(6,793	)
(Loss) income before income taxes		—		(755	)		7,556			3,386			—			10,187
Income tax expense (benefit)		—		137			1,585			(781	)		—			941
Equity in earnings of subsidiaries		9,246		10,138			5,272			4,687			(29,343	)		—
Net income (loss)	$	9,246	$	9,246		$	11,243		$	8,854		$	(29,343	)	$	9,246

ATT Holding Co.
Condensed Consolidating Statement of Operations
For the Thirteen Week Period Ended June 28, 2008

			Ames
	ATT		True						Subsidiary
	Holding		Temper,			Subsidiary			Non-
	Co.		Inc.			Guarantors			Guarantors			Eliminations			Consolidated
Net sales	$	—	$	140,139		$	—		$	27,309		$	(4,868	)	$	162,580
Cost of goods sold		—		107,288			—			19,406			(4,868	)		121,826
Gross profit		—		32,851			—			7,903			—			40,754
Selling, general and administrative expenses		—		21,039			58			4,724			—			25,821
Loss on disposal of fixed assets		—		35			—			(3	)		—			32
Amortization of intangible assets		—		295			—			45			—			340
Impairment of fixed assets		—		166			—			—			—			166
Operating income (loss)		—		11,316			(58	)		3,137			—			14,395
Interest expense (income)		—		10,603			(4,509	)		2,302			—			8,396
Other expense (income)		—		3,119			(3,501	)		(537	)		—			(919	)
(Loss) income before income taxes		—		(2,406	)		7,952			1,372			—			6,918
Income tax (benefit) expense		—		(2,266	)		2,784			434			—			952
Equity in earnings of subsidiaries		5,966		6,106			958			3,632			(16,662	)		—
Net income (loss)	$	5,966	$	5,966		$	6,126		$	4,570		$	(16,662	)	$	5,966

17

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

ATT Holding Co.
Condensed Consolidating Statement of Operations
For the Thirty-Nine Week Period Ended June 27, 2009

			Ames
	ATT		True						Subsidiary
	Holding		Temper,			Subsidiary			Non-
	Co.		Inc.			Guarantors			Guarantors			Eliminations			Consolidated
Net sales	$	—	$	302,734		$	—		$	74,895		$	(12,966	)	$	364,663
Cost of goods sold		—		227,828			—			53,439			(12,966	)		268,301
Gross profit		—		74,906			—			21,456			—			96,362
Selling, general and administrative expenses		—		49,153			166			12,824			—			62,143
Loss on disposal of fixed assets		—		901			—			—			—			901
Amortization of intangible assets		—		799			—			112			—			911
Impairment of fixed assets		—		476			—			451			—			927
Operating income (loss)		—		23,577			(166	)		8,069			—			31,480
Interest expense (income)		—		29,571			(14,781	)		7,630			—			22,420
Other expense (income)		—		6,070			(7,475	)		7,048			—			5,643
(Loss) income before income taxes		—		(12,064	)		22,090			(6,609	)		—			3,417
Income tax expense		—		236			1,803			203			—			2,242
Equity in earnings of subsidiaries		1,175		13,475			(4,875	)		13,427			(23,202	)		—
Net income (loss)	$	1,175	$	1,175		$	15,412		$	6,615		$	(23,202	)	$	1,175

ATT Holding Co.
Condensed Consolidating Statement of Operations
For the Thirty-Nine Week Period Ended June 28, 2008

			Ames
	ATT		True						Subsidiary
	Holding		Temper,			Subsidiary			Non-
	Co.		Inc.			Guarantors			Guarantors			Eliminations			Consolidated
Net sales	$	—	$	340,020		$	—		$	81,005		$	(12,521	)	$	408,504
Cost of goods sold		—		258,934			—			56,042			(12,521	)		302,455
Gross profit		—		81,086			—			24,963			—			106,049
Selling, general and administrative expenses		—		56,754			174			14,848			—			71,776
Loss (gain) on disposal of fixed assets		—		534			—			(3	)		—			531
Amortization of intangible assets		—		886						137			—			1,023
Impairment of fixed assets		—		200			—			—			—			200
Operating income (loss)		—		22,712			(174	)		9,981			—			32,519
Interest expense (income)		—		31,993			(13,309	)		6,944			—			25,628
Other expense (income)		—		6,960			(8,218	)		1,728			—			470
(Loss) income before income taxes		—		(16,241	)		21,353			1,309			—			6,421
Income tax (benefit) expense		—		(7,010	)		7,474			446			—			910
Equity in earnings of subsidiaries		5,511		14,742			1,030			9,272			(30,555	)		—
Net income (loss)	$	5,511	$	5,511		$	14,909		$	10,135		$	(30,555	)	$	5,511

18

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

ATT Holding Co.
Condensed Consolidating Statement of Cash Flows
For the Thirty-Nine Week Period Ended June 27, 2009

				Ames
	ATT			True						Subsidiary
	Holding			Temper,			Subsidiary			Non-
	Co.			Inc.			Guarantors			Guarantors			Eliminations			Consolidated
Operating activities
Net income	$	1,175		$	1,175		$	15,412		$	6,615		$	(23,202	)	$	1,175
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation expense		—			10,234			—			1,591			—			11,825
Equity in earnings of subsidiaries		(1,175	)		(13,475	)		4,875			(13,427	)		23,202			—
Provision for deferred taxes		—			677			823			(394	)		—			1,106
Other, net		—			3,485			—			118			—			3,603
Unrealized foreign currency loss		—			—			—			7,047			—			7,047
Impairment charges		—			476			—			451			—			927
Related party non-cash transactions		—			4,674			(5,677	)		1,003			—			—
Changes in assets and liabilities:
Accounts receivable		—			(1,472	)		—			588			—			(884	)
Inventories		—			15,625			—			(3,363	)		—			12,262
Prepaid expenses and other current assets		—			2,537			—			(276	)		—			2,261
Accounts payable		—			(10,551	)		(6	)		(2,036	)		—			(12,593	)
Intercompany accounts		—			7,322			(18,481	)		11,159			—			—
Accrued expenses and other liabilities		—			(7,543	)		3,057			320			—			(4,166	)
Net cash (used in) provided by operating activities		—			13,164			3			9,396			—			22,563
Investing activities
Cash paid for property, plant and equipment		—			(4,581	)		—			(435	)		—			(5,016	)
Proceeds from sale of property, plant and equipment		—			49			—			—			—			49
Net cash used in investing activities		—			(4,532	)		—			(435	)		—			(4,967	)
Financing activities
Repayments of long-term debt		—			(414	)		—			—			—			(414	)
Borrowings on revolver		—			120,422			—			—			—			120,422
Repayments on revolver		—			(128,417	)		—			—			—			(128,417	)
Principal payments under capital lease obligation		—			—			—			(3	)		—			(3	)
Net cash provided by financing activities		—			(8,409	)		—			(3	)		—			(8,412	)
Effect of exchange rate changes on cash		—			(1	)		—			(707	)		—			(708	)
Increase in cash and cash equivalents		—			222			3			8,251			—			8,476
Cash and cash equivalents at beginning of period		—			285			5			16,869			—			17,159
Cash and cash equivalents at end of period	$	—		$	507		$	8		$	25,120		$	—		$	25,635

19

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

ATT Holding Co.
Condensed Consolidating Statement of Cash Flows
For the Thirty-Nine Week Period Ended June 28, 2008

				Ames
	ATT			True						Subsidiary
	Holding			Temper,			Subsidiary			Non-
	Co.			Inc.			Guarantors			Guarantors			Eliminations			Consolidated
Operating activities
Net income	$	5,511		$	5,511		$	14,909		$	10,135		$	(30,555	)	$	5,511
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation expense		—			9,691			—			2,051			—			11,742
Equity in earnings of subsidiaries		(5,511	)		(14,742	)		(1,030	)		(9,272	)		30,555			—
Provision for deferred taxes		—			1,125			—			2,328			—			3,453
Other, net		—			3,311			—			157			—			3,468
Unrealized foreign currency loss		—			—			—			502			—			502
Changes in assets and liabilities:
Accounts receivable		—			(46,754	)		—			(1,013	)		—			(47,767	)
Inventories		—			11,420			—			(234	)		—			11,186
Prepaid expenses and other current assets		—			(451	)		—			(226	)		—			(677	)
Accounts payable		—			5,168			(100	)		1,179			—			6,247
Intercompany accounts		—			6,877			(13,778	)		6,901			—			—
Accrued expenses and other liabilities		—			5,460			—			(691	)		—			4,769
Net cash (used in) provided by operating activities		—			(13,384	)		1			11,817			—			(1,566	)
Investing activities
Cash paid for property, plant and equipment		—			(4,968	)		—			(547	)		—			(5,515	)
Proceeds from sale of property, plant and equipment		—			587			—			13			—			600
Proceeds from state government grant		—			300			—			—			—			300
Net cash used in investing activities		—			(4,081	)		—			(534	)		—			(4,615	)
Financing activities
Repayments of long-term debt		—			(522	)		—			—			—			(522	)
Borrowings on revolver		—			126,822			—			—			—			126,822
Repayments on revolver		—			(108,800	)		—			—			—			(108,800	)
Net cash provided by financing activities		—			17,500			—			—			—			17,500
Effect of exchange rate changes on cash		—			—			—			(47	)		—			(47	)
Increase in cash and cash equivalents		—			35			1			11,236			—			11,272
Cash and cash equivalents at beginning of period		—			276			5			4,901			—			5,182
Cash and cash equivalents at end of period	$	—		$	311		$	6		$	16,137		$	—		$	16,454

20

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

12. Related Party Transactions

     The Company is party to a management agreement with Castle Harlan, Inc., an affiliate of the shareholder, under which Castle Harlan, Inc. provides business and organizational strategy, financial and investment management, advisory, merchant and investment banking services to the Company. The Company recorded expenses of $841 and $2,479 for the thirteen and thirty-nine weeks ended June 27, 2009, respectively, related to the management fees which are included in selling, general and administrative expenses. These fees for the thirteen and thirty-nine weeks ended June 28, 2008 were $758 and $2,311, respectively. Management fees are payable quarterly in advance in accordance with the management agreement. The Company had payables of $22 to Castle Harlan, Inc. at June 27, 2009 which is included in trade accounts payable. No amounts were outstanding as of September 27, 2008.

     On June 28, 2004, affiliates of Castle Harlan, Inc. together with certain employees of the Company or its subsidiaries completed the acquisition of the Company (the “Acquisition”). In connection with the Acquisition, CHATT Holdings LLC (“CHATT LLC”) was formed. CHATT LLC owns 100% of CHATT Holdings Inc. (“CHATT Inc”); which owns 100% of ATT Holding Co.; which owns 100% of the Company. Upon completion of the Acquisition, affiliates of Castle Harlan, Inc. owned approximately 87% of the equity interests in CHATT LLC and certain employees of the Company or its subsidiaries owned approximately 13% of the equity interests of CHATT LLC. The equity interests of CHATT LLC as of the completion of the Acquisition consisted of Class A Units and Class B Units. The Class A Units and Class B Units were issued as strips of equal numbers of Class A Units and Class B Units (“Strips”). In addition, certain employees of the Company or its subsidiaries were issued Class B Units (sometimes referred to as Class B Incentive Units) that are subject to certain vesting requirements.

     All of the Class B Units that are subject to vesting requirements were issued pursuant to employee subscription agreements entered into separately between CHATT LLC and each employee that received such Class B Units (“Employee Subscription Agreements”). Pursuant to the Employee Subscription Agreements, these units vest based on three criteria: (1) time vesting based on a five year term, (2) performance vesting based on the financial results of ATT and (3) vesting based upon a targeted rate of return upon a change of control. There are certain acceleration clauses in the event of a change of control. As of June 27, 2009 and September 27, 2008, there were 137,943 and 135,429 units, respectively, issued to management and members of the CHATT Holdings LLC Board of Directors who are not employees of ATT or Castle Harlan, Inc. These units may not be sold, pledged or otherwise transferred except in compliance with applicable securities laws. These units are also subject to additional restrictions and limitations.

     Each Class A or Class B Unit, whether issued as part of a Strip or pursuant to an Employee Subscription Agreement, is governed by and subject to the terms of an operating agreement among CHATT LLC and each of its equity holders (the “Operating Agreement”). Pursuant to the Operating Agreement: (1) to the extent any distribution of assets is made by CHATT LLC, the holders of Class A Units are entitled to a preferred return prior to any distribution to holders of Class B Units, (2) after the preferred return has been paid to the holders of Class A Units, the holders of Class B Units are entitled to receive any remaining amounts of any distribution on a pro rata basis, (3) holders of Class A Units do not have any voting rights, and (4) each holder of any Class B Units is entitled to one vote per Class B Unit on all matters to be voted on by members of CHATT LLC. The above-referenced rights of the Class B Units are applicable only to those Class B Units that (1) were issued as part of a strip and therefore are not subject to vesting requirements or (2) were issued pursuant to an Employee Subscription Agreement and have become vested. Unvested Class B Units do not have any voting rights or rights to receive distributions. Each Class A and B Unit held by employees of the Company or its subsidiaries is subject to repurchase by CHATT LLC or an affiliate of Castle Harlan, Inc. upon termination of such employee’s employment.

     At certain times following the Acquisition, CHATT LLC issued strips of Class A-1 Units and Class B Units to certain employees of the Company or its subsidiaries. Pursuant to the Operating Agreement, the holders of Class A-1 Units were entitled to a preferred return prior to any distribution of assets to holders of Class A Units or Class B Units. The terms of the Class A-1 Units were otherwise identical to the Class A

21

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

Units. In January 2007, all of the Class A-1 Units were converted into Class A Units pursuant to the terms of the Operating Agreement.

     Following the conversion of the Class A-1 Units into Class A Units, CHATT LLC issued strips of Class A-2 Units and Class B Units to certain employees of the Company or its subsidiaries. Pursuant to the Operating Agreement, the holders of Class A-2 Units were entitled to a preferred return prior to any distribution of assets to holders of Class A Units or Class B Units. The terms of the Class A-2 Units were otherwise identical to the Class A Units. In January 2009, all of the Class A-2 Units were converted into Class A Units pursuant to the terms of the Operating Agreement.

13. Commitments and Contingencies

     During December 2004, a customer of the Company was named in litigation that involved UnionTools products. The complaint asserted causes of action against the defendant for improper advertisement to the end consumer. The allegation suggests that advertisements led the consumer to believe that the hand tools sold were manufactured within the boundaries of the United States. The allegation asserts cause of action against the customer for common law fraud. In the event that an adverse judgment is rendered against the customer, there is a possibility that the customer would seek legal recourse against the Company for an unspecified amount in contributory damages. Presently, the Company cannot estimate the amount of loss, if any, if the customer were to seek legal recourse against the Company.

     From approximately 1993 through 1999, the Company manufactured and sold 647,000 wheelbarrows with poly wheel hubs. Various claims were submitted, and lawsuits filed, to recover for injuries sustained while inflating tires on these wheelbarrows. In 2002, the Company participated in a voluntary “fast track” recall of these wheelbarrows with the Consumer Product Safety Commission (“CPSC”). The Company again voluntarily recalled these wheelbarrows in June 2004 in cooperation with the CPSC. However, less than 1% of the total products sold were returned, leaving an unknown number in service. To date, the Company has responded to 34 claims involving this product. As of June 27, 2009, the Company had responded to all claims. Although the Company believes it has sufficient insurance coverage in place to cover these claims, a successful claim may exceed the limits of the Company’s coverage.

     The Company is involved in lawsuits and claims, including certain environmental matters, arising out of the normal course of its business. In the opinion of management, the ultimate amount of liability, if any, under pending litigation will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

14. Assets Held for Sale

     As of September 28, 2008 assets held for sale consisted of three facilities, a woodmill located in Portville, NY, a manufacturing facility in Frankfort, NY, and a woodmill in Palmyra, ME. During the thirteen week period ended March 28, 2009, management determined the Palmyra, ME woodmill would not be sold due to current economic conditions. The asset was reclassified as an asset held for use and the carrying amount was decreased by $9, the depreciation that would have been expensed had the asset been continuously classified as held for use. During the thirteen week period ended June 27, 2009 management determined both remaining held for sale facilities were not expected to be sold due to current economic conditions. As a result, both facilities were reclassified as an asset held for use and their total combined carrying value was decreased by $3, the depreciation that would have been expensed had the assets been continuously classified as held for use.

15. Fair Value Measurements

     Effective September 28, 2008, the Company adopted the provisions of SFAS 157 for all financial assets and liabilities required to be measured at fair value on a recurring basis. Although the adoption of SFAS 157 did not materially impact the values of assets and liabilities on the Company’s condensed consolidated balance sheet, the adoption resulted in expanded disclosure requirements for assets and

22

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

liabilities recorded at fair value. Under SFAS 157, fair value is defined as the exit price, or the price that would be received to sell the asset or paid to transfer the liability at the measurement date.

     SFAS 157 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into the following three categories (from highest to lowest priority):

• Level 1 — Inputs that represent quoted prices for identical instruments in active markets.

• Level 2 — Inputs that represent quoted prices for similar instruments in active markets, or quoted prices for identical instruments in non-active markets. Also includes valuation techniques whose inputs are derived principally from observable market data other than quoted prices, such as interest rates or other market-corroborated means.

• Level 3 — Inputs that are largely unobservable, as little or no market data exists for the instrument being valued.

     The Company is required to categorize all financial assets and liabilities required to be measured at fair value on a recurring basis into the above three levels.

     Items Measured at Fair Value on a Recurring Basis

     Effective September 28, 2008, the application of fair value under SFAS 157, as amended, related to the Company’s derivative contracts are mainly comprised of interest rate swaps and foreign currency forward contracts. These items were previously, and will continue to be, recorded at fair value at each balance sheet date. The Company utilized a present value technique to fair value each derivative contract. The Company calculated the present value of future expected cash flows using a discount rate commensurate with the underlying risk of the debtor. If the derivative represented a liability to the Company, the Company’s incremental borrowing rate was utilized as the discount rate in the present value calculation. If the derivative represented an asset to the Company, the recorded value includes an estimate of a credit value adjustment for the counterparty. No changes to valuation techniques were made during the period.

	Quoted Prices
	in Active		Significant		Significant
	Markets for		Other		Other
	Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Total as of
	(Level 1)		(Level 2)		(Level 3)		June 27, 2009
Foreign currency forward contracts	$	—	$	58	$	—	$	58
Interest rate swaps and other		—		1,681		—		1,681
Total liabilities	$	—	$	1,739	$	—	$	1,739

16. Derivatives

     Effective December 28, 2009, the Company adopted the provisions of SFAS 161 to provide enhanced disclosure about how and why the Company uses derivative instruments, how the derivatives and related hedged items are accounted for under SFAS 133, and how the derivative and hedged items affect the Company’s financial position, financial performance, and cash flows. SFAS 133 requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the statement of financial position. The primary risks managed by using derivative instruments are interest rate and foreign currency exchange rate risks. Interest rate swaps are entered into to manage interest rate risk associated with the Company’s variable-rate borrowings. Foreign currency forward contracts are entered into to manage exchange rate risk for portions of the Company’s forecasted U.S. dollar purchases by the Canada segment.

23

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

     Interest rate swaps were entered into to fix the variable interest rate portion of the Senior Floating Rate Notes. The Company swaps 3-month LIBOR rates for fixed interest rates to limit the exposure of changes in interest payments. The Company has structured all existing interest rate swap agreements to be perfectly effective. In accordance with SFAS 133, the Company designates the interest rate swaps as cash flow hedges. The change in fair values of the interest rate swaps are recorded within other comprehensive income (loss), net of deferred taxes. The remaining gain or loss, if any, is recognized currently in earnings. Amounts in other comprehensive income (loss) are reclassified into earnings in the same period in which the interest rate swap affects earnings. See Note 6 for further information regarding the notional amounts and duration of the interest rate swaps. See Note 15 for further information regarding the fair value of the interest rate swaps.

     The foreign currency forward contracts do not qualify for hedge accounting. Therefore, in accordance with SFAS 133 and related interpretations, the change in fair value is recognized as an unrealized gain or loss in earnings in the period of change. As of June 27, 2009, two foreign currency forward contracts remain outstanding with a total notional amount of $1,635. See Note 15 for further information regarding the fair value of the foreign currency forward contracts.

     For more information on the location and amounts of derivative fair values in the condensed consolidated balance sheet and derivative gains and losses in the condensed consolidated statements of operations, see the tabular information below.

     Fair values of derivative instruments as of June 27, 2009:

Asset Derivatives

Liability Derivatives

Qualifies

Balance

Pretax Loss

Balance

Pretax Loss

Description of

for Hedge

Fair

Sheet

Recognized

Sheet

Recognized

Derivative

Designation

Value

Location

in AOCI

Fair Value

Location

in AOCI

Foreign currency forward contracts

No

—

—

—

$

58

(a

)

—

Other

No

—

—

—

12

(b

)

—

Interest rate swaps

Yes

—

—

—

1,669

(c

)

1,669

(a)	The balance sheet location for the foreign currency forward contracts is Accrued expenses and other current liabilities.
(b)	The balance sheet location for the other is Accrued expenses and other current liabilities.
(c)	The balance sheet location for the interest rate swaps is Other liabilities.

     The effect of derivative instruments on the condensed consolidated statements of operations for the thirteen weeks ended June 27, 2009 is as follows:

		Location of pretax gain or		Amount of pretax gain					Amount of pretax gain
	Qualifies	(loss) reclassed		or (loss) reclassed			Location of pretax gain or		or (loss)
Description of	for Hedge	from AOCI into		from AOCI into			(loss) recognized in		recognized in
Derivative	Designation	earnings		earnings			earnings		earnings
Foreign currency forward contracts	No		—		—		Other expense		$	(221	)
Other	No		—		—		SG&A			(30	)
Other	No		—		—		Other expense			45
Interest rate swaps	Yes	Interest expense		$	(583	)		—		—

24

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

     The effect of derivative instruments on the condensed consolidated statements of operations for the thirty-nine weeks ended June 27, 2009 is as follows:

		Location of pretax gain or		Amount of pretax gain					Amount of pretax gain
	Qualifies	(loss) reclassed		or (loss) reclassed			Location of pretax gain or		or (loss)
Description of	for Hedge	from AOCI into		from AOCI into			(loss) recognized in		recognized in
Derivative	Designation	earnings		earnings			earnings		earnings
Foreign currency forward contracts	No		—		—		Other expense		$	1,626
Other	No		—		—		SG&A			(78	)
Other	No		—		—		Other expense			(12	)
Interest rate swaps	Yes	Interest expense		$	(692	)		—		—

     Gains and losses on the interest rate swaps are reclassified from accumulated other comprehensive income into earnings as interest expense on the Senior Floating Rate Notes is accrued. The Company expects $2,403 of net pretax losses recognized in accumulated other comprehensive income as of June 27, 2009, to be reclassified into earnings within the next twelve months.

     Other than standard cross default provisions if a default occurs across the organization, no credit-risk related-contingent features exist for the Company’s derivatives.

17. Fair Value of Financial Instruments

     Effective March 29, 2009, the Company adopted the provisions of FSP 107-1 and APB 28-1 to provide disclosures about the fair value of financial instruments for interim periods. The Company’s financial instruments include cash and cash equivalents, trade receivables, trade accounts payable, and debt. Because of short term maturities, the carrying amounts of cash and cash equivalents, trade receivables, trade accounts payable, the revolving loan and term note approximate fair value. The fair value and carrying value of the Company’s financial instruments are as follows:

		June 27, 2009
	Balance Sheet	Carrying		Fair
	Classification	Value		Value
Senior Floating Rate Notes	Liability	$	149,732	$	126,541
Senior Subordinated Notes	Liability		150,000		110,849

     To determine the fair value of the Senior Floating Rate Notes and Senior Subordinated Notes, the Company computed the present value for the estimated interest and principal payments using borrowing rates of 14% and 24%, respectively. Borrowing rates were estimated based on interest rates as of June 27, 2009 for similar instruments with comparable features and terms. The Company estimated quarterly interest payments under the Senior Floating Rate Notes using projected LIBOR rates through the date of maturity.

     See Notes 15 and 16 for information for the fair value of the Company’s derivative instruments.

18. Other

     The Company applied for relief under the U. S. Continued Dumping and Subsidy Offset Act of 2000, or “Byrd Amendment,” as a result of foreign manufacturers selling certain tools at unfair prices within the U. S. market. During December 2008 and December 2007, the Company received a distribution of tariffs

25

ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

collected in the amount of $2,983 and $1,110, respectively. These amounts were recorded within selling, general and administrative expenses on the accompanying condensed consolidated statements of operations.

19. Subsequent Events

     The Company has evaluated subsequent events through August 5, 2009. August 5, 2009 is the date the financial statements were available to be issued. No material events subsequent to June 27, 2009 were noted.

26

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

     The following discussion and analysis of our parent’s results of operations and financial condition should be read in conjunction with and is qualified in its entirety by reference to the unaudited condensed consolidated financial statements and notes of ATT Holding Co. (the “Company,” “we,” “us,” or “our”) as it relates to the consolidated financial performance and results of operations of our parent, ATT Holding Co., Ames True Temper, Inc. (“ATT”) and its wholly-owned subsidiaries. A separate discussion for ATT is not presented since our parent has no operations or assets separate from its investment in Ames True Temper, Inc. and since the Senior Subordinated Notes and the Senior Floating Rate Notes are guaranteed by our parent and all of our domestic subsidiaries.

Forward-Looking Statements

     This Form 10-Q contains forward-looking statements. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws. Forward-looking statements are identified by terms and phrases such as “may,” “will,” “plans,” “estimates,” “anticipates,” “believes,” “expects,” “intends” and similar expressions and are based on assumptions related to our future business, financial condition, prospects, developments and business strategies.

     Factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to the following:

• we depend on a small number of customers for a significant portion of our business;

• our results of operations have been and may continue to be adversely impacted by macroeconomic events;

• increased reliance on third party suppliers and manufacturers may decrease our ability to meet customer demand;

• if we are unable to obtain raw materials for our products at favorable prices it could adversely impact our operating performance;

• we are subject to risks associated with our foreign operations, especially our operations in China;

• unseasonable weather could have a negative impact on our business and financial results;

• our lawn and garden sales are highly seasonal, which could impact our cash flow and operating results;

• our industry is highly competitive and we may not be able to compete successfully;

• further consolidation in the retail industry may adversely affect our results of operations;

• a failure to successfully introduce new products could result in a reduction in sales and floor space at retailers that carry our products;

• the products that we manufacture could expose us to product liability claims;

• our ability to pay our debt or seek alternative financing may be adversely impacted by other factors listed herein;

• environmental health and safety laws, ordinances, and regulations impose risks and costs on us;

• we depend on the service of key individuals, the loss of any of which could materially harm our business;

• unionized employees could strike or participate in a work stoppage; and

• we may not be able to acquire complementary lawn and garden product manufacturers or brands; in addition, pursuing or completing acquisitions may negatively impact our operating results, divert management’s attention from operating our core business, and expose us to other risks.

27

     Our actual results, performance or achievements could differ materially from those expressed in, or implied by the forward-looking statements. We can give no assurances that any of the events anticipated by or described in the forward-looking statements will occur or, if any of them do, what impact they will have on our business, results of operations and financial condition. We do not intend, and we undertake no obligation, to update any forward-looking statement included in this report, whether as a result of new information, future events or otherwise, after the date of this report. This report should be read in conjunction with the Company’s most recent consolidated financial statements, Risk Factors and the Management Discussion & Analysis (MD&A) included in the Company’s Form 10-K for the fiscal year ended September 27, 2008.

Overview

     The following MD&A is intended to help the reader understand ATT, our operations and our present business environment. MD&A is provided as a supplement to, and should be read in conjunction with, the condensed consolidated financial statements and notes thereto of our parent, ATT Holding Co., contained in Item 1 of this report. The following discussion includes forward-looking statements that involve certain risks and uncertainties. See “Forward-Looking Statements” above. The MD&A includes the following sections:

• “Our Business” — a general description of our business.

• “Operations Review” — an analysis of our consolidated results of operations.

• “Liquidity and Capital Resources” — an analysis of cash flows, debt and other obligations, off-balance sheet arrangements and aggregate contractual obligations and an overview of financial position.

Our Business

General

     ATT is a leading global provider of non-powered landscaping products that make work easier for homeowners and professionals. We sell our products primarily in the U.S. and Canada to (1) retail centers, including home centers and mass merchandisers, (2) wholesale chains, including hardware stores and garden centers and (3) industrial distributors. We offer the following 11 distinct product lines: long handle tools, wheelbarrows, planters, hose reels, snow tools, striking tools, pruning tools, garden hoses, Hound Dog, specialty tools, and landscape fabric.

     We believe that our global manufacturing strategy, based primarily upon a blend of domestic manufacturing and sourced product, makes us cost-competitive while allowing us to provide a high level of customer service.

Operations Review

Company-Wide

     The table below and the following narrative compares our statements of operations for the thirteen week period ended June 27, 2009 (“Q3 2009”) to the thirteen week period ended June 28, 2008 (“Q3 2008).

28

(Dollars in Millions)
	Q3			Q3			Increase/(Decrease)
	2009			2008			$			%
Net sales	$	130.0		$	162.6		$	(32.6	)		(20.0	)%
Cost of goods sold		96.4			121.8			(25.4	)		(20.9	)
Gross profit		33.7			40.8			(7.1	)		(17.4	)
Gross profit percentage		25.9	%		25.1	%
Selling, general, and administrative expenses		21.8			25.8			(4.0	)		(15.5	)
Loss on disposal of fixed assets		0.6			—			0.6			—
Amortization of intangible assets		0.3			0.3			—			—
Impairment charges		0.5			0.2			0.3			*
Operating income		10.5			14.4			(3.9	)		(27.1	)
Operating income percentage		8.1	%		8.9	%
Interest expense		7.1			8.4			(1.3	)		(15.5	)
Other income		(6.8	)		(0.9	)		5.9			*
Income before income taxes		10.2			6.9			3.3			47.8
Income tax expense		0.9			1.0			(0.1	)		(10.0	)
Net income	$	9.2		$	6.0		$	3.2			53.3	%

* Greater than 100%.

Note: Totals may not sum due to rounding.

Q3 2009 compared to Q3 2008

     Net Sales.Overall net sales decreased primarily due to volume declines of approximately $41.0 million mainly due to the continued global economic slowdown, unfavorable Canadian currency translation of $3.2 million, reduced inventory levels at certain customers, and less favorable weather conditions throughout much of the United States, partially offset by general selling price increases of approximately $13.0 million. The global economic downturn continues to negatively impact retail, industrial, and construction demand. The general selling price increases went into effect during Q1 2009.

     Gross Profit.The gross profit decrease is mainly attributable to volume declines partially offset by general selling price increases.

     Selling, General and Administrative (“SG&A”) Expenses.SG&A expenses decreased primarily due to lower distribution and commission expenses of $2.0 million and $0.3 million, respectively, attributed to lower sales volume.

     Loss on Disposal of Fixed Assets.Loss on disposal of fixed assets includes miscellaneous disposals of machinery and equipment.

     Amortization of Intangible Assets.Amortization expense is consistent with the prior period.

     Impairment Charges.The impairment charges of $0.5 million relate to the impairment of a manufacturing facility and equipment at our Other segment mainly due to the discontinuance of manufacturing certain products.

     Interest Expense.Interest expense decreased partially due to lower average borrowings under our Amended and Restated Senior Secured Credit Facility (“Revolving Loan”). In addition, we entered into an interest rate swap during Q2 2009 to replace expiring swaps with a notional amount of $100 million related to our Senior Floating Rate Notes. The new swap reduced the effective interest rate on our Senior Floating

29

Rate Notes to 6.37%. LIBOR rates also declined on a year over year basis reducing interest expense associated with our Revolving Loan.

     Other Income.Other income for Q3 2009 includes $7.5 million of an unrealized foreign currency gain on a U.S. dollar denominated intercompany note issued by a Canadian subsidiary that is not of a long-term nature. The gain was partially offset by unrealized losses of $0.6 million related to a U.S. dollar bank account held by a Canadian subsidiary and $0.5 million related to foreign currency forward contracts. Other income for Q3 2009 also includes a realized gain related to foreign currency forward contracts of $0.3 million. Other income for Q3 2008 includes an unrealized foreign currency translation gain of $0.9 million on the intercompany note.

     Income Tax Expense.Income tax expense for Q3 2009 was primarily due to the recording of federal taxes of $1.1 million, state taxes of $0.1 million, an additional valuation allowance related to intangible assets of $0.3 million, and a foreign income tax benefit of $0.4 million. We have accrued $1.2 million of federal and state taxes as an estimate of the expected tax liability that would result from the repatriation of our unremitted foreign earnings. The unremitted foreign earnings are expected to be taxable in the U.S. as a result of an internal reorganization that is expected to be completed in the fourth quarter of this year. Income tax expense for Q3 2008 was primarily due to the recording of additional valuation allowances of $0.4 million and deferred taxes related to an unrealized foreign currency gain of $0.3 million. As of March 28, 2009 and September 2008, a deferred tax asset valuation allowance was necessary for substantially all of our U.S. domestic deferred tax assets, net of certain deferred tax liabilities. We expect to maintain a valuation allowance on these deferred tax assets until we can sustain a sufficient level of profits in the applicable jurisdictions that will demonstrate the ability to realize these net deferred tax assets.

Our Segments

     The following table presents our net sales and operating income after intercompany eliminations by segment for Q3 2009 and Q3 2008:

(Dollars in Millions)
	Q3			Q3		Increase/(Decrease)
	2009			2008		$			%
Net sales:
United States	$	109.7		$	136.1	$	(26.4	)		(19.4	)%
Canada		19.1			24.3		(5.2	)		(21.4	)
Other		1.2			2.2		(1.0	)		(45.5	)
Net sales	$	130.0		$	162.6	$	(32.6	)		(20.0	)%
Operating income (loss):
United States	$	11.1		$	11.3	$	(0.2	)		(1.8	)%
Canada		0.6			3.1		(2.5	)		(80.6	)
Other		(1.2	)		—		(1.2	)		*
Operating income	$	10.5		$	14.4	$	(3.9	)		(27.1	)%

* Greater than 100%.

Note: Totals may not sum due to rounding.

Q3 2009 compared to Q3 2008

United States

     Net Sales.Overall net sales decreased primarily due to volume declines of approximately $37.0 million due to the continued global economic slowdown, and less favorable weather conditions throughout the United States, partially offset by general selling price increases of approximately $11.0 million. The

30

global economic downturn continues to negatively impact retail, industrial, and construction demand. The general selling price increases went into effect during Q1 2009.

     Operating income. Operating income decreased due to lower sales volume partially offset by general selling price increases and lower distribution and commission expenses of $1.7 million and $0.2 million, respectively, attributed to lower sales volume.

Canada

     Net Sales.Net sales decreased primarily due to volume declines of approximately $4.0 million due to the continued global economic slowdown and unfavorable currency translation of $3.2 million partially offset by general selling price increases of approximately $2.0 million.

     Operating income.Operating income decreased due to volume declines partially offset by general selling price increases and lower distribution and commission expenses of $0.3 million and $0.1 million, respectively, due to lower sales volume.

Other

     Net Sales.Net sales decreased as a result of lower sales volume of approximately $1.0 million due to slower retail demand, partially offset by general selling price increases of approximately $0.1 million.

     Operating income.Operating income decreased due to lower sales volume and $0.5 million in long lived assets impairment charges and $0.5 million in severance costs partially offset by general selling price increases.

Company-Wide

     The table below and the following narrative compares our statements of operations for the thirty-nine week period ended June 27, 2009 (“YTD 2009”) to the thirty-nine week period ended June 28, 2008 (“YTD 2008”).

(Dollars in Millions)
	YTD			YTD			Increase/(Decrease)
	2009			2008			$			%
Net sales	$	364.7		$	408.5		$	(43.8	)		(10.7	)%
Cost of goods sold		268.3			302.5			(34.2	)		(11.3	)
Gross profit		96.4			106.0			(9.6	)		(9.1	)
Gross profit percentage		26.4	%		25.9	%
Selling, general, and administrative expenses		62.1			71.8			(9.7	)		(13.5	)
Loss on disposal of fixed assets		0.9			0.5			0.4			80.0
Amortization of intangible assets		0.9			1.0			(0.1	)		(10.0	)
Impairment charges		0.9			0.2			0.7			*
Operating income		31.5			32.5			(1.0	)		(3.1	)
Operating income percentage		8.6	%		8.0	%
Interest expense		22.4			25.6			(3.2	)		(12.5	)
Other expense		5.6			0.5			5.1			*
Income before income taxes		3.4			6.4			(3.0	)		(46.9	)
Income tax expense		2.2			0.9			1.3			*
Net income	$	1.2		$	5.5		$	(4.3	)		(78.2	)%

* Greater than 100%.

Note: Totals may not sum due to rounding.

31

YTD 2009 compared to YTD 2008

     Net Sales.Overall net sales decreased primarily due to volume declines of approximately $69.0 million, mainly due to the continued global economic slowdown, unfavorable Canadian currency translation of $14.4 million, less favorable weather conditions throughout much of the United States, and the recording of an additional $1.8 million of store servicing and advertising fees for certain customers as a reduction in revenue, partially offset by general selling price increases of approximately $34.0 million and an increase in snow tool volume of $8.6 million. The general selling price increases went into effect during Q1 2009. The global economic downturn continues to negatively impact retail, industrial, and construction demand. Also, several customers decreased their inventory levels in all three quarters of 2009 which adversely affected our net sales.

     During Q2 2008, one customer changed the manner in which store servicing was provided by eliminating third party contractors and utilizing the customer’s own full-time employees. We could no longer identify the benefit received from store servicing performed for our products sold by the customer. Therefore, beginning in Q2 2008, we recorded store servicing allowances as a reduction to revenue.

     Also during Q2 2008, agreements governing advertising allowances with two significant customers were amended stipulating that no proof of performance was required and advertising allowances were guaranteed. We could no longer identify the benefit received from advertising our products by these customers. Therefore, beginning in Q2 2008, we recorded advertising allowances as a reduction to revenue.

     Gross Profit.Gross profit decreased primarily due to reduced sales volume and the recording of $1.8 million of store servicing and advertising fees as a reduction to revenue as discussed above partially offset by general selling price increases and improved manufacturing efficiencies of $3.1 million. In addition, we purchased certain raw materials and finished goods in late 2008 at lower average prices and our Q1 2009 gross profit benefited from those purchases as the inventory was sold.

     Selling, General and Administrative (“SG&A”) Expenses.SG&A expenses decreased primarily due to a $1.9 million increase in recoveries under the U.S. Continued Dumping and Subsidy Offset Act of 2000, or “Byrd Amendment,” lower distribution and commission expenses of $2.8 million and $1.7 million, respectively, attributed to lower sales volume and the recording of $1.8 million of store servicing and advertising fees as a reduction in revenue as discussed above. We recovered $3.0 million in Q1 2009 and $1.1 million in Q1 2008 under the Byrd Amendment. Future recoveries under the Byrd Amendment are unknown and cannot be reasonably assured.

     Loss on Disposal of Fixed Assets.Loss on disposal of fixed assets includes miscellaneous disposals of machinery and equipment.

     Amortization of Intangible Assets.Amortization expense is consistent with the prior period.

     Impairment Charges.Impairment charges increased due to the recording of an impairment loss of $0.5 million related to an asset previously held for sale and $0.5 million related to the impairment of a manufacturing facility and equipment at our Other segment mainly due to the discontinuance of manufacturing certain products.

     Interest Expense.Interest expense decreased partially due to lower average borrowings under our Revolving Loan. In addition, we entered into an interest rate swap during Q2 2009 to replace expiring swaps with a notional amount of $100 million related to our Senior Floating Rate Notes. The new swap reduced the effective interest rate on our Senior Floating Rate Notes to 7.06%. LIBOR rates also declined on a year over year basis reducing interest expense associated with our Revolving Loan.

     Other Expense.Other expense for YTD 2009 includes $8.8 million of an unrealized foreign currency loss on a U.S. dollar denominated intercompany note issued by a Canadian subsidiary that is not of a long-term nature. The loss was partially offset by unrealized gains of $1.5 million related to a U.S. dollar bank account held by a Canadian subsidiary and $0.1 million related foreign currency forward contracts. Other expense for Q3 2009 also includes a realized gain related to foreign currency forward contracts of $1.5

32

million. Other expense for YTD 2008 includes an unrealized foreign currency translation loss of $0.5 million on the intercompany note.

     Income Tax Expense.Income tax expense for YTD 2009 was mainly comprised of additional valuation allowances of $0.8 million, state taxes of $0.2 million and accrual of federal taxes of $1.1 million. We have accrued $1.2 million of federal and state taxes as an estimate of the expected tax liability that would result from the repatriation our unremitted foreign earnings. The unremitted foreign earnings are expected to be taxable in the U.S. as a result of an internal reorganization that is expected to be completed in the fourth quarter of this year. Income tax expense for YTD 2008 was mainly comprised of additional valuation allowances of $1.1 million. For YTD 2008, a deferred tax asset valuation was necessary for substantially all of our U.S. domestic deferred tax assets, net of certain deferred tax liabilities. We expect to maintain a valuation allowance on these deferred tax assets until we can sustain a sufficient level of profits in the applicable jurisdictions that will demonstrate the ability to realize these net deferred tax assets.

Our Segments

     The following table presents our net sales and operating income (loss) after intercompany eliminations by segment for YTD 2009 and YTD 2008:

(Dollars in Millions)
	YTD			YTD			Increase/(Decrease)
	2009			2008			$			%
Net sales:
United States	$	293.3		$	330.0		$	(36.7	)		(11.1	)%
Canada		67.5			72.6			(5.1	)		(7.0	)
Other		3.9			5.9			(2.0	)		(33.9	)
Net sales	$	364.7		$	408.5		$	(43.8	)		(10.7	)%
Operating income (loss):
United States	$	23.6		$	22.7		$	0.9			4.0	%
Canada		9.8			10.0			(0.2	)		(2.0	)
Other		(1.9	)		(0.2	)		(1.7	)		*
Operating income	$	31.5		$	32.5		$	(1.0	)		(3.1	)%

* Greater than 100%.

Note: Totals may not sum due to rounding.

United States

     Net Sales.Net sales decreased primarily due to volume declines of approximately $63.0 million due to the continued global economic slowdown, the decrease in inventory for several customers in all three quarters of 2009, the recording of $1.8 million of store servicing and advertising fees for certain customers as a reduction in revenue and less favorable weather in the spring as discussed above, partially offset by general selling price increases of approximately $29.0 million. The global economic downturn continues to negatively impact retail, industrial and construction demand.

     Operating income. Operating income increased due to general selling price increases and lower distribution and commission expenses of $2.2 million and $1.4 million, respectively, attributed to lower sales volume partially offset by volume declines.

33

Canada

     Net Sales.Net sales decreased primarily due to volume declines of approximately $4.0 million, due to the continued global economic slowdown and unfavorable currency translation of $14.4 million, partially offset by $8.6 million in increased snow tool sales and general selling price increases of approximately $5.0 million.

     Operating income.Operating income decreased due to volume declines partially offset by general selling price increases and lower distribution and commission expenses of $0.6 million and $0.3 million, respectively, due to lower sales volume.

Other

     Net Sales.Net sales decreased as a result of lower sales volume of approximately $2.0 million due to slower retail demand partially offset by general selling price increases of approximately $0.2 million.

     Operating income.Operating income decreased due to lower sales volume and the recording of $0.5 million in impairment of long lived assets and $0.8 million in severance costs partially offset by general selling price increases.

Liquidity and Capital Resources

     Our principal liquidity requirements are to service our debt and meet our working capital and capital expenditure needs. We expect to be able to meet our liquidity requirements for at least the next twelve months through cash provided by operations and through borrowings available under our Revolving Loan. We anticipate the need to refinance our indebtedness, particularly our Revolving Loan, Senior Subordinated Notes and Senior Floating Rate Notes, on or before maturity. We cannot provide assurance that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all.

(Dollars in Millions)
	YTD			YTD			Increase/(Decrease)
	2009			2008			$			%
Net cash provided by (used in) operating activities	$	22.6		$	(1.6	)	$	24.2			*
Net cash used in investing activities		(5.0	)		(4.6	)		(0.4	)		8.7	%
Net cash (used in) provided by financing activities		(8.4	)		17.5			(25.9	)		*

* Greater than 100%.

Cash Flows from Operating Activities

     The increase in cash provided by operation activities was primarily the result of a reduction in accounts receivable partially offset by a decrease in accounts payable and accrued expenses and other liabilities.

Cash Flows from Investing Activities

     Purchases of property, plant and equipment were our main investing activities during both periods. Fiscal 2009 capital expenditures are expected to be at or slightly below prior fiscal year levels.

Cash Flows from Financing Activities

     The increase in cash used in financing activities was primarily related to increased Revolving Loan repayments from cash generated from operating activities.

34

Debt and Other Obligations

     Total indebtedness is as follows:

	June 27,			September 27,
	2009			2008
Revolving Loan	$	32,015		$	40,010
Senior Floating Rate Notes, net of unamortized discount of $268 and $349, respectively		149,732			149,651
Senior Subordinated Notes		150,000			150,000
Term Note		619			1,033
Capital lease obligation		44			—
Total debt		332,410			340,694
Less:
Short-term Revolving Loan		(32,015	)		(40,010	)
Current portion of capital lease obligation		(10	)		—
Current portion of long-term debt		(566	)		(554	)
Long-term debt	$	299,819		$	300,130

					Letters of				(b)
			Borrowing		Credit		(a)		Interest
	Maximum		Base as		Outstanding		Availability		Rate as
	Borrowing		of June		as of June		as of June		of June			Expiration
	Amount		27, 2009		27, 2009		27, 2009		27, 2009			Date
Revolving Loan	$	130,000	$	84,461	$	2,368	$	50,078		2.5	%	Apr 7, 2011

					(d)		(e)
	Original		(c)		Interest	Maturity	Call Option
	Principal		Interest Rate		Payments	Date	Date
Senior Floating Rate Notes	$	150,000	LIBOR + 4%		Jan 15, Apr 15, Jul 15, Oct 15	Jan 15, 2012	Jan 15, 2007
Senior Subordinated Notes		150,000		10%	Jan 15, Jul 15	Jul 15, 2012	Jul 15, 2008
Term Note		2,700		2.5%	Monthly	Jul 19, 2010		n/a

(a)	Total amount available is limited by the amount of eligible accounts receivable, inventory, machinery and equipment, and real estate less letters of credit outstanding.
(b)	The interest rate applicable to the loans under the Revolving Loan is either 1) the “Eurodollar Rate” or London Interbank Offered Rate (LIBOR) plus a margin of 1.75% to 2.75%, or 2) the “Base Rate” plus a margin of 0.50% to 1.50%. The Base Rate is calculated at the higher of 1) the prevailing Federal Funds rate plus 50 basis points or 2) the administrative agent’s prime interest rate plus an applicable rate determined by the Company’s consolidated leverage ratio as defined by the Amended and Restated Senior Secured Credit Agreement.
(c)	LIBOR represents the three month London Interbank Offered Rate which resets quarterly. LIBOR was 1.13% as of April 9, 2009. April 9, 2009 is the reset date for the July 15, 2009 interest payment.
(d)	Interest payments are in cash and paid in arrears.
(e)	The Senior Floating Rate Notes do not have a redemption premium. The Senior Subordinated Notes have a redemption price of 102.5% of principal on or after July 15, 2009, and 100% of principal on or after July 15, 2010.
(f)	As of June 27, 2009, the Company was in compliance with all financial covenants under its indebtedness agreements.

Revolving Loan

     On April 7, 2006, we entered into the Revolving Loan with Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer. The Revolving Loan is a five-year revolving facility of up to $130.0 million, including a sub-facility for letters of credit in an amount not to exceed $15.0 million and a sub-facility for swing-line loans in an amount not to exceed $15.0 million. Our obligations under the Revolving Loan are guaranteed by ATT Holding Co. and collateralized by substantially all of the assets of

35

ATT and Ames True Temper Properties, Inc. Future domestic subsidiaries will be required to guarantee the obligations and grant a lien on substantially all of their assets.

     The terms of the Revolving Loan include various covenants that restrict our ability to, among other things, incur additional liens, incur additional indebtedness and make additional investments. In addition, we are prohibited from incurring capital expenditures exceeding $15.0 million in any fiscal year (subject to the right to carry over the unused portion to the following year). In addition, upon the occurrence of a “Cash Dominion Trigger”, we will be required to have Consolidated EBITDA, as defined by the Revolving Loan, of at least $41.0 million cumulative over four consecutive quarters. Under the Revolving Loan, a Cash Dominion Trigger shall have occurred if (1) an event of default under the Revolving Loan shall have occurred or (2) availability under the Revolving Loan falls below certain thresholds. The Revolving Loan also includes customary events of default, including, without limitation, payment defaults, cross defaults to other indebtedness and bankruptcy related defaults.

Senior Subordinated Notes

     The Senior Subordinated Notes are fully and unconditionally guaranteed by our parent, ATT Holding Co. and all domestic subsidiaries, on a senior subordinated basis. The Senior Subordinated Notes are unsecured senior subordinated obligations and rank behind all of our existing and future senior debt, including borrowings under the Revolver Loan, equally with any of our future senior subordinated debt, ahead of any of our future debt that expressly provides for subordination to the Senior Subordinated Notes and effectively behind all of the existing and future liabilities of our subsidiaries, including trade payables.

     The indenture governing Senior Subordinated Notes contains various affirmative and negative covenants, subject to a number of important limitations and exceptions, including but not limited to those limiting our ability and the ability of our restricted subsidiaries to borrow money, guarantee debt or sell preferred stock, create liens, pay dividends on or redeem or repurchase stock, make certain investments, sell stock in our restricted subsidiaries, restrict dividends or other payments from restricted subsidiaries, enter into transactions with affiliates and sell assets or merge with other companies. The indenture governing the Senior Subordinated Notes also contains various events of default, including but not limited to those related to non-payment of principal, interest or fees; violations of certain covenants; certain bankruptcy-related events; invalidity of liens; non-payment of certain legal judgments and cross defaults with certain other indebtedness. We are required to redeem the Senior Subordinated Notes under certain circumstances involving changes of control.

Senior Floating Rate Notes

     The Senior Floating Rate Notes are fully and unconditionally guaranteed by our parent and all domestic subsidiaries on a senior unsecured basis. The Senior Floating Rate Notes are unsecured, unsubordinated obligations and are effectively subordinated to all of our existing and future secured debt, to the extent of the assets securing such debt, including borrowings under the Revolving Loan,pari passuwith all future senior unsecured indebtedness, senior in right of payment to all existing and future senior subordinated debt, including our Senior Subordinated Notes, and effectively behind all of the existing and future liabilities of our subsidiaries, including trade payables.

     The indenture governing the Senior Floating Rate Notes contains various affirmative and negative covenants, subject to a number of important limitations and exceptions, including but not limited to those limiting our ability and the ability of our restricted subsidiaries to borrow money, guarantee debt or sell preferred stock, create liens, pay dividends on or redeem or repurchase stock, make specified types of investments, sell stock in our restricted subsidiaries, restrict dividends or other payments from restricted subsidiaries, enter into transactions with affiliates and sell assets or merge with other companies. The indenture governing the Senior Floating Rate Notes also contains various events of default, including but not limited to those related to non-payment of principal, interest or fees; failure to perform or observe certain covenants; inaccuracy of representations and warranties in any material respect; cross defaults with certain other indebtedness; certain bankruptcy related events; monetary judgment defaults and material non-monetary judgment defaults and ERISA (Employee Retirement Income Security Act) defaults and change

36

of control. In addition, we are required to redeem the Senior Floating Rate Notes under certain circumstances involving changes of control.

Other Debt

     The Term Note contains customary events of default (subject to customary exceptions, thresholds and grace periods), including, without limitation, nonpayment of principal, interest, fees and failure to perform or observe certain covenants.

Interest Rate Swaps

     The Senior Floating Rate Notes have an interest rate of 3-month LIBOR plus 4%. We have entered into interest rate swaps that fix the variable rate portion of the interest rate as follows:

(Dollars in Thousands)
							(a)
							Effective
					Notional		Interest
	Receive	Pay			Amount		Rate
January 16, 2009 through January 15, 2010	3-month LIBOR		4.31	%	$	33,333		8.31	%
January 16, 2009 through January 15, 2010	3-month LIBOR		4.29	%		16,667		8.29	%
January 15, 2009 through January 15, 2010	3-month LIBOR		1.40	%		100,000		5.40	%
January 15, 2010 through January 15, 2011	3-month LIBOR		1.90	%		150,000		5.90	%
January 18, 2011 through January 15, 2012	3-month LIBOR		2.50	%		150,000		6.50	%

(a) Represents the effective interest rate on the respective portion of the Senior Floating Rate Notes including the contractual terms of the interest rate swap for the periods indicated.

     As of June 27, 2009, the interest rate swaps were recorded as a liability of $1.7 million. The change in fair value for the thirteen and thirty nine week periods ended June 27, 2009 was recognized as an increase to other comprehensive income of $0.6 million and a decrease to other comprehensive income of $0.8 million, net of taxes, respectively.

Off-Balance Sheet Arrangements

     As of June 27, 2009 and September 27, 2008, we had no off-balance sheet arrangements.

37

Contractual Obligations and Commitments

     The following table represents our contractual commitments associated with our debt and other obligations as of June 27, 2009.

			July		October		October		October		October
			2009 to		2009 to		2010 to		2011 to		2012 to
			September		September		September		September		September
	Total		2009		2010		2011		2012		2013		Thereafter
					(Dollars in Thousands)
Contractual Obligations
Revolving Loan	$	32,015	$	32,015	$	—	$	—	$	—	$	—	$	—
Senior Floating Rate Notes		150,000		—		—		—		150,000		—		—
Senior Subordinated Notes		150,000		—		—		—		150,000		—		—
Term Note		619		140		479		—		—		—		—
Capital lease obligation		44		2		10		10		10		10		2
Interest on Notes		69,408		6,141		24,060		24,488		14,719		—		—
Operating leases		80,350		2,433		9,601		9,525		8,957		8,164		41,670
Pension and postretirement payments		55,122		1,109		7,929		7,196		8,769		8,494		21,625
Medical self-insurance		2,150		2,150		—		—		—		—		—
Open purchase orders		21,095		21,095		—		—		—		—		—
Forward purchase commitments		1,701		66		1,635		—		—		—		—
Other commitments		3,266		2,217		512		512		12		13		—
Total contractual obligations	$	565,770	$	67,368	$	44,226	$	41,731	$	332,467	$	16,681	$	63,297
Commitments
Outstanding letters of credit	$	2,368	$	2,368	$	—	$	—	$	—	$	—	$	—
Total commitments	$	2,368	$	2,368	$	—	$	—	$	—	$	—	$	—

     As of June 27, 2009, the total amount of gross unrecognized tax benefits for uncertain tax positions was $1.3 million. We do not expect a significant tax payment related to these obligations within the next year, however, due to the uncertainty of the timing of these tax positions we have not included this liability in the above table.

Financial Position

     Working capital as of June 27, 2009 and September 27, 2008 was as follows:

(Dollars in Thousands)
	June 27,		September 27,		Increase/(Decrease)
	2009		2008		$			%
Current assets:
Cash and cash equivalents	$	25,635	$	17,159	$	8,476			49.4	%
Trade receivables, net		58,910		59,168		(258	)		(0.4	)
Inventories		96,959		110,891		(13,932	)		(12.6	)
Assets held for sale		—		1,025		(1,025	)		(100.0	)
Prepaid expenses and other current assets		5,162		6,156		(994	)		(16.1	)
Total current assets		186,666		194,399		(7,733	)		(4.0	)
Current liabilities:
Trade accounts payable		22,284		35,691		(13,407	)		(37.6	)
Accrued interest payable		8,754		6,021		2,733			45.4
Accrued expenses and other current liabilities		24,492		27,634		(3,142	)		(11.4	)
Revolving loan		32,015		40,010		(7,995	)		(20.0	)
Current portion of long-term debt and capital lease obligation		576		554		22			4.0
Total current liabilities		88,121		109,910		(21,789	)		(19.8	)
Working capital	$	98,545	$	84,489	$	14,056			16.6	%

38

     Our working capital as of June 27, 2009 compared to our working capital as of September 27, 2008 was impacted by declines in inventories, trade accounts payable, and amounts outstanding under the Revolving Loan which reflect our actions to reduce spending and working capital in light of sales declines. Accounts receivable remained relatively consistent despite completing our peak selling season, primarily due to the reduced sales and shortened payment terms with certain customers.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     Our cash flows, results of operations and financial position are subject to fluctuations resulting from changes in interest rates, foreign currency exchange rates and raw material costs. We manage our exposure to these market risks through internally established policies and procedures and, when deemed appropriate, through the use of derivative financial instruments. Our policy does not allow speculation in derivative instruments for profit or execution of derivative instrument contracts for which there are no underlying exposures. We do not use financial instruments for trading purposes and are not a party to any leveraged derivatives. We monitor our underlying market risk exposures on an ongoing basis and believe that we can modify or adapt our hedging strategies as needed.

Interest Rate Risk

     Our primary market risk is interest rate exposure with respect to our floating rate debt, which includes the Senior Floating Rate Notes and Revolving Loan. The interest rate on the Senior Floating Rate Notes at June 27, 2009 was 5.13%. The interest rate on the Revolving Loan at June 27, 2009 was 2.5%. As of June 27, 2009, we had three outstanding interest rate swaps. These swaps effectively fix the variable interest rate portion of the Senior Floating Rate Notes. See “Debt and Other Obligations — Senior Floating Rate Notes” and “— Interest Rate Swaps.” We estimate a 1% change in Revolving Loan interest rates would impact us by approximately $0.6 million based on a trailing twelve month analysis of actual Revolving Loan balances.

Foreign Operations; Currency Risk

     We conduct foreign operations primarily in Canada and Ireland and utilize international suppliers and manufacturers. For fiscal year 2009, we have hedged some of our forecasted Canadian subsidiary operation purchases that are denominated in U.S. dollars. Additionally, we have a Canadian subsidiary that has issued a U.S. dollar denominated intercompany note in the principal amount of $105 million to a U.S. subsidiary. As a result, we are subject to risk from changes in foreign exchange rates. These changes result in either cumulative translation adjustments, which are included in accumulated other comprehensive income (loss), or realized and unrealized gains and losses which are included in other expense. As of June 27, 2009, a hypothetical 10% change in quoted foreign currency exchange rates would increase or decrease the income before income taxes by $13.7 million.

Raw Material; Commodity Price Risk

     We purchase certain raw materials such as resin, steel and wood that are subject to price volatility caused by unpredictable factors. Where possible, we employ fixed rate raw material purchase contracts and customer price adjustments to help us to manage this risk. We do not currently manage our raw materials risk through the use of derivative instruments.

Item 4T. Controls and Procedures

Disclosure Controls and Procedures

     Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of disclosure controls and procedures as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 27, 2009, our disclosure controls and procedures were effective.

39

Changes in Internal Control over Financial Reporting

     There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

40

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     Not applicable

Item 1A. Risk Factors

     See “Risk Factors” disclosed in the Form 10-K for the fiscal year ended September 27, 2008.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

     None

Item 3. Defaults Upon Senior Securities

     None

Item 4. Submission of Matters to a Vote of Security Holders

     None

Item 5. Other Information

     None

Item 6. Exhibits

Exhibit 31.1	Certification of Chief Executive Officer Pursuant to Rules 13a-14 and 15d-14, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	Certification of Chief Financial Officer Pursuant to Rules 13a-14 and 15d-14, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

41

AMES TRUE TEMPER, INC.

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.

	AMES TRUE TEMPER, INC.
Date: August 5, 2009	/s/ Duane R. Greenly
	Duane R. Greenly
	President and Chief Executive Officer (Principal Executive Officer)
Date: August 5, 2009	/s/ David M. Nuti
	David M. Nuti
	Chief Financial Officer (Principal Financial Officer)

42

AMES TRUE TEMPER, INC.

EXHIBIT INDEX

Exhibit		Description
	31.1	Certification of Chief Executive Officer Pursuant to Rules 13a-14 and 15d-14, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of Chief Financial Officer Pursuant to Rules 13a-14 and 15d-14, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

43