Ames Companies 10-K 2006 FY Annual report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the fiscal year ended September 30, 2006

OR

		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the transition period from__________________ to __________________

Commission file number 333-118086

AMES TRUE TEMPER, INC.

(Exact name of registrant as specified in its charter)

DELAWARE			22-2335400
(State or other jurisdiction of incorporation or organization)			(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

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes     No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes     No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes     No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes     No

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

As of December 22, 2006, the registrant had 1,000 shares of its common stock, $1.00 par value, outstanding.

Documents Incorporated by Reference

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Table of Contents

AMES TRUE TEMPER, INC.

FORM 10-K

YEAR ENDED SEPTEMBER 30, 2006

TABLE OF CONTENTS

PART I						3
Item 1.			BUSINESS			3
Item 1A.			RISK FACTORS			9
Item 1B.			UNRESOLVED STAFF COMMENTS			13
Item 2.			PROPERTIES			13
Item 3.			LEGAL PROCEEDINGS			14
Item 4.			SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS			15
PART II						16
Item 5.			MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES			16
Item 6.			SELECTED FINANCIAL DATA			16
Item 7.			MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			18
Item 7A.			QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			32
Item 8.			FINANCIAL STATEMENTS			34
Item 9.			CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE			69
Item 9A.			CONTROLS AND PROCEDURES			69
Item 9B.			OTHER INFORMATION			69
PART III						70
Item 10.			DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT			70
Item 11.			EXECUTIVE COMPENSATION			74
Item 12.			SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS			76
Item 13.			CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS			77
Item 14.			PRINCIPAL ACCOUNTANT FEES AND SERVICES			79
PART IV						80
Item 15.			EXHIBITS AND FINANCIAL STATEMENT SCHEDULES			80

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TERMS USED IN THIS FORM 10-K

Unless otherwise noted, or indicated by the context, in this Form 10-K the terms the ‘‘Company,’’ ‘‘we,’’ ‘‘us,’’ ‘‘Ames True Temper’’ and ‘‘our’’ refer to Ames True Temper, Inc. and its subsidiaries and, for periods prior to June 27, 2004 our predecessor companies; the term ‘‘parent’’ refers to ATT Holding Co., the owner of 100% of our capital stock, which has no assets other than our capital stock; the term ‘‘Predecessor Company I’’ refers to the Company under the ownership of Wind Point Partners; and the term ‘‘Predecessor Company II’’ refers to Ames True Temper Group, a division of U.S. Industries, Inc. (‘‘USI’’). References to our fiscal years are to our parent’s 52 or 53 week period that generally ends on the Saturday nearest to September 30 of such year. ‘‘Fiscal 2004’’ is the 52-week period that is combined from the thirteen-week period ended September 25, 2004 with the 39-week period ended June 27, 2004 under Predecessor Company I; ‘‘fiscal 2003’’ is the 52-week period ended September 27, 2003 under Predecessor Company I and references to ‘‘fiscal 2002’’ are to the period from September 30, 2001 to January 13, 2002 under Predecessor Company II combined with the period from January 14, 2002 to September 28, 2002 under Predecessor Company I to form a 52-week period.

TRADEMARKS AND SERVICE MARKS

We own or have the rights to various trademarks, copyrights and trade names used in our business, including, but not limited to, the following: Ames™, Ames True Temper™, Ceramic Lite™, Classic™, Dynamic Design Garant™, Homeowner, IXL, Jackson™, Kodiak™, Pony™, Site Safe™, Snow Plow True Temper™, Blue Max™, Polylam 4™ and Woodings. We have recently acquired the rights to Razor-Back™, UnionTools™ and Hound Dog™.

In addition, we have a limited license to use the Stanley™ and John Deere™ trademarks. This Form 10-K also includes trade names and trademarks of other companies. Our use or display of other parties’ trade names, trademarks or products is not intended to and does not imply a relationship with, or endorsement or sponsorship of us by, the trade name or trademark owners.

FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K contains ‘‘forward-looking statements’’ within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are ‘‘forward-looking statements’’ for purposes of federal and state securities laws. Forward-looking statements may include the words ‘‘may,’’ ‘‘will,’’ ‘‘plans,’’ ‘‘estimates,’’ ‘‘anticipates,’’ ‘‘believes,’’ ‘‘expects,’’ ‘‘intends’’ and similar expressions. Although we believe that such statements are based on reasonable assumptions, these forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected or assumed in our forward-looking statements. These factors, risks and uncertainties include, among others, the following:

	•	our liquidity and capital resources;

	•	sales levels to existing and new customers;

	•	increased concentration of our customers;

	•	seasonality and adverse weather conditions;

	•	competitive pressures and trends;

	•	changing consumer preferences;

	•	new product and customer initiatives;

	•	risks relating to foreign sourcing and foreign operations and availability of raw materials;

	•	our ability to successfully consummate and integrate acquisitions; and

	•	general economic conditions.

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 the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. We do not intend, and we undertake no obligation, to update any forward-looking statement.

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PART I

Item 1.	BUSINESS

Our History

Ames True Temper was formed in 1999 when Ames and its then parent, USI, acquired True Temper from the Huffy Corporation, combining two non-powered lawn and garden tool and accessory companies with market leadership positions in long handle tools and wheelbarrows. Ames, founded in 1774, only manufactured shovels for much of its history. However, over the last three decades, Ames acquired several companies to expand its product lines and geographical reach. For example, in 1991, Ames acquired Garant, a Canadian lawn and garden tool manufacturer. In 1997, Ames acquired Woodings-Verona and IXL in two separate transactions, adding striking tool and hickory handle manufacturing capabilities, respectively.

Founded in 1809 in Vermont, True Temper started as a manufacturer of agricultural products, particularly shovels and other digging tools. Like Ames, True Temper also expanded its product lines through acquisitions. In 1981, True Temper acquired Jackson Manufacturing, a leading manufacturer of wheelbarrows and carts. In addition, True Temper acquired Meaford Steel Products, a leading Canadian wheelbarrow manufacturer, in 1996, and SuperLight, a leading aluminum rake manufacturer, in 1997.

As part of a restructuring plan, USI decided to divest Predecessor Company II in 2001. Wind Point Partners, a private equity investment firm, in conjunction with Richard Dell, our current president and chief executive officer, and Duane Greenly, our current chief operating officer, purchased Predecessor Company II in January 2002. Under Predecessor Company I, we completed three acquisitions to complement our product portfolio and enhance our sourcing capabilities. In November 2002, we acquired Dynamic Design, a leading supplier of plastic and foam flowerpots, outdoor planters, window boxes, indoor planters and hanging baskets. In May 2003, we acquired Outdoor Inspirations, to enter the garden hose market. In August 2003, we acquired Greenlife, a leading supplier of non-powered lawn and garden tools manufactured in China.

In June 2004, affiliates of Castle Harlan, Inc., a New York-based private-equity investment firm, together with certain of our employees, completed the acquisition of our company. In order to acquire our company, CHATT Holdings, Inc., ‘‘the buyer’’, and CHATT Holdings LLC, ‘‘the buyer-parent’’, were formed. Upon completion of the acquisition, affiliates of Castle Harlan, Inc. owned approximately 87% of the buyer-parent and management owned approximately 13%.

On April 7, 2006, we acquired Acorn Products, Inc. (‘‘Acorn’’), the parent company of UnionTools, Inc., (‘‘Union’’), a business engaged in the manufacture and distribution of non-powered lawn and garden tools. On April 12, 2006, we acquired substantially all of the assets and properties of Hound Dog Products (‘‘Hound Dog’’), Inc., a business that designs, markets and distributes non-powered lawn and garden tools. These businesses were acquired to expand the Company’s product lines.

General

We are a leading North American manufacturer and marketer of non-powered lawn and garden products, including tools and decorative accessories.

We sell our products primarily in the U.S. and Canada through (1) retail centers, including home centers and mass merchandisers, (2) wholesale chains, including hardware stores and garden centers, and (3) industrial distributors. We have a large portfolio of recognized brands that enables us to offer specific branding strategies for key retail customers. 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.

Our brands are among the most recognized across our primary product categories in the North American non-powered lawn and garden products market. Our brand portfolio includes Ames, True

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Temper, Ames True Temper and Stanley (licensed from The Stanley Works), as well as contractor-oriented brands including UnionTools, Razor-Back, Jackson Professional Tools, and John Deere (licensed from Deere & Company). This strong portfolio of brands allows us to build and maintain long-standing relationships with the leading companies that sell our product categories.

Products

Leveraging a strong portfolio of brand names, we manufacture and market one of the broadest product portfolios in the non-powered lawn and garden industry. We currently offer 14 distinct product lines, anchored by two core product categories: long handle tools and wheelbarrows. We believe that, as a result of our high product quality, high level of customer service and strong customer relationships, we have earned market-leading positions in the following six product lines: long handle tools, wheelbarrows, snow tools, striking tools, lawn carts and repair handles.

The following is a brief description of each of our 14 product lines:

	•	Long Handle Tools:    Our long handle tool product offering consists of shovels, spades, scoops, rakes, hoes, cultivators, weeders, post hole diggers, scrapers, edgers, and forks. We offer numerous types of heads, including plastic, steel or aluminum, and various handles manufactured from wood, engineered polymers or fiberglass. We currently offer over 1,600 SKUs in this category. Long handle tools are marketed under leading brand names including Ames, True Temper, Jackson Professional Tools, UnionTools, Professional Tools, Razor-Back and Garant.

	•	Wheelbarrows:    We manufacture a full line of wheelbarrows, primarily under the True Temper, Jackson, Professional Tools, UnionTools and Garant brand names. We offer both plastic and steel wheelbarrows at a full range of price points for a multitude of tasks.

	•	Planters:    With our acquisition of Dynamic Design, we became a supplier of plastic and foam flower pots, outdoor planters, window boxes, indoor planters and hanging baskets. We source most of our planters’ line from third party manufacturing facilities both domestically and abroad. All of our planters are sold under the Dynamic Design brand. Recently, for both indoor and outdoor use, we introduced the Ceramic-Lite series of polyurethane-molded planters and urns designed to look like glazed and polished ceramic pots. We also added a new line of fiberglass planters in 2005. In 2006, we introduced a new line of proprietary plastic planters with a unique painted finish in trend leading colors.

	•	Hose Reels:    We market rotating, portable, freestanding and swivel hose reels for the home gardener and industrial end user. Hose reels are designed to keep hoses from getting tangled, while providing compact storage of hoses when not in use. Our hose reels are available in portable, wheeled and wall-mount versions. We also offer a line of patio and deck hose reels. We market our hose reels under the Ames and Jackson Professional Tools brand names.

	•	Snow Tools:    We manufacture and distribute numerous types of snow tools, including shovels, pushers, roof rakes, sled scoops, and ice scrapers, with plastic, steel and aluminum heads. We recently introduced our new Snow Plow which clears snow significantly faster than traditional shovels and is designed to remove snow without heavy lifting, which is appealing to many older consumers. We market these products under the Ames, Garant, True Temper, UnionTools and Jackson Professional Tools brand names.

	•	Striking Tools:    We offer a wide range of striking tools, including axes, picks, mallets, mauls, wood splitters and sledgehammers. These products are marketed under the True Temper, Jackson Professional Tools, UnionTools, Garant and Woodings brand names.

	•	Decorative Accessories:    We offer a wide variety of plastic accessories, including edging, fencing, splash blocks and trellises marketed under the Ames brand.

	•	Lawn Carts:    Lawn carts typically are used for transporting everything from plants and mulches to garden debris, sticks and rocks. Lawn carts have molded-in tool holders for ease of carrying tools. Their flat bottom design is useful for carrying plants and easy dumping. Our lawn carts are marketed under the Ames brand.

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	•	Pruning Tools:    We offer a broad line of pruning tools, including grass, pruning, lopping, hedge and pole pruning tools, as well as a variety of trimming saws and cutting tools.

	•	Repair Handles:    We manufacture an extensive line of repair handles for lawn and garden tools, such as long handle tools, snow tools and striking tools. Our repair handles are marketed under our Garant and IXL brand names.

	•	Garden Hoses:    We supply light, medium and heavy-duty garden hoses. Our hoses are marketed under the Ames and Jackson Professional Tools brand names.

	•	Hound Dog:    We offer a wide variety of innovative tools uniquely designed to resolve homeowners’ specific lawn & garden care problems. Hound Dog tools accomplish specific tasks more easily and effectively than traditional approaches. Most importantly, the tools are used from a standing position, which makes yard work easier on a person’s back and knees.

	•	Brooms:    We supply a line of brooms that are typically used in the industrial, utility, and commercial settings. They can be used on rough, unimproved, and smooth surfaces. They generally have poly bristles and may be shipped assembled or unassembled. We market these under the UnionTools brand.

	•	Specialty Tools:    We offer a extensive line of specialty lawn and garden tools targeted at garden enthusiast and commercial landscapers that include (1) Hand Tools such as trowels, transplanters, cultivators, weeders, and bulb planters, and (2) Long Handle Tools such as thatch rakes, ditch bank blades, bush hooks, brush cutters, sod lifters, weeders, weed cutters, grass whips, grass hooks, corn knives and fruit pickers.

In addition to the brands listed above, we also utilize unbranded products to capture the opening price point at major retailers or to satisfy the entire product offering of a customer. While this category historically has not generated significant revenues, it is an important part of establishing our step-up strategy. As an example, we use opening price point products for our long handle tools to strengthen the position of that category’s ‘‘good’’, ‘‘better’’ and ‘‘best’’ product lines.

Customers

We sell our products through (1) retail centers, including home centers and mass merchandisers, such as Home Depot, Lowe’s, Wal-Mart, Sears and Tractor Supply Company (2) wholesale chains, including hardware stores and garden centers, such as Ace, Do-It-Best, Orgill, Mid State and True Value and (3) industrial distributors, such as Grainger and McMaster Carr.

Product Development

Our product development efforts focus on new products and product line extensions. We develop products through our in-house engineering staff and through our relationships with a number of outside product engineering and design firms. In addition, starting in 2002, we established ‘‘core teams’’ to introduce new products more quickly and cost effectively. The core teams, headed by each product category’s marketing director, consist of eight members, one from each functional department. These core teams are empowered to execute the respective category’s strategic plan.

Examples of recent new product initiatives include a line of planters that weigh substantially less than traditional ceramics and are shatter and crack resistant, our retractable hose reel, which won Popular Mechanic’s 2004 Editors Choice Award, and a line of GardenScapes tools that cater to women and older consumers. These tools are smaller, lighter and easier to use than full-sized tools but still retain the strength and durability specifications of their full-sized counterparts.

Sales and Marketing

Our sales organization is structured by distribution channel in the U.S. and by country internationally. In the U.S., we have dedicated a team of sales professionals to each of our large retail customers. We maintain offices adjacent to each of our three largest customers’ headquarters, as well

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as in-house dedicated sales analysts. In addition, we have assigned sales professionals to our domestic wholesale and industrial distribution channels. We also have sales teams located in Canada and Ireland to handle our Canadian and European sales efforts, respectively.

To assist our clients in marketing our products and responding to new customer trends, we have created teams headed by a product marketing director focused on each product line. Each team is responsible for implementing category-specific marketing strategies, including SKU rationalization and support for key accounts.

We offer internal graphic capabilities to design catalogs, labels, point of purchase and other sales materials. In addition, we monitor point of sale and sell-through activity to identify product opportunities and develop merchandising programs to help our customers achieve their sales objectives. We also work closely with external research firms, design studios and product engineering organizations to identify and capitalize on emerging consumer and professional trends.

Raw Materials and Suppliers

The primary raw material inputs for our products include resin (primarily polypropylene and high density polyethylene), wood (mainly ash, hickory and poplar logs) and steel (hot rolled and cold rolled). In addition, we purchase some key materials and components, such as metal fork components, wheelbarrow tires, shovel heads and fiberglass handles; however, we complete most of the final assembly internally in order to better ensure consistent quality for our customers. During fiscal 2006, one supplier accounted for approximately 10% of our total material purchases. We do not believe that our purchases from this one supplier subject us to significant risks of shortages and interruptions. If this supplier failed to meet our needs, we believe that other sources of product would be readily available. We had no supplier provide more than 10% of our raw materials or components.

Competition

The non-powered lawn and garden industry is highly competitive and fragmented. Most of our competitors consist of small privately held companies focusing on a single product category. Some of our competitors include Fiskars and Truper in long handle tools, Suncast in hose reels and decorative accessories and Colorite/Swan in garden hoses. In addition, we face competition from imported or sourced products from China, India and other low-cost producing countries, particularly in wheelbarrows, striking tools and pruning tools. We believe the principal factors by which we compete are quality, performance, price, brand strength, reliability and customer service, with the relative importance of each factor varying by product line. Additionally, our four Chinese joint ventures enable us to compete with products from these low-cost producing countries.

We believe that our size and product depth provide us with a competitive advantage. In addition, we believe that offshore manufacturers lack sufficient distribution capabilities to service large retailers. We also believe that our extensive wood mill infrastructure and expertise in curing wood handles, coupled with our easy geographical access to American ash and hickory sources, provide us with a competitive advantage over offshore manufacturers given the continued preference by consumers for wood handles in long handle and striking tools.

Distribution

We operate five distribution centers and outsource an additional center. The largest distribution center is a 1.2 million square foot distribution center in Carlisle, Pennsylvania. Finished goods from our manufacturing sites are transported to this facility by our internal fleet, which allows us to consolidate customer orders in different product areas and provide freight savings to our customers. Additionally, some light assembly is performed at this location.

We also maintain distribution centers in Nevada, Kentucky, Canada and Ireland. We also utilize a third-party distribution center in Miraloma, CA for our sourced planters. The Nevada facility provides light assembly operations enabling us to provide faster turnaround for our West Coast customers. This facility also operates four injection-molding machines to reduce some of the costs associated with

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transporting high cube products. Our company-wide computer network utilizes software that enables us to more efficiently manage orders, quickly replenish our customers’ inventory and provide our customers with strong logistics support.

Joint Ventures

We hold joint venture interests ranging from 25% to 35% in four separate joint ventures that each owns a manufacturing facility in China. We do not share in the profits or losses of the joint ventures. Under the terms of the Chinese joint venture agreements, we are entitled to minority representation on the board of directors of each joint venture.

Chengde Greenlife Houseware Co., Ltd. Joint Venture

This joint venture, owned by Pingquan County Stamping Factory (65%), our company (30%) and Dick Liao (5%), manufactures metal home and gardening products. We are responsible under the joint venture agreement for handling the sale of products outside of China, while the joint venture is responsible for the sale of products within China. The term of the joint venture agreement is 15 years and was entered into during 1999. The joint venture may be terminated by mutual agreement of the joint venture parties.

Fujian Greenlife Tools of Garden Co., Ltd. Joint Venture

This joint venture, owned by Fujian Huakun Implement Company Limited (Fujian) (13%), Fuzhou Huatian Auto Accessories Company Limited (25%), Dick Liao (37%) and our company (25%), manufactures poly rakes, steel rakes, cutting tools and car components. Fujian is responsible for the development, engineering and production of products, while we are responsible for exporting products of the joint venture. The term of the joint venture agreement is 10 years and it was entered into during 2002. The joint venture can be terminated by mutual agreement of the joint venture parties.

Dalian Greenlife Tools Co., Ltd. Joint Venture

This joint venture, owned by Shushi (Dalian) Steel Shovel Manufacturing Co. (Dalian) (57%), our company (35%) and Dick Liao (8%), manufactures assorted garden tools and metal products. We are responsible for exporting the products of the joint venture. The term of the joint venture agreement is 20 years and was entered into during 1997. The joint venture may be terminated by mutual agreement of the joint venture parties.

Dalian Greenlife Ames True Temper Rubber & Plastic Co., Ltd. Joint Venture

This joint venture, owned by Dalian Greenlife Rubber & Plastic Co., Ltd. (75%) and our company (25%), manufactures handles for long handle tools and other associated products. We are responsible for exporting the products of the joint venture. The term of the joint venture is 10 years and was entered into during 2005. The joint venture may be terminated by mutual agreement of the joint venture parties.

Intellectual Property

We hold registered U.S. trademarks and issued U.S. patents, which are important to our business. Additionally, we and our wholly-owned subsidiaries hold trademarks, patents and copyrights in countries that we sell our products. We also hold an exclusive license in the U.S. and Canada to manufacture clog-free rakes. In addition, we license the Stanley brand name from The Stanley Works for use on long handle tools, wheelbarrows, pruning tools and snow tools placed primarily at Wal-Mart. This license agreement renews automatically for successive one-year periods unless either party gives one-year notice of termination. Currently, the agreement expires on December 31, 2007. We pay royalties for our use of the Stanley name, which were in an amount that is not material to us.

Employees

As of September 30, 2006, we had approximately 2,048 full-time employees worldwide. Most of these employees work in manufacturing and distribution for the U.S. market. At certain times of the

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year, we augment our workforce with temporary workers to accommodate seasonal increases in business activity. Approximately 282 of our U.S. employees are represented by the following:

	1)	United Brotherhood of Carpenters and Joiners of America (UBCJ),; contract expires October, 2007,

	2)	United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union; contract expires October, 2009,

	3)	International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers; contract expires June, 2007,

	4)	International Association of Machinists and Aerospace Workers, Local Lodge No. 2306, District 28; contract underwent bargaining and an agreement was reached on November 10, 2006. The plant is scheduled to close December 2006, and

	5)	International Brotherhood of Teamsters (IBT); contract expires April, 2008.

In addition, 248 employees in our Canadian facility are represented by the Trade Union Advisory Committee. The collective bargaining agreement affecting these employees is in place until October, 2009. Thirty-one of our approximately 53 employees in Ireland are covered by one labor agreement and participate in a national wage plan. We believe that our relations with our employees are generally good.

Environmental and Other Regulations

Our operations, both in the United States and abroad, are subject to foreign, federal, state and local environmental laws, ordinances and regulations that limit discharges into the environment, establish standards for the handling, generation, emission, release, discharge, treatment, storage and disposal of hazardous materials, substances and wastes, and require cleanup of contaminated soil and groundwater. These laws, ordinances and regulations are complex, change frequently and have tended to become more stringent over time. Many of them provide for substantial fines and penalties, orders (including orders to cease operations) and criminal sanctions for violations. They may also impose liability for property damage and personal injury stemming from presence of, or exposure to hazardous substances. In addition, certain of our operations require us to obtain, maintain compliance with, and periodically renew permits.

Certain of these laws, including the U.S. Comprehensive Environmental Response, Compensation and Liability Act, may require the investigation and cleanup of an entity’s or its predecessor’s current or former properties, even if the associated contamination was caused by the operations of a third party. These laws also may require the investigation and cleanup of third-party sites at which an entity or its predecessor sent hazardous wastes for disposal, notwithstanding that the original disposal activity accorded with all applicable requirements. Liability under such laws may be imposed jointly and severally, and regardless of fault.

There are eight sites where we currently are engaged in site investigation or active remediation, which arise out of historical facility operations prior to our operations or ownership. Prior to entering into a Settlement and Release Agreement with Jacuzzi Brands, Inc. on May 15, 2006 as noted in Item 3, we were entitled to indemnification by the former owners for 100% of costs for remediation efforts arising out of certain environmental conditions that were known at the time of closing and 80% of costs for remediation efforts for certain other known items. We were also entitled to indemnification for costs of remediation efforts arising out of certain environmental conditions that were unknown at the time of closing, subject to a sliding scale cost allocation scheme. Upon executing the Settlement and Release Agreement, the Company assumed all environmental liabilities as a result of the release of the environmental indemnities. A portion of the settlement payment offset the recording of additional environmental liabilities. The Company continues to carry environmental insurance. While we do not expect to incur significant costs associated with these projects, there can be no assurance that all such costs will be covered by insurance. We could be subject to claims brought pursuant to applicable laws, ordinances and regulations for property damage or personal injury resulting from the

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environmental impacts of our operations. Increasingly stringent environmental requirements, more aggressive enforcement actions, the discovery of unknown conditions or the bringing of future claims may cause our expenditures for environmental, health and safety matters to increase, and we may incur material costs associated with such matters.

We also are subject to the requirements of U.S. Department of Labor Occupational Safety and Health Administration (‘‘OSHA’’). In order to maintain compliance with applicable OSHA requirements, we have established uniform safety and compliance procedures for our operations and implemented measures to prevent workplace injuries.

We have incurred and will continue to incur costs to comply with the requirements of environmental, health and safety laws, ordinances and regulations. We anticipate that these requirements will become more stringent in the future, and we cannot assure you that compliance costs will not be material.

Item 1A.    RISK FACTORS

In addition to the other information set forth in this Form 10-K, you should carefully consider the following factors which could materially affect our business, financial condition or future results. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

We depend on a small number of customers for a significant portion of our business.

Our two largest customers accounted for 50% (32% and 18%) of our net sales for fiscal 2006 and approximately 49% of our net accounts receivable as of September 30, 2006. Our ten largest customers accounted for 63% of our total net sales during fiscal 2006. The loss of, or reduction in orders from, any of these customers could have a material adverse effect on our business and our financial results, as could customer disputes regarding shipments, fees, brand use and positioning, merchandise condition or related matters. Our business also may be negatively affected by changes in the policies of our significant retail customers, such as return policies or reductions in shelf space allocation to us.

Furthermore, a bankruptcy or a significant deterioration in the financial condition of any of our significant customers or suppliers could have a material adverse effect on our sales, profitability and cash flow. Any of the foregoing could result in a reduction in purchases, a longer collection cycle or an inability to collect accounts receivable.

Further consolidation in the retail industry may adversely affect our profitability.

Home centers and mass merchandisers have consolidated and increased in scale. If, as we expect, this trend continues, our customers will likely seek more favorable terms, including pricing, for their purchases of our products, which will limit our ability to raise prices, including to recoup raw material and other cost increases. Sales on terms less favorable to us than our current terms will have an adverse effect on our profitability.

Increased reliance on third party suppliers and manufacturers may decrease our ability to meet customer demands.

We rely on a limited number of domestic and foreign companies, including our joint venture partners, to supply components and manufacture certain of our products. The percentage of our products, based on net sales, that we source has increased from 2% in fiscal 2002 to over 40% in fiscal 2006. We expect that this percentage will continue to increase in the future. Reliance on third party suppliers and manufacturers may reduce our control over the timing of deliveries and quality of products. Reduced product quality or failure to deliver products quickly may jeopardize our relationships with certain of our key customers. In addition, increased reliance on third party suppliers or manufacturers may result in failure to meet our customer demands, should any of these parties fail

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to manufacture sufficient supply, go out of business or discontinue a particular component. In such event, we may not be able to find alternative suppliers in a timely manner, if at all. Such events could impact our ability to fill orders, which would have a material adverse effect on our customer relationships.

We are subject to risks associated with our foreign operations.

We have operations in Canada, China and Ireland, either directly or through joint ventures. Our foreign operations are subject to the risk of fluctuations in the relative value of the U.S. dollar and the local unit of currency. It will become more expensive to operate in any of these countries if the value of the U.S. dollar declines relative to the local unit of currency. We have not hedged against any currency risk exposure associated with our foreign operations.

Foreign operations are subject to risks that can materially increase the cost of operating in foreign countries and thereby may reduce our overall profitability. These risks include, but are not limited to:

	•	currency exchange rate fluctuations;

	•	increases in foreign tax rates and foreign earnings potentially being subject to withholding requirements or the imposition of tariffs, exchange controls or other restrictions;

	•	general economic and political conditions in countries where we operate and/or sell our products, including inflation;

	•	the difficulties associated with managing our organization spread throughout various countries;

	•	required compliance with a variety of foreign laws and regulations; and

	•	limited protection of intellectual property in certain foreign jurisdictions.

We are subject to risks associated with our operations in China.

A substantial amount of our sourcing is done through our Chinese joint ventures. Since 1979, many new laws and regulations covering general economic matters have been promulgated in China. Despite this activity to develop the legal system, China’s system of laws is not yet complete. Even where adequate law exists in China, enforcement of existing laws or contracts based on existing law may be uncertain and sporadic, and it may be difficult to obtain swift and equitable enforcement or to obtain enforcement of a judgment by a court of another jurisdiction. The relative inexperience of China’s judiciary in many cases creates additional uncertainty as to the outcome of any litigation. In addition, interpretation of statutes and regulations may be subject to government policies reflecting domestic political changes.

Furthermore, a substantial portion of our pruning tools, as well as all of our foam planters, are manufactured in China and must be shipped into the U.S. When they enter the U.S., these products may be subject to import quotas, import duties and other restrictions. Any inability to import these products into the U.S. and any tariffs we may be required to pay with respect to these products may have a material adverse result on our business and results of operations.

We may not be able to acquire complementary lawn and garden product manufacturers or brands. In addition, our acquisition strategy may negatively impact our operating results, divert management’s attention from operating our core business and expose us to other risks.

Part of our growth strategy includes pursuing acquisitions. We may not be able to find suitable acquisition targets, make suitable acquisitions on favorable terms or obtain financing for such acquisitions. In addition, we may not be able to successfully integrate future acquisitions. Future acquisitions may result in significant integration costs, and we may not realize the anticipated strategic benefits of any future acquisitions. Acquisitions may involve a number of special risks, including, but not limited to:

	•	adverse short-term effects on our profitability and cash flows as a result of integration costs;

	•	diversion of management’s attention from the operation of our core business;

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	•	difficulties assimilating and integrating the operations of the acquired company with our own; and

	•	unanticipated liabilities or contingencies relating to the acquired company.

If we are unable to obtain raw materials for our products at favorable prices it could adversely impact our operating performance.

Our suppliers primarily provide resin, wood (mainly ash and hickory logs) and steel. During fiscal 2006, we purchased approximately 10% of our total materials from one supplier, no single supplier provides more than 10% of our raw materials or components. We cannot assure you that we will not experience shortages of raw materials or components for our products or be forced to seek alternative sources of supply. If temporary shortages due to disruptions in supply caused by weather, transportation, production delays or other factors require us to secure our raw materials from sources other than our current suppliers, we may not be able to do so on terms as favorable as our current terms or at all. In addition, material increases in the cost of any of these items on an industry-wide basis could have an adverse impact on our operating performance and cash flows if we are unable to pass on these increased costs to our customers, which could have a material adverse effect on our business and financial results. We currently do not engage in hedging or other financial risk management strategies with respect to potential price fluctuations in the cost of raw materials.

Our industry is highly competitive and we may not be able to compete successfully.

All aspects of the lawn and garden industry, including attracting and retaining customers and pricing, are competitive. To compete effectively, we must, among other things, maintain our relationships with key retailers, continually develop innovative new products that appeal to consumers and deliver products on a reliable basis at competitive prices. We cannot assure you that we will be able to maintain existing competitive advantages we have in our market. We compete for customers with various consumer product manufacturers and numerous other companies that produce home and garden tools and accessories, including foreign manufacturers that export their products to the United States.

Our current or potential competitors may offer products at a lower price or products and services that are superior to ours. In addition, our competitors may be more effective and efficient in integrating new technologies. Furthermore, as a result of business combinations or acquisitions, some of our competitors could become more formidable and may have substantially more resources at their disposal than us. Any of these factors may cause price reductions, reduced gross margins, decreased sales and reduced ability to attract and retain customers.

Changing consumer preferences and discretionary spending patterns could have an adverse effect on our business.

Purchases of our products are discretionary for consumers and, therefore, we are susceptible to economic slowdowns. Consumers generally are more willing to make discretionary purchases during periods in which favorable economic conditions prevail. Slowdowns in the United States economy may adversely affect consumer confidence and spending habits, which could adversely affect our sales. The performance of the economy is affected by numerous economic, political and other factors that are beyond our control.

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

We believe that our future success will depend, in part, upon our ability to develop, market and produce new products, as well as to continue to improve existing products. We may not continue to be successful in the timely introduction and marketing of new products or innovations to our existing products. If we fail to successfully introduce, market and manufacture new products or product innovations and differentiate our products from those of our competitors, our ability to maintain or enhance our industry position could be adversely affected, which in turn could materially adversely affect our business, financial condition or results of operations.

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Our business and financial operations may be adversely affected if our licensing agreement with The Stanley Works for the name Stanley were terminated or not renewed on acceptable terms.

We license from The Stanley Works the name Stanley for certain products. This license agreement renews automatically for successive one-year periods unless either party gives one year notice of termination. Currently, the agreement expires on December 31, 2007. We use the Stanley brand exclusively for sales of garden tools to Wal-Mart. As a result, our failure to renew the license agreement on acceptable terms or replace the volume with another brand of the Company, could have a material adverse effect on our sales to Wal-Mart and, as a result, on our business and financial results.

The products that we manufacture could expose us to product liability claims.

Our business exposes us to potential product liability risks, which are inherent in the manufacture and distribution of certain of our products. From time to time, various suits and claims have been brought against us asserting injury sustained while using our products. Although we generally seek to insure against these risks, there can be no assurance that our coverage may be adequate and we may not be able to maintain insurance on acceptable terms. A successful product liability claim in excess of our insurance coverage could have a material adverse effect on us and could prevent us from obtaining adequate product liability insurance in the future on commercially reasonable terms or at all. Moreover, any adverse publicity arising from claims made against us could adversely affect the reputation and sales of our products.

Unseasonable weather could have a negative impact on our business and financial results.

Demand for lawn and garden products is influenced by weather, particularly weekend weather during the peak gardening season. As a result, our business, financial results, cash flow and our ability to service our debt could be adversely affected by certain weather patterns such as unseasonably cool or warm temperatures, hurricanes, water shortages or floods. In addition, lack of snow or lower than average snowfall during the winter season may result in reduced sales of certain of our products, such as snow shovels and other snow tools.

Our lawn and garden sales are highly seasonal which could impact our cash flow and operating results.

Because our lawn and garden products are used primarily in the spring and summer, our business is highly seasonal. In fiscal 2006, 62% of our sales occurred during our second and third fiscal quarters. A majority of our operating income and cash flow is generated in this period. Our working capital needs and our borrowings generally peak near the end of our second fiscal quarter because we are generating lower sales while incurring expenses in preparation for the spring selling season. If cash on hand and borrowings under our senior credit facility are ever insufficient to meet our seasonal needs or if cash flow generated during the spring and summer is insufficient to repay our borrowings on a timely basis, this seasonality could have a material adverse effect on our business, results of operations, financial condition, cash flow and our ability to service our indebtedness.

Environmental health and safety laws, ordinances and regulations impose risks and costs on us.

Our operations are subject to federal, state, local and foreign laws, ordinances and regulations governing the protection of the environment and health and safety matters, including, but not limited to, those regulating discharges into the air and water, the use, handling and disposal of hazardous or toxic substances, the management of wastes, the cleanup of contamination and the control of noise and odors. We have made, and will continue to make, expenditures to comply with these requirements. While we believe, based upon current information, that we are in substantial compliance with all applicable environmental laws, ordinances and regulations, we cannot assure you of this, and we could be subject to potentially significant fines or penalties for any failure to comply. Moreover, under certain environmental laws, a current or previous owner or operator of real property, and parties that generate or transport hazardous substances that are disposed of at real property, may

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be held liable for the cost to investigate or clean up such real property and for related damages to natural resources. We may be subject to liability, including liability for investigation and cleanup costs, resulting from historical or ongoing operations if contamination is discovered at one of our current or former facilities, or at a landfill or other location where we have disposed of, or arranged for the disposal of, wastes. There are eight sites where we currently are engaged in site investigation or active remediation, which arise out of historical facility operations prior to our operations or ownership.

Prior to entering into a Settlement and Release Agreement with Jacuzzi Brands, Inc. on May 15, 2006 as noted in Item 3, we were entitled to indemnification by the former owners for 100% of costs for remediation efforts arising out of certain environmental conditions that were known at the time of closing and 80% of costs for remediation efforts for certain other known items. We were also entitled to indemnification for costs of remediation efforts arising out of certain environmental conditions that were unknown at the time of closing, subject to a sliding scale cost allocation scheme. Upon executing the Settlement and Release Agreement, the Company assumed all environmental liabilities as a result of the release of the environmental indemnities. A portion of the settlement payment offset the recording of additional environmental liabilities. The Company continues to carry environmental insurance. While we do not expect to incur significant costs associated with these projects, there can be no assurance that all such costs will be covered by insurance.

We depend on the service of key individuals, the loss of any of which could materially harm our business.

Our success will depend, in part, on the efforts of our executive officers and other key employees. The loss of the services of any of our key employees could have a material adverse effect on us. We do not maintain key man life insurance on our executive officers.

Unionized employees could strike or participate in a work stoppage.

We employ approximately 1,952 people on a full-time basis, approximately 29% of whom are covered by collective bargaining or similar labor agreements. We currently are a party to seven such agreements. If our unionized employees were to engage in a strike or other work stoppage, or if we are unable to negotiate acceptable extensions of our agreements with labor unions resulting in a strike or other work stoppage by the affected workers, we could experience a significant disruption of operations and increased operating costs. In addition, any renegotiation or renewal of labor agreements could result in higher wages or benefits paid to unionized employees, which could increase our operating costs and could have a material adverse effect on our profitability.

Item 1B.    UNRESOLVED STAFF COMMENTS

Not applicable.

Item 2.	PROPERTIES

We currently operate 12 manufacturing facilities and 14 wood mills. At our manufacturing facilities, we perform various value added processes for our products, including assembly, forging, forming, injection molding, painting, stamping, treating, turning and welding. Through our Chinese joint venture partners, we have access to four manufacturing facilities in China. Our executive headquarters are located in Camp Hill, Pennsylvania.

In fiscal 2006, we paid an aggregate of approximately $7.9 million for rent on all our leased properties and our projected rent for fiscal 2007 is substantially the same. Our leased facilities vary in term, generally lasting up to 16 years. Several of the leases also contain renewal provisions. We believe our current facilities are generally well maintained and provide adequate production and distribution capacity for future operations. We may, during peak seasons, enter into short-term leases to provide overflow storage facilities. Additionally, we have several small satellite offices to support our sales force throughout the U.S.

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The following table sets forth certain information concerning our current operating facilities and those of our joint venture partners:

Location

Approximate Square Footage

Owned/Leased

Use

Manufacturing/Distribution

Bernie, MO

170,000

Owned

Manufacturing

Byesville, OH

46,000

Owned

Manufacturing

Camp Hill, PA

380,000

Leased

Manufacturing, Executive Offices

Carlisle, PA

1,217,000

Leased

Manufacturing, Distribution

Cork, Ireland

83,000

Owned

Manufacturing, Distribution

Falls City, NE

82,000

Owned

Manufacturing

Frankfort, NY

289,800

Owned

Manufacturing

Harrisburg, PA

264,000

Owned

Manufacturing

Lewistown, PA

124,400

Leased

Manufacturing

Louisville, KY

302,500

Leased

Manufacturing, Distribution

Reno, NV

231,000

Leased

Manufacturing, Distribution

St. Francois, Quebec

353,000

Owned

Manufacturing, Distribution

Wood Mills

Campaign, TN

10,000

Owned

Wood Processing

Delaware, OH

51,100

Owned

Wood Processing

Dexter City, OH

12,600

Owned

Wood Processing

Frankfort, NY

13,500

Owned

Wood Processing

Huntington, IN

7,600

Owned

Wood Processing

Lebanon, KY

13,500

Owned

Wood Processing

North Vernon, IN

17,680

Owned

Wood Processing

Palmyra, ME

15,000

Owned

Wood Processing

Pine Valley, NY

15,750

Owned

Wood Processing

Princeton, KY

10,000

Owned

Wood Processing

Unadilla, NY

13,000

Owned

Wood Processing

Union City, PA

70,000

Owned

Wood Processing

Wallingford, VT

93,000

Owned

Wood Processing

Woodstock, New Brunswick

7,800

Owned

Wood Processing

Administrative

Columbus, OH

40,000

Leased

Administrative Offices

Joint Ventures

Chengde, China

120,000

—

Manufacturing, Distribution

Dalian, China

86,000

—

Manufacturing, Distribution

Fuzhou, China

180,000

—

Manufacturing, Distribution

Dalian, China

184,000

—

Manufacturing, Distribution

During fiscal 2007, we plan to close the administrative office in Columbus, OH, wood mills in Frankfort, NY and Delaware, OH as well as the manufacturing facility in Frankfort, NY.

Item 3.    LEGAL PROCEEDINGS

On August 3, 2004, Jacuzzi Brands, Inc. (‘‘Jacuzzi’’) filed a complaint in the Court of Common Pleas of Cumberland County, Pennsylvania against us, our parent and several Castle Harlan and Wind Point entities. The complaint alleged that, in connection with the acquisition of our parent by affiliates of Castle Harlan, we failed to provide notice to Jacuzzi and to obtain its consent to such acquisition, as allegedly required by the provisions of a leasehold mortgage granted to Jacuzzi on our distribution center in Carlisle, Pennsylvania. The complaint asserted causes of action against us for breach of

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contract, civil conspiracy and common law fraud. In the complaint, Jacuzzi sought an unspecified amount of damages, that a letter of credit should be posted to secure our remaining rental obligations under the lease for the distribution center and other injunctive relief. Upon the filing of the complaint, Jacuzzi moved for preliminary injunction, which, following a hearing, the court denied by order dated August 23, 2004.

We, our parent and the Castle Harlan defendants answered the complaint, and the Wind Point defendants filed preliminary objections seeking to dismiss the claims asserted against them. By order dated December 9, 2004, the court denied Wind Point’s preliminary objections to the complaint. On January 6, 2005, Jacuzzi served interrogatories and document demands upon all the defendants. In February 2005, the defendants responded to these interrogatories and document demands. On May 15, 2006, we entered into a Settlement and Release Agreement (the ‘‘Agreement’’) with Jacuzzi. Under the terms of the Agreement, Jacuzzi paid to us $6.2 million as settlement payment and dismissed the court actions against all defendants related to the acquisition of ATT Holding Co. by affiliates of Castle Harlan, Inc. In return, we agreed to release Jacuzzi from any damages related to any environmental indemnities or wheelbarrow claims. A portion of the settlement payment offset the recording of additional environmental liabilities as a result of the release of the environmental indemnities and the balance was recorded as other income.

During December 2004, a customer of Union’s was named in litigation that involved the company’s products. The complaint asserted causes of action against the defendant for improper advertisement to the consumer. The allegation suggests that advertisements lead the consumer to believe that the hand tools sold were manufactured in the boundaries of the United States. The allegation asserts cause of action against the customer for common law fraud. In the event that courts would deem a judgment against our customer, there is a possibility that the customer would seek legal recourse for a unspecified amount in contributory damages.

From approximately 1993 through 1999, we 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, we participated in a voluntary ‘‘fast track’’ recall of these wheelbarrows with the Consumer Product Safety Commission. We again voluntarily recalled these wheelbarrows in June 2004 in cooperation with the Consumer Product Safety Commission. However, less than 1% of the total products sold were returned, leaving an unknown number in service. To date, we have responded to 31 claims involving this product. All open claims have been resolved. We are currently named as a defendant in one wheelbarrow claim. Although we believe that we have sufficient insurance coverage in place to cover these claims, a successful claim may exceed the limits of our coverage.

We are involved in various claims and legal actions that arise in the ordinary course of business. We do not believe that the ultimate resolution of any of these actions will have a material adverse effect on our consolidated financial position, results of operations, liquidity or capital resources.

Item 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

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PART II

Item 5.	MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

There is no established public trading market for our common stock. All of our 1,000 outstanding shares of common stock are held by our parent. We have not declared a dividend on our common stock. We are generally restricted from paying dividends by certain of our credit facility covenants and the indentures pursuant to which the 10% Senior Subordinated Notes due 2012, which are referred to in this Form 10-K as the ‘‘Senior Subordinated Notes,’’ and the Senior Floating Rate Notes due 2012, referred to as ‘‘Senior Floating Rate Notes’’, were issued. However, we may pay dividends in the future if we are permitted to do so under our debt covenants.

Item 6.	SELECTED FINANCIAL DATA

The selected consolidated financial data below should be read in conjunction with Item 7, ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ and Item 8, ‘‘Financial Statements’’ and the related notes included in this Form 10-K.

The following table sets forth selected consolidated financial data of our parent. Our parent was incorporated on December 20, 2001 for the purpose of acquiring certain assets and liabilities of Predecessor Company II from USI on January 14, 2002. Our parent, under Predecessor Company I, did not have any operations prior to January 14, 2002. Separate financial information for Ames True Temper, Inc. 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.

The selected consolidated financial data presented below for the period ended January 13, 2002 have been derived from Predecessor Company II’s audited combined financial statements for the period ended January 13, 2002 that are not included in this Form 10-K. The selected consolidated financial data presented below for the period ended September 28, 2002 (which is not included in this Form 10-K), the fiscal year ended September 27, 2003 and the period ended June 27, 2004 of our parent, under Predecessor Company I have been derived from our parent’s audited consolidated financial statements, while under control of Predecessor Company I. The selected consolidated financial data presented below for the period ended September 25, 2004, fiscal year ended October 1, 2005 and fiscal year ended September 30, 2006 have been derived from our parent’s audited consolidated financial statements. Our parent’s historical results included below and elsewhere in this Form 10-K are not necessarily indicative of our parent’s future performance.

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			Predecessor Company II												Predecessor Company I
			Period Ended						Period Ended						Fiscal Year Ended						Period Ended						Period Ended						Fiscal Year Ended						Fiscal Year Ended
			January 13,						September 28,						September 27,						June 27,						September 25,						October 1,						September 30,
			2002						2002						2003						2004						2004						2005						2006
Income Statement Data:
Net sales				$	75,600					$	279,354					$	407,426					$	355,443					$	83,044					$	450,604					$	483,601
Cost of goods sold					58,200						223,414						294,487						256,248						73,009						344,544						355,617
Gross profit					17,400						55,940						112,939						99,195						10,035						106,060						127,984
Selling, general and administrative expenses					19,100						46,462						72,262						54,022						16,565						77,319						96,593
Amortization of intangible assets					—						—						3,508						3,303						477						1,754						1,836
Other operating expenses (income)					—						—						797						799						(12	)					122,701						6,007
Operating (loss) income					(1,700	)					9,478						36,372						41,071						(6,995	)					(95,714	)					23,548
Interest expense					2,300						7,000						10,377						7,563						5,899						32,527						33,781
Other (income) expense					(2,400	)					(131	)					(1,065	)					199						(36	)					(86	)					(5,656	)
(Loss) income before income taxes					(1,600	)					2,609						27,060						33,309						(12,858	)					(128,155	)					(4,577	)
Income taxes expense (benefit)					1,200						1,050						10,495						13,928						(5,038	)					(2,955	)					—
Net (loss) income				$	(2,800	)				$	1,559					$	16,565					$	19,381					$	(7,820	)				$	(125,200	)				$	(4,577	)
Other Data:
Cash flows provided by (used in):
Operating activities				$	2,100					$	70,935					$	7,205					$	(14,290	)				$	20,842					$	30,391						($15,752	)
Investing activities					(2,000	)					(169,859	)					(44,561	)					640						(307,991	)					(11,410	)					65,141
Financing activities					500						131,548						5,705						12,649						288,030						861						64,674
Depreciation and amortization					900						3,000						10,993						9,256						3,103						12,031						12,143
Capital expenditures					2,000						4,647						7,053						4,219						1,624						11,600						15,797
Ratio of earnings to fixed Charges (1)					—						—						1.6x						2.1x						—						—						—
Balance Sheet Data (at end of period):
Cash and cash equivalents				$	3,200					$	32,593					$	1,688					$	903					$	1,250					$	21,394					$	5,638
Working capital (2)					119,800						63,327						92,718						133,612						107,593						88,731						147,703
Total assets					286,100						191,154						228,081						279,911						483,237						375,025						458,321
Total debt					126,300						74,894						78,488						91,343						296,300						301,948						368,148
Shareholders’ equity (deficit)					80,800						62,202						84,173						103,718						91,389						(36,654	)					(30,727	)

(1)

For purposes of computing the ratio of earnings to fixed charges, earnings consist of income (loss) before income taxes plus fixed charges. Fixed charges consist of interest (expensed and capitalized) on all indebtedness, plus preferred stock dividends and a proportion of rental expenses deemed to be representative of the interest factor. The earnings were deficient to meet fixed charges by $1.6 million, $4.2 million, $15.5 million, $136.2 million and $ 20.3 million in the periods ended January 13, 2002, September 28, 2002, September 25, 2004, the fiscal year ended October 1, 2005, and the fiscal year ended September 30, 2006, respectively. See Item 7 ‘‘Management Discussion and Analysis of Financial Condition and Results of Operations’’ for a discussion of the purchase accounting items and commodity costs that caused a deficiency for the period ended September 30, 2006.

(2)	Working capital is defined as current assets, excluding cash and cash equivalents, less current liabilities, excluding short-term borrowings and current portion of long-term debt.

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Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion relates to the consolidated financial performance and results of operations of our parent, ATT Holding Co. A separate discussion for Ames True Temper, Inc. 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 Senior Floating Rate Notes are guaranteed by our parent. The following discussion includes forward-looking statements that involve certain risks and uncertainties. See ‘‘Forward-Looking Statements.’’

Overview

Ames True Temper is a leading North American manufacturer and marketer of non-powered lawn and garden tools and accessories. We offer the following 14 distinct product lines with over 4,800 active SKUs: long handle tools, wheelbarrows, planters, hose reels, snow tools, striking tools, decorative accessories, lawn carts, pruning tools, repair handles, garden hoses, Hound Dog, brooms, and specialty tools. We sell our products primarily in the U.S. and Canada through (1) retail centers, including home centers and mass merchandisers, (2) wholesale chains, including hardware stores and garden centers, and (3) industrial distributors.

Predecessor and Successor Periods

Financial statements for periods prior to June 28, 2004 are referred to as the financial statements of Predecessor Company I. Financial statements for periods subsequent to June 27, 2004 are referred to as the financial statements of the Company. For comparison purposes, we have presented the financial information and results of operations for fiscal 2004 on a combined basis, consisting of the Predecessor Company I’s audited financial results of operations for the period from September 28, 2003 through June 27, 2004 and the Company’s audited financial results of operations for the period from June 28, 2004 through September 25, 2004. We have determined that this presentation is more meaningful than disclosing these periods separately, as the combined amounts represent a 52-week period that is comparable to our other fiscal years presented.

The purchase price of Predecessor Company I from Wind Point Partners included a write-up to the fair market value of inventory acquired, which resulted in an increase in cost of goods sold of $10.1 million, or 2.3% of sales, during fiscal 2004. That amount represents the manufacturing profits acquired. Additionally, the purchase price allocated to the fair value of tradenames and other finite lived assets was approximately $69.7 million and $13.1 million, respectively. Additionally, a $34.9 million write-up was recorded to adjust fixed assets to fair value.

Restructuring

Following the acquisition of Predecessor Company II by certain members of management and Wind Point Partners, our new management embarked on a restructuring plan that resulted in the closure of a corporate office, consolidation of certain under-utilized manufacturing facilities and the increase in the sourcing of certain products and components from overseas suppliers.

In connection with the acquisition of Predecessor Company I, the Company reevaluated the restructuring reserves previously set up by Predecessor Company I. These restructuring reserves were originally established to reduce total workforce and close certain facilities. The Company, as of the date of acquisition of Predecessor Company I, began to assess and formulate an exit and restructuring plan that included additional reductions of workforce, facility closures and changes in business strategies. At June 28, 2004 the Company recorded a liability of $4.8 million related to the reductions of workforce and facility closures and $4.8 million related to changes in business strategies for a product line. These plans also resulted in a $6.8 million decrease to the beginning balance of the pension asset for the period ended September 25, 2004. Adjustments were made to these reserves as the cost estimates were refined and finalized. At September 30, 2006, the restructuring reserves were $3.5 million. The Company expects to complete these plans in the next one to two years.

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At date of acquisition of Acorn Products, Inc., the Company recorded a reserve of $1.5 million related to the reductions in workforce and a facility consolidation plan. During fiscal 2006, the Company revised and refined these restructuring reserves, as additional information was available. At September 30, 2006 the restructuring reserve was $1.2 million. The Company expects to complete these plans in the next one to two years.

Business Unit Acquisitions

During fiscal 2003, we acquired three separate businesses: Dynamic Design, Greenlife and Outdoor Inspirations. Dynamic Design and Outdoor Inspirations added new product lines to our portfolio, adding planters and garden hoses, respectively. The acquisition of Greenlife added significant access to low cost manufacturing facilities in China through three separate joint ventures in which Greenlife was a partner. This acquisition has helped us to increase our sourcing of product from 2% in fiscal 2001 to over 40% in fiscal 2006, based on net sales. During fiscal 2006, we acquired substainally all the assets and properties of Hound Dog Products, Inc. in order to add this product line to our portfolio. During fiscal 2006, we acquired the stock of Acorn in order to expand our existing product line portfolio.

Accounting Treatment for Joint Ventures

In August 2003, we purchased Greenlife, which had investments in three cooperative joint ventures in China with certain exclusive marketing rights to sell, outside of China, products manufactured by the three separate joint ventures. We purchased shares of 25%, 30%, and 35% in the three joint ventures. During fiscal 2005, we purchased a 25% interest in a fourth joint venture in Dalian, China. We do not share in either the profit or the loss of any of the joint ventures. We have minority representation on the board of directors of each of the joint ventures. Therefore, the investment is treated under the cost method in our financial statements. See Item 1, ‘‘Business—Joint Ventures.’’

Seasonality

Our revenue stream is seasonal. In fiscal 2006, 61% of net sales were recorded in the second and third quarter. Weather plays a part in the amount and timing of our sales. For example, during the winter season, lack of snow or lower than average snowfall may result in reduced sales of certain of our products, such as snow shovels and other tools. During the spring and summer season, unseasonably cool or warm temperatures, water shortages or floods may reduce or impact the timing of sales.

Acquisition by Castle Harlan

On June 1, 2004, our parent and its equity holders entered into a stock purchase agreement with CHATT Holdings Inc., referred to as the ‘‘buyer,’’ and its parent, CHATT Holdings LLC, referred to as the ‘‘buyer parent.’’ The buyer and buyer parent were newly formed entities established by Castle Harlan Partners IV, L.P., or CHP IV. Pursuant to the stock purchase agreement, the buyer acquired, on June 28, 2004, all of the outstanding equity interests of our parent for a purchase price of $380.0 million plus transaction costs of $6.3 million and working capital adjustments of $27.8 million. Upon completion of the acquisition, approximately 87% of the equity interests of the buyer parent was owned by CHP IV and its affiliates, and the remainder was issued to members of our management who previously held capital stock in our parent, in lieu of cash consideration that they otherwise would have been entitled to receive in the acquisition. In addition, in a few cases, certain members of management that did not currently hold equity in our parent purchased an equity interest in the buyer parent for cash. In order to finance the acquisition, repay our outstanding debt and pay related fees and expenses:

	•	we entered into a $215.0 million senior credit facility consisting of a $75.0 million revolving credit facility and a $140.0 million term loan, as described in ‘‘—Debt and Other Obligations;’’

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	•	we issued $150.0 million of 10% Senior Subordinated Notes; and

	•	the buyer parent received a $110.5 million equity capital contribution from CHP IV and its affiliates and management.

The foregoing transactions, including the acquisition, are collectively referred to in this Form 10-K as the ‘‘transactions.’’

Closing Purchase Price and Adjustments

The purchase price for the acquisition was $380.0 million in cash (excluding fees and expenses of $6.3 million), subject to the working capital and other adjustments described below. Approximately $92.8 million of the consideration was allocated to the repayment or assumption of all of our and our parent’s outstanding debt and accrued interest at the time of the acquisition with the remainder allocated to the purchase of the equity interests of our parent.

The purchase price payable by the buyer for the equity of our parent was subject to the following adjustments:

	•	an upward adjustment based on our parent’s consolidated cash-on-hand as of June 28, 2004;

	•	an upward or downward adjustment based on the estimated amount by which our parent’s consolidated working capital as of June 28, 2004 deviated from $100.5 million;

	•	a downward adjustment of approximately $14.0 million, reflecting the estimated value of our management’s equity investment discussed more fully below in ‘‘—Rollover of Equity; Management Equity Investment.’’

In accordance with the stock purchase agreement, ten business days prior to the anticipated closing of the acquisition, the sellers provided the buyer with an estimate of the working capital adjustment that would be made to the purchase price on June 28, 2004. Based on that estimate, an additional $19.3 million was added to the purchase price. A final purchase price adjustment payment of approximately $7.3 million, reflecting the buyer’s review of the actual deviation of our parent’s consolidated working capital as of June 28, 2004 from $100.5 million, was made by buyer to Wind Point Investors V, L.P., as representative of the sellers, in September 2004. A portion of this adjustment was funded through additional borrowings under the revolving portion of our senior credit facility. Three additional amounts totalling $1.3 million have been paid in fiscal 2006 relating to certain tax benefits that were required to be remitted to the seller.

Rollover of Equity; Management Equity Investment

In connection with the acquisition, approximately 13% of the equity interests in the buyer parent, was issued to members of our management who previously held capital stock in our parent, in lieu of cash consideration that they otherwise would have been entitled to receive in the acquisition and, in a few cases, certain members of management that did not currently hold equity in our parent purchased an equity interest in buyer parent for cash.

The transaction was accounted for as a purchase in accordance with SFAS 141, Business Combinations, and EITF Issue 88-16, Basis in Leveraged Buyout Transactions. As such, the acquired assets and assumed liabilities have been recorded at fair market value for the interests acquired and preliminary estimates of assumed liabilities by new investors and at the carryover basis for continuing investors. The acquired assets and assumed liabilities were assigned new book values in the same proportion as the residual interests of the continuing investors and the new interests acquired by the new investors. Under EITF 88-16, our assets and liabilities were revalued at the merger date to the fair value to the extent of the majority stockholder’s 87% controlling interest. The remaining 13% is accounted for at the continuing stockholders’ carryover basis. The excess of the purchase price over the historical basis of the net assets acquired has been applied to adjust net assets to their fair values to the extent of the majority stockholder’s 87% ownership.

See Item 12, ‘‘Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters’’ and Item 13, ‘‘Certain Relationships and Related Transactions’’ for additional information concerning equity ownership and transactions involving management.

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Stock Purchase Agreement

The stock purchase agreement contains customary representations and warranties, covenants and indemnities by and for the benefit of the buyer, the buyer parent, the sellers, our parent and us.

The sellers’ indemnification obligations, which are several and not joint, for breaches of representations and warranties generally survive until 60 days following the earlier of (1) the buyer’s receipt of the audited financial statements of our parent and its subsidiaries for fiscal 2005 and (2) February 28, 2006, except for representations and warranties relating to certain title matters which survive indefinitely, certain employee benefits, tax and third party indemnification matters which survive for 60 days beyond the applicable statute of limitations and certain environmental matters which survive for three years following the closing of the acquisition. The sellers’ obligations to indemnify the buyer and the buyer’s obligation to indemnify the sellers are not triggered, subject to certain exceptions, until the other suffers losses in the aggregate of more than $2.0 million, but only to the extent that such losses exceed $0.5 million. The buyer’s and the sellers’ aggregate indemnification obligations are generally capped at $30.0 million in the aggregate, respectively, subject to certain exceptions. The sellers have authorized Wind Point Partners V, L.P., Predecessor Company I’s majority equity holder, to act on their behalf on substantially all indemnification and other matters arising under the stock purchase agreement.

On June 28, 2004, the buyer deposited $7.0 million of the closing purchase price with a third party escrow agent to secure the sellers’ indemnification obligations and certain other contingent payment obligations of the sellers under the stock purchase agreement. The escrow agreement expires and the funds remaining in escrow, if any, will be distributed to the sellers on February 28, 2006, except that if any dispute between the buyer and the sellers’ representative, acting as representative for all sellers, exists on that date as to any claim of the buyer to any escrowed funds, the amount in dispute will continue to be held in escrow until the dispute is resolved either by agreement of the buyer and sellers’ representative or by a final, non-appealable order of a court of competent jurisdiction. At September 30, 2006, $0.6 million remained in the escrow account and was subsequently paid to the seller in November 2006.

The stock purchase agreement also provides that the buyer is entitled to indemnification from the sellers, without regard to any threshold, cap or time limitation, for any losses incurred by the buyer or its affiliates in connection with certain pre-acquisition liabilities including (1) the sale by us of our Davisville, West Virginia warehouse and distribution facility; (2) an action brought against us by a former employee involving personal injury and other tort-based claims for which the availability of insurance has been disputed by our insurance carrier; (3) environmental liabilities resulting from conditions which first occurred during the ownership of our parent and its subsidiaries by the sellers; and (4) certain tax liabilities relating to any taxable period ending on or prior to the closing of the acquisition for which a tax return was not due on or prior to the closing of the acquisition.

The stock purchase agreement also provides that the buyer is entitled to indemnification from the sellers, without regard to any threshold, cap or time limitation, for any losses incurred by our parent or its subsidiaries in seeking to enforce the indemnification obligations of third parties under certain contracts relating to pre-acquisition transactions or as a result of pre-acquisition acts or omissions by the sellers, our parent or us or which prejudice or have prejudiced the rights of our parent or us under such contracts.

Under the stock purchase agreement, the buyer has agreed to remit to the sellers any amounts actually received by the buyer, our parent or us after the closing of the acquisition (less related fees, costs, taxes and expenses) with respect to:

(1) our pending breach of contract action against Connecticut General Life Insurance Company seeking damages in the amount of approximately $0.9 million;

(2) amounts claimed to be owed to us by customs authorities for the 2003 calendar year and the portion of the 2004 calendar year during which we were owned by the sellers pursuant to anti-dumping legislation commonly known as the ‘‘Byrd Amendment’’ that have not been paid to us; and

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(3) approximately $0.3 million in deferred purchase price we expect to receive in connection with our prior sale of certain real property.

The sellers have agreed to indemnify the buyer, our parent and us, without regard to any threshold, cap or time limitation, for any losses incurred in connection with these matters, including the costs of prosecuting the pursuit of these matters.

Acquisitions Made by the Company

On April 7, 2006, we acquired Acorn, the parent company of Union, a business engaged in the manufacture and distribution of non-powered lawn and garden tools, pursuant to an Agreement and Plan of Merger (the ‘‘Acorn Merger Agreement’’) among us, Acorn and ATTUT Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of ours (‘‘Merger Sub’’). Pursuant to the Acorn Merger Agreement, we acquired all of the issued and outstanding capital stock of Acorn through the merger of Merger Sub with and into Acorn, with Acorn surviving as a wholly-owned subsidiary of ours (the ‘‘Acorn Merger’’). The Acorn Merger was consummated simultaneously with the execution of the Acorn Merger Agreement. The aggregate cash consideration paid by us on the day of the transaction was $46.4 million.

On April 12, 2006, HD Acquisition Corp. (‘‘HDAC’’), a wholly-owned subsidiary of ours, completed the acquisition of substantially all of the assets and property of Hound Dog, a business that designs, markets and distributes non-powered lawn and garden tools. The transaction was consummated simultaneously with the execution of an Asset Purchase Agreement (the ‘‘Asset Purchase Agreement’’) among HDAC, Hound Dog and the shareholders of Hound Dog. The cash consideration paid by HDAC on the day of the transaction was $5.2 million.

These businesses were acquired to expand the Company’s product lines. The operating results of the acquired companies have been included in the accompanying consolidated statements of operations from the respective dates of acquisition. Prior to the end of our fiscal year, Acorn, Union and HDAC were merged into Ames True Temper.

Results of Operations

The following table presents the major components of our statement of operations together with each component’s percentage of net sales for fiscal 2004, fiscal 2005, and fiscal 2006:

			Combined 52 Weeks Ended September 25, 2004												Fiscal Year Ended October 1, 2005												Fiscal Year Ended September 30, 2006
			(unaudited)												(53 weeks)												(52 weeks)
			(dollars in millions)
Net sales				$	438.5						100.0	%				$	450.6						100.0	%				$	483.6						100.0	%
Cost of goods sold					329.3						75.1	%					344.5						76.5	%					355.6						73.5	%
Gross profit					109.2						24.9	%					106.1						23.5	%					128.0						26.5	%
Selling, general, and administrative expenses					70.5						16.1	%					77.3						17.2	%					96.2						19.9	%
Special charges					0.8						0.2	%					—						0.0	%					—						—	%
Amortization of intangible assets					3.8						0.9	%					1.8						0.4	%					1.9						0.4	%
Impairment charges					—						0.0	%					122.7						27.2	%					6.4						1.3	%
Operating income (loss)					34.1						7.7	%					(95.7	)					-21.2	%					23.5						4.9	%
Interest expense					13.4						3.1	%					32.5						7.2	%					33.8						7.0	%
Other expense (income)					0.2						—	%					(0.1	)					—	%					(5.7	)					-1.2	%
Income before taxes					20.5						4.6	%					(128.2	)					-28.4	%					(4.6	)					-0.9	%
Income tax expense (benefit)					8.9						2.0	%					(2.9	)					-0.6	%					—						—	%
Net income (loss)				$	11.6						2.6	%					(125.2	)					-27.8	%					(4.6	)					-0.9	%

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Fiscal 2006 (52 Weeks) Compared to Fiscal 2005 (53 Weeks)

Net Sales.    Net sales for the fifty-two week period ended September 30, 2006 increased $33.0 million, or 7.3%, to $483.6 million compared to $450.6 million for the fifty-three weeks ended October 1, 2005. Overall net sales increased primarily due to the acquisition of UnionTools and Hound Dog, which contributed additional net revenues of $30.8 and $3.8 respectively. The increase was partially offset by an extra week of sales in the prior year.

Gross Profit.    Gross profit for the fifty-two weeks ended September 30, 2006 increased $22.0 million to $128.0 million from $106.0 million for the fifty-three weeks ended October 1, 2005. Gross profit as a percentage of net sales increased to 26.5% from 23.5% during this period. This increase was primarily due to a favorable product mix and increase in price on several of our product lines.

Selling, General and Administrative (‘‘SG&A’’) Expenses.    SG&A expenses for the fifty-two weeks ended September 30, 2006 increased $18.9 million to $96.2 million from $77.3 million for the fifty-three weeks ended October 1, 2005. The increase relates primarily to $8.3 million and $0.5 million of additional expenses incurred as a result of the acquisition of UnionTools and Hound Dog, respectively. Additional expenses were incurred for a 1% rate increase of sales commission for a major customer in the amount of $2.2 million, a one-time buy-back from a major customer of $2.3 million and accrued management expense of $2.1 million.

Amortization of Intangible Assets.    During the fifty-two weeks ended September 30, 2006, we recorded $1.9 million in amortization expense, as compared to $1.8 million during the fifty-three weeks ended October 1, 2005.

Impairment charges.    During fiscal 2006, impairment charges decreased $115.8 million. In fiscal 2006, the Company recorded an impairment of trade names of $6.0 million, primarily due to a shift in branding strategies by certain customers. In fiscal 2005, the Company recorded an impairment of goodwill for $119.8 million related to the annual impairment analysis and an impairment of $2.9 million related to the write-down to fair market value of fixed assets resulting from a plant closure.

Interest Expense.    Interest expense for fifty-two weeks ended September 30, 2006 increased $1.3 million to $33.8 million from $32.5 million during the fifty-three weeks ended October 1, 2005. The increase was attributed to an increase in borrowings under our revolving credit facility due to the acquisitions of Acorn and Hound Dog in April 2006.

Other Income.    Other income increased $5.6 million from $0.1 million for the fifty-three weeks ended October 1, 2005 to $5.7 million for the fifty-two weeks ended September 30, 2006. The increase was the result of the settlement of a dispute with Jacuzzi Brands, Inc.

Income Tax (Benefit) Expense.    During fiscal 2006, we recorded a deferred tax asset valuation allowance, an adjustment of state tax liabilities in conjunction with the completion of certain state tax audits and an adjustment related to a change in the estimated state tax rates, resulting in no net income tax benefit or expense. Income tax benefit for the fifty-three weeks ended October 1, 2005 was $2.9 million, or approximately 2.3% of loss before taxes. During fiscal 2005, we incurred goodwill impairment charges that were not deductible for tax purposes, which resulted in a significantly lower tax benefit. Without this goodwill impairment charge, the prior year tax benefit would have been approximately 35%.

Fiscal 2005 (53 Weeks) Compared to Combined Fiscal 2004 (52 Weeks)

Net Sales.    Net sales for the fifty-three week period ended October 1, 2005 increased $12.1 million, or 2.8%, to $450.6 million compared to $438.5 million for the fifty-two weeks ended September 25, 2004. Overall net sales increased primarily from an additional week of sales and increases in sales prices, partially offset by a sales volume decline in the thirteen weeks ended December 25, 2004. The sales volume decline was driven by a decrease in snow tool sales as a result of less snowfall as compared to the prior year period.

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Gross Profit.    Gross profit for the fifty-three weeks ended October 1, 2005 decreased $3.1 million to $106.1 million from $109.2 million for the fifty-two weeks ended September 25, 2004. This decrease was primarily due to the increase in commodity costs, primarily steel and resin, partially offset by the absence of the $10.1 million non-cash charge to inventory due to purchase accounting in fiscal 2004. Gross profit as a percentage of net sales decreased to 23.5% from 24.9% during this period.

Selling, General and Administrative (‘‘SG&A’’) Expenses.    SG&A expenses for the fifty-three weeks ended October 1, 2005 increased $6.8 million to $77.3 million from $70.5 million for the fifty-two weeks ended September 25, 2004. The increase relates primarily to an additional week of expenses, an increase in distribution expenses as a result of the expansion of our largest distribution center, increased depreciation expenses as a result of the write-up to fair value of assets from the sale of our company to affiliates of Castle Harlan and increased compensation expense and professional service fees attributable to public reporting requirements, partially offset by cost savings initiatives. Additionally, during fiscal 2004 we recorded a gain of $4.8 million on the sale of our idle distribution center in Davisville, WV and one of our manufacturing facilities in Parkersburg, WV.

Amortization of Intangible Assets.    During the fifty-three weeks ended October 1, 2005, we recorded $1.8 million in amortization expense, as compared to $3.8 million during the fifty-two weeks ended September 25, 2004. This decrease was due to the acquisition by affiliates of Castle Harlan, which reflects a change in valuation and lives of the finite assets acquired, as required.

Impairment charges.    During fiscal 2005, the Company recorded an impairment of goodwill for $119.8 million related to the annual impairment analysis and an impairment of $2.9 million related to the write-down to fair market value of fixed assets resulting from a plant closure.

Interest Expense.    Interest expense for fifty-three weeks ended October 1, 2005 increased $19.1 million to $32.5 million from $13.4 million during the fifty-two weeks ended September 25, 2004. The increase was a result of increased debt in connection with the acquisition by affiliates of Castle Harlan and the write off of $4.1 million of deferred financing fees as a result of the repayment of the Term Loan B under the senior credit facility in connection with the issuance of the Senior Floating Rate Notes.

Income Tax (Benefit) Expense.    Income tax benefit for the fifty-three weeks ended October 1, 2005 was $2.9 million, or approximately 2.3% of loss before taxes. Income tax expense for the fifty-two weeks ended September 25, 2004 was $8.9 million, or approximately 43.4% of income before taxes. During fiscal 2005, we incurred goodwill impairment charges that were not deductible for tax purposes, which resulted in a significantly lower tax benefit. Without this goodwill impairment charge, the current year tax benefit would have been approximately 35%. Additionally, during the fifty-two weeks ended September 25, 2004, we incurred additional tax expense of $1.4 million due to a limitation of foreign tax credits related to our Canadian subsidiary, which resulted in a higher effective tax rate.

Liquidity and Capital Resources

Our principal liquidity requirements are to service our debt and meet our working capital and capital expenditure needs. Subject to our performance, which, if adversely affected, could adversely affect the availability of funds, we expect to be able to meet our liquidity requirements for the foreseeable future through cash provided by operations and through borrowings available under our senior secured credit facility. We cannot assure you, however, that this will be the case.

Cash Flows

Cash used in operating activities for fiscal 2006 was $15.8 million, compared to cash provided by operating activities of $30.1 million for fiscal 2005. The increase of cash used in operating activities in the amount of $45.9 million was primarily due to increased working capital requirements associated with the integration of Acorn. Cash used in investing activities for fiscal 2006 was $65.1 million compared to cash used of $11.4 million for fiscal 2005. The increase of $53.7 million was due to the purchase of Acorn and Hound Dog, higher than average capital expenditures associated with the start

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up of a new facility and the implementation of an ERP system. Cash provided by financing activities for fiscal 2006 was $64.7 million compared to cash provided by financing activities for fiscal 2005 in the amount of $1.1 million. The increase of $63.6 million was primarily the result of increased borrowings under our revolving credit facility to fund the acquisitions of Acorn and Hound Dog.

Cash provided from operating activities for fiscal 2005 was $30.1 million, compared to $6.6 million for fiscal 2004. The increase in cash provided from operating activities was primarily due to decreased working capital levels, including a reduction of inventory and accounts receivable balances, coupled with an increase in accounts payable. Cash used in investing activities of $11.4 million and $307.4 million for fiscal 2005 and 2004, respectively, was due to the purchase of fixed assets and the acquisitions of businesses, partially offset by proceeds from the sale of fixed assets. During fiscal 2005, we increased our capital spending as we commenced production at a new manufacturing facility in Central Pennsylvania. During fiscal 2004, our parent was acquired by affiliates of Castle Harlan. Additionally, during fiscal 2004 we received $5.1 million in proceeds for the sale of our idle distribution center in Davisville, WV and one of our manufacturing facilities in Parkersburg, WV. Cash provided by financing activities was $1.1 million and $300.7 million for fiscal 2005 and 2004, respectively. These proceeds were due primarily to debt borrowings and capital contributions, offset by repayments of long-term debt and debt issuance costs. During fiscal 2005, we repaid term loan B under our senior credit facility by issuing Senior Floating Rate Notes .. During fiscal 2004, in connection with the sale of our parent, we received capital contributions and entered into the senior credit facility and issued the Senior Subordinated Notes, which were used to repay our existing debt and fund the acquisition noted above.

Debt and Other Obligations

Senior Secured Credit Facility Prior to Amendment and Restatement on April 7, 2006

On June 28, 2004, we entered into a $215.0 million senior secured credit facility with various banks, financial institutions and other lenders. The senior secured credit facility consisted of a $140.0 million term loan B facility, which would have matured on June 28, 2011, and a $75.0 million revolving credit facility, which would have matured on June 28, 2010. On January 14, 2005, simultaneously with the completion of the offering of the Senior Floating Rate Notes referred to below, we repaid the term loan in full and entered into an amendment (the ‘‘Amendment No. 1’’) to the terms of the senior secured credit facility.

The interest rates applicable to the senior secured credit facility prior to the amendment and restatement were the Eurodollar Rate plus the Applicable Rate, or at our option, the Alternate Base Rate plus the Applicable Rate. The ‘‘Alternate Base Rate’’ means the higher of (i) the floating rate of interest announced from time to time by Bank of America N.A as its ‘‘prime rate’’ or (ii) the Federal Funds rate plus 50 basis points per annum. The ‘‘Eurodollar Rate’’ means the rate per annum equal to the rate determined by the administrative agent to be the offered rate that appears on the Telerate Screen that displays an average British Bankers Association Interest Settlement Rate for deposits in dollars. With respect to the revolving credit facility (including swing line loans), the ‘‘Applicable Rate’’ means (i) until December 28, 2004, 3.00% per annum, in the case of Eurodollar Rate loans, and 2.00% per annum, in the case of Alternate Base Rate advances, and (ii) thereafter, a percentage per annum to be determined in accordance with a pricing grid based on the leverage ratio.

Certain customary fees are payable to the lenders and the agents under the senior secured credit facility, as amended, including without limitation, a commitment for our revolving credit facility and letter of credit fees. The senior secured credit facility contains various affirmative and negative covenants customary for similar credit facilities (subject to customary exceptions and certain existing obligations and liabilities), including, but not limited to, restrictions on: liens, loans, acquisitions, mergers, sales, transfers, dividends, distributions, changes in the nature of our business and transactions with affiliates.

The senior secured credit facility, under Amendment No. 1 dated January 14, 2005, required that the Company meet certain financial covenant tests, including without limitation: the maintenance of a

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minimum Consolidated EBITDA of $41.0 million and the maintenance of a minimum fixed charge coverage ratio (defined as EBITDA less capital expenditures to cash taxes plus cash interest expense plus scheduled principal payments and prepayments plus dividends and distributions on equity) of 1.00:1.00.

Pursuant to Amendment No. 1, availability under the senior secured credit facility was restricted to the lesser of $75.0 million and the borrowing base amount, which was equal to (a) 85% of the amount of eligible receivables, plus (b) the lower of (i) 55% of the cost or fair market value of eligible inventory and (ii) if an inventory appraisal has been performed, 80% of the orderly liquidation value of our inventory, plus (c) a percentage of eligible equipment or real property determined by Bank of America, N.A., as administrative agent, and not objected to by the required lenders. In addition, the senior secured credit facility, as amended, required that we meet certain financial covenant tests, including without limitation, the maintenance of minimum EBITDA and minimum fixed charge coverage ratio, as defined by the amended Credit Agreement described below.

Amendment No. 2, dated December 1, 2005, temporarily reduced the minimum consolidated EBITDA requirement for the four quarters ending December 31, 2005 and April 1, 2006 to $36.0 million and $38.0 million, respectively. Commencing with the four quarters ending July 1, 2006, the minimum consolidated EBITDA resumed at the $41.0 million level. This amendment also provided for certain exclusions of capital expenditures and expenses for covenant compliance purposes.

Senior Secured Credit Facility as Amended and Restated on April 7, 2006

On April 7, 2006, we entered into an amended and restated credit agreement with Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, Acorn, Union, and Ames True Temper Properties, Inc. (‘‘ATTP’’); together with the Company, (the ‘‘Borrowers’’), ATT Holding Co., as guarantor, and each lender from time to time thereto (the ‘‘Credit Agreement’’). The Credit Agreement amends and restates our existing credit facility with, among others, Bank of America, N.A. Pursuant to the Credit Agreement, the lenders made available a five-year revolving credit 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. The Borrowers’ obligations under the Credit Agreement are guaranteed by ATT Holding Co. The credit facilities are collateralized by substantially all of our assets, including our domestic subsidiaries, and guaranteed by ATT Holding Co. Future domestic subsidiaries will be required to guarantee the obligations and grant a lien on substantially all of their assets.

The interest rate applicable to the loans under the Credit Agreement is either: (1) the ‘‘Eurodollar Rate’’ plus a margin of 1.75% to 2.75% or (2) the ‘‘Base Rate’’ plus a margin of 0.50% to 1.50%. The initial applicable margin for loans based on the Eurodollar Rate will be 2.25%, and the applicable margin for loans based on the Base Rate will be 1.00%. ‘‘Eurodollar Rate’’ is defined as the London interbank offered rate, adjusted for statutory reserve requirements. The ‘‘Base Rate’’ is the higher of: (1) prime rate publicly announced by Bank of America, N.A. or (2) the Federal Funds effective rate plus 0.50%, adjusted for statutory reserve requirements. The applicable margin may under certain limited circumstances be increased slightly, if Bank of America, N.A. cannot otherwise syndicate the credit facility. We estimate a 1% change in interest rates would impact us by approximately $0.85 million.

As set forth in the Credit Agreement, the total outstanding amount of all loans and letter of credit obligations under the Credit Agreement shall not exceed the lesser of (1) $130.0 million and (2) the borrowing base, which includes specific percentages of eligible inventory, eligible equipment, eligible accounts receivable and eligible real estate of the Borrowers, minus (b) certain reserves, all as set forth in the Credit Agreement.

The terms of the Credit Agreement include various covenants that restrict our ability to, among other things, incur additional liens, incur additional indebtedness and make additional investments. In addition, the Borrowers are prohibited from incurring capital expenditures exceeding $19.125 million in fiscal year 2006, $16.125 million in fiscal year 2007, and $15.0 million in any fiscal year thereafter

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(subject to the right to carry over the unused portion to the following year). In addition, under certain circumstances the Borrowers will be required to have consolidated EBITDA of at least $41.0 million for each period of four fiscal quarters. The Credit Agreement also includes customary events of default, including, without limitation, payment defaults, cross defaults to other indebtedness and bankruptcy related defaults. As of September 30, 2006, we were in compliance with all of our financial covenants. As of September 30, 2006, we had $66.6 million of borrowings on the revolving portion of our senior credit facility, with $2.4 million of letters of credit outstanding under the Credit Agreement. At September 30, 2006, based on the borrowing base calculation, the revolver limit was $114.4 million, with $45.4 million available under the revolving credit facility. In addition, the Company had $2.0 million of letters of credit outstanding with another financial institution as of September 30, 2006. These letters of credit were supported by $2.1 million of restricted cash in the form of an escrow deposit at this financial institution.

Senior Subordinated Notes

On June 28, 2004, we completed a private offering of $150.0 million in aggregate principal amount at maturity of 10% Senior Subordinated Notes due July 15, 2012. The Senior Subordinated Notes are fully and unconditionally guaranteed by our parent, ATT Holding Co., on a senior subordinated basis. On August 10, 2004, we filed a registration statement with respect to new notes having substantially identical terms as the original notes, as part of an offer to exchange registered notes for the privately issued original Senior Subordinated Notes. The new notes evidence the same debt as the original Senior Subordinated Notes, are entitled to the benefits of the indenture governing the original Senior Subordinated Notes and are treated under the indenture as a single class with the original notes. The exchange offer was completed on November 24, 2004.

The Senior Subordinated Notes are unsecured senior subordinated obligations and rank behind all of our existing and future senior debt, including borrowings under the senior credit facility, 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.

We pay interest on the Senior Subordinated Notes semi-annually in cash, in arrears, on January 15 and July 15 at an annual rate of 10.0%. 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 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 may redeem the Senior Subordinated Notes on or after July 15, 2008, except we may redeem up to 35% of the Senior Subordinated Notes prior to July 15, 2007 with the proceeds of one or more public equity offerings. We are required to redeem the Senior Subordinated Notes under certain circumstances involving changes of control.

Senior Floating Rate Notes

On January 14, 2005, we completed a private offering of $150.0 million principal amount at maturity of our Senior Floating Rate Notes due 2012, which was issued at a 0.5% discount. Net proceeds for the offering were used to repay our term loan B in full, repay a portion of our revolving credit facility and pay related fees and expenses. The Senior Floating Rate Notes are fully and unconditionally guaranteed by our parent on a senior unsecured basis. On March 25, 2005 we filed a registration statement with respect to new notes having substantially identical terms as the original

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notes, as part of an offer to exchange registered notes for the privately issued original Senior Floating Rate Notes. The new notes evidence the same debt as the original Senior Floating Rate Notes, are entitled to the benefits of the indenture governing the original Senior Floating Rate Notes and are treated under the indenture as a single class with the original notes. The exchange offer was completed on May 23, 2005.

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 senior secured credit facility, pari passu with all future senior unsecured indebtedness, senior in right of payment to all existing and future senior subordinated debt, including our Senior Subordinated Notes due 2012, and effectively behind all of the existing and future liabilities of our subsidiaries, including trade payables.

We pay interest on the Senior Floating Rate Notes quarterly in cash, in arrears, on January 15, April 15, July 15 and October 15 at a rate per annum, reset quarterly, equal to LIBOR plus 4.0%, starting on April 15, 2005. 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 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, ERISA defaults and change of control. We can redeem the Senior Floating Rate Notes, in whole or in part, at any time on or after January 15, 2007. In addition, we may redeem up to 35% of the Senior Floating Rate Notes prior to January 15, 2007 with the net proceeds of one or more public equity offerings. We are required to redeem the Senior Floating Rate Notes under certain circumstances involving changes of control.

Other Debt

On July 19, 2005, we entered into a $2.7 million Term Note, Loan and Security Agreement and Subordination Agreement with a Lender. This note is payable in monthly installments over five years. The interest rate per annum is equal to 2.5% and secured by certain collateral, which was agreed to by the Administrative Agent of the Senior Secured Credit Facility, as amended and restated. Under the terms of this note, we are required to create 108 jobs at the new manufacturing facility in Pennsylvania within three years of the completion of the facility. 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. As of September 30, 2006, we were in compliance with these covenants.

Interest Rate Swaps

In connection with the offering of the Senior Floating Rate Notes, on January 11, 2005, we entered into interest rate swaps (the ‘‘Swaps’’) with Bank of America, N.A. and Wachovia Bank, N.A to hedge variable interest rate debt. Pursuant to the Swap with Bank of America, N.A., which became effective on January 17, 2006, we swap 3 month LIBOR rates for fixed interest rates of 4.31% on a notional amount of $100.0 million for the period from January 17, 2006 through January 15, 2008, approximately $66.7 million for the period from January 15, 2008 to January 15, 2009 and approximately $33.3 million for the period from January 15, 2009 through January 15, 2010. Pursuant to the Swap with Wachovia Bank, N.A., effective January 15, 2006, we swap 3 month LIBOR rates for fixed interest rates of 4.29% for a notional amount of $50 million for the period from January 15, 2006 through January 15, 2008, approximately $33.3 million for the period from January 15, 2008 to

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January 15, 2009 and approximately $16.7 million for the period from January 15, 2009 through January 15, 2010. These swaps fix the variable rate portion of the Senior Floating Rate Notes, while there is an additional margin of 4.00% that is fixed.

The interest rate swaps are accounted for in accordance with Statement of Financial Accounting Standard (‘‘SFAS’’) No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities and SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities (collectively, ‘‘SFAS 133’’). SFAS 133 establishes accounting and reporting standards for derivative instruments and hedging activities. SFAS 133 requires that all derivatives be recognized as either assets or liabilities at fair value.  For the fiscal years ended September 30, 2006 and October 1, 2005, the interest rate swaps were recorded as an asset of $2.6 and $1.1 million, respectively. The change in fair value was accumulated as other comprehensive income of $0.9 and $0.7 million, net of deferred taxes of $0.6 and $0.4 million, for the fiscal years ended September 30, 2006 and October 1, 2005, respectively. The fair market values of the interest rate swap agreements, which were obtained from broker quotes are included on the consolidated balance sheet as of September 30, 2006 and October 1, 2005. The changes in fair market value are reflected in other non-current assets and other comprehensive loss.

Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (‘‘FASB’’) issued Statement of Financial Accounting Standards (‘‘SFAS’’) No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of SFAS statements No. 87, 88, 106 and 132(R) to improve financial reporting by requiring an employer to recognize the overfunded or underfunded status of a defined benefit post retirement plan as an asset or liability. SFAS 158 requires employers to recognize changes in the funded status as of the date of the year end financial statements. SFAS 158 is effective for fiscal years ending after December 15, 2006. The Company is currently evaluating what effect the adoption of SFAS 158 will have on the Company’s consolidated financial statements, which will not be determined until the September 29, 2007 measurement date of the assets and benefit obligations of the defined benefit plans.

In July 2006, the FASB issued FASB Interpretation No. 48, ‘‘Accounting for Uncertainty in Income Taxes,’’ an interpretation of FASB Statement No. 109,’’ (FIN 48). FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating what effect, if any, adoption of FIN 48 will have on the Company’s consolidated financial statements.

In November 2004, the FASB issued SFAS No. 151, Inventory Costs, an amendment of ARB No. 43 Chapter 4. This Statement amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). This Statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of ‘‘so abnormal’’ as defined in ARB No. 43. In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The Company implemented SFAS 151 during the fiscal year ended September 30, 2006 with no material impact on the consolidated financial statements.

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Contractual Commitments

The following table represents our contractual commitments associated with our debt and other obligations as of September 30, 2006.

			Total						October 2006 to September 2007						October 2007 to September 2008						October 2008 to September 2009						October 2009 to September 2010						October 2010 to September 2011						Thereafter
			(dollars in thousands)
Contractual Obligations
Revolving credit facility				$	66,608					$	66,608					$	—					$	—					$	—					$	—					$	—
Senior Floating Rate Notes					150,000						—						—						—						—						—						150,000
Senior Subordinated Notes					150,000						—						—						—						—						—						150,000
Term Note					2,103						483						540						601						479						—						—
Operating leases					101,789						10,495						10,211						10,179						8,496						8,336						54,072
Open purchase orders					55,804						55,804						—						—						—						—						—
Other purchase commitments					3,544						1,772						1,772						—						—						—						—
Total contractual obligations				$	529,848					$	135,162					$	12,523					$	10,780					$	8,975					$	8,336					$	354,072
Commitments
Outstanding letters of credit				$	4,392					$	4,392					$	—					$	—					$	—					$	—					$	—
Total commitments				$	4,392					$	4,392					$	—					$	—					$	—					$	—					$	—

Off-Balance Sheet Arrangements

As of September 30, 2006 and October 1, 2005, we had no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying footnotes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results could differ from those estimates, and such differences may be material to the financial statements. The process of determining significant estimates is fact specific and takes into account factors such as historical experience, current and expected economic conditions, product mix and, in some cases, actuarial techniques. We evaluate these significant factors as facts and circumstances dictate. Historically, actual results have not differed significantly from those determined using estimates.

The following are the accounting policies that most frequently require us to make estimates and judgments and are critical to understanding our financial condition, results of operation and cash flows.

Allowance for Doubtful Accounts and Other Customer Reserves

Accounts receivable are reported net of an allowance for doubtful accounts, customer program reserves and cash discounts. The allowance for doubtful accounts is based on management’s estimate, using certain assumptions, of the amount of receivables that will actually be collected. This reserve is based on historical collection activity adjusted for current conditions. Accounts are considered past due based on how payments are received compared to the customer’s credit terms. Accounts are written off when management determines the account is uncollectible. If the financial condition of one of our significant customers were to deteriorate, resulting in an inability to make payments, then an additional reserve would be required. Customer program reserves are management’s estimates of amounts due for volume discounts and co-op advertising programs to certain of its customers. Cash discounts are management’s estimate of the customers ability to pay within the billing terms in order to receive the discount.

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Long-Lived Assets

SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, requires that companies consider whether indicators of impairment of long-lived assets held for use are present. If such indicators are present, companies determine whether the sum of the estimated undiscounted future cash flows attributable to such assets is less than their carrying amount, and if so, companies recognize an impairment loss based on the excess of the carrying amount of the assets over their fair value. Accordingly, management will periodically evaluate the ongoing value of property and equipment. During fiscal 2006, the Company recorded an impairment charge of $414 related to certain fixed assets.

Goodwill and Other Intangible Assets

Effective January 14, 2002, we adopted SFAS No. 141, Business Combinations¸ and SFAS No. 142, Goodwill and Other Intangible Assets. In addition to goodwill, we have trade names that are deemed to have indefinite lives. Intangible assets with finite lives are amortized over their useful lives. Under the provisions of SFAS No. 142, intangible assets, including goodwill, that are not subject to amortization will be tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired, using a two-step impairment assessment, which requires management to make judgments in determining what assumptions to use in the calculation. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, and the second step of the impairment test is not necessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The Company completed the annual impairment tests, which resulted in impairment to goodwill of $0 and $119.8 million for the fiscal years ended September 30, 2006 and October 1, 2005, respectively, and the impairment of trade names of $6.0 million for the fiscal year ended September 30, 2006.

We cannot predict the occurrence of certain future events that might adversely affect the reported value of goodwill and indefinite lived intangible assets, which totaled $126.8 and $111.9 million at September 30, 2006 and October 1, 2005, respectively. Such events include, but are not limited to, strategic decisions made in response to economic and competitive conditions, the impact of the economic environment on our customer base, a material negative change in our relationships with significant customers; or economic conditions that may affect the assumptions used in the discounted cash flow calculation.

Pensions

We have several defined benefit plans, under which participants earn a retirement benefit based upon a formula set forth in the plan. We record expense related to these plans using actuarially determined amounts that are calculated under the provisions of SFAS No. 87, Employer’s Accounting for Pensions. Key assumptions used in the actuarial valuations include the discount rate, the expected rate of return on plan assets and rate of increase in future compensation levels. These rates are based on market interest rates, and therefore fluctuations in market interest rates could impact the amount of pension expense recorded for these plans.

The accumulated benefit obligation of the defined benefit plans is a discounted amount calculated using the market interest rates described above. An increase in the market interest rates, assuming no other changes in the estimates, reduces the amount of the accumulated benefit obligation and the related required expense. A decrease in the market interest rates, assuming no other changes in the estimates, increases the amount of the accumulated benefit obligation and the related required expense.

Inventory Reserves

We reduce our inventory value for estimated obsolete and slow moving inventory in an amount equal to the difference between the cost of inventory and the estimated market value based upon

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assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required.

Revenue Recognition

We recognize revenues and freight billed to customers, net of provisions for cash discounts, returns, volume or trade customer discounts, co-op advertising and other sales discounts, upon shipment to customers or delivery of products to customers depending upon the terms of the sale. In accordance with EITF No. 00-10, Accounting for Shipping and Handling Fees and Costs, we record amounts billed to customers related to shipping and handling as revenue and all expenses related to shipping and handling as a cost of products sold or selling, general and administrative expense. See Footnote 2 to the Consolidated Financial Statements.

Income Taxes

We account for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes, which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between book and tax bases of recorded assets and liabilities. SFAS No. 109 also requires that deferred tax assets be reduced by a valuation allowance, if it is more likely than not that some portion or all of the deferred tax assets will not be recognized.

We evaluate on a quarterly basis the realizability of our deferred tax assets by assessing our valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization are our forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets.

Derivatives

Our cash flows and earnings are subject to fluctuations resulting from changes in interest rates, foreign currency exchange rates and raw material costs. We manage the 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 hold two interest rate swaps that are accounted for in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities and SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities (collectively, ‘‘SFAS 133’’). SFAS 133 establishes accounting and reporting standards for derivative instruments and hedging activities. SFAS 133 requires that all derivatives be recognized as either assets or liabilities at fair value. We have structured all of our existing interest rate swap agreements to be 100% effective. As a result, there is no current impact to earnings resulting from hedge ineffectiveness. The change in values of the interest rate swaps is reflected in the activity of other comprehensive income, net of tax.

Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our cash flows and earnings 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.

Our primary market risk is interest rate exposure with respect to our floating rate debt. The interest rate of the Senior Floating Rate Notes at September 30, 2006 was 9.51%. In connection with

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the offering of the Senior Floating Rate Notes, we entered into two interest rate swaps. These swaps effectively fix the interest rate of the Senior Floating Rate Notes at notional amounts of $150.0 million for two years beginning January 15, 2006, subsequently amortizing at a rate of $50.0 million per year until the maturity in 2010. See ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations—Debt and Other Obligations—Senior Floating Rate Notes’’ and ‘‘—Interest Rate Swaps.’’

We conduct foreign operations in Canada and Ireland and utilize international suppliers and manufacturers. As a result, we are subject to risk from changes in foreign exchange rates. These changes result in cumulative translation adjustments, which are included in accumulated other comprehensive income (loss). We do not consider the potential loss resulting from a hypothetical 10% adverse change in quoted foreign currency exchange rates, as of September 30, 2006, to be material.

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 use derivatives to manage the risk of raw material price fluctuations.

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Item 8.    FINANCIAL STATEMENTS

ATT Holding Co.

Consolidated Financial Statements

Contents

Report of Independent Registered Public Accounting Firm					35
Consolidated Balance Sheets as of September 30, 2006 and October 1, 2005					36
Consolidated Statements of Operations for the fiscal year ended September 30, 2006, the fiscal year ended October 1, 2005, the period ended September 25, 2004, and the period ended June 27, 2004 (Predecessor Company I)					37
Consolidated Statements of Changes in Stockholders’ (Deficit) Equity for the fiscal year ended September 30, 2006, for the fiscal year ended October 1, 2005 and the period ended September 25, 2004					38
Consolidated Statement of Changes in Stockholders’ Equity for the period ended June 27, 2004 (Predecessor Company I)					39
Consolidated Statements of Cash Flows for the fiscal year ended September 30, 2006, the fiscal year ended October 1, 2005, the period ended September 25, 2004, the period ended June 27, 2004 (Predecessor Company I)					40
Notes to Consolidated Financial Statements					41

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Report of Independent Registered Public Accounting Firm

Board of Directors
ATT Holding Co.

We have audited the accompanying consolidated balance sheets of ATT Holding Co. (the ‘‘Company’’) as of September 30, 2006 and October 1, 2005 and the related consolidated statements of operations, changes in stockholders’ (deficit) equity and cash flows for the fiscal year ended September 30, 2006, the fiscal year ended October 1, 2005, the period June 28, 2004 to September 25, 2004, and the period September 28, 2003 to June 27, 2004 (Predecessor Company I). Our audits also included the financial statement schedule listed in the index at Item 15(a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of ATT Holding Co. at September 30, 2006 and October 1, 2005, and the consolidated results of its operations and its cash flows for the fiscal year ended September 30, 2006, the fiscal year ended October 1, 2005, the period ended September 25, 2004, and the period ended June 27, 2004 (Predecessor Company I), in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

December 21, 2006
Philadelphia, Pennsylvania

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ATT Holding Co.
Consolidated Balance Sheets
(In Thousands, Except Number of Shares and Per Share Amounts)

			September 30, 2006						October 1, 2005
Assets
Current assets:
Cash and cash equivalents				$	5,638					$	21,394
Restricted cash					2,081						—
Trade receivables, net					66,418						49,677
Inventories					141,239						91,146
Deferred income taxes					11,063						6,265
Prepaid expenses and other current assets					6,673						6,472
Total current assets					233,112						174,954
Property, plant and equipment, net					72,680						61,907
Intangibles, net					78,450						81,129
Goodwill					58,359						41,735
Other noncurrent assets					15,720						15,300
Total assets				$	458,321					$	375,025
Liabilities and stockholders’ deficit
Current liabilities:
Trade accounts payable				$	39,773					$	34,697
Accrued payroll and related taxes					3,249						2,368
Accrued interest payable					7,325						5,832
Accrued expenses and other current liabilities					29,424						21,932
Revolving loan					66,608						—
Current portion of long-term debt					528						515
Total current liabilities					146,907						65,344
Deferred income taxes					26,325						20,297
Long-term debt					301,012						301,433
Accrued retirement benefits					7,812						17,280
Other liabilities					6,992						7,325
Total liabilities					489,048						411,679
Stockholders’ deficit:
Preferred stock-Series A, $.0001 per share par value; 100,000 shares authorized; 62,495 shares issued and outstanding as of September 30, 2006 and October 1, 2005					—						—
Common stock-Class A, $.0001 per share par value; 1,600,000 shares authorized; 726,556 shares issued and outstanding as of September 30, 2006 and October 1, 2005					—						—
Common stock-Class B, $.0001 per share par value; 300,000 shares authorized; 267,448 shares issued and outstanding as of September 30, 2006 and October 1, 2005					—						—
Additional paid-in capital					110,500						110,500
Predecessor basis adjustment					(13,539	)					(13,539	)
Retained deficit					(137,597	)					(133,020	)
Accumulated other comprehensive income (loss)					9,909						(595	)
Total stockholders’ deficit					(30,727	)					(36,654	)
Total liabilities and stockholders’ deficit				$	458,321					$	375,025

See accompanying notes.

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ATT Holding Co.
Consolidated Statements of Operations
(In thousands)

															Predecessor Company I
			Fiscal year ended September 30, 2006						Fiscal year ended October 1, 2005						Period ended September 25, 2004						Period ended June 27, 2004
			(52 weeks)						(53 weeks)						(13 weeks)						(39 weeks)
Net sales				$	483,601					$	450,604					$	83,044					$	355,443
Cost of goods sold					355,617						344,544						73,009						256,248
Gross profit					127,984						106,060						10,035						99,195
Selling, general, and administrative expenses					96,593						77,319						16,560						58,808
(Gain) loss on disposal of fixed assets					(370	)					23						(7	)					(4,786	)
Amortization of intangible assets					1,836						1,754						477						3,303
Impairment charges					6,377						122,678						—						—
Special charges					—						—						—						799
Operating income (loss)					23,548						(95,714	)					(6,995	)					41,071
Interest expense					33,781						32,527						5,899						7,563
Other (income) expense					(5,656	)					(86	)					(36	)					199
(Loss) income before taxes					(4,577	)					(128,155	)					(12,858	)					33,309
Income tax (benefit) expense					—						(2,955	)					(5,038	)					13,928
Net (loss) income				$	(4,577	)				$	(125,200	)				$	(7,820	)				$	19,381

See accompanying notes.

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ATT Holding Co.
Consolidated Statements of Changes in Stockholders’ (Deficit) Equity
(In Thousands, Except Number of Shares)

			Series A Preferred Stock												Class A Common Stock												Class B Common Stock												Additional Paid-in Capital						Predecessor Basis Adjustment						Retained Earnings (Deficit)						Accumulated Other Comprehensive Income (Loss)						Total Stockholders’ Equity (Deficit)
			Shares						Amount						Shares						Amount						Shares						Amount
Balance at June 27, 2004 (Predecessor Company I)					62,495					$	—						726,556					$	—						267,448					$	—					$	63,544					$	—					$	37,501					$	2,674					$	103,719
Acquisition by CHATT Holdings Inc.					—						—						—						—						—						—						46,956						(13,539	)					(37,501	)					(2,674	)					(6,758	)
Net loss					—						—						—						—						—						—						—						—						(7,820	)					—						(7,820	)
Other comprehensive income:
Foreign currency translation adjustment					—						—						—						—						—						—						—						—						—						2,248						2,248
Comprehensive loss																																																																	(5,572	)
Balance at September 25, 2004					62,495					$	—						726,556					$	—						267,448					$	—					$	110,500					$	(13,539	)				$	(7,820	)				$	2,248					$	91,389
Net loss					—						—						—						—						—						—						—						—						(125,200	)					—						(125,200	)
Other comprehensive (loss) income:
Foreign currency translation adjustment					—						—						—						—						—						—						—						—						—						4,841						4,841
Minimum pension liability, net of tax benefit					—						—						—						—						—						—						—						—						—						(8,371	)					(8,371	)
Change in fair value of interest rate swaps, net of tax					—						—						—						—						—						—						—						—						—						687						687
Comprehensive loss																																																																	(128,043	)
Balance at October 1, 2005					62,495					$	—						726,556					$	—						267,448					$	—					$	110,500					$	(13,539	)				$	(133,020	)				$	(595	)				$	(36,654	)
Net loss					—						—						—						—						—						—						—						—						(4,577	)					—						(4,577	)
Other comprehensive income:
Foreign currency translation adjustment					—						—						—						—						—						—						—						—						—						1,772						1,772
Minimum pension liability, net of tax					—						—						—						—						—						—						—						—						—						7,794						7,794
Change in fair value of interest rate swaps, net of tax					—						—						—						—						—						—						—						—						—						938						938
Comprehensive income																																																																	5,927
Balance at September 30, 2006					62,495					$	—						726,556					$	—						267,448					$	—					$	110,500					$	(13,539	)				$	(137,597	)				$	9,909					$	(30,727	)

See accompanying notes.

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ATT Holding Co.
Consolidated Statement of Changes in Stockholders’ Equity (Predecessor Company I)
(In Thousands, Except Number of Shares)

			Series A Preferred Stock												Class A Common Stock												Class B Common Stock												Additional Paid-in Capital						Retained Earnings						Accumulated Other Comprehensive Income						Total Stockholders’ Equity
			Shares						Amount						Shares						Amount						Shares						Amount
Balance at September 27, 2003					62,495						—						726,706						—						267,448						—						63,543						18,120						2,510						84,173
Issuance of common stock					—						—						600						—						—						—						1						—						—						1
Purchase of treasury stock					—						—						(750	)					—						—						—						—						—						—						—
Net income					—						—						—						—						—						—						—						19,381						—						19,381
Other comprehensive (loss) income:
Foreign currency translation adjustment					—						—						—						—						—						—						—						—						217						217
Minimum pension liability, net of tax benefit					—						—						—						—						—						—						—						—						(53	)					(53	)
Comprehensive income																																																											19,545
Balance at June 27, 2004					62,495					$	—						726,556					$	—						267,448					$	—					$	63,544					$	37,501					$	2,674					$	103,719

See accompanying notes.

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

															Predecessor Company I
			Fiscal year ended September 30, 2006						Fiscal year ended October 1, 2005						Period ended September 25, 2004						Period ended June 27, 2004
Operating activities
Net (loss) income				$	(4,577	)				$	(125,200	)				$	(7,820	)				$	19,381
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation expense					12,143						10,277						2,626						5,953
Amortization of intangible assets					1,836						1,754						477						3,303
Amortization of loan fees					2,440						6,496						453						661
Provision for bad debts					(120	)					(88	)					66						(95	)
Provision for deferred taxes					(1,916	)					(1,105	)					(4,080	)					5,281
Noncash interest expense					271						355						—						206
(Gain) loss on disposal of fixed assets					(370	)					23						(7	)					(4,786	)
Amortization of bond discount					107						80						—						—
Impairment charges					6,377						122,678						—						—
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable					955						8,247						35,233						(40,754	)
Inventories					(31,649	)					7,071						4,082						(18,737	)
Prepaid expenses and other assets					161						(7,908	)					1,235						(21	)
Accounts payable					(2,015	)					5,771						(11,528	)					14,588
Accrued expenses and other liabilities					605						1,696						105						729
Net cash (used in) provided by operating activities					(15,752	)					30,147						20,842						(14,291	)
Investing activities
Acquisition of businesses, net of cash acquired					(50,126	)					(225	)					(306,374	)					(236	)
Restricted cash in escrow					(2,081	)					—						—						—
Purchase of fixed assets					(15,797	)					(11,600	)					(1,624	)					(4,219	)
Proceeds from sale of fixed assets					2,763						523						7						5,095
Investment in joint ventures					100						(108	)					—						—
Net cash (used in) provided by investing activities					(65,141	)					(11,410	)					(307,991	)					640
Financing activities
Repayments of long-term debt					(515	)					(140,206	)					(60,936	)					(15,731	)
Borrowings (repayments) on revolver, net					66,608						(6,300	)					(24,021	)					28,380
Borrowings on long-term debt					—						152,074						290,000						—
Debt issuance costs					(1,419	)					(4,463	)					(13,598	)					—
Proceeds from issuance of capital stock					—						—						—						1
Capital contributions from buyer					—						—						96,585						—
Net cash provided by financing activities					64,674						1,105						288,030						12,650
Effect of exchange rate changes on cash					463						302						(534	)					216
(Decrease) increase in cash and cash equivalents					(15,756	)					20,144						347						(785	)
Cash and cash equivalents at beginning of period					21,394						1,250						903						1,688
Cash and cash equivalents at end of period				$	5,638					$	21,394					$	1,250					$	903

See accompanying notes.

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ATT Holding Co.

Notes to Consolidated Statements

(Dollars in Thousands, Except Share Data)

1.	Formation and Description of Business

ATT Holding Co. and its subsidiaries (the ‘‘Company’’) manufacture and market non-powered lawn and garden tools and accessories primarily in North America and Europe. The Company refers to operations subsequent to June 27, 2004. Operations from September 28, 2003 to June 27, 2004 are referred to as ‘‘Predecessor Company I’’.

The accompanying consolidated financial statements present the financial position of the Company as of September 30, 2006 and October 1, 2005, and the results of operations, changes in stockholders’ (deficit) equity, and cash flows of the Company for the fiscal year ended September 30, 2006, fiscal year ended October 1, 2005 and the period from June 28, 2004 to September 25, 2004 and the results of operations, changes in stockholders’ equity, and cash flows of the Predecessor Company I from September 28, 2003 to June 27, 2004.

ATT Holding Co. (as Predecessor Company I) was incorporated on December 20, 2001. On January 14, 2002, Predecessor Company I acquired, from U.S. Industries, Inc. (‘‘USI’’), certain assets and liabilities of Ames True Temper Group (‘‘Predecessor Company II’’), including Ames True Temper, Inc.; True Temper Ltd.; IXL Manufacturing, Inc.; and Garant Division of USI Canada, Inc., a division of U.S. Industries, Inc. In May 2002, IXL Manufacturing was merged into Ames True Temper, Inc.

On June 28, 2004, the Company completed the sale of all outstanding common and preferred stock and warrants of Predecessor Company I to affiliates of Castle Harlan, a New York private-equity investment firm. CHATT Holdings Inc., the ‘‘buyer’’, and CHATT Holdings LLC, the ‘‘buyer parent’’, were created to make the acquisition of the Company. Approximately 87% of the equity interests of the buyer parent are owned by affiliates of Castle Harlan, and the remainder were issued to members of our management who held capital stock in the Predecessor Company I, in lieu of cash consideration that they otherwise would have been entitled to receive in the acquisition. In addition, certain members of management that did not hold equity in Predecessor Company I purchased an equity interest in the buyer parent for cash.

The transaction was valued at approximately $380,000, plus $6,345 in transaction costs and a working capital adjustment of $27,771. In connection with the sale, Ames True Temper, Inc., which is a 100% owned subsidiary of the Company, entered into a new credit facility, at which time all existing indebtedness was repaid. In connection with the new facility, ATT Holding Co. fully and unconditionally guaranteed the $150,000 10% Senior Subordinated Notes due 2012 (and subsequently the $150,000 Senior Floating Rate Notes due 2012). ATT Holding Co. has no other subsidiaries other than Ames True Temper, Inc. and has no independent assets or operations separate from the investment in Ames True Temper, Inc. Ames True Temper, Inc. is restricted by the Credit Agreement dated as of June 28, 2004, as amended to date, to provide funds to ATT Holding Co., except for the provisions described therein.

The Company’s fiscal year generally ends on the Saturday nearest to September 30.

2.	Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

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ATT Holding Co.

Notes to Consolidated Statements (Continued)

Principles of Consolidation

The accompanying consolidated financial statements for the fiscal year ended September 30, 2006, fiscal year ended October 1, 2005, the period ended September 25, 2004, and the period ended June 27, 2004 (Predecessor Company I) include the accounts of ATT Holding Co. and its subsidiaries. All material intercompany transactions have been eliminated in consolidation.

Cash and Cash Equivalents

Cash equivalents represent short-term, highly liquid investments, which have maturities of 90 days or less when purchased. The Company had restricted cash in the form of an escrow deposit for an outstanding letter of credit. The carrying amount of cash and cash equivalents approximates fair value.

Accounts Receivable

Accounts receivable are reported net of an allowance for doubtful accounts, customer program reserves and cash discounts. The allowance for doubtful accounts is based on management’s estimate of the amount of receivables that will actually be collected including consideration of historical levels of write-off. Accounts are considered past due based on how payments are received compared to the customer’s credit terms. Accounts are written off when management determines the account is uncollectible. Finance charges are generally not assessed on past due accounts. Customer program reserves are management’s estimates of amounts due for volume discounts and co-op advertising programs to certain of its customers. Cash discounts are management’s estimate of the customers ability to pay within the billing terms in order to receive the discount.

Inventories

Inventories are stated at the lower of cost, which is determined by the first-in, first-out method, or market.

Investments

The Company accounts for its investments in accordance with the cost method. The investments are included in other non-current assets. The Company has investments in four cooperative joint ventures in China with certain exclusive marketing rights to sell, outside China, products manufactured by the four separate joint ventures. The Company’s interests in the joint ventures range between 25% and 35%. The Company does not share in either the profit or loss and has minority representation on the Board of Directors of each of the joint ventures.

Property, Plant and Equipment

Property, plant and equipment are stated on the basis of cost less accumulated depreciation provided under the straight-line method. Buildings and building improvements are depreciated based on lives of 25 and 10 years, respectively. Land improvements and leasehold improvements are depreciated based on lives of 15 and 10 years (or less, depending on the life of the lease), respectively. Machinery and equipment is depreciated based on lives ranging from three to seven years, and furniture and fixtures based on a life of five years. Expenditures for major additions and improvements are capitalized, while minor replacements, maintenance, and repairs are charged to expense as incurred. When property is retired or otherwise disposed of, the costs and accumulated depreciation are removed from the accounts. Any resulting gain or loss is recognized currently. Construction in progress is comprised of ongoing development costs associated with upgrades and additions.

Long-Lived Assets

Statement of Financial Accounting Standards (‘‘SFAS’’) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, requires that companies consider whether indicators of impairment of

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ATT Holding Co.

Notes to Consolidated Statements (Continued)

long-lived assets held for use are present. If such indicators are present, companies determine whether the sum of the estimated undiscounted future cash flows attributable to such assets is less than their carrying amount, and if so, companies recognize an impairment loss based on the excess of the carrying amount of the assets over their fair value. Accordingly, management will periodically evaluate the ongoing value of property and equipment. During fiscal 2006, the Company recorded an impairment charge of $414 related to certain fixed assets. During fiscal 2005, the Company recorded an impairment charge of $2,925 in conjunction with the closure of a manufacturing facility.

Goodwill and Other Intangible Assets

Effective January 14, 2002, Predecessor Company I, and the Company adopted SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141, which addresses financial accounting and reporting for business combinations, requires the use of the purchase method of accounting for business combinations initiated after June 30, 2001 and prohibits the use of the pooling-of-interests method. SFAS No. 141 also includes guidance on the initial recognition and measurement of goodwill and other intangible assets.

SFAS No. 142 prohibits the amortization of goodwill and intangible assets with indefinite useful lives and requires that these assets be tested for impairment. In addition to goodwill, the Company has tradenames that are deemed to have indefinite lives. Intangible assets with finite lives are amortized over their useful lives. Under the provisions of SFAS No. 142, intangible assets, including goodwill, that are not subject to amortization will be tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired, using a two-step impairment assessment. The first step of the impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including the indefinite-lived assets. If the fair value of the reporting unit exceeds its carrying amount, the indefinite-lived assets of the reporting unit is considered not impaired, and the second step of the impairment test is not necessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The Company uses financial projections and certain cash flow measures in its determination of the fair value of these assets. During fiscal year 2005, the Company performed the required impairment test of goodwill and other intangible assets using a discounted cash flow analysis. The analysis included the decreased profitability as a result of increased commodity prices, which caused financials results to differ materially from the expected results at the time of the purchase of the Company in June 2004. This resulted in goodwill impairment of $119,753. The Company completed the annual impairment tests at September 30, 2006, which resulted in an impairment in trade names of $5,948. The impairment of trade names was primarily the result of a shift in branding strategy by certain customers during the fiscal year.

Debt Issuance Costs

Current and other non-current assets include debt issuance costs in the amount of $11,618 and $12,504 as of September 30, 2006 and October 1, 2005, respectively. The debt issuance costs are being amortized over periods of three to eight years based on the corresponding life of the debt.

Income Tax

Deferred tax assets and liabilities are computed based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates and laws. Deferred income tax expense or benefit is based on changes in deferred tax assets and liabilities from period to period.

Revenue and Cost Recognition

Revenue is recognized upon shipment of products or delivery of products to the customer depending on the terms of the sale. The Company offers volume discounts and co-op advertising programs to

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ATT Holding Co.

Notes to Consolidated Statements (Continued)

certain of its customers. The discounts and co-op advertising program expense are estimated and accrued for at the time of sale to the customer based on expected annual rates at established volume thresholds. The adequacy of the accruals is re-assessed quarterly, monitoring the customer’s progress toward earning any applicable volume rebate. Discounts provided to customers are recorded as a reduction of sales, while expenses associated with co-op advertising are recorded as part of selling, general and admininstrative expenses in accordance with Emerging Issues Task Force (‘‘EITF’’) 01-9. Provisions are made for estimated sales returns and allowances at the time of the sale. Such amounts, which are included in net sales, totaled $6,144, $8,511, $3,325, and $4,489 for the fiscal year ended September 30, 2006, the fiscal year ended October 1, 2005, the period ended September 25, 2004, and the period ended June 27, 2004, respectively.

Shipping and Handling Costs

All shipping and handling costs are expensed as incurred. Costs incurred to ship product from the manufacturing facility and distribution centers to the customer and from plants and our main distribution center to our West Coast distribution facility are included in costs of goods sold and totaled $21,258, $18,773, $3,889 and $14,224 for the fiscal year ended September 30, 2006, the fiscal year ended October 1, 2005, the period ended September 25, 2004 and the period ended June 27, 2004, respectively. Costs to ship the product from manufacturing facilities to the main distribution center is included in selling, general and administrative expense and totaled $3,299, $3,691, $575, and $2,617, for the fiscal year ended September 30, 2006, the fiscal year ended October 1, 2005, the period ended September 25, 2004, and the period ended June 27, 2004, respectively.

Advertising Costs

Advertising costs are expensed as incurred. Such amounts totaled $15,430, $11,201, $2,447 and $9,424 for the fiscal year ended September 30, 2006, fiscal year ended October 1, 2005, the period ended September 25, 2004, and the period ended June 27, 2004, respectively.

Research and Development Costs

Research and development costs are expensed as incurred. Such amounts totaled $1,273, $928, $195, and $648 for the fiscal year ended September 30, 2006, fiscal year ended October 1, 2005, the period ended September 25, 2004, and the period ended June 27, 2004.

Foreign Currency Translation

The financial statements of the Company’s foreign operations are measured using the local currency as the functional currency. Assets and liabilities of foreign subsidiaries are translated at the exchange rates as of the balance sheet date. Resulting translation adjustments, net of the related income tax effects, are recorded in the currency translation adjustment account, a separate component of Accumulated Other Comprehensive Income (Loss). Income and expense items are translated at average monthly exchange rates. Gains and losses from foreign currency transactions are included in net income.

Accumulated Other Comprehensive Income (Loss)

Comprehensive income (loss) is defined as net income (loss) and other changes in stockholders’ (deficit) equity from transactions and other events from sources other than stockholders. The components of and changes in other comprehensive income (loss) are as follows:

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ATT Holding Co.

Notes to Consolidated Statements (Continued)

			Beginning Balance						Before-Tax Amount						Tax Benefit (Expense)						Net-of-Tax Amount						Ending Balance
September 30, 2006
Currency translation adjustment				$	7,089					$	1,772					$	—					$	1,772					$	8,861
Minimum pension liability adjustment					(8,371	)					12,666						(4,872	)					7,794						(577	)
Interest rate swaps					687						1,513						(575	)					938						1,625
				$	(595	)				$	15,951					$	(5,447	)				$	10,504					$	9,909
October 1, 2005
Currency translation adjustment				$	2,248					$	4,841					$	—					$	4,841					$	7,089
Minimum pension liability adjustment					—						(13,502	)					5,131						(8,371	)					(8,371	)
Interest rate swaps					—						1,108						(421	)					687						687
				$	2,248					$	(7,553	)				$	4,710					$	(2,843	)				$	(595	)
September 25, 2004
Currency translation adjustment				$	—					$	3,696					$	(1,448	)				$	2,248					$	2,248
Predecessor Company I
June 27, 2004
Currency translation adjustment				$	2,536					$	372					$	(155	)				$	217					$	2,753
Minimum pension liability adjustment					(26	)					(90	)					37						(53	)					(79	)
				$	2,510					$	282					$	(118	)				$	164					$	2,674

Fair Value of Financial Instruments

The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable and long-term debt. The Company uses interest rate swap agreements to manage risk on its floating-rate debt.

Because of short maturities, the carrying amount of cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximates fair value. The fair value of the Company’s long-term debt, described in Footnote 10, approximates its carrying value and the fair value of derivative instruments is described in Footnote 2.

Segment Reporting

Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by chief operating decision makers in deciding how to allocate resources in assessing performance. All of the Company’s operations are classified within one business segment.

Labor Availability

The industry is labor intensive and requires an adequate supply of labor. As of September 30, 2006, approximately 29% of the Company’s employees are subject to collective bargaining agreements.

Material Suppliers

During fiscal 2006, one supplier accounted for approximately 10% of the Company’s total raw material purchases.

Stock-Based Compensation

On June 28, 2004, certain management employees of Ames True Temper and affiliates became eligible to purchase Class B management incentive units of CHATT Holdings LLC. These units vest based on

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ATT Holding Co.

Notes to Consolidated Statements (Continued)

three criteria: (1) time vesting based on a five year term, (2) performance vesting based on the results of Ames True Temper, Inc. and (3) vesting based upon a targeted rate of return upon change of control. There are certain acceleration clauses in the event of a change of control. As of September 30, 2006 and October 1, 2005, there were 161,756 and 136,014 incentive units, respectively, issued to management and members of the CHATT Holdings LLC Board of Directors that are not employees of Ames True Temper, Inc. or Castle Harlan, Inc. Additionally, an affiliate of Castle Harlan holds 27,768 and 59,273 units at September 30, 2006 and October 1, 2005 , respectively, that will be used for future awards. These units may not be sold, pledged or otherwise transferred under securities law. Additional restrictions and limitations are set forth in the agreement. These units are accounted for under Financial Accounting Standards Board (FASB) Interpretation No. 44 of APB No. 25, Accounting for Stock Issued to Employees. For the fiscal years ended September 30, 2006 and October 1, 2005, there was no expense recorded related to these units.

Derivatives

The Company’s cash flows and earnings are subject to fluctuations resulting from changes in interest rates, foreign currency exchange rates and raw material costs. The Company manages the exposure to these market risks through internally established policies and procedures and, when deemed appropriate, through the use of derivative financial instruments. The Company’s policy does not allow speculation in derivative instruments for profit or execution of derivative instrument contracts for which there are no underlying exposures. The Company does not use financial instruments for trading purposes and are not a party to any leveraged derivatives.

During fiscal 2005, the Company entered into two interest rate swaps that are accounted for in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities and SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities (collectively, ‘‘SFAS 133’’). SFAS 133 establishes accounting and reporting standards for derivative instruments and hedging activities. SFAS 133 requires that all derivatives be recognized as either assets or liabilities at fair value.

The accounting for gains and losses associated with changes in the fair value of the derivative and the effect on the consolidated financial statements depends on its hedge designation and whether the hedge is highly effective in achieving offsetting changes in the fair value of cash flows of the asset or liability hedged. Any deferred gains or losses associated with derivative instruments, which on infrequent occasions may be terminated prior to maturity, are recognized in income in the period in which the underlying hedged transaction is recognized. In the event a designated hedged item is sold, extinguished, or matures prior to the termination of the related derivative instrument, such instrument would be closed and the resulting gain or loss would be recognized in income.

The Company has structured all existing interest rate swap agreements to be perfectly effective. As a result, there is no current impact to earnings resulting from hedge ineffectiveness. The Company periodically reassesses the effectiveness of the swap. If the swaps were deemed to be ineffective a gain or loss would be recognized in income. The change in values of the interest rate swaps is reflected in the activity of other comprehensive income, net of deferred taxes. For the fiscal years ended September 30, 2006 and October 1, 2005, the interest rate swaps were recorded as an asset of $2,621 and $1,108, respectively. The change in fair value was accumulated as other comprehensive income of $938 and $687, net of deferred taxes of $575 and $421, for the fiscal years ended September 30, 2006 and October 1, 2005, respectively. The fair market values of the interest rate swap agreements, which were obtained from broker quotes are included on the consolidated balance sheet as of September 30, 2006 and October 1, 2005. The changes in fair market values are reflected in other non-current assets and other comprehensive loss.

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ATT Holding Co.

Notes to Consolidated Statements (Continued)

Recent Accounting Pronouncements

In September 2006, SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of SFAS statements No. 87, 88, 106 and 132(R) to improve financial reporting by requiring an employer to recognize the overfunded or underfunded status of a defined benefit post retirement plan as an asset or liability was issued. The Statement requires employers to recognize changes in the funded status as of the date of the year end financial statements. SFAS 158 is effective for fiscal years ending after December 15, 2006. The Company is currently evaluating what effect, if any, adoption of SFAS 158 will have on the Company’s consolidated financial statements, which will not be determined until the September 29, 2007 measurement date of the assets and benefit obligations of the defined benefit plans.

In July 2006, the FASB issued FASB Interpretation No. 48, ‘‘Accounting for Uncertainty in Income Taxes’’, an interpretation of FASB Statement No. 109,’’ (FIN 48). FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating what effect, if any, adoption of FIN 48 will have on the Company’s consolidated financial statements.

In November 2004, the FASB issued SFAS No. 151, Inventory Costs, an amendment of ARB No. 43 Chapter 4. This Statement amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). This Statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of ‘‘so abnormal.’’ as defined in ARB No. 43. In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The Company implemented this provision during the fiscal year ended September 30, 2006 with no material impact from SFAS 151on the consolidated financial statements.

Reclassifications

Certain prior period amounts in the accompanying financial statements have been reclassified to conform to the Company’s fiscal 2006 presentation.

3.	Purchase Accounting

Acquisition of Acorn and Hound Dog

On April 7, 2006, Ames True Temper, Inc. (‘‘ATT’’), a direct wholly-owned subsidiary of the Company, acquired Acorn Products, Inc. (‘‘Acorn’’), a Delaware corporation and the parent company of UnionTools, Inc. (‘‘Union’’), a business engaged in the manufacture and distribution of non-powered lawn and garden tools, pursuant to an Agreement and Plan of Merger (the ‘‘Acorn Merger Agreement’’) among ATT, Acorn and ATTUT Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of ATT (‘‘Merger Sub’’). Pursuant to the Acorn Merger Agreement, ATT acquired all of the issued and outstanding capital stock of Acorn through the merger of Merger Sub with and into Acorn, with Acorn surviving as a wholly-owned subsidiary of ATT (the ‘‘Acorn Merger’’). The Acorn Merger was consummated simultaneously with the execution of the Acorn Merger Agreement. The aggregate cash consideration paid by ATT on the day of the transaction was $46,394.

On April 12, 2006, HD Acquisition Corp. (‘‘HDAC’’), a wholly-owned subsidiary of ATT, completed the acquisition of substantially all of the assets and intellectual property of Hound Dog Products, Inc. (‘‘Hound Dog’’), a business that designs, markets and distributes non-powered lawn and garden tools.

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ATT Holding Co.

Notes to Consolidated Statements (Continued)

The transaction was consummated simultaneously with the execution of an Asset Purchase Agreement (the ‘‘Asset Purchase Agreement’’) among HDAC, Hound Dog and the shareholders of Hound Dog. The cash consideration paid by HDAC on the day of the transaction was $5,161.

These businesses were acquired to expand the Company’s product lines. The operating results of the acquired companies have been included in the accompanying consolidated statements of operations from the respective dates of acquisition.The acquisitions of Acorn and Hound Dog are being accounted for as purchases in accordance with SFAS No. 141, Business Combinations. The financial statements as of September 30, 2006 reflect a preliminary allocation of the purchase price based upon available information and are subject to further refinement. The Company expects any refinements to occur in the first half of fiscal 2007 and primarly relate to pending litigation, state escheat audit results and the closure of certain facilities. The Company adjusted inventory by $824 to write up the acquired inventory to its estimated selling price less the costs of disposal and profit allowance for the selling effort of the Company. This resulted in an increase in cost of goods sold of $824 during fiscal year 2006. This amount represents the manufacturing profits acquired. The Hound Dog acquisition is subject to purchase price adjustments that are contingent upon the achievement of certain financial goals. Any contingent payment realized will be added to the cost of the acquisitions in excess of the fair value of the net assets acquired. Goodwill resulting from this transaction is not deductible for income tax purposes. The following represents the preliminary allocation of purchase price for the Acorn and Hound Dog acquisitions:

Revolver debt used for purchase price including acquisition costs, net of cash acquired				$	50,126
Other liabilities assumed					19,535
Fair value of assets acquired, primarily accounts receivable, inventory and fixed assets					(47,434	)
Identified intangible assets, primarily tradenames and patents					(4,830	)
Cost in excess of fair value of net assets acquired (goodwill)				$	17,397

In connection with the Acorn acquisition, the Company formulated restructuring plans for the integration of the acquired business. See Footnote 4 for additional information regarding these plans.

The following unaudited pro forma financial information reflects the results of operations as if the acquisition of Acorn had occurred as of the beginning of the periods being presented. Pro forma adjustments include only the effects of events directly attributed to the transaction that are factually supportable and expected to have a continuing impact.

The pro forma data reflected in the table below includes adjustments to conform the acquired business’ accounting policies to the Company’s accounting policies, and interest expense on the acquisition debt and the related income tax effects.

			Fiscal Year Ended September 30, 2006												Fiscal Year Ended October 1, 2005
			(Unaudited)												(Unaudited)
			Net Sales						Net loss						Net Sales						Net loss
				$	522,648					$	(5,531	)				$	537,444					$	(125,023	)

The unaudited pro forma financial information does not necessarily reflect the operating results that would have occurred had the acquisition been consummated as of the above date, nor is such information indicative of future operating results. Pro-forma information, reflecting the results of operations of Hound Dog, is not provided as this acquisition did not materially impact the Company’s results of operations.

As of the date of ownership change, Acorn had approximately $88,000 of federal net operating loss carryforwards.  Due to the ownership change, the net operating losses of Acorn will be limited under

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Internal Revenue Code §382 and limited as well under the normal expiration dates of federal net operating loss carryfowards. It is currently projected that ATT will be able to utilize only $1,100 of the losses.  In order to avoid negative tax consequences of allowing net operating losses to expire unutilized, ATT will elect to relinquish the portion of the net operating losses that are in excess of the amounts to be utilized.

Acquisition of Predecessor Company I

On June 28, 2004, the Company completed the sale of all outstanding common and preferred stock of Predecessor Company I to affiliates of Castle Harlan, a private equity group. CHATT Holdings Inc., the ‘‘buyer’’, and CHATT Holdings LLC, the ‘‘buyer parent’’, were created to make the acquisition of the Company. Approximately 87% of the equity interests of the buyer parent are owned by affiliates of Castle Harlan, and the remainder were issued to members of our management who held capital stock in the Predecessor Company I, in lieu of cash consideration that they otherwise would have been entitled to receive in the acquisition. In addition, in a few cases, certain members of management that did not hold equity in Predecessor Company I purchased an equity interest in the buyer parent for cash.

The following represents the allocation of purchase price for the acquisition of the Company on June 28, 2004, as described above:

Capital contributions from buyer				$	96,585
Revolver debt used					25,338
Long-term debt issued					290,000
Liabilities assumed, net of pay off of debt of Predecessor Company I					109,983
					521,906
Fair value of assets acquired, primarily accounts receivable, inventory and fixed assets					284,838
Trade names					69,406
Customer relationships					11,144
Patents					878
Non-compete agreements					981
Cost in excess of fair value of net assets acquired (goodwill)				$	154,659

The transaction was accounted for as a purchase in accordance with SFAS No. 141, Business Combinations, and EITF Issue 88-16, Basis in Leveraged Buyout Transactions. As such, the acquired assets and assumed liabilities have been recorded at fair market value for the interests acquired and preliminary estimates of assumed liabilities by new investors and at the carryover basis for continuing investors. The acquired assets and assumed liabilities were assigned new book values in the same proportion as the residual interests of the continuing investors and the new interests acquired by the new investors. Under EITF 88-16, the Company was revalued at the merger date to the fair value to the extent of the majority stockholder’s 87.35% controlling interest in the Company. The remaining 12.65% is accounted for at the continuing stockholders’ carryover basis in the Company. The excess of the purchase price over the historical basis of the net assets acquired has been applied to adjust net assets to their fair values to the extent of the majority stockholder’s 87.35% ownership. Goodwill resulting from this transaction is not deductible for income tax purposes. Goodwill resulting from the acquisitions made by Predecessor Company I is expected to be deductible for income tax purposes.

In connection with Predecessor Company I acquisition, the Company formulated restructuring plans for the integration of the acquired business. See Footnote 4 for additional information regarding these plans.

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Notes to Consolidated Statements (Continued)

4.	Restructuring

Restructuring Related to Acquisition of Predecessor Company II and Dynamic Design

In connection with the initial acquisition of Predecessor Company II on January 14, 2002, Predecessor Company I committed to exit plans for the closing of several facilities. The exit plans called for Predecessor Company I to consolidate corporate office functions and to reduce workforce in multiple manufacturing locations in order to reduce fixed overhead costs and lower internal shipping and handling expenses. Costs associated with the plans, including severance, totaling approximately $6,198 were accrued as part of the purchase price allocation. In addition, the Company granted enhanced pension benefits to certain severed employees, which resulted in a net decrease to the pension asset of $3,315. During fiscal 2003, as additional information was obtained, adjustments were made to these estimates.

In 2003, in connection with the acquisition of Dynamic Design, Predecessor Company I committed to exit plans for the closure of certain acquired administrative offices and the consolidation of certain acquired distribution facilities. Costs related to these plans consist of employee severance and benefits, and exit costs (primarily lease expenses under existing contracts), and totaled $434 and were added to the purchase price of Dynamic Design.

At June 27, 2004, the remaining restructuring reserves of $2,223 were included in accrued liabilities and relate to portions of the exit plans that were not yet completed. At the date of acquisition of Predecessor Company I, these reserves were reevaluated and included in the purchase price. Changes to the restructuring reserves are as follows:

Balance as of September 28, 2002				$	2,774
Adjustments to 2002 reserves (see below)					1,730
2003 exit plans					434
Payments					(2,524	)
Balance as of September 27, 2003					2,414
Payments					(191	)
Balance as of June 27, 2004				$	2,223

During the allocation period, Predecessor Company I recorded adjustments to the original purchase accounting totaling $1,340 based on refinement of the original estimated purchase information. The nature of the adjustments are as follow: increase of restructuring accruals for severance of $1,730; decrease of self-insurance reserves of $(558); increase in reserves for potential product liability for plastic-rim wheelbarrow tires of $1,617; decrease of prepaid pension assets for curtailment related to restructuring plans of $(782); decrease of reserves for an employee injury suit of $(745) and other adjustments of $78. These adjustments have been allocated to the purchase price of Predecessor Company II resulting in an increase to fixed assets.

Restructuring Related to Acquisition of Predecessor Company I

In connection with the acquisition of Predecessor Company I, the Company reevaluated the restructuring reserves previously set up by Predecessor Company I. These restructuring reserves were originally established to reduce total workforce and close certain facilities. The Company, as of the date of acquisition of Predecessor Company I, began to assess and formulate an exit and restructuring plan that includes additional reductions of workforce, facility closures and changes in business strategies. This updated exit and restructuring plan is intended to increase operating efficiencies. At June 28, 2004, the Company recorded a liability of $4,782 related to the reductions of workforce and facility closures and $4,795 related to changes in business strategies for a product line. These plans also resulted in a $6,825 decrease to the beginning balance of the pension asset for a curtailment to

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Notes to Consolidated Statements (Continued)

the Company’s pension plan in conjunction with the planned closures of certain manufacturing facilities for the period ended September 25, 2004. Adjustments of $2,066, primarily to the reserves associated with plant closures, were made to these reserves as the cost estimates were refined and finalized during the fiscal year ended October 1, 2005.

In the fiscal year ended September 30, 2006, payouts in the amount of $2,802 were related to costs associated with plant closures. The Company expects to complete these plans in the next one to three years. In accordance with EITF 95-3, any reductions of these plans made after the one year period from the date of acquisition resulted in a decrease to goodwill. The following schedule shows the changes to the restructuring reserve since the date of acquisition, which is included in accrued liabilities and other long-term liabilities:

Balance as of June 27, 2004				$	2,223
Additions					7,354
Balance as of June 28, 2004, date of acquisition					9,577
Payments					(79	)
Balance as of September 25, 2004					9,498
Accretion of interest					355
Current year provisions					80
Purchase accounting adjustments					(2,066	)
Payments					(1,027	)
Balance as of October 1, 2005				$	6,840
Accretion of interest					271
Purchase accounting adjustments					(832	)
Payments					(2,809	)
Balance as of September 30, 2006				$	3,470

Restructuring Related to Acquisition of Acorn

At date of acquisition, the Company recorded a reserve of $1,547 associated with certain facility closures and reductions in workforce as part of a facility consolidation plan. The Company appropriately met the conditions as outlined in EITF 95-3 to record such charges as liabilities in a purchase accounting combination. This plan was executed beginning in the third quarter of fiscal 2006 and is expected to be completed in fiscal 2007. As the Company obtains additional information regarding costs to close certain facilities, adjustments may be made to the restructuring reserves. These restructuring reserves were included in accrued expenses and other current liabilities and related to portions of the exit plan that have not yet been completed. In addition, certain employees were given retention packages totaling approximately $2,987 to transition their current roles over 4-12 months. These costs are being recognized over the retention period and have not been included in the purchase price or as a reduction to the net assets acquired. During fiscal 2006, the Company’s operating results reflect a charge of $2,315 related to the recognition of these retention packages. Severance payments for these retention packages began in the Company’s fourth quarter of fiscal 2006 and will carry into fiscal 2007. The balance of the restructuring reserve at September 30, 2006 is $1,175 which is included in accrued liabilities and other long term liabilities.

Balance as of April 7, 2006				$	1,547
Adjustments to purchase accounting					(40	)
Payments					(332	)
Balance as of September 30, 2006				$	1,175

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Notes to Consolidated Statements (Continued)

5.	Trade Receivables and Concentrations of Credit Risk

Trade receivables are as follows:

			September 30, 2006						October 1, 2005
Trade receivables				$	83,809					$	66,544
Allowance for doubtful accounts					(1,269	)					(1,335	)
Other sales reserves					(16,122	)					(15,532	)
				$	66,418					$	49,677

The Company operates principally in the United States, and to a lesser extent, in Europe and Canada. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. Credit losses have been within management’s estimates.

The Company’s top two customers represented approximately 32% and 18% of the net sales for the fiscal year ending September 30, 2006. These customers represented 32% and 22% of net sales for the fiscal year ended October 1, 2005. These customers represent 30% and 16% of trade receivables at September 30, 2006 and 32% and 22% of trade receivables at October 1, 2005.

6.	Inventories

Inventories are as follows:

			September 30, 2006						October 1, 2005
Finished goods				$	94,903					$	59,671
Work in process					21,398						15,613
Raw materials					33,626						22,908
					149,927						98,192
Less inventory reserves					(8,688	)					(7,046	)
				$	141,239					$	91,146

7.	Property, Plant and Equipment

A summary of property, plant and equipment is as follows:

			September 30, 2006						October 1, 2005
Land and improvements				$	2,462					$	1,637
Buildings and improvements					14,781						14,561
Machinery and equipment					67,027						53,095
Furniture and fixtures					608						218
Computer hardware					1,253						563
Computer software					3,641						1,760
Construction in progress					7,847						5,828
					97,619						77,662
Less accumulated depreciation					(24,939	)					(15,755	)
Net property, plant and equipment				$	72,680					$	61,907

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8.	Goodwill and Other Intangibles

In accordance with SFAS No. 142, the Company is required to test goodwill and indefinite lived intangible assets for impairment on at least an annual basis. The Company performed the required impairment test of goodwill and other intangible assets using discounted cash flow analysis for the fiscal years ended September 30, 2006 and October 1, 2005. The Company recorded trade name impairment of $5,948 for the fiscal year ended September 30, 2006. The impairment of trade names was primarily the result of a shift in branding strategies by certain customers during the fiscal year. The Company recorded goodwill impairment of $119,753 for the fiscal year ended October 1, 2005. The goodwill analysis in fiscal 2005 included the decreased profitability as a result of increased commodity prices, which caused financial results to differ materially from the expected results at the time of the purchase of the Company in June 2004. There can be no assurance that future impairment tests will not result in a charge to earnings.The cost of other acquired intangible assets, including primarily customer and vendor relationships, covenants not to compete and employment agreements, is amortized on a straight-line basis over the estimated lives of 2 to 19 years. Amortization of other intangibles amounted to $1,836 and $1,754 for the fiscal years ended September 30, 2006 and October 1, 2005, respectively. Amortization of other intangibles amounted to $477 for the period ended September 25, 2004. The Predecessor Company I amortization of other intangibles amounted to $3,303 for the period ended June 27, 2004.

The estimated aggregate amortization expense for each of the succeeding fiscal years is as follows: $1,488 in 2007; $1,337 in 2008; $1,221 in 2009; $1,211 in 2010; $1,200 in 2011 and $3,480 thereafter.

The changes in carrying amount of goodwill are as follows:

Goodwill, after allocations to fair value on June 28, 2004				$	154,659
Currency translation adjustments					1,904
Goodwill at September 25, 2004				$	156,563
Currency translation adjustments					3,348
Revision of purchase price allocations					1,577
Impairment of goodwill					(119,753	)
Goodwill at October 1, 2005				$	41,735
Currency translation adjustments					548
Revision of purchase price allocations					(1,321	)
Goodwill associated with Union and Hound Dog					17,397
Goodwill at September 30, 2006				$	58,359

During fiscal 2006, the Company reduced the initial purchase price allocation in the amount of $1,321 due to the refinement of restructuring reserves. In addition, the Company added goodwill of $16,597 and $800 for the acquisition of Union and Hound Dog, respectively.

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Notes to Consolidated Statements (Continued)

The following table reflects the components of intangible assets other than goodwill at September 30, 2006:

			Gross Carrying Amount						Accumulated Amortization
Indefinite lived intangible assets:
Trade names				$	68,513					$	—
Finite lived intangible assets:
Technology (patents)					1,356						619
Non-compete agreements					976						902
Customer relationships					11,672						2,546
					14,004						4,067
				$	82,517					$	4,067

The following table reflects the components of intangible assets other than goodwill at October 1, 2005:

			Gross Carrying Amount						Accumulated Amortization
Indefinite lived intangible assets:
Trade names				$	70,172					$	—
Finite lived intangible assets:
Technology (patents)					984						336
Non-compete agreements					887						493
Customer relationships					11,317						1,402
					13,188						2,231
				$	83,360					$	2,231

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Notes to Consolidated Statements (Continued)

9.	Income Taxes

Income before income taxes and the related provision for income taxes consist of the following:

															Predecessor Company I
			Fiscal year ended September 30, 2006						Fiscal year ended October 1, 2005						Period ended September 25, 2004						Period ended June 27, 2004
(Loss) income before provision for income taxes:
Domestic				$	(13,153	)				$	(135,518	)				$	(12,985	)				$	27,482
Foreign					8,576						7,363						127						5,827
				$	(4,577	)				$	(128,155	)				$	(12,858	)				$	33,309
Income tax expense (benefit):
Current:
Federal				$	—					$	(3,394	)				$	(842	)				$	6,615
State					(574	)					(923	)					(103	)					360
Foreign					2,490						2,467						(13	)					1,672
					1,916						(1,850	)					(958	)					8,647
Deferred:
Federal					(836	)					(1,560	)					(3,665	)					3,703
State					(1,104	)					596						(415	)					743
Foreign					24						(141	)					—						835
					(1,916	)					(1,105	)					(4,080	)					5,281
				$	—					$	(2,955	)				$	(5,038	)				$	13,928

The reported income tax provisions differ from the amount based on United States federal income tax rates as follows:

															Predecessor Company I
			Fiscal year ended September 30, 2006						Fiscal year ended October 1, 2005						Period ended September 25, 2004						Period ended June 27, 2004
Statutory federal income tax (benefit) expense				$	(1,556	)				$	(43,572	)				$	(4,372	)				$	11,658
Non-deductible goodwill impairment loss					—						40,715						—						—
State income tax expense (net of federal benefit)					(1,395	)					(710	)					(342	)					717
Nondeductible other					(102	)					(20	)					22						—
Foreign income tax differential					(135	)					(177	)					—						908
Change in estimated tax rate					(1,199	)					—						—						—
Valuation allowance					4,509						750						—						—
Other					(122	)					59						(346	)					645
				$	—					$	(2,955	)				$	(5,038	)				$	13,928

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Notes to Consolidated Statements (Continued)

The following table sets forth the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities:

			September 30, 2006						October 1, 2005
Deferred tax assets:
Accounts receivable				$	190					$	279
Inventories					2,467						2,037
Accrued liabilities and restructuring expenses					7,907						8,559
Other non-current items					734						568
Pension					6,210						5,131
Net operating loss carryforwards					8,341						4,009
Total deferred tax assets					25,849						20,583
Deferred tax liabilities:
Plant and equipment, principally due to differences in depreciation					9,276						10,378
Pensions					3,353						611
Intangible assets					18,896						19,314
Derivative financial instruments					997						421
Other current items					1,041						1,242
Total deferred tax liabilities					33,563						31,966
Valuation allowance					7,548						2,649
Net deferred tax liabilities				$	(15,262	)				$	(14,032	)

During the fiscal year ended September 30, 2006, the fiscal year ended October 1, 2005, the period ended September 25, 2004 and the period ended June 27, 2004, the Company paid income taxes of $7,500, $1,014, $1 and $8,743, respectively.

Effective for the fiscal years ended September 30, 2006 and October 1, 2005, no provision had been made for U.S. federal and state income taxes on approximately $8,349 and $7,363 of foreign earnings, respectively, which are expected to be reinvested outside of the United Sates indefinitely. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to U.S. income taxes (subject to an adjustment for foreign tax credits), state income taxes and withholding taxes to various foreign countries. Determination of the amount of unrecognized deferred U.S. income tax liability is not practicable because of the complexities associated with its hypothetical calculation.

The Company has federal net operating loss carryforwards of approximately $18,421, which begin to expire in 2025. In addition, with the acquisition of Union, the Company has approximately $1,100 of net operating losses limited by the provisions of Section 382 of the Internal Revenue Code which provides for the annual limitations on the deductibility of the net operating losses and certain tax deductions. These limitations apply until the earlier of utilization or expiration of the net operating losses. The Company has state net operating loss carryforwards of approximately $34,173 with various expiration dates according to state rules.

The valuation allowance is primarily attributable to the uncertainty regarding the realization of the net operating losses. The Company has performed the required assessment regarding the realization of the net operating losses and has concluded that it is more likely than not that the net operating losses, net of the valuation allowance, will be realized.

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Notes to Consolidated Statements (Continued)

10.	Debt Arrangements

Senior Secured Credit Facility Amended and Restated

On June 28, 2004, in conjunction with the acquisition of Predecessor Company I, ATT entered into a $215,000 Senior Secured Credit Facility ($75,000 revolving credit facility and $140,000 Term Loan B) in order to finance the acquisition, repay Predecessor Company I’s outstanding debt and pay related fees and expenses. The Senior Secured Credit Facility is guaranteed by the Company and each of its existing and future direct and indirect subsidiaries, other than any subsidiary that is a ‘‘controlled foreign corporation’’ under Section 957 of the Internal Revenue Code. The Company and each of the other guarantors granted to the senior lenders a first priority (subject to certain customary exceptions) security interest in and liens on all of the respective present and future property and assets to secure all of the obligations under the Senior Secured Credit Facility, and any interest rate swap or similar agreements with a senior lender under the Senior Secured Credit Facility.

On January 14, 2005, simultaneously with the completion of the offering of the Senior Floating Rate Notes referred to below, ATT entered into an amendment (‘‘Amendment No.1’’) to the terms of the Senior Secured Credit Facility. As amended, availability under the Senior Secured Credit Facility was restricted to the lesser of $75,000 and the borrowing-base amount, which was equal to (a) 85% of the amount of eligible receivables, plus (b) the lower of (i) 55% of the cost or fair market value of eligible inventory and (ii) if an inventory appraisal has been performed, 80% of the orderly liquidation value of Ames True Temper, Inc.’s inventory, plus (c) a percentage of eligible equipment or real property determined by Bank of America, N.A., as administrative agent, and not objected to by the required lenders. On December 1, 2005, the Company entered into Amendment No. 2 to the terms of the Senior Secured Credit Facility, which temporarily changed certain financial covenants for the Company’s fiscal 2006 performance. The Senior Secured Credit Facility was amended and restated on April 7, 2006 as described below.

Senior Subordinated Notes

On June 28, 2004, we completed a private offering of $150.0 million in aggregate principal amount at maturity of 10% Senior Subordinated Notes due July 15, 2012. The Senior Subordinated Notes are fully and unconditionally guaranteed by the Company on a senior subordinated basis. On August 10, 2004, we filed a registration statement with respect to new notes having substantially identical terms as the original notes, as part of an offer to exchange registered notes for the privately issued original Senior Subordinated Notes. The new notes evidence the same debt as the original Senior Subordinated Notes, are entitled to the benefits of the indenture governing the original Senior Subordinated Notes and are treated under the indenture as a single class with the original notes. The exchange offer was completed on November 24, 2004.

The new Senior Subordinated Notes are unsecured senior subordinated obligations and rank behind all of our existing and future senior debt, including borrowings under the Senior Secured Credit Facility and the Amended and Restated Senior Secured Credit Agreement, equally with any of our future senior subordinated debt, ahead of any of our future debt that expressly provides for subordination to the new Senior Subordinated Notes and effectively behind all of the existing and future liabilities of our subsidiaries, including trade payables. The Company also guarantees the new Senior Subordinated Notes on a senior subordinated basis. This guarantee ranks behind all existing and future senior debt of the Company, including the guarantee of the Senior Secured Credit Facility and the Senior Floating Rate Notes, equal to all future senior subordinated indebtedness and ahead of all future debt that expressly provides that it is subordinated to the guarantee.

We pay interest on the new Senior Subordinated Notes semi-annually in cash, in arrears, on January 15 and July 15 at an annual rate of 10.0%. The indenture governing new Senior Subordinated

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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 new Senior Subordinated Notes 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 may redeem the Senior Subordinated Notes on or after July 15, 2008, except we may redeem up to 35% of the new Senior Subordinated Notes prior to July 15, 2007 with the proceeds of one or more public equity offerings. We are required to redeem the new Senior Subordinated Notes under certain circumstances involving changes of control.

Senior Floating Rate Notes

On January 14, 2005, ATT completed the offering of $150,000 Senior Floating Rate Notes due 2012. The proceeds of this offering were used by the Company to repay the entire balance of Term Loan B, which amounted to $139,300. Additionally, the proceeds were used to pay transaction fees and repay a portion of the revolving credit facility. As a result of the transaction, the Company recorded a charge of $4,102 to interest expense to write-off the portion of prepaid bank fees related to Term Loan B.

The Senior Floating Rate Notes, issued at a 0.5% discount, bear interest at a floating rate per annum, reset quarterly, equal to LIBOR plus 4%, which was 9.51% at September 30, 2006. The Senior Floating Rate Notes pay interest quarterly in cash in arrears on January 15, April 15, July 15 and October 15 of each year. The Senior Floating Rate Notes mature on January 15, 2012, unless earlier redeemed or repurchased, and are subject to the terms and conditions set forth in the Indenture. The Company guarantees the Senior Floating Rate Notes.

The Senior Floating Rate Notes are unsecured, unsubordinated obligations of ATT. They are effectively subordinated to all existing and future secured debt, to the extent of the assets securing such debt, including borrowings under the Senior Secured Credit Facility and the Amended and Restated Senior Secured Credit Agreement, pari passu with all future senior unsecured indebtedness, senior in right of payment to all existing and future senior subordinated debt, including the Senior Subordinated Notes, and effectively behind all of the existing and future liabilities of ATT’s subsidiaries, including trade payables.

Interest Rate Swaps

In connection with the issuance of the Senior Floating Rate Notes, ATT entered into interest rate swaps (the ‘‘Swaps’’) with Bank of America, N.A. and Wachovia Bank, N.A. Pursuant to the Swap with Bank of America, N.A., which became effective on January 17, 2006, ATT swaps 3-month LIBOR rates for fixed interest rates of 4.31% on a notional amount of $100,000 for the period from January 17, 2006 through January 15, 2008, $66,667 for the period from January 16, 2008 to January 15, 2009 and $33,333 for the period from January 16, 2009 through January 15, 2010. Pursuant to the Swap with Wachovia Bank, N.A., effective January 15, 2006, ATT swaps 3 month LIBOR rates for fixed interest rates of 4.29% on a notional amount of $50,000 for the period from January 15, 2006 through January 15, 2008, $33,333 for the period from January 16, 2008 to January 15, 2009 and $16,667 for the period from January 16, 2009 through January 15, 2010. These swaps fix the variable rate portion of the Senior Floating Rate Notes, while there is an additional margin of 4.00% that is fixed.

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Term Note

On July 19, 2005, the Company entered into a $2,700 Term Note, Loan and Security Agreement and Subordination Agreement with a Lender. This note is payable in monthly installments over five years. The interest rate per annum is equal to 2.5% and secured by certain collateral, which was agreed to by the Administrative Agent of the Senior Secured Credit Facility. Under the terms of this note, the Company is required to create 108 jobs at the new manufacturing facility in Pennsylvania within three years of the completion of the facility. 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. As of September 30, 2006, the Company was in compliance with these covenants.

Amended and Restated Senior Secured Credit Agreement

On April 7, 2006, in conjunction with the acquisition of Acorn, ATT entered into an amended and restated Senior Secured Credit Agreement with Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, Acorn, Union, and Ames True Temper Properties, Inc. (‘‘ATTP’’); together with ATT (the ‘‘Borrowers’’), the Company, as guarantor, and each lender from time to time thereto (the ‘‘Credit Agreement’’). The Credit Agreement amends and restates ATT’s existing credit facility with, among others, Bank of America, N.A. Pursuant to the Credit Agreement, the lenders made available a five-year revolving credit facility of up to $130,000 in order to finance the acquisition of Acorn, pay fees and expenses associated with the acquisition, repay outstanding debt and provide for ongoing working capital.

Borrowings outstanding under the revolving credit facility as of September 30, 2006 and October 1, 2005 were $66,608 and $0, respectively. The Company had letters of credit outstanding totaling $4,392 and $1,410 as of September 30, 2006 and October 1, 2005, respectively. The total amount available under the revolving credit facility at September 30, 2006 was $45,365. The interest rate for base rate loans under the revolving credit facility is calculated as 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 in the Credit Agreement. The interest rate for base rate loans under the revolving credit facility was 9.25% at September 30, 2006.

Total indebtedness is as follows:

			September 30, 2006						October 1, 2005
Revolving loan facility dated 4/7/06, expires 2011				$	66,608					$	—
Term Note due 2010					2,103						2,618
Senior Floating Rate Notes due 2012					150,000						150,000
10% Senior Subordinated Notes due 2012					150,000						150,000
Total debt					368,711						302,618
Less short-term revolving loan facility					(66,608	)					—
Current portion of long-term debt					(528	)					(515	)
Less unamortized discount					(563	)					(670	)
Long-term debt				$	301,012					$	301,433

The Credit Agreement and the Senior Subordinated Notes contain various affirmative and negative covenants customary for similar credit facilities (subject to customary exceptions and certain existing obligations and liabilities), including, but not limited to, restrictions (with exceptions) on: liens; debt; loans, acquisitions, joint ventures and other investments; mergers and consolidations, sales, transfers

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and other dispositions of property or assets; dividends, distributions, redemptions and other restricted payments; changes in the nature of the Company’s business; transactions with affiliates; and prepayment, redemption or repurchase of certain debt. In addition, the Credit Agreement and term note require that the Company meet certain financial covenants. Capital expenditures are subject to fiscal year limitations of $19,125 in 2006, $16,125 in 2007 and $15,000 thereafter. In the event the Company triggers Cash Dominion as defined in the Credit Agreement, the Company is required to maintain a minimum consolidated EBITDA of $41,000 for any period of four quarters ending on the last day of any fiscal quarter. As of September 30, 2006, the Company was in compliance with all applicable debt covenants.

Interest payments were approximately $31,459, $24,642, $2,004, and $7,229 for the fiscal year ended September 30, 2006, fiscal year ended October 1, 2005, and the period ended September 25, 2004 and period ended June 27, 2004, respectively.

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11.	Lease Arrangements

The Company leases certain distribution and production facilities, machinery, computer hardware, computer software, office equipment, and vehicles under lease arrangements of varying terms. The most significant lease commitments involve distribution and production facilities with lease terms of up to 17 years.

Rental expense for operating leases was $11,894, $10,714, $2,496, and $6,748 for the fiscal year ended September 30, 2006, for the fiscal year ended October 1, 2005, the period ended September 25, 2004, and the period ended June 27, 2004, respectively.

Future minimum rental commitments under noncancelable operating leases as of September 30, 2006 are as follows:

2007				$	10,495
2008					10,211
2009					10,179
2010					8,496
2011					8,336
Thereafter					54,072
Total minimum lease payments				$	101,789

12.	Pension and Other Postretirement Benefits

The Company has three noncontributory defined benefit plans covering substantially all of its United States employees. The benefits under these plans are based primarily on years of credited service and compensation as defined under the respective plan provisions. The Company’s funding policy is to contribute amounts to the plans sufficient to meet the minimum funding requirements set forth in the Employee Retirement Income Security Act of 1974, plus such amounts as the Company may determine to be appropriate from time to time. The Company also sponsors two Supplemental Executive Retirement Plans, which are nonqualified, unfunded plans designed to provide certain senior executives defined pension benefits in excess of the limits defined under Sections 415 and 401(a)(17) of the Internal Revenue Code. The Company also provides healthcare and life insurance benefits for certain groups of retirees through several plans. The benefits are at fixed amounts per retiree and are partially contributory by the retiree.The following table provides a reconciliation of changes in the projected benefit obligation, fair value of plan assets and the funded status of the Company’s U.S. qualified defined-benefit pension (valuation dates June 30, 2006 and June 30, 2005), non-qualified defined-benefit pension, and postretirement benefit plans with the amounts recognized in the Company’s consolidated balance sheets at September 30, 2006 and October 1, 2005:

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			Pension Benefits												Other Benefits
			September 30, 2006						October 1, 2005						September 30, 2006						October 1, 2005
Change in projected benefit obligation
Benefit obligation at beginning of period				$	128,641					$	106,492					$	3,028					$	2,464
Acquisition of business					25,753						—						206						—
Service cost, net					2,782						2,518						3						23
Interest cost					6,962						6,050						150						148
Participant contribution					—						—						10						—
Curtailment, purchase accounting					—						798						—						393
Assumption changes					(15,388	)					17,034						(1,532	)					298
Actuarial loss (gain)					(3,496	)					1,644						(20	)					(111	)
Benefits paid					(8,185	)					(5,895	)					(66	)					(187	)
Benefit obligation at end of period				$	137,069					$	128,641					$	1,779					$	3,028
Change in fair value of plan assets
Fair value at beginning of period				$	108,672					$	104,719					$	—					$	—
Acquisition of business					22,767						—						—						—
Actual return on plan assets					7,538						10,432						—						—
Employer contributions					223						—						56						187
Participant contribution					—						—						10						—
Benefits paid					(8,185	)					(5,895	)					(66	)					(187	)
Plan expenses					(525	)					(584	)					—						—
Fair value at end of period				$	130,490					$	108,672					$	—					$	—
Funded status of plan
Plan assets less than projected benefit obligation				$	(6,579	)				$	(19,969	)				$	(1,779	)				$	(3,028	)
Unrecognized prior service cost					360						—						4						—
Unrecognized net (gain) loss					2,759						19,521						(1,510	)					42
Net amount recognized				$	(3,460	)				$	(448	)				$	(3,285	)				$	(2,986	)

			Pension Benefits												Other Benefits
			September 30, 2006						October 1, 2005						September 30, 2006						October 1, 2005
Amounts recognized in balance sheet consist of
Accrued benefit liability				$	(4,315	)				$	(13,788	)				$	(3,285	)				$	(2,986	)
Accumulated other comprehensive income					855						13,340						—						—
Net amount recognized				$	(3,460	)				$	(448	)				$	(3,285	)				$	(2,986	)

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The weighted-average assumptions used in determining the net periodic pension cost for the Company’s defined benefit and retiree plans, covering employees in the United States are presented below.

			Pension Benefits						Other Benefits
			2006			2005			2006			2005
Discount rate			5% - - 6%			6.25%			5% - - 6%					6.25	%
Rate of compensation increase			2.75% - 4%			3.50%			—					—
Expected return on assets			8.5% - 9%			9.00%			—					—

The weighted-average assumptions used in determining the plan obligations for the Company’s defined benefit and retiree plans, covering employees in the United States, at the measurement dates of June 30, 2006 and June 30, 2005 are presented below.

			Pension Benefits						Other Benefits
			2006			2005			2006						2005
Discount rate			6.15%			5.00%					6.15	%					5.00	%
Rate of compensation increase			3.5% - 4%			2.75%					—						—

The accumulated benefit obligations for the Company’s U.S. defined benefit plans at the measurement dates were $132,054 at June 30, 2006 and $122,460 at June 30, 2005.

Amounts recognized in the income statement consist of:

			Pension Benefits												Other Benefits
			Fiscal year ended September 30, 2006						Fiscal year ended October 1, 2005						Fiscal year ended September 30, 2006						Fiscal year ended October 1, 2005
Service cost				$	3,307					$	3,102					$	3					$	23
Interest cost					6,962						6,050						150						148
Actual return on plan assets					(10,173	)					(10,432	)					—						—
Asset gain deferred					513						1,253						0						—
Net periodic benefit cost (credit)				$	609					$	(27	)				$	153					$	171

The Company anticipates making contributions of $97 to the U.S. defined benefit pension plan and $4 to its retiree plan during the fiscal year beginning on October 1, 2006.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid to participants in the U.S. pension and retiree plans:

			Pension Benefits						Postretirement Benefits
2007				$	9,033					$	145
2008					9,023						143
2009					8,987						141
2010					8,905						136
2011					8,922						134
Five year period beginning thereafter					46,973						639

The Company’s Irish subsidiary administers a defined benefit pension plan. The following table provides a reconciliation of changes in the projected benefit obligation, fair value of plan assets and the funded status of this pension plan. The measurement dates were September 30, 2006 and September 30, 2005.

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			September 30, 2006						October 1, 2005
Change in projected benefit obligation
Benefit obligation at beginning of period				$	7,610					$	5,558
Service cost, net					206						268
Interest cost					282						299
Assumption changes					(273	)					1,522
Actuarial (gain) loss					(515	)					530
Benefits paid					(186	)					(339	)
Effect of foreign currency					343						(228	)
Benefit obligation at end of period				$	7,467					$	7,610
Change in fair value of plan assets
Fair value at beginning of period				$	5,808					$	5,017
Actual return on plan assets					630						1,152
Employer contributions					405						101
Plan participants’ contributions					—						24
Benefits paid					(223	)					(339	)
Effect of foreign currency					283						(147	)
Fair value at end of period				$	6,903					$	5,808
Funded status of plan
Plan assets (less than) projected benefit obligation				$	(564	)				$	(1,802	)
Unrecognized net loss					352						1,457
Net amount recognized				$	(212	)				$	(345	)
Amounts recognized in balance sheet consist of
Accrued benefit liability				$	(212	)				$	(507	)
Accumulated other comprehensive income					—						162
Net amount recognized				$	(212	)				$	(345	)

The weighted-average assumptions used in determining the net periodic pension cost for the Irish pension plan are presented below.

			2006			2005
Discount rate			4.00%			5.00%
Rate of compensation increase			3.75%			3.75%
Expected return on assets			6.30%			6.50%

The weighted-average assumptions used in determining the plan obligations for the Irish pension plan are listed below.

			2006			2005
Discount rate			4.50%			4.00%
Rate of compensation increase			3.75%			3.75%

At the measurement date of September 30, 2006, the accumulated benefit obligation was $6,289.

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Amounts recognized in the income statement consist of:

			Fiscal year ended September 30, 2006						Fiscal year ended October 1, 2005
Service cost				$	249					$	243
Interest cost					282						299
Actual return on plan assets					(630	)					(1,152	)
Asset gain deferred					273						812
Amortization of unrecognized prior service costs					48						—
Net periodic benefit cost				$	222					$	202

The Irish subsidiary anticipates making contributions of $203 to the plan during the fiscal year beginning on October 1, 2006.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid to plan participants:

2006				$	181
2007					200
2008					223
2009					250
2010					282
Five year period beginning thereafter					1,502

The tables above set forth the historical components of net periodic pension cost and a reconciliation of the funded status of the pension and other postretirement benefit plans for the employees associated with the Company and are not necessarily indicative of the amounts to be recognized by the Company on a prospective basis.

The assets of the Ames True Temper, Inc. Pension Plan are invested and managed by Mellon Bank, which acts as both trustee and administrator. The Ames True Temper Benefits Committee meets quarterly to review current investment policy and to monitor Mellon Bank’s fund performance. The assets of UnionTools, Inc. Retirement Plan and Trust and Pension Plan and Trust are invested and managed by Diversified Investment Advisors, which acts as both trustee and administrator. The assets of all plans are invested in a manner consistent with the Fiduciary Standards of the Employee Retirement Income Security Act of 1974. Investment strategy is based on a rolling time horizon of three to five years. The investment objective is to achieve the highest possible return commensurate with the assumed level of risk. Based on key characteristics such as work force growth, plan maturity, and assets vs. liabilities, a slightly conservative to normal risk portfolio asset mix structure has been adopted.

The asset allocations attributable to the Company’s U.S. pension plan, excluding the Union plans, at June 30, 2006 and the target allocation of plan assets for the period beginning July 1, 2006, by asset category, are as follows (as permitted by SFAS No. 132 (revised 2003), Employers’ Disclosures about Pensions and Other Postretirement Benefits—an amendment of FASB Statements No. 87, 88, and 106, the Company has deferred reporting of this information for its Irish pension plan assets):

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Notes to Consolidated Statements (Continued)

			Target Allocation June 30, 2006			Percentage of Assets July 1, 2006
Domestic equity securities			58%			58%
Fixed income securities			30%			30%
International equity securities			12%			12%

The asset allocation attributed to the Union pension plans at June 30, 2006 and the target allocation of plan assets for the period beginning July 1, 2006, by asset category, are as follows:

			Target Allocation June 30, 2006			Percentage of Assets July 1, 2006
Equity securities			65%			66% - - 79%
Debt securities			5%			5% - 8%
Other			30%			13% - - 29%

The Company has a defined contribution savings plan that covers substantially all of its eligible U.S. employees. The purpose of the plan is generally to provide additional financial security to employees during retirement. Participants in the savings plan may elect to contribute, on a pre-tax basis, a certain percent of their annual earnings with the Company matching a portion of these contributions. Expenses under the plan related to the Company’s matching contribution were $656, $522, $121 and $353 for the fiscal year ended September 30, 2006, the fiscal year ended October 1, 2005, and the periods ended September 25, 2004 and June 27, 2004, respectively.

The Company’s Canadian subsidiary, Garant Inc., operates a group-registered retirement savings plan. The Company matches 50% of nonunion employee contributions, up to 3% of an employee’s base salary. The expenses related to the plan for the Company for the fiscal year ended September 30, 2006, the fiscal year ended October 1, 2005 and the periods ended September 25, 2004 and June 27, 2004 were $56, $80, $21 and $40, respectively.

13.	Stockholders’ Equity

On June 28, 2004, CHATT Holdings Inc. purchased 726,556 shares of Class A Common Stock, 124,859 warrants to purchase shares of Class A Common Stock, 267,448 shares of Class B Common Stock and 62,495 shares of Series A Preferred Stock, which constituted all of the outstanding securities of ATT Holding Co. There were no changes to the legal composition of these equity securities. The number of authorized shares of ATT Holding Co. remained unchanged as a result of the sale of the Company.

Series A Preferred Stock

The Company is authorized to issue 100,000 shares of Series A Preferred Stock at a par value of $0.0001. There were 62,495 shares issued and outstanding as of September 30, 2006 and October 1, 2005. Dividends on each share of the Series A Preferred Stock were accrued on a daily basis at the rate of 10% per annum of the Liquidation Value thereof plus all accumulated and unpaid dividends thereon from and including the date of issuance of such share to and including the first to occur of (i) the date on which the Liquidation Value of such share (plus all accrued and unpaid dividends thereon) is paid to the holder thereof in connection with the liquidation of the Company or the redemption of such share by the Company or (ii) the date on which such share is otherwise acquired by the Company. Predecessor Company I had $16,925 accumulated and unpaid dividends as of June 27, 2004, which were paid out on June 28, 2004, the day of sale. The Company had $15,718 and $8,296 accumulated, unrecorded and unpaid dividends as of September 30, 2006 and October 1, 2005, respectively.

Upon any liquidation, dissolution or winding up of the Company, each holder of Series A Preferred Stock shall be entitled to be paid, before any distribution or payment is made upon any junior

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securities, an amount in cash equal to the aggregate Liquidation Value of all shares held by such holder plus all accrued and unpaid dividends thereon, and the holders of Series A Preferred Stock shall not be entitled to any further payment. The aggregate Liquidation Preference was $62,495 as of June 27, 2004, which was purchased by the buyer on June 28, 2004, the day of sale. The aggregate Liquidation Preference was $62,495 as of September 30, 2006 and October 1, 2005, which excludes any accumulated dividends. The Series A Preferred Stock has no voting rights.

Class A and B Common Stock

The Company is authorized to issue 1,600,000 shares of Class A Common Stock at a par value of $0.0001. There were 726,556 shares issued and outstanding as of September 30, 2006 and October 1, 2005.

The Company is authorized to issue 300,000 shares of Class B Common Stock at a par value of $0.0001. There were 267,448 shares issued and outstanding as of September 30, 2006 and October 1, 2005.

Class A Common Stock and Class B Common Stock shall be entitled to one vote for each share. With respect to the election of the Board of Directors, the holders of shares of Class B Common Stock shall have that number of votes equal to the lesser of (i) the number of shares outstanding or (ii) 29.99% of the voting power of the Company. With respect to the election of the Board of Directors, the holders of shares of Common Stock excluding Class B Common Stock shall have the number of votes equal to the greater of (i) the number of shares outstanding or (ii) 70.01% of the voting power of the Company.

Warrants

In conjunction with the issuance of $47,000 Senior Subordinated Notes on January 14, 2002, Predecessor Company I issued warrants to purchase 124,859 shares of Class A Common Stock at a price equal to $.01 per share. The warrants were exercisable at any time prior to January 13, 2010. In connection with the sale of the Predecessor Company I, CHATT Holdings Inc. purchased the warrants to purchase Class A Common Stock on June 28, 2004. These warrants were outstanding at September 30, 2006 and October 1, 2005.

14.	Segment Information

The Company’s operations are classified into one business segment. These operations are conducted primarily in the United States, and to a lesser extent, in Canada and Europe. The following table presents certain data by geographic areas:

			Identifiable Assets						Net Sales						Earnings Before Income Taxes
Fiscal year ended September 30, 2006
United States				$	399,890					$	407,444					$	(13,153	)
Europe					6,589						6,453						150
Canada					51,842						69,704						8,426
Total				$	458,321					$	483,601					$	(4,577	)

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			Identifiable Assets						Net Sales						Earnings Before Income Taxes
Fiscal year ended October 1, 2005
United States				$	323,665					$	382,980					$	(110,556	)
Europe					5,869						6,730						11
Canada					45,491						60,894						(17,610	)
Total				$	375,025					$	450,604					$	(128,155	)

			Identifiable Assets						Net Sales						Earnings Before Income Taxes
Period ended September 25, 2004
United States				$	410,801					$	71,054					$	(12,981	)
Europe					6,432						1,833						1
Canada					66,004						10,157						122
Total				$	483,237					$	83,044					$	(12,858	)

			Identifiable Assets						Net Sales						Earnings Before Income Taxes
Predecessor Company I
Period ended June 27, 2004
United States				$	251,205					$	307,465					$	27,482
Europe					5,919						5,405						347
Canada					22,787						42,573						5,480
Total				$	279,911					$	355,443					$	33,309

15.	Other (Income) Expense

Other (income) expense consists of the following:

															Predecessor Company I
			Fiscal year ended September 30, 2006						Fiscal year ended October 1, 2005						Period ended September 25, 2004						Period ended June 27, 2004
Foreign exchange (gain) loss				$	(76	)				$	(46	)				$	(82	)				$	71
Legal settlement					(5,587	)					—						—						—
Other					7						(40	)					46						128
Total				$	(5,656	)				$	(86	)				$	(36	)				$	199

On May 15, 2006, the Company entered into a Settlement and Release Agreement (the ‘‘Agreement’’) with Jacuzzi Brands, Inc (‘‘Jacuzzi’’). Under the terms of the Agreement, Jacuzzi paid to the Company $6,165 as settlement payment and dismissed the court actions against all defendants related to the acquisition of the Company by affiliates of Castle Harlan, Inc. In return, the Company agreed to release Jacuzzi from any damages related to any environmental indemnities or wheelbarrow claims. A portion of the settlement payment in the amount of $578 offset the recording of additional environmental liabilities as a result of the release of the environmental indemnities. The remaining balance of the settlement, $5,587, was recorded as other income during fiscal year 2006.

16.	Related Party Transactions

The Company entered into a management agreement with Castle Harlan, Inc., an affiliate of a shareholder, to provide business and organizational strategy, financial and investment management,

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advisory, merchant and investment banking services to the Company. The Company paid $3,186 at the closing of the acquisition of Predecessor Company I in connection with one-time transaction services in connection with the acquisition. During the fiscal year ended September 30, 2006 and the fiscal year ended October 1, 2005, the Company recorded expenses of $1,869 and $1,526, respectively, for the annual management fee plus expenses, which is payable quarterly in advance in accordance with the management agreement.

Wind Point Partners, a shareholder of Predecessor Company I, provided certain management services to Predecessor Company I. Fees incurred for the period ended June 27, 2004 were $606.

17.	Commitments and Contingencies

During December 2004, a customer of Union’s was named in litigation that involved the Company’s products. The complaint asserted causes of action against the defendant for improper advertisement to the consumer. The allegation suggests that advertisements lead the consumer to believe that the hand tools sold were manufactured in the boundaries of the United States. The allegation asserts cause of action against the customer for common law fraud. In the event that courts would deem a judgment against our customer, there is a possibility that the customer would seek legal recourse for a unspecified amount in contributory damages.

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.

The Company has future minimum purchase obligations and royalty payments under certain supply contracts associated with its operations. The future minimum purchases under this contract as of September 30, 2006 are as follows: $1,772 for 2007 and $1,772 for 2008.

18.	Special Charges

During the period ended June 27, 2004, the Company incurred non-capitalizable transaction expenses of $799 related to the sale of the Company.

Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

Item 9A.	CONTROLS AND PROCEDURES

Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report, and based on their evaluation, the principal executive officer and principal financial officer have concluded that these controls and procedures are effective. There were no significant changes in internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

Item 9B.	OTHER INFORMATION

None

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PART III

Item 10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information regarding our board of directors, the board of directors of our parent, the board of directors of the buyer and the board of directors of the buyer parent. In addition, the table sets forth information regarding our executive officers and certain of our other senior officers. Richard Dell is the sole member of our, our parent’s and the buyer’s board of directors.

Name			Age						Position
Richard Dell					60				President and Chief Executive Officer; Member of our board of directors, the board of directors of our parent, the board of directors of the buyer and the board of directors of the buyer parent
Duane Greenly					56				Chief Operating Officer
David M. Nuti					47				Chief Financial Officer
Geoff Brownrigg					43				Vice President, Marketing
Joseph Wersosky					48				Vice President, National Sales
Christopher Frew					41				Vice President, Wholesale, Industrial and International Sales
Jean Gaudreault					50				President and General Manager, Garant (Canada)
Tom O’Connor					60				Managing Director, True Temper Ltd. (Ireland)
Chris Ebling					55				Vice President, Human Resources
Michael Doyle					51				Vice President, Information Technology
Daniel Yurovich					44				Vice President, Manufacturing
William Kley					59				Vice President, Logistics
Troy W. Bryce					38				Chief Accounting Officer
Denise Z. MacIvor					46				Director, Corporate Services, Treasury and Risk Management
John K. Castle					66				Member of the Board of Directors of the buyer parent
Justin B. Wender					37				Member of the Board of Directors of the buyer parent
William M. Pruellage					33				Member of the Board of Directors of the buyer parent
John E. Morningstar					30				Member of the Board of Directors of the buyer parent
Robert Elman					68				Member of the Board of Directors of the buyer parent
Edward LeBlanc					60				Member of the Board of Directors of the buyer parent
Kenneth Roman					75				Member of the Board of Directors of the buyer parent

Richard Dell has been our President and Chief Executive Officer and a member of our board of directors since acquiring us, in partnership with Duane Greenly and Wind Point Partners, in January 2002 and he has been a member of the board of directors of the buyer parent since June 1, 2004. Prior to his employment by our company, he served 27 years with Newell Rubbermaid where he began in Sales and Marketing and became President of two different divisions. Prior to leaving Newell Rubbermaid, Mr. Dell was Group President. Mr. Dell serves on the Board of Directors of Gander Mountain Company.

Duane Greenly has been our Chief Operating Officer since acquiring us, in partnership with Richard Dell and Wind Point Partners, in January 2002. From 1998 through 2001, Mr. Greenly was President and CEO of Barry Controls, which served the retail, industrial, and OEM markets. From 1996 through 1998, he was President of Morgan Manufacturing. Mr. Greenly has held numerous positions with Newell Rubbermaid, and was most recently Business Manager – Window Hardware. Mr. Greenly also held engineering, product development, and operational roles with BF Goodrich and Milliken Textiles.

David Nuti was appointed to the position of Chief Financial Officer of Ames True Temper effective March 1, 2006. Mr. Nuti most recently served as CFO and Senior Vice President, Administration for Rubicon Technology from 2004 to 2006. From 2002 to 2004, he served as CFO and Vice President, Operations at Third Wave Technologies, Inc., from 2000 to 2002, he was

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Vice President Corporate Controller at Fiskars and from 1991 to 1999, Mr. Nuti was with Rubbermaid, Inc. in various senior financial and operational roles. Mr. Nuti began his career with Container Corporation of America and Anchor Hocking Packaging Company and holds an MBA from Lewis University.

Geoff Brownrigg is our Vice President, Marketing. He joined the Company in February 2005. Prior thereto, from 1999 to 2004, Mr. Brownrigg held various progressively responsible positions with Huffy Corporation, most recently as President & General Manager of Huffy Service Solutions (HSS). Before joining HSS, Mr. Brownrigg was Vice President, Sales & Marketing for True Temper Hardware (TTH) prior to the sale of TTH to US Industries. Prior to joining TTH in 1998, Mr. Brownrigg was Vice President, Sales & Marketing with The Cambridge Towel Corporation. Mr. Brownrigg began his career with The Canadian Coleman Company and subsequently at Black & Decker Canada where he held progressively responsible sales management roles in their housewares and power tool groups.

Joseph Wersosky has been our Vice President, National Sales since 1999. Mr. Wersosky joined Garant in 1986, before it was purchased by Ames in 1991. During his time with us, he has served as Director of Sales—The Home Depot and General Sales Manager for the Company.

Christopher Frew is the Vice President, Wholesale, Industrial and International Sales. Mr. Frew joined True Temper in 1995 as a Sales Manager, and has served with us as a Director of Sales, Sales Manager in the Northeast, and International Sales Manager.

Jean Gaudreault has been the President and General Manager of Garant Canada since 1996. From 1991 to 1996, Mr. Gaudreault was part owner of Venmar Ventilation where he held the position of Vice President, Sales & Marketing until the company was sold. From 1980 to 1991, Mr. Gaudreault served in various positions with Denco Canada, including the last two years with Denco SA in France, where he held the position of General Manger, responsible for the restructuring of operations in France.

Thomas O’Connor has been the Managing Director of True Temper Ltd., Ireland since July 2005. Mr. O’Connor joined the True Temper Ltd. in 1985 and served in various sales and marketing functions most recently as Sales and Marketing Director. Prior to joining True Temper Ltd., Mr. O’Connor served 10 years with I. S. Varian & Co. Ltd. Dublin, Ireland in Sales and 6 years with Polycell Products Ltd. United Kingdom.

Chris Ebling has been our Vice President, Human Resources since the merger of Ames and True Temper in 2001. Mr. Ebling joined True Temper in 1986 in the role of Employee Relations Representative and progressed through several roles before becoming Vice President of Human Resources in 1992. Prior to joining True Temper, Mr. Ebling served in various human resource positions with Pullman Standard, Capital Products and Donlee Industries.

Michael Doyle joined us in November 2006 as Vice President of Information Technology. Prior to joining us, Mr. Doyle ran his own information technology practice, Doyle Technology Consulting, focused on mergers, acquisitions and divestitures from 2002 to 2006. Before forming Doyle Technology Consulting, he was Director, Information Technology Infrastructure for Agere Systems and was a key player in the spin off of Agere from Lucent Technologies from 1997 to 2002. Mr. Doyle has also held various senior information technology positions with General Electric, ARINC and Black & Decker, along with a technology solutions group role at EMC.

Daniel Yurovich is our Vice President of Manufacturing. He joined us in April of 2006. Prior to joining us, Mr. Yurovich held the position of President/CEO of Barry Controls Defense and Industrial, a subsidiary of Hutchinson S.A., from 2001 to April 2006. Before joining Barry Controls, Mr. Yurovich was a key player in the turn around and sale of Morgan Manufacturing as the Director of Support Services. Mr. Yurovich started his career at Amerock, a division of Newell, after leaving the Marine Corps, where he attained the rank of Major. Mr Yurovich is a US Naval Academy Graduate and has a Masters degree in finance and accounting.

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William Kley has been our Vice President of Logistics since June 2006. Mr Kley joined our Company in 2003 as Director of Materials. From 2000 to 2002, Mr. Kley was Director of Global Supply Chain Management for Southco. Mr. Kley served as Vice President of Logistics for the Kendall Division of Tyco International from 1995 to 1999. From 1993 to 1994, he served as Director of Materials Management for Sara Lee’s Aris Isotoner Division and from 1986 to 1993 was Director of Logistics for Philips Electronics’ Lighting Division. Mr. Kley started his career in manufacturing and distribution with Johnson & Johnson.

Troy W. Bryce joined our company as Chief Accounting Officer in December 2004. Prior to joining us, Mr. Bryce held various positions with Corning Incorporated from 1999 to 2004, most recently as Director of Global Finance for the worldwide frequency control business. Prior to Corning, he held positions of increasing responsibility in accounting and finance with Snyders of Hanover, Inc. and Cardinal Technologies, Inc. He started his career as an auditor with Ernst & Young LLP. Mr. Bryce is a licensed CPA in Pennsylvania.

Denise Z. MacIvor became our Director, Corporate Services, Treasury and Risk Management in December 2004. Ms. MacIvor joined our company in 2001 as Treasurer. Prior to joining our company, Ms. MacIvor served as the Assistant Treasurer for Metrocall, Inc. from 1997 to 1999 and in various treasury and finance functions at Mercedes-Benz of North America, Inc., most recently as Assistant Treasurer.

John K. Castle is a member of the board of the directors of the buyer parent. Mr. Castle is Chairman and Chief Executive Officer of Castle Harlan. Prior to forming Castle Harlan in 1987, Mr. Castle was President and Chief Executive Officer of Donaldson, Lufkin & Jenrette, Inc., one of the nation’s leading investment banking firms. At that time, he also served as a director of the Equitable Life Assurance Society of the U.S. Mr. Castle is a board member of The Restaurant Company, Advanced Accessory Systems, LLC, Wilshire Restaurant Group, Inc., Morton’s Restaurant Group, Inc., Horizon Lines, Inc. and various private equity companies. Mr. Castle has also been elected to serve as a Life Member of the Massachusetts Institute of Technology. He has served for twenty-two years as a trustee of New York Medical College, including eleven of those years as Chairman of the Board. He is a member of the Board of the Whitehead Institute for Biomedical Research, and was Founding Chairman of the Whitehead Board of Associates. He is also a member of The New York Presbyterian Hospital Board of Trustees and Former Chairman of the Columbia-Presbyterian Health Sciences Advisory Council. Mr. Castle received his bachelor’s degree from the Massachusetts Institute of Technology, his MBA as a Baker Scholar with High Distinction from Harvard, and two Honorary Doctorate degrees of Humane Letters.

Justin B. Wender is a member of the board of directors of the buyer parent.  Mr. Wender is the President of Castle Harlan, Inc. Prior to joining Castle Harlan in 1993, Mr. Wender worked in the Corporate Finance Group of Merrill Lynch & Co., where he assisted clients with a variety of corporate finance matters. He is a board member of McCormick & Schmick’s Seafood Restaurants, Inc., Morton’s Restaurant Group, Ames True Temper, Caribbean Restaurants Polypipe Building Products Limited and Baker & Taylor. In addition, he currently serves as Chair of the International Center for the Disabled, is Trustee of Carleton College and a Board Member of the Pew Center on Global Climate Change. Mr. Wender is a Cum Laude graduate of Carleton College with a B.A. in Political Science and has his M.B.A. from the Wharton School of the University of Pennsylvania.

William M. Pruellage is a member of the board of directors of the buyer parent. Mr. Pruellage is a Managing Director of Castle Harlan, Inc. Mr. Pruellage is also a board member of Universal Compression, Inc., Advanced Accessory Systems, LLC and Wilshire Restaurant Group, Inc. Prior to joining Castle Harlan in July 1997, Mr. Pruellage worked in the Mergers & Acquisitions group of Merrill Lynch & Co., where he assisted clients in strategic planning and corporate mergers. Mr. Pruellage is a Summa Cum Laude graduate of Georgetown University.

John E. Morningstar is a member of the board of directors of the buyer parent. Mr. Morningstar is a Vice President of Castle Harlan, Inc. Mr. Morningstar is also a board member of Associated Packaging Technologies, Inc. and Polypipe Building Products Limited. Prior to joining Castle Harlan in July 2000, Mr. Morningstar worked in the Retail Investment Banking department of Merrill Lynch

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& Co., where he assisted clients with corporate finance matters and strategic mergers. Mr. Morningstar received his B.S. from the University of Virginia and holds an M.B.A. from the Wharton School of the University of Pennsylvania.

Robert Elman is a member of the board of directors of the buyer parent. Mr. Elman served as Chairman and Chief Executive Officer of DESA International from its formation in 1985 until his retirement in 1999. Mr. Elman, in a leveraged buyout, co-founded DESA Industries in 1969. In 1975, AMCA International acquired DESA Industries and he became a Senior Group Vice President responsible for the Consumer, Automotive products, Aerospace and Food Packaging Divisions. Prior to joining DESA, Mr. Elman worked with ITT corp. and Singer Company in various management positions in the United States and Europe. He received his Bachelor’s Degree in Mechanical Engineering from Rensselaer Polytechnic Institute and his M.B.A. from Harvard Business School.

Edward LeBlanc is a member of the board of directors of the buyer parent. Mr. LeBlanc served as President, Residential and Commercial Division of Kidde, Inc. from September 2000 until his retirement in December of 2005. Mr. LeBlanc served as President and CEO of Regent Lighting Corporation from 1997 until 2000. Prior to joining Regent, Mr. LeBlanc held a number of positions with Macklanburg-Duncan over a 19-year period including President and Chief Operating Officer. Mr. LeBlanc also serves on the Boards of IPS Inc. and Pro Build Corporation.

Kenneth Roman is a member of the board of directors of the buyer parent. Mr. Roman was Executive Vice President of American Express from 1989 to 1991. Mr. Roman spent 26 years with Ogilvy & Mather Worldwide (and its parent, The Ogilvy Group). Mr. Roman was Chairman and Chief Executive Officer of The Ogilvy Group from 1988 to 1989, Chairman of Ogilvy & Mather Worldwide from 1985 to 1989. Mr. Roman has served on a dozen corporate boards—including Compaq Computer, Brunswick Corp. and Gartner Inc.

Audit Committee Financial Expert

The audit committee of CHATT Holding LLC, the buyer parent of ATT Holding Co., which we refer to as the Audit Committee, effectively functions as our audit committee. The Audit Committee consists of Edward LeBlanc (Chairman), Robert Elman and John Morningstar. The Audit Committee of CHATT Holding LLC has determined that Mr. LeBlanc is considered an ‘‘audit committee financial expert’’, as defined in Section 401 (h) of Regulation S-K. The Audit Committee has not determined that Mr. LeBlanc qualifies as ‘‘independent’’ as defined in the listing standards of the New York Stock Exchange.

Code of Ethics

The Audit Committee of CHATT Holdings LLC, the buyer parent of ATT Holding Co. has adopted a ‘‘code of ethics’’ applicable to Ames True Temper, Inc. and its affiliates. The Audit Committee has established a hotline where, on a confidential basis, anyone with concerns involving internal controls, accounting or auditing matters, can contact a third-party law firm without screening or review by management. A copy of the code of ethics was included as exhibit 14 of the fiscal 2004 Form 10-K and is incorporated by reference in this Form 10-K.

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Item 11.	EXECUTIVE COMPENSATION

The following table sets forth information regarding compensation for the last three fiscal years awarded to, earned by or paid to our chief executive officer and our other four most highly compensated executive officers at the end of fiscal 2006:

			Annual Compensation																		Long-Term Compensation
Name and Principal Position			Year						Salary ($)						Bonus ($)						Restricted Stock Awards ($)						All Other Compensation (1) ($)
Richard Dell					2006						473,562						265,194						—						6,300
President and Chief Executive Officer					2005						459,768						—						—						6,300
					2004						448,053						223,961						—						—
Duane Greenly					2006						253,694						152,216						—						6,300
Chief Operating Officer					2005						246,304						—						—						6,300
					2004						240,759						166,610						—						—
David Nuti(2)					2006						130,927						103,659						—						222,926
Chief Financial Officer					2005						—						—						—						—
					2004						—						—						—						—
Jean Gaudreault					2006						223,062						179,489						—						8,857
President and General Manager, Garant					2005						202,922						104,611						—						4,971
					2004						196,084						95,981						—						7,763
Geoff Brownrigg(3)					2006						189,056						76,627						—						70,606
Vice President, Marketing					2005						160,204						37,000						—						4,250
					2004						—						—						—						—

(1)	All Other Compensation includes car allowances and reimbursement of relocation expenses for certain executives.

(2)	Mr. Nuti joined our company in March 2006.

(3)	Mr. Brownrigg joined our company in February 2005.

Compensation of Directors

Board members who are not employees of Ames True Temper or Castle Harlan receive an annual retainer of $35,000. All members of our and our parents’ boards of directors will be reimbursed for actual expenses incurred in connection with attendance at meetings of the respective boards on which they serve and of committees thereof.

Compensation Committee Interlocks and Insider Participation

Other than Messrs. Castle, Wender, Pruellage and Morningstar, there are no compensation committee interlocks (i.e., no executive officer of either the issuer or our parent serves as a member of the board or the compensation committee of another entity which has an executive officer serving on the board of either the issuer or our parent or on the compensation committee thereof).

Employment Agreements

We have employment agreements with Richard Dell, Duane Greenly, David Nuti, Jean Gaudreault, Geoff Brownrigg, Joseph Wersosky, and Daniel Yurovich. The term of each executive’s agreement is three years and will be automatically renewed for consecutive one-year periods, unless within 60 days prior to the expiration of the employment term, either party to the agreement provides notice of its election to terminate the agreement. Mr. Dell’s annual base salary is $470,000, Mr. Greenly’s is $250,000, Mr. Nuti’s is $230,000, Mr. Brownrigg’s is $190,000, Mr. Wersosky’s is $170,000, Mr. Gaudreault’s is CDN$230,000 and Mr. Yurovich’s is $170,500. Their agreements provide

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that their base salary is subject to increase from time to time, solely at our discretion. During the employment period, each executive is eligible to receive a cash bonus based on the achievement of budgeted performance goals, as well as additional bonuses based on the achievement of performance goals and objectives approved by the buyer parent’s board of directors. Each executive is eligible to receive employee benefits comparable to the benefits provided to our other senior executive officers and to the benefits provided to him or her immediately prior to the date of his or her agreement and will be reimbursed by us for any business expenses reasonably incurred.

As the result of the merger of Acorn and UnionTools, we have an employment agreement with John G. Jacob, Union’s Chief Financial Officer. His annual base salary is $250,000 and runs for the period of April 2, 2006 thru November 30, 2006. Mr. Jacob’s agreement provides customary termination events, including death, permanent disability and cause. Mr. Jacob will be entitled to receive Accrued Benefits and a Severance Payment payable in tweleve monthly installments upon completion of his employment period. We also have an employment agreement with A. Corydon Meyer, who accepted the position of Senior Executive Vice President of Business Development, with the Company. His annual base salary is $364,000.

With respect to each of the executives, in the event of a termination of employment by reason of death or ‘‘permanent disability,’’ as defined in the agreements, by us for ‘‘due cause,’’ as defined in the agreements, or by the executive voluntarily, we will have no further obligation to the executive (or the executive’s estate) except for salary and benefits accrued through the termination date. In the case of a termination based on permanent disability, the executive will also be entitled to any benefits provided under our disability insurance policy. If the executive is terminated by us without due cause or if he or she terminates employment for ‘‘good reason,’’ as defined in the agreements for the period specified in the applicable executive’s employment agreement, then the executive will be entitled to receive as severance pay his or her base salary and benefits for the period specified in the applicable executive’s employment agreement, payable at our regular payroll intervals. If the executive obtains employment at any time during the severance period, our severance obligations will be reduced by the amount of compensation or benefits received by the executive under his or her new employment arrangement. For two years after the termination of employment, each executive will be subject to a non-competition and non-solicitation restriction.

Employment Plans

Retirement Plans

Effective January 14, 2002, we established the Ames True Temper, Inc. Pension Plan and Trust which we refer to as the pension plan. Assets necessary to fund the pension plan were transferred from the Lawn and Garden Pension Plan, formerly known as the USI Group Pension Plan, which we refer to as the lawn and garden plan, the Predecessor Company II plan in which our employees participated. Accumulated years of benefit service under the lawn and garden plan are included in the benefit formula of the pension plan, which generally covers employees who have completed either one year of service or one hour of service, depending upon his or her location of employment.

Subject to certain exceptions, most hourly employees will receive a pension at normal retirement age (which is generally the later of age 65 and the completion of five years of service) equal to the product of his or her years of benefit service and the applicable multiplier, subject to offset in certain instances for payments that are required by law (other than social security payments). The applicable multiplier is generally between $11.00 and $37.50, but will vary depending upon, among other things, the employee’s work location, years of benefit service and the date the employee last worked for the company. Eligible salaried employees and certain other hourly employees are entitled to a pension at the normal retirement age of 65 equal to 1.20% of average monthly compensation, as defined below, up to the social security integration level times years of benefit service, plus 1.85% of average monthly compensation, in excess of the social security integration level times years of benefit service, up to a total of 30 years of benefit service. ‘‘Average monthly compensation’’ is the highest average monthly salary received in any 60 consecutive months in the last 120 months. ‘‘Compensation’’ includes all

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wages paid by us, including bonuses, severance pay up to six months, before-tax contributions made to the Ames True Temper, Inc. Retirement Savings and Investment Plan and salary reduction contributions to any Section 125 Plan, but excludes income realized under any incentive plan or stock option plan, severance pay in excess of six months, welfare benefits, accrued vacation for periods in excess of one year, moving expenses, taxable fringe benefits, reimbursements and other expense allowances and deferred compensation. This compensation is comparable to the ‘‘Annual Compensation’’ shown in the Summary Compensation Table. After completing five years of service, an employee whose employment with the participating company has terminated is entitled to a benefit, as of the employee’s normal retirement date, equal to the benefit earned to the date of termination of employment, or an actuarially reduced benefit commencing at any time after age 55 or 60, depending upon the employee’s work location, if the participant is eligible for early retirement under the pension plan. Certain death benefits are available to eligible surviving spouses of participants.

Since various laws and regulations set limits on the amounts allocable to a participant under the pension plan, we have established the Ames True Temper, Inc. Supplemental Executive Retirement Plan, or SERP. The SERP provides retirement benefits on an unfunded basis to Messrs. Dell, Greenly, and Reed (whose benefits under the pension plan would be restricted by the limits) upon retirement from our company of an amount equal to the difference between the annual retirement benefits permitted under the pension plan and the amount that would have been paid if the limitations imposed were at a level stated in the SERP rather than the laws and regulations. The limits in the SERP are different for each participant. Benefits under the SERP generally become 100% vested after five years of service, at early retirement, at normal retirement, upon death, upon disability or upon a ‘‘change in control’’, as defined in the SERP.

The amounts set forth in the table are the amounts which would be paid to salaried employees pursuant to the pension plan and the SERP (for a participant with no additional limits in the SERP) at a participant’s normal retirement age assuming the indicated average annual compensation and the indicated years of benefit service and assuming that the straight life annuity form of benefit will be elected and that SERP benefits will be paid in the form of an annuity.

			Years of Service
Salary			15 Years						20 Years						25 Years						30 Years						35 Years						40 Years
$125,000				$	30,401					$	40,534					$	50,668					$	60,801					$	60,801					$	60,801
$150,000				$	37,338					$	49,784					$	62,230					$	74,676					$	74,676					$	74,676
$175,000				$	44,276					$	59,034					$	73,793					$	88,551					$	88,551					$	88,551
$200,000				$	51,213					$	68,284					$	85,355					$	102,426					$	102,426					$	102,426
$225,000				$	58,151					$	77,534					$	96,918					$	116,301					$	116,301					$	116,301
$250,000				$	65,088					$	86,784					$	108,480					$	130,176					$	130,176					$	130,176
$300,000				$	78,963					$	105,284					$	131,605					$	157,926					$	157,926					$	157,926
$350,000				$	92,838					$	123,784					$	154,730					$	185,676					$	185,676					$	185,676
$400,000				$	106,713					$	142,284					$	177,855					$	213,426					$	213,426					$	213,426
$450,000				$	120,588					$	160,784					$	200,980					$	241,176					$	241,176					$	241,176
$500,000				$	134,463					$	179,284					$	224,105					$	268,926					$	268,926					$	268,926
$550,000				$	148,338					$	197,784					$	247,230					$	296,676					$	296,676					$	296,676

(1)	At September 30, 2006 Messrs. Dell, Greenly and Reed had 4.75, 4.75 and .92 years of benefit service, respectively.

Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

All of our issued and outstanding capital stock is held by our parent. Our parent’s capitalization consists of 1,600,000 shares of Class A Common Stock, $.0001 par value per share, 300,000 shares of Class B Common Stock, $.0001 par value per share, and 100,000 shares of Series A Preferred Stock, $.0001 par value per share. Our parent (ATT Holding Co.) is a direct wholly owned subsidiary of buyer (CHATT Holdings Inc.), and buyer is a direct wholly owned subsidiary of buyer parent (CHATT Holdings LLC) and approximately 87% and 13%, respectively, of the equity interests of buyer parent are owned by CHAMES Holdings I LLC and its affiliates (an affiliate of Castle Harlan), and certain members of management.

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The following table sets forth information with respect to the beneficial ownership of buyer parent’s equity interests by:

	•	each person who is known by us to beneficially own 5% or more of buyer parent’s outstanding equity;

	•	each member of buyer parent’s board of directors;

	•	each of our executive officers named in the table under Item 11 – Executive Compensation; and

	•	all members of buyer parent’s board of directors and our executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC. Accordingly, the following table does not reflect certain Class B management incentive units of buyer parent that are subject to vesting or units that have been repurchased from certain departed members of management. To our knowledge, each of the holders of units of ownership interests listed below has sole voting and investment power as to the units owned unless otherwise noted. The holders of Class A-1 and A units will not ordinarily have the right to vote on matters to be voted on by unitholders. Holders of Class A-1, A and Class B units will also have different rights with respect to distributions.

Name and Address of Beneficial Owner			Number of Class A1, A Units						Percentage of Total Class A1, A Units (%)						Number of Class B Units						Percentage of Total Class B Units (%)
CHAMES Holdings I LLC(1)(2)					961,564						87.03	%					961,564						87.03	%
John K. Castle(1)(3)					961,564						87.03	%					961,564						87.03	%
Richard Dell(1)					60,398						5.47	%					60,398						5.47	%
Duane Greenly(1)					22,706						2.06	%					22,706						2.06	%
David Nuti					1,000							*					1,000							*
Jean Gaudreault(1)					4,723							*					4,723							*
Geoff Brownrigg(1)					400							*					400							*
Justin B. Wender(1)					0							*					0							*
William M. Pruellage(1)					0							*					0							*
John Morningstar(1)					0							*					0							*
Robert Elman(1)					1,000							*					1,000							*
Edward LeBlanc(1)					500							*					500							*
Kenneth Roman(1)					2,000							*					2,000							*
All directors and executive officers as a group (including those listed above)					1,078,100						97.58	%					1,078,100						97.58	%

*	Denotes beneficial ownership of less than 1% of the class of units.

(1)	The address for CHP IV and Messrs. Castle, Morningstar, Pruellage and Wender is c/o Castle Harlan, Inc., 150 East 58th Street, New York, New York 10155. The address for Mr. Dell, our other executive officers named in the table and Messrs. Elman, LeBlanc and Roman is 465 Railroad Avenue, Camp Hill, Pennsylvania 17011.

(2)	CHP IV is the direct parent of CHAMES Holdings I LLC and includes units of ownership interests held by related entities and persons, all of which may be deemed to be beneficially owned by CHP IV. CHP IV disclaims beneficial ownership of these units.

(3)

John K. Castle, a member of buyer parent’s board of directors, is the controlling stockholder of Castle Harlan Partners IV, G.P., Inc., the general partner of the general partner of CHP IV, the indirect parent of the buyer parent, and as such may be deemed a beneficial owner of the units of the buyer parent owned by CHP IV and its affiliates. Mr. Castle disclaims beneficial ownership of all units in excess of his proportionate partnership share of CHP IV.

Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Management Agreement

On June 28, 2004, at the closing of the acquisition, we entered into a management agreement with Castle Harlan, Inc., as manager, under which Castle Harlan provides business and organizational strategy, financial and investment management, advisory, merchant and investment banking services to

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the buyer parent, the buyer, our parent and us. As compensation for those services, we will pay to Castle Harlan (1) for services rendered during the first year of the term of the agreement, a management fee equal to 1.5% of the aggregate equity contributions made upon closing of the acquisition by CHP IV and its affiliates (including their limited partners), payable on June 28, 2005, (2) for services rendered during the second year of the term of the agreement, a management fee equal to 1.5% of the aggregate equity contributions made on June 28, 2004 by CHP IV and its affiliates (including their limited partners), payable quarterly in advance and (3) for services rendered after the second full year of the agreement, an annual management fee equal to 3.0% of the aggregate equity contributions made on June 28, 2004 by CHP IV and its affiliates (including their limited partners), payable quarterly in advance. Under the management agreement, we will also pay Castle Harlan, for services rendered in connection with the transactions, a one-time transaction fee, payable on June 28, 2004, equal to 3% of the aggregate equity contributions made on June 28, 2004 by CHP IV and its affiliates (including their limited partners). In addition, if at any time after the closing of the acquisition, CHP IV or its affiliates (including their limited partners) make any additional equity contributions to any of us, our parent, the buyer or the buyer parent, we will pay Castle Harlan an annual management fee equal to 3% of each such equity contribution. We will also pay or reimburse Castle Harlan for all out-of-pocket fees and expenses incurred by Castle Harlan and any advisors, consultants, legal counsel and other professionals engaged by Castle Harlan to assist in the provision of services under the management agreement. During fiscal 2006, we recorded expenses of $1.9 million related to Castle Harlan’s annual management fee.

The management agreement is for an initial term expiring December 31, 2011 and is subject to renewal for consecutive one-year terms unless terminated by Castle Harlan or us upon 90 days’ notice prior to the expiration of the initial term or any annual renewal. We also indemnify the manager, its officers, directors and affiliates from any losses or claims suffered by them as a result of services they provide us. Payment of management fees will be subject to restrictions contained in our senior credit facility.

Management Equity

In connection with the acquisition, certain members of management, including our executive officers, made an equity investment in the aggregate amount of approximately $14.0 million in buyer parent, through the exchange of shares of our parent’s capital stock held by management and, in a few cases, certain members of management that did not hold equity in our parent purchased an equity interest in buyer parent for cash. During fiscal 2006, new or promoted members of Ames True Temper management purchased equity units of CHATT Holdings LLC.

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Item 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Audit Committee of the Board of Directors appointed the firm of Ernst & Young LLP, independent registered public accounting firm (‘‘E&Y’’), to audit our books, records and accounts for the fiscal year ended September 30, 2006.

The Audit Committee approves all services rendered by E&Y to us and approves all fees paid to E&Y. The Audit Committee requires that management obtain the prior approval of the Audit Committee for all audit and permissible non-audit services to be provided by E&Y. The Audit Committee considers and approves anticipated audit and permissible non-audit services to be provided by E&Y during the year and estimated fees. The Audit Committee will not approve non-audit engagements that would violate rules of the Securities and Exchange Commission or impair the independence of E&Y.

For the fiscal years ended September 30, 2006 and October 1, 2005, E&Y was paid the following fees for services provided us:

			Fiscal 2006						Fiscal 2005
Audit Fees(1)				$	679,394					$	493,214
Audit-Related Fees(2)					415,315						62,224
Tax Fees(3)					98,460						27,240
All Other Fees					—						—

(1)

Includes fees for professional services performed for the audit of our annual financial statements and services that are normally provided in connection with statutory and regulatory filings or engagements. During fiscal 2006, certain services were performed in connection with our acquisition of Acorn Products, Inc. During fiscal 2005, certain services were provided in connection with the offering of our Senior Floating Rate Notes and registration statements associated with the aforementioned notes and the Senior Subordinated Notes.

(2)	Includes fees for professional service performed for the review of inventory control procedures as well as certain services surrounding the future compliance with section 404 of the Sarbanes-Oxley Act of 2002.

(3)	For fiscal 2006 and 2005., tax fees consist principally of fees related to tax consulting and compliance.

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PART IV

Item 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)    The following documents are filed as part of this Form 10-K:

1.    Financial Statements:

A list of the Consolidated Financial Statements, related notes and Report of Independent Registered Public Accounting Firm is set forth in Item 8 of this report on Form 10-K.

2.    Financial Statement Schedules:

Schedule II — Valuation and Qualifying Accounts

All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions, are inapplicable, are not material, or the information called for thereby is otherwise included in the financial statements and, therefore, have been omitted.

3.    Index to Exhibits:

Each management contract or compensatory plan or arrangement filed as an exhibit to this report is identified in this index to exhibits with a ‘‘+’’ sign following the exhibit number.

Exhibit Number			Description
2.1			Agreement and Plan of Merger, dated as of April 7, 2006, by and among Acorn Products, Inc., Ames True Temper, Inc. and ATTUT Holdings, Inc.			G
3.1			Certificate of Incorporation of Ames True Temper, Inc.			A
3.2			By-laws of Ames True Temper, Inc.			A
3.3			Certificate of Incorporation of ATT Holding Co.			A
3.4			By-laws of ATT Holding Co.			A
4.1			Indenture dated as of June 28, 2004 among Ames True Temper, Inc., as Issuer, ATT Holding Co., as Guarantor and The Bank of New York, as Trustee			A
4.2			Form of 10% Senior Subordinated Notes due 2012 (included in Exhibit 4.1)			A
4.3			Registration Rights Agreement, dated June 28, 2004, among Ames True Temper, Inc., ATT Holding Co. and the Initial Purchasers			A
4.4			Indenture, dated as of January 14, 2005, among Ames True Temper, Inc. as Issuer, ATT Holding Co., as Guarantor and The Bank of New York, as Trustee			C
4.5			Form of Senior Floating Rate Notes due 2012 (included in Exhibit 4.4)			C
4.6			Registration Rights Agreement, dated January 14, 2005, among Ames True Temper, Inc., ATT Holding Co. and the Initial Purchasers			C
10.1			Stock Purchase Agreement, dated as of June 21, 2004, by and among ATT Holding Co., the Warrantholders of ATT Holding Co., Windpoint Investors V, L.P., as Sellers’ Representative, CHATT Holdings LLC, as Buyer Parent, and CHATT Holdings Inc., as Buyer.			B

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Exhibit Number			Description
10.2			Credit Agreement, dated as of June 28, 2004, by and among Ames True Temper, Inc., ATT Holding Co., the lenders from time to time party thereto (each a ‘‘Lender’’ and collectively, the ‘‘Lenders’’), Bank of America, N.A., in its capacity as Administrative Agent, Swing Line Lender and L/C Issuer, General Electric Capital Corporation, as Documentation Agent, Wachovia Bank, National Association, as Syndication Agent and Banc of America Securities LLC, as Sole Lead Arranger and Sole Book Manager			B
10.2.1			Amendment No. 1 to Credit Agreement, dated January 14, 2005, by and among Ames True Temper, Inc., ATT Holding Co., as a guarantor, the banks, financial institutions and other institutional lenders parties to the Credit Agreement dated as of June 28, 2004, and Bank of America, N.A., as administrative agent.			C
10.2.2			Amendment No. 2 to Credit Agreement, dated December 1, 2005, by and among Ames True Temper, Inc., ATT Holding Co., as a guarantor, the banks, financial institutions and other institutional lenders parties to the Credit Agreement dated as of June 28, 2004, and Bank of America, N.A., as administrative agent.			D
10.2.3			Amended and Restated Credit Agreement, dated as of April 7, 2006, among Ames True Temper, Inc., Acorn Products, Inc., UnionTools, Inc., and Ames True Temper Properties, Inc., as borrowers, ATT Holding Co., as a guarantor, Bank of America, N.A., as administrative agent, swing line lender and l/c issuer, and the other lenders party thereto.			H
10.3			Security Agreement, dated as of June 28, 2004, made by Ames True Temper, Inc., the other persons listed on the signature pages thereof to Bank of America, N.A., as Collateral Agent			B
10.4			Intellectual Property Security Agreement, dated June 28, 2004, made by the persons listed on the signature pages thereof in favor of Bank of America, N.A., as Collateral Agent			B
10.5			Subsidiary Guaranty, dated as of June 28, 2004, made by the persons listed on the signature pages thereof under the caption ‘‘Subsidiary Guarantor’’ in favor of the Secured Parties			B
10.6			Charge of Shares in respect of the shares of True Temper Limited made on June 28, 2004 between Ames True Temper, Inc. and Bank of America, N.A., as security trustee			B
10.7+			Amended and Restated Employment Agreement, dated June 28, 2004, between Ames True Temper, Inc. and Richard C. Dell			B
10.8+			Amended and Restated Employment Agreement, dated June 28, 2004, between Ames True Temper, Inc. and Judy A. Schuchart			B
10.9+			Amended and Restated Employment Agreement, dated June 28, 2004, between Ames True Temper, Inc. and Duane R. Greenly			B
10.10+			Amended and Restated Employment Agreement, dated June 28, 2004, between Ames True Temper, Inc. and George Reed, Jr.			B
10.11+			Amended and Restated Employment Agreement, dated June 28, 2004, between Ames True Temper, Inc. and Joseph Wersosky			B

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Exhibit Number			Description
10.12+			Management Agreement, dated June 28, 2004, by and among Castle Harlan, Inc., ATT Holding Co., Ames True Temper, Inc. and CHATT Holdings Inc.			B
10.13+			Amended and Restated Employment Agreement, dated June 28, 2004, between Ames True Temper, Inc. and Jean Gaudreault			F
10.14+			Employment Agreement, dated March 28, 2005, between Ames True Temper, Inc. and Geoff Brownrigg			E
10.15*+			Amended and Restated Employment Agreement, dated April 7, 2006, between Ames True Temper, Inc. and A. Corydon Meyer.
10.16*+			Amended and Restated Employment Agreement, dated April 7, 2006, between Ames True Temper, Inc. and John G. Jacob.
10.17*+			Amended and Restated Employment Agreement, dated May 5, 2006, between Ames True Temper, Inc. and David M. Nuti.
12.1*			Statement Regarding Computation of Ratios
14.1			Code of Ethics			B.1
21.1			List of subsidiaries of the Company			A
31.1*			Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*			Certification of Chief Financial Officer pursuant to Section 302 and 404 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 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 2002
*			Filed herewith
(A)			Previously filed as an exhibit to the Registrants’ Registration Statement on Form S-4 (Reg. No. 333-118086) filed with the SEC on August 10, 2004.
(B)			Previously filed as an exhibit to Amendment No. 1 to the Registrants’ Registration Statement on Form S-4 (Reg. No. 333-118086) filed with the SEC on October 7, 2004
(B.1)			Previously files as an exhibit to Registrant’s Annual Report on Form 10-K for the fiscal year ended September 25, 2004, filed with the SEC on December 23, 2004
(C)			Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on January 18, 2005
(D)			Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on December 7, 2005
(E)			Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on March 28, 2005

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Exhibit Number			Description
(F)			Previously filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended October 1, 2005, filed with the SEC on December 22, 2005
(G)			Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on April 7, 2006
(H)			Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the SEC on , April 14, 2006

(b)    Reference is made to Item 15(a)(3) above.

(c)    Reference is made to Item 15(a)(2) above.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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: December 22, 2006			By:    /s/ Richard Dell
			Richard Dell
			President and Chief Executive Officer (Authorized Signatory)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below, by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature			Title
/s/ Richard Dell                                              Richard Dell Dated: December 22, 2006			Director, President and Chief Executive Officer (Principal Executive Officer)
/s/ David M. Nuti                                            David M. Nuti Dated: December 22, 2006			Chief Financial Officer (Principal Financial Officer)

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SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

For the Fiscal year Ended September 30, 2006, the Fiscal year Ended October 1, 2005,
and the Periods Ended September 25, 2004 and June 27, 2004.
(Dollar amounts in thousands)

Allowance for doubtful accounts			Balance at beginning of period						Additions charged to costs and expenses						Deductions						Other (1)						Balance at end of period
ATT Holding Co.
Fiscal year ended September 30, 2006				$	1,335					$	(120	)					(2	)					56					$	1,269
Fiscal year ended October 1, 2005					1,410						(88	)					(48	)					61						1,335
Period ended September 25, 2004					—						66						(449	)					1,793						1,410
ATT Holding Co. (Predecessor Company I)
Period ended June 27, 2004					2,091						(95	)					(50	)					(51	)					1,895

Valuation allowance of deferred tax asset			Balance at beginning of period						Additions						Deductions						Other (1)						Balance at end of period
Fiscal year ended September 30, 2006				$	2,649						4,509						—						390						7,548
Fiscal year ended October 1, 2005					1,899						750						—						—						2,649

(1)	Primarily the impact of currency changes as well as acquisitions of certain businesses.

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