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UNITEDSTATES

SECURITIES AND EXCHANGECOMMISSIONWashington, D.C.20549

FORM 10-K

(MarkOne)

|  |        |                                                                                   |
|--|--------|-----------------------------------------------------------------------------------|
|  |   | ANNUAL REPORT PURSUANT TOSECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF1934 |

|  |        |                                             |
|--|--------|---------------------------------------------|
|  |   | For the fiscal year endedSeptember  30,2006 |

OR

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|--|--------|---------------------------------------------------------------------------------------|
|  |   | TRANSITION REPORTPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGEACT OF 1934 |

|  |        |                                                                                 |
|--|--------|---------------------------------------------------------------------------------|
|  |   | For the transition periodfrom__________________ to __________________ |

Commissionfile number 333-118086

AMES TRUE TEMPER,INC.

(Exact name of registrant as specified in itscharter)

|                                                             |  |  |                                   |
|-------------------------------------------------------------|--|--|-----------------------------------|
| DELAWARE                                                    |  |  | 22-2335400                        |
| (Stateor other jurisdictionof incorporation ororganization) |  |  | (I.R.S.EmployerIdentificationNo.) |
| 465Railroad Avenue, Camp Hill,Pennsylvania                  |  |  | 17011                             |
| (Address of principalexecutive offices)                     |  |  | (ZipCode)                         |
|                                                             |

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

Securities registered pursuant to Section12(b) of the Act: NONE

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

Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined inRule 405 of the Securities Act. Yes     No

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

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

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

Indicate by check markwhether the registrant is an accelerated filer (as defined in Rule12b-2 of the Act). Yes     No

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

As of December22,  2006, the registrant had 1,000 shares of its common stock,$1.00 par value, outstanding.

Documents Incorporated byReference

None

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AMESTRUE TEMPER, INC.

FORM 10-K

YEAR ENDED SEPTEMBER 30,2006

TABLE OFCONTENTS

|             |  |  |                                                                                                                     |  |  |    |
|-------------|--|--|---------------------------------------------------------------------------------------------------------------------|--|--|----|
| PARTI  |  |  | 3                                                                                                                   |
| Item1.      |  |  | BUSINESS                                                                                                            |  |  | 3  |
| Item 1A.    |  |  | RISKFACTORS                                                                                                         |  |  | 9  |
| Item 1B.    |  |  | UNRESOLVED STAFFCOMMENTS                                                                                            |  |  | 13 |
| Item2.      |  |  | PROPERTIES                                                                                                          |  |  | 13 |
| Item3.      |  |  | LEGAL PROCEEDINGS                                                                                                   |  |  | 14 |
| Item4.      |  |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS                                                                  |  |  | 15 |
| PARTII      |  |  | 16                                                                                                                  |
| Item5.      |  |  | MARKET FOR THEREGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS ANDISSUER PURCHASES OF EQUITYSECURITIES |  |  | 16 |
| Item 6.     |  |  | SELECTEDFINANCIAL DATA                                                                                              |  |  | 16 |
| Item7.      |  |  | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS                          |  |  | 18 |
| Item7A.     |  |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKETRISK                                                           |  |  | 32 |
| Item 8.     |  |  | FINANCIALSTATEMENTS                                                                                                 |  |  | 34 |
| Item 9.     |  |  | CHANGES IN ANDDISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURE                                  |  |  | 69 |
| Item 9A.    |  |  | CONTROLS ANDPROCEDURES                                                                                              |  |  | 69 |
| Item 9B.    |  |  | OTHERINFORMATION                                                                                                    |  |  | 69 |
| PART III    |  |  | 70                                                                                                                  |
| Item 10.    |  |  | DIRECTORS AND EXECUTIVEOFFICERS OF THE REGISTRANT                                                                   |  |  | 70 |
| Item11.     |  |  | EXECUTIVE COMPENSATION                                                                                              |  |  | 74 |
| Item12.     |  |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS ANDMANAGEMENT AND RELATED STOCKHOLDERMATTERS                        |  |  | 76 |
| Item 13.    |  |  | CERTAINRELATIONSHIPS AND RELATEDTRANSACTIONS                                                                        |  |  | 77 |
| Item 14.    |  |  | PRINCIPALACCOUNTANT FEES ANDSERVICES                                                                                |  |  | 79 |
| PARTIV      |  |  | 80                                                                                                                  |
| Item 15.    |  |  | EXHIBITS ANDFINANCIAL STATEMENTSCHEDULES                                                                            |  |  | 80 |
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TERMSUSED IN THIS FORM 10-K

Unless otherwise noted, or indicated bythe context, in this Form 10-K the terms the‘‘Company,’’‘‘we,’’ ‘‘us,’’‘‘Ames True Temper’’ and‘‘our’’ refer to Ames True Temper, Inc. andits subsidiaries and, for periods prior to June  27,  2004our predecessor companies; the term‘‘parent’’ refers to ATT Holding Co., theowner of 100% of our capital stock, which has no assets otherthan our capital stock; the term ‘‘Predecessor CompanyI’’ refers to the Company under the ownership of WindPoint Partners; and the term ‘‘Predecessor CompanyII’’ refers to Ames True Temper Group, a division of U.S.Industries, Inc. (‘‘USI’’). References toour fiscal years are to our parent’s 52 or 53 week period thatgenerally ends on the Saturday nearest to September  30 of suchyear. ‘‘Fiscal 2004’’ is the 52-week periodthat is combined from the thirteen-week period ended September25,  2004 with the 39-week period ended June  27,2004 under Predecessor Company I; ‘‘fiscal2003’’ is the 52-week period ended September27,  2003 under Predecessor Company I and references to‘‘fiscal 2002’’ are to the period fromSeptember  30,  2001 to January  13,  2002under Predecessor Company II combined with the period fromJanuary  14,  2002 to September  28,  2002under Predecessor Company I to form a 52-weekperiod.

TRADEMARKS AND SERVICE MARKS

Weown or have the rights to various trademarks, copyrights and tradenames used in our business, including, but not limited to, thefollowing: AmesTM, Ames True TemperTM, CeramicLiteTM, ClassicTM, Dynamic Design GarantTM,Homeowner, IXL, JacksonTM, KodiakTM, PonyTM, SiteSafeTM, Snow Plow True TemperTM, Blue MaxTM, Polylam4TM and Woodings. We have recently acquired the rights toRazor-BackTM, UnionToolsTM and Hound DogTM.

In addition, we have a limited license to use theStanleyTM and John DeereTM trademarks. This Form 10-K alsoincludes trade names and trademarks of other companies. Our use ordisplay of other parties’ trade names, trademarks or products isnot intended to and does not imply a relationship with, or endorsementor sponsorship of us by, the trade name or trademarkowners.

FORWARD-LOOKING STATEMENTS

This annual report onForm 10-K contains ‘‘forward-lookingstatements’’ within the meaning of Section 21E of theSecurities Exchange Act of 1934, as amended. All statements other thanstatements of historical fact are ‘‘forward-lookingstatements’’ for purposes of federal and state securitieslaws. 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 reasonableassumptions, these forward-looking statements are subject to numerousfactors, risks and uncertainties that could cause actual outcomes andresults to be materially different from those projected or assumed inour forward-looking statements. These factors, risks and uncertaintiesinclude, among others, thefollowing:

|  |              |                                     |
|--|--------------|-------------------------------------|
|  | •  | our liquidity and capitalresources; |

|  |              |                                           |
|--|--------------|-------------------------------------------|
|  | •  | sales levels toexisting and newcustomers; |

|  |              |                                         |
|--|--------------|-----------------------------------------|
|  | •  | increasedconcentration of ourcustomers; |

|  |              |                                           |
|--|--------------|-------------------------------------------|
|  | •  | seasonality andadverse weatherconditions; |

|  |              |                                  |
|--|--------------|----------------------------------|
|  | •  | competitivepressures and trends; |

|  |              |                               |
|--|--------------|-------------------------------|
|  | •  | changingconsumer preferences; |

|  |              |                                     |
|--|--------------|-------------------------------------|
|  | •  | newproduct and customerinitiatives; |

|  |              |                                                                                            |
|--|--------------|--------------------------------------------------------------------------------------------|
|  | •  | risks relating toforeign sourcing and foreign operations and availability of rawmaterials; |

|  |              |                                                                      |
|--|--------------|----------------------------------------------------------------------|
|  | •  | our ability tosuccessfully consummate and integrate acquisitions;and |

|  |              |                             |
|--|--------------|-----------------------------|
|  | •  | general economicconditions. |

Our actual results, performance or achievements coulddiffer materially from those expressed in, or implied by, theforward-looking statements. We can give no assurances that any of theevents anticipated by the forward-looking statements will occur or, ifany of them do, what impact they will have on our results of operationsand financial condition. We do not intend, and we undertake noobligation, to update any forward-looking statement.

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PART I

|              |          |
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| Item1.  | BUSINESS |

Our History

Ames TrueTemper was formed in 1999 when Ames and its then parent, USI, acquiredTrue Temper from the Huffy Corporation, combining two non-powered lawnand garden tool and accessory companies with market leadershippositions in long handle tools and wheelbarrows. Ames, founded in 1774,only manufactured shovels for much of its history. However, over thelast three decades, Ames acquired several companies to expand itsproduct lines and geographical reach. For example, in 1991, Amesacquired 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 asa manufacturer of agricultural products, particularly shovels and otherdigging tools. Like Ames, True Temper also expanded its product linesthrough acquisitions. In 1981, True Temper acquired JacksonManufacturing, a leading manufacturer of wheelbarrows and carts. Inaddition, True Temper acquired Meaford Steel Products, a leadingCanadian wheelbarrow manufacturer, in 1996, and SuperLight, a leadingaluminum rake manufacturer, in 1997.

As part of a restructuringplan, USI decided to divest Predecessor Company II in 2001. Wind PointPartners, a private equity investment firm, in conjunction with RichardDell, our current president and chief executive officer, and DuaneGreenly, our current chief operating officer, purchased PredecessorCompany II in January  2002. Under Predecessor Company I, wecompleted three acquisitions to complement our product portfolio andenhance our sourcing capabilities. In November  2002, we acquiredDynamic Design, a leading supplier of plastic and foam flowerpots,outdoor planters, window boxes, indoor planters and hanging baskets. InMay  2003, we acquired Outdoor Inspirations, to enter the gardenhose market. In August  2003, we acquired Greenlife, a leadingsupplier of non-powered lawn and garden tools manufactured inChina.

In June  2004, affiliates of Castle Harlan, Inc., aNew York-based private-equity investment firm, together with certain ofour employees, completed the acquisition of our company. In order toacquire our company, CHATT Holdings, Inc., ‘‘thebuyer’’, and CHATT Holdings LLC, ‘‘thebuyer-parent’’, were formed. Upon completion of theacquisition, affiliates of Castle Harlan, Inc. owned approximately87% of the buyer-parent and management owned approximately13%.

On April  7,  2006, we acquired AcornProducts, Inc. (‘‘Acorn’’), the parentcompany of UnionTools, Inc., (‘‘Union’’), abusiness engaged in the manufacture and distribution of non-poweredlawn and garden tools. On April  12,  2006, we acquiredsubstantially all of the assets and properties of Hound Dog Products(‘‘Hound Dog’’), Inc., a business thatdesigns, markets and distributes non-powered lawn and garden tools.These businesses were acquired to expand the Company’s productlines.

General

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

We sell our productsprimarily in the U.S. and Canada through (1) retail centers, includinghome centers and mass merchandisers, (2) wholesale chains, includinghardware stores and garden centers, and (3) industrial distributors. Wehave a large portfolio of recognized brands that enables us to offerspecific branding strategies for key retail customers. We believe thatour global manufacturing strategy, based primarily upon a blend ofdomestic manufacturing and sourced product, makes us cost-competitivewhile allowing us to provide a high level of customerservice.

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

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Temper, Ames True Temper and Stanley (licensedfrom The Stanley Works), as well as contractor-oriented brandsincluding UnionTools, Razor-Back, Jackson Professional Tools, and JohnDeere (licensed from Deere & Company). This strong portfolio ofbrands allows us to build and maintain long-standing relationships withthe leading companies that sell our productcategories.

Products

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

Thefollowing is a brief description of each of our 14 productlines:

|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | Long Handle Tools:    Ourlong 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, steelor aluminum, and various handles manufactured from wood, engineeredpolymers or fiberglass. We currently offer over 1,600 SKUs in thiscategory. Long handle tools are marketed under leading brand namesincluding Ames, True Temper, Jackson Professional Tools, UnionTools,Professional Tools, Razor-Back and Garant. |

|  |              |                                                                                                                                                                                                                                                                                     |
|--|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | Wheelbarrows:    We manufacture afull line of wheelbarrows, primarily under the True Temper, Jackson,Professional Tools, UnionTools and Garant brand names. We offer bothplastic and steel wheelbarrows at a full range of price points for amultitude oftasks. |

|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | Planters:    With ouracquisition of Dynamic Design, we became a supplier of plastic and foamflower pots, outdoor planters, window boxes, indoor planters andhanging baskets. We source most of our planters’ line from thirdparty manufacturing facilities both domestically and abroad. All of ourplanters are sold under the Dynamic Design brand. Recently, for bothindoor and outdoor use, we introduced the Ceramic-Lite series ofpolyurethane-molded planters and urns designed to look like glazed andpolished ceramic pots. We also added a new line of fiberglass plantersin 2005. In 2006, we introduced a new line of proprietary plasticplanters with a unique painted finish in trend leadingcolors. |

|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | Hose Reels:    We marketrotating, portable, freestanding and swivel hose reels for the homegardener and industrial end user. Hose reels are designed to keep hosesfrom getting tangled, while providing compact storage of hoses when notin use. Our hose reels are available in portable, wheeled andwall-mount versions. We also offer a line of patio and deck hose reels.We market our hose reels under the Ames and Jackson Professional Toolsbrand names.  |

|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | SnowTools:    We manufacture and distribute numerous types of snowtools, including shovels, pushers, roof rakes, sled scoops, and icescrapers, with plastic, steel and aluminum heads. We recentlyintroduced our new Snow Plow which clears snow significantly fasterthan traditional shovels and is designed to remove snow without heavylifting, which is appealing to many older consumers. We market theseproducts under the Ames, Garant, True Temper, UnionTools and JacksonProfessional Tools brandnames.  |

|  |              |                                                                                                                                                                                                                                                                                       |
|--|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | StrikingTools:    We offer a wide range of striking tools, includingaxes, picks, mallets, mauls, wood splitters and sledgehammers. Theseproducts are marketed under the True Temper, Jackson ProfessionalTools, UnionTools, Garant and Woodings brandnames.  |

|  |              |                                                                                                                                                                                         |
|--|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | DecorativeAccessories:    We offer a wide variety of plastic accessories,including edging, fencing, splash blocks and trellises marketed underthe Ames brand.  |

|  |              |                                                                                                                                                                                                                                                                                                                                                  |
|--|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | LawnCarts:    Lawn carts typically are used for transportingeverything 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 easydumping. Our lawn carts are marketed under the Amesbrand. |

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|  |              |                                                                                                                                                                                                           |
|--|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | PruningTools:    We offer a broad line of pruning tools, includinggrass, pruning, lopping, hedge and pole pruning tools, as well as avariety of trimming saws and cuttingtools.  |

|  |              |                                                                                                                                                                                                                                                        |
|--|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | RepairHandles:    We manufacture an extensive line of repair handlesfor lawn and garden tools, such as long handle tools, snow tools andstriking tools. Our repair handles are marketed under our Garant andIXL brand names.  |

|  |              |                                                                                                                                                                          |
|--|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | GardenHoses:    We supply light, medium and heavy-duty garden hoses.Our hoses are marketed under the Ames and Jackson Professional Toolsbrand names. |

|  |              |                                                                                                                                                                                                                                                                                                                                                                                                     |
|--|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | Hound Dog:    Weoffer a wide variety of innovative tools uniquely designed to resolvehomeowners’ specific lawn & garden care problems. Hound Dogtools accomplish specific tasks more easily and effectively thantraditional approaches. Most importantly, the tools are used from astanding position, which makes yard work easier on a person’sback and knees. |

|  |              |                                                                                                                                                                                                                                                                                                                          |
|--|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | Brooms:    Wesupply 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 andmay be shipped assembled or unassembled. We market these under theUnionTools brand. |

|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | SpecialtyTools:    We offer a extensive line of specialty lawn and gardentools targeted at garden enthusiast and commercial landscapers thatinclude (1) Hand Tools such as trowels, transplanters, cultivators,weeders, and bulb planters, and (2) Long Handle Tools such as thatchrakes, ditch bank blades, bush hooks, brush cutters, sod lifters,weeders, weed cutters, grass whips, grass hooks, corn knives and fruitpickers. |

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

Customers

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

ProductDevelopment

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

Examples of recent new product initiativesinclude a line of planters that weigh substantially less thantraditional ceramics and are shatter and crack resistant, ourretractable hose reel, which won Popular Mechanic’s 2004 EditorsChoice Award, and a line of GardenScapes tools that cater to women andolder consumers. These tools are smaller, lighter and easier to usethan full-sized tools but still retain the strength and durabilityspecifications of their full-sized counterparts.

Sales andMarketing

Our sales organization is structured by distributionchannel in the U.S. and by country internationally. In the U.S., wehave dedicated a team of sales professionals to each of our largeretail customers. We maintain offices adjacent to each of our threelargest customers’ headquarters, as well 

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as in-house dedicated sales analysts. Inaddition, we have assigned sales professionals to our domesticwholesale and industrial distribution channels. We also have salesteams located in Canada and Ireland to handle our Canadian and Europeansales efforts, respectively.

To assist our clients in marketingour products and responding to new customer trends, we have createdteams headed by a product marketing director focused on each productline. Each team is responsible for implementing category-specificmarketing strategies, including SKU rationalization and support for keyaccounts.

We offer internal graphic capabilities to designcatalogs, labels, point of purchase and other sales materials. Inaddition, we monitor point of sale and sell-through activity toidentify product opportunities and develop merchandising programs tohelp our customers achieve their sales objectives. We also work closelywith external research firms, design studios and product engineeringorganizations to identify and capitalize on emerging consumer andprofessional trends.

Raw Materials and Suppliers

Theprimary raw material inputs for our products include resin (primarilypolypropylene and high density polyethylene), wood (mainly ash, hickoryand poplar logs) and steel (hot rolled and cold rolled). In addition,we purchase some key materials and components, such as metal forkcomponents, wheelbarrow tires, shovel heads and fiberglass handles;however, we complete most of the final assembly internally in order tobetter ensure consistent quality for our customers. During fiscal 2006,one supplier accounted for approximately 10% of our totalmaterial purchases. We do not believe that our purchases from this onesupplier subject us to significant risks of shortages andinterruptions. If this supplier failed to meet our needs, we believethat other sources of product would be readily available. We had nosupplier provide more than 10% of our raw materials orcomponents.

Competition

The non-powered lawn and gardenindustry is highly competitive and fragmented. Most of our competitorsconsist of small privately held companies focusing on a single productcategory. Some of our competitors include Fiskars and Truper in longhandle tools, Suncast in hose reels and decorative accessories andColorite/Swan in garden hoses. In addition, we face competition fromimported or sourced products from China, India and other low-costproducing countries, particularly in wheelbarrows, striking tools andpruning tools. We believe the principal factors by which we compete arequality, performance, price, brand strength, reliability and customerservice, with the relative importance of each factor varying by productline. Additionally, our four Chinese joint ventures enable us tocompete with products from these low-cost producing countries.

Webelieve that our size and product depth provide us with a competitiveadvantage. In addition, we believe that offshore manufacturers lacksufficient distribution capabilities to service large retailers. Wealso believe that our extensive wood mill infrastructure and expertisein curing wood handles, coupled with our easy geographical access toAmerican ash and hickory sources, provide us with a competitiveadvantage over offshore manufacturers given the continued preference byconsumers for wood handles in long handle and strikingtools.

Distribution

We operate five distribution centersand outsource an additional center. The largest distribution center isa 1.2  million square foot distribution center in Carlisle,Pennsylvania. Finished goods from our manufacturing sites aretransported to this facility by our internal fleet, which allows us toconsolidate customer orders in different product areas and providefreight savings to our customers. Additionally, some light assembly isperformed at this location.

We also maintain distribution centersin Nevada, Kentucky, Canada and Ireland. We also utilize a third-partydistribution center in Miraloma, CA for our sourced planters. TheNevada facility provides light assembly operations enabling us toprovide faster turnaround for our West Coast customers. This facilityalso operates four injection-molding machines to reduce some of thecosts associated with 

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transporting high cube products. Ourcompany-wide computer network utilizes software that enables us to moreefficiently manage orders, quickly replenish our customers’inventory and provide our customers with strong logisticssupport.

Joint Ventures

We hold joint venture interestsranging from 25% to 35% in four separate joint venturesthat each owns a manufacturing facility in China. We do not share inthe profits or losses of the joint ventures. Under the terms of theChinese joint venture agreements, we are entitled to minorityrepresentation on the board of directors of each jointventure.

Chengde Greenlife Houseware Co., Ltd. JointVenture

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

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

This joint venture, owned by Fujian HuakunImplement Company Limited (Fujian) (13%), Fuzhou Huatian AutoAccessories Company Limited (25%), Dick Liao (37%) andour company (25%), manufactures poly rakes, steel rakes, cuttingtools and car components. Fujian is responsible for the development,engineering and production of products, while we are responsible forexporting products of the joint venture. The term of the joint ventureagreement is 10 years and it was entered into during 2002. The jointventure can be terminated by mutual agreement of the joint ventureparties.

Dalian Greenlife Tools Co., Ltd. JointVenture

This joint venture, owned by Shushi (Dalian) SteelShovel Manufacturing Co. (Dalian) (57%), our company(35%) and Dick Liao (8%), manufactures assorted gardentools and metal products. We are responsible for exporting the productsof the joint venture. The term of the joint venture agreement is 20years and was entered into during 1997. The joint venture may beterminated by mutual agreement of the joint ventureparties.

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 handletools and other associated products. We are responsible for exportingthe products of the joint venture. The term of the joint venture is 10years and was entered into during 2005. The joint venture may beterminated by mutual agreement of the joint ventureparties.

Intellectual Property

We hold registered U.S.trademarks and issued U.S. patents, which are important to ourbusiness. Additionally, we and our wholly-owned subsidiaries holdtrademarks, patents and copyrights in countries that we sell ourproducts. We also hold an exclusive license in the U.S. and Canada tomanufacture clog-free rakes. In addition, we license the Stanley brandname from The Stanley Works for use on long handle tools, wheelbarrows,pruning tools and snow tools placed primarily at Wal-Mart. This licenseagreement renews automatically for successive one-year periods unlesseither party gives one-year notice of termination. Currently, theagreement expires on December  31,  2007. We pay royaltiesfor our use of the Stanley name, which were in an amount that is notmaterial to us.

Employees

As of September30,  2006, we had approximately 2,048 full-time employeesworldwide. Most of these employees work in manufacturing anddistribution for the U.S. market. At certain times of the 

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

|  |          |                                                                                                |
|--|----------|------------------------------------------------------------------------------------------------|
|  | 1)  | United Brotherhood of Carpentersand Joiners of America (UBCJ),; contract expires October,2007, |

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

|  |          |                                                                                                                             |
|--|----------|-----------------------------------------------------------------------------------------------------------------------------|
|  | 3)  | International Brotherhood ofBoilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers;contract expires June, 2007, |

|  |          |                                                                                                                                                                                                                                      |
|--|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 4)  | InternationalAssociation of Machinists and Aerospace Workers, Local Lodge No. 2306,District 28; contract underwent bargaining and an agreement was reachedon November  10,  2006. The plant is scheduled to closeDecember  2006, and |

|  |          |                                                                            |
|--|----------|----------------------------------------------------------------------------|
|  | 5)  | InternationalBrotherhood of Teamsters (IBT); contract expires April, 2008. |

Inaddition, 248 employees in our Canadian facility are represented by theTrade Union Advisory Committee. The collective bargaining agreementaffecting these employees is in place until October, 2009. Thirty-oneof our approximately 53 employees in Ireland are covered by one laboragreement and participate in a national wage plan. We believe that ourrelations with our employees are generally good.

Environmentaland Other Regulations

Our operations, both in the United Statesand abroad, are subject to foreign, federal, state and localenvironmental laws, ordinances and regulations that limit dischargesinto the environment, establish standards for the handling, generation,emission, release, discharge, treatment, storage and disposal ofhazardous materials, substances and wastes, and require cleanup ofcontaminated soil and groundwater. These laws, ordinances andregulations are complex, change frequently and have tended to becomemore stringent over time. Many of them provide for substantial finesand penalties, orders (including orders to cease operations) andcriminal sanctions for violations. They may also impose liability forproperty damage and personal injury stemming from presence of, orexposure to hazardous substances. In addition, certain of ouroperations require us to obtain, maintain compliance with, andperiodically renew permits.

Certain of these laws, including theU.S. Comprehensive Environmental Response, Compensation and LiabilityAct, may require the investigation and cleanup of an entity’s orits predecessor’s current or former properties, even if theassociated contamination was caused by the operations of a third party.These laws also may require the investigation and cleanup ofthird-party sites at which an entity or its predecessor sent hazardouswastes for disposal, notwithstanding that the original disposalactivity accorded with all applicable requirements. Liability undersuch laws may be imposed jointly and severally, and regardless offault.

There are eight sites where we currently are engaged insite investigation or active remediation, which arise out of historicalfacility operations prior to our operations or ownership. Prior toentering into a Settlement and Release Agreement with Jacuzzi Brands,Inc. on May  15,  2006 as noted in Item 3, we were entitledto indemnification by the former owners for 100% of costs forremediation efforts arising out of certain environmental conditionsthat were known at the time of closing and 80% of costs forremediation efforts for certain other known items. We were alsoentitled to indemnification for costs of remediation efforts arisingout of certain environmental conditions that were unknown at the timeof closing, subject to a sliding scale cost allocation scheme. Uponexecuting the Settlement and Release Agreement, the Company assumed allenvironmental liabilities as a result of the release of theenvironmental indemnities. A portion of the settlement payment offsetthe recording of additional environmental liabilities. The Companycontinues to carry environmental insurance. While we do not expect toincur significant costs associated with these projects, there can be noassurance that all such costs will be covered by insurance. We could besubject to claims brought pursuant to applicable laws, ordinances andregulations for property damage or personal injury resulting from the

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

We also are subject to therequirements of U.S. Department of Labor Occupational Safety and HealthAdministration (‘‘OSHA’’). In order tomaintain compliance with applicable OSHA requirements, we haveestablished uniform safety and compliance procedures for our operationsand implemented measures to prevent workplace injuries.

We haveincurred and will continue to incur costs to comply with therequirements of environmental, health and safety laws, ordinances andregulations. We anticipate that these requirements will become morestringent in the future, and we cannot assure you that compliance costswill not be material.

Item 1A.    RISK FACTORS

Inaddition to the other information set forth in this Form 10-K, youshould carefully consider the following factors which could materiallyaffect our business, financial condition or future results. The risksdescribed below are not the only risks facing us. Additional risks anduncertainties not currently known to us or that we currently deem to beimmaterial also may materially adversely affect our business, financialcondition and/or operating results.

We depend on a smallnumber of customers for a significant portion of ourbusiness.

Our two largest customers accounted for50% (32% and 18%) of our net sales for fiscal 2006and approximately 49% of our net accounts receivable as ofSeptember  30,  2006. Our ten largest customers accountedfor 63% of our total net sales during fiscal 2006. The loss of,or reduction in orders from, any of these customers could have amaterial adverse effect on our business and our financial results, ascould customer disputes regarding shipments, fees, brand use andpositioning, merchandise condition or related matters. Our businessalso may be negatively affected by changes in the policies of oursignificant retail customers, such as return policies or reductions inshelf space allocation to us.

Furthermore, a bankruptcy or asignificant deterioration in the financial condition of any of oursignificant customers or suppliers could have a material adverse effecton our sales, profitability and cash flow. Any of the foregoing couldresult in a reduction in purchases, a longer collection cycle or aninability to collect accounts receivable.

Furtherconsolidation in the retail industry may adversely affect ourprofitability.

Home centers and mass merchandisers haveconsolidated and increased in scale. If, as we expect, this trendcontinues, our customers will likely seek more favorable terms,including pricing, for their purchases of our products, which willlimit our ability to raise prices, including to recoup raw material andother cost increases. Sales on terms less favorable to us than ourcurrent terms will have an adverse effect on ourprofitability.

Increased reliance on third party suppliersand manufacturers may decrease our ability to meet customerdemands.

We rely on a limited number of domestic andforeign companies, including our joint venture partners, to supplycomponents and manufacture certain of our products. The percentage ofour products, based on net sales, that we source has increased from2% in fiscal 2002 to over 40% in fiscal 2006. We expectthat this percentage will continue to increase in the future. Relianceon third party suppliers and manufacturers may reduce our control overthe timing of deliveries and quality of products. Reduced productquality or failure to deliver products quickly may jeopardize ourrelationships with certain of our key customers. In addition, increasedreliance on third party suppliers or manufacturers may result infailure to meet our customer demands, should any of these parties fail

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to manufacture sufficient supply, go out ofbusiness or discontinue a particular component. In such event, we maynot be able to find alternative suppliers in a timely manner, if atall. Such events could impact our ability to fill orders, which wouldhave a material adverse effect on our customerrelationships.

We are subject to risks associatedwith our foreign operations.

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

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

|  |              |                                     |
|--|--------------|-------------------------------------|
|  | •  | currency exchange ratefluctuations; |

|  |              |                                                                                                                                                                              |
|--|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | increases inforeign tax rates and foreign earnings potentially being subject towithholding requirements or the imposition of tariffs, exchangecontrols or otherrestrictions; |

|  |              |                                                                                                                     |
|--|--------------|---------------------------------------------------------------------------------------------------------------------|
|  | •  | general economicand political conditions in countries where we operate and/or sell ourproducts, includinginflation; |

|  |              |                                                                                               |
|--|--------------|-----------------------------------------------------------------------------------------------|
|  | •  | the difficultiesassociated with managing our organization spread throughout variouscountries; |

|  |              |                                                                       |
|--|--------------|-----------------------------------------------------------------------|
|  | •  | required compliancewith a variety of foreign laws and regulations;and |

|  |              |                                                                             |
|--|--------------|-----------------------------------------------------------------------------|
|  | •  | limited protection ofintellectual property in certain foreignjurisdictions. |

We are subject to risks associatedwith our operations in China.

A substantial amount of oursourcing is done through our Chinese joint ventures. Since 1979, manynew laws and regulations covering general economic matters have beenpromulgated in China. Despite this activity to develop the legalsystem, China’s system of laws is not yet complete. Even whereadequate law exists in China, enforcement of existing laws or contractsbased on existing law may be uncertain and sporadic, and it may bedifficult to obtain swift and equitable enforcement or to obtainenforcement of a judgment by a court of another jurisdiction. Therelative inexperience of China’s judiciary in many cases createsadditional uncertainty as to the outcome of any litigation. Inaddition, interpretation of statutes and regulations may be subject togovernment policies reflecting domestic politicalchanges.

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

We may not be able to acquirecomplementary lawn and garden product manufacturers or brands. Inaddition, our acquisition strategy may negatively impact our operatingresults, divert management’s attention from operating our corebusiness and expose us to other risks.

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

|  |              |                                                                                                |
|--|--------------|------------------------------------------------------------------------------------------------|
|  | •  | adverseshort-term effects on our profitability and cash flows as a result ofintegration costs; |

|  |              |                                                                                  |
|--|--------------|----------------------------------------------------------------------------------|
|  | •  | diversion ofmanagement’s attention from the operation of our corebusiness; |

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|  |              |                                                                                                  |
|--|--------------|--------------------------------------------------------------------------------------------------|
|  | •  | difficultiesassimilating and integrating the operations of the acquired companywith our own; and |

|  |              |                                                                            |
|--|--------------|----------------------------------------------------------------------------|
|  | •  | unanticipatedliabilities or contingencies relating to the acquiredcompany. |

If we are unable to obtain raw materials for ourproducts at favorable prices it could adversely impact our operatingperformance.

Our suppliers primarily provide resin, wood(mainly ash and hickory logs) and steel. During fiscal 2006, wepurchased approximately 10% of our total materials from onesupplier, no single supplier provides more than 10% of our rawmaterials or components. We cannot assure you that we will notexperience shortages of raw materials or components for our products orbe forced to seek alternative sources of supply. If temporary shortagesdue to disruptions in supply caused by weather, transportation,production delays or other factors require us to secure our rawmaterials from sources other than our current suppliers, we may not beable to do so on terms as favorable as our current terms or at all. Inaddition, material increases in the cost of any of these items on anindustry-wide basis could have an adverse impact on our operatingperformance and cash flows if we are unable to pass on these increasedcosts to our customers, which could have a material adverse effect onour business and financial results. We currently do not engage inhedging or other financial risk management strategies with respect topotential price fluctuations in the cost of rawmaterials.

Our industry is highly competitive and we may notbe able to compete successfully.

All aspects of the lawnand garden industry, including attracting and retaining customers andpricing, are competitive. To compete effectively, we must, among otherthings, maintain our relationships with key retailers, continuallydevelop innovative new products that appeal to consumers and deliverproducts on a reliable basis at competitive prices. We cannot assureyou that we will be able to maintain existing competitive advantages wehave in our market. We compete for customers with various consumerproduct manufacturers and numerous other companies that produce homeand garden tools and accessories, including foreign manufacturers thatexport their products to the United States.

Our current orpotential competitors may offer products at a lower price or productsand services that are superior to ours. In addition, our competitorsmay be more effective and efficient in integrating new technologies.Furthermore, as a result of business combinations or acquisitions, someof our competitors could become more formidable and may havesubstantially more resources at their disposal than us. Any of thesefactors may cause price reductions, reduced gross margins, decreasedsales and reduced ability to attract and retaincustomers.

Changing consumer preferences and discretionaryspending patterns could have an adverse effect on ourbusiness.

Purchases of our products are discretionary forconsumers and, therefore, we are susceptible to economic slowdowns.Consumers generally are more willing to make discretionary purchasesduring periods in which favorable economic conditions prevail.Slowdowns in the United States economy may adversely affect consumerconfidence 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.

Afailure to successfully introduce new products could result in areduction in sales and floor space at retailers that carry ourproducts.

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 notcontinue to be successful in the timely introduction and marketing ofnew products or innovations to our existing products. If we fail tosuccessfully introduce, market and manufacture new products or productinnovations and differentiate our products from those of ourcompetitors, our ability to maintain or enhance our industry positioncould be adversely affected, which in turn could materially adverselyaffect our business, financial condition or results ofoperations.

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Our business and financialoperations may be adversely affected if our licensing agreement withThe Stanley Works for the name Stanley were terminated or not renewedon acceptable terms.

We license from The Stanley Works thename Stanley for certain products. This license agreement renewsautomatically for successive one-year periods unless either party givesone year notice of termination. Currently, the agreement expires onDecember  31,  2007. We use the Stanley brand exclusivelyfor sales of garden tools to Wal-Mart. As a result, our failure torenew the license agreement on acceptable terms or replace the volumewith another brand of the Company, could have a material adverse effecton our sales to Wal-Mart and, as a result, on our business andfinancial results.

The products that we manufacture couldexpose us to product liability claims.

Our business exposesus to potential product liability risks, which are inherent in themanufacture and distribution of certain of our products. From time totime, various suits and claims have been brought against us assertinginjury sustained while using our products. Although we generally seekto insure against these risks, there can be no assurance that ourcoverage may be adequate and we may not be able to maintain insuranceon acceptable terms. A successful product liability claim in excess ofour insurance coverage could have a material adverse effect on us andcould prevent us from obtaining adequate product liability insurance inthe future on commercially reasonable terms or at all. Moreover, anyadverse publicity arising from claims made against us could adverselyaffect the reputation and sales of ourproducts.

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

Demand for lawn andgarden products is influenced by weather, particularly weekend weatherduring the peak gardening season. As a result, our business, financialresults, cash flow and our ability to service our debt could beadversely affected by certain weather patterns such as unseasonablycool or warm temperatures, hurricanes, water shortages or floods. Inaddition, lack of snow or lower than average snowfall during the winterseason may result in reduced sales of certain of our products, such assnow shovels and other snow tools.

Our lawn and garden salesare highly seasonal which could impact our cash flow and operatingresults.

Because our lawn and garden products are usedprimarily in the spring and summer, our business is highly seasonal. Infiscal 2006, 62% of our sales occurred during our second andthird fiscal quarters. A majority of our operating income and cash flowis generated in this period. Our working capital needs and ourborrowings generally peak near the end of our second fiscal quarterbecause we are generating lower sales while incurring expenses inpreparation for the spring selling season. If cash on hand andborrowings under our senior credit facility are ever insufficient tomeet our seasonal needs or if cash flow generated during the spring andsummer is insufficient to repay our borrowings on a timely basis, thisseasonality could have a material adverse effect on our business,results of operations, financial condition, cash flow and our abilityto service our indebtedness.

Environmental health and safetylaws, ordinances and regulations impose risks and costs onus.

Our operations are subject to federal, state, local andforeign laws, ordinances and regulations governing the protection ofthe environment and health and safety matters, including, but notlimited to, those regulating discharges into the air and water, theuse, handling and disposal of hazardous or toxic substances, themanagement of wastes, the cleanup of contamination and the control ofnoise and odors. We have made, and will continue to make, expendituresto comply with these requirements. While we believe, based upon currentinformation, that we are in substantial compliance with all applicableenvironmental laws, ordinances and regulations, we cannot assure you ofthis, and we could be subject to potentially significant fines orpenalties for any failure to comply. Moreover, under certainenvironmental laws, a current or previous owner or operator of realproperty, and parties that generate or transport hazardous substancesthat are disposed of at real property, may 

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be held liable for the cost to investigateor clean up such real property and for related damages to naturalresources. We may be subject to liability, including liability forinvestigation and cleanup costs, resulting from historical or ongoingoperations if contamination is discovered at one of our current orformer facilities, or at a landfill or other location where we havedisposed of, or arranged for the disposal of, wastes. There are eightsites where we currently are engaged in site investigation or activeremediation, which arise out of historical facility operations prior toour operations or ownership.

Prior to entering into a Settlementand Release Agreement with Jacuzzi Brands, Inc. on May15,  2006 as noted in Item 3, we were entitled to indemnificationby the former owners for 100% of costs for remediation effortsarising out of certain environmental conditions that were known at thetime of closing and 80% of costs for remediation efforts forcertain other known items. We were also entitled to indemnification forcosts of remediation efforts arising out of certain environmentalconditions that were unknown at the time of closing, subject to asliding scale cost allocation scheme. Upon executing the Settlement andRelease Agreement, the Company assumed all environmental liabilities asa result of the release of the environmental indemnities. A portion ofthe settlement payment offset the recording of additional environmentalliabilities. The Company continues to carry environmental insurance.While we do not expect to incur significant costs associated with theseprojects, there can be no assurance that all such costs will be coveredby insurance.

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

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

Unionized employees could strike orparticipate in a work stoppage.

We employ approximately1,952 people on a full-time basis, approximately 29% of whom arecovered by collective bargaining or similar labor agreements. Wecurrently are a party to seven such agreements. If our unionizedemployees were to engage in a strike or other work stoppage, or if weare unable to negotiate acceptable extensions of our agreements withlabor unions resulting in a strike or other work stoppage by theaffected workers, we could experience a significant disruption ofoperations and increased operating costs. In addition, anyrenegotiation or renewal of labor agreements could result in higherwages or benefits paid to unionized employees, which could increase ouroperating costs and could have a material adverse effect on ourprofitability.

Item 1B.    UNRESOLVED STAFFCOMMENTS

Not applicable.

|              |            |
|--------------|------------|
| Item2.  | PROPERTIES |

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

In fiscal 2006, we paid an aggregate ofapproximately $7.9  million for rent on all our leased propertiesand our projected rent for fiscal 2007 is substantially the same. Ourleased facilities vary in term, generally lasting up to 16 years.Several of the leases also contain renewal provisions. We believe ourcurrent facilities are generally well maintained and provide adequateproduction and distribution capacity for future operations. We may,during peak seasons, enter into short-term leases to provide overflowstorage facilities. Additionally, we have several small satelliteoffices to support our sales force throughout theU.S.

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The following table sets forth certaininformation concerning our current operating facilities and those ofour joint venturepartners:

|                            |  |  |                          |  |           |              |  |  |         |  |  |                                 |
|----------------------------|--|--|--------------------------|--|-----------|--------------|--|--|---------|--|--|---------------------------------|
| Location                   |  |  | ApproximateSquareFootage |  |           | Owned/Leased |  |  | Use     |
| Manufacturing/Distribution |  |  |                          |  |      |              |  |  |    |  |  |                            |
| Bernie,MO                  |  |  |                          |  | 170,000   |              |  |  | Owned   |  |  | Manufacturing                   |
| Byesville,OH               |  |  |                          |  | 46,000    |              |  |  | Owned   |  |  | Manufacturing                   |
| CampHill, 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      |
| WoodMills                  |  |  |                          |  |      |              |  |  |    |  |  |                            |
| Campaign,TN                |  |  |                          |  | 10,000    |              |  |  | Owned   |  |  | WoodProcessing                  |
| Delaware,OH                |  |  |                          |  | 51,100    |              |  |  | Owned   |  |  | WoodProcessing                  |
| Dexter City,OH             |  |  |                          |  | 12,600    |              |  |  | Owned   |  |  | WoodProcessing                  |
| Frankfort,NY               |  |  |                          |  | 13,500    |              |  |  | Owned   |  |  | WoodProcessing                  |
| Huntington,IN              |  |  |                          |  | 7,600     |              |  |  | Owned   |  |  | WoodProcessing                  |
| Lebanon,KY                 |  |  |                          |  | 13,500    |              |  |  | Owned   |  |  | WoodProcessing                  |
| North Vernon,IN            |  |  |                          |  | 17,680    |              |  |  | Owned   |  |  | WoodProcessing                  |
| Palmyra,ME                 |  |  |                          |  | 15,000    |              |  |  | Owned   |  |  | WoodProcessing                  |
| Pine Valley,NY             |  |  |                          |  | 15,750    |              |  |  | Owned   |  |  | WoodProcessing                  |
| Princeton,KY               |  |  |                          |  | 10,000    |              |  |  | Owned   |  |  | WoodProcessing                  |
| Unadilla,NY                |  |  |                          |  | 13,000    |              |  |  | Owned   |  |  | WoodProcessing                  |
| Union City,PA              |  |  |                          |  | 70,000    |              |  |  | Owned   |  |  | WoodProcessing                  |
| Wallingford,VT             |  |  |                          |  | 93,000    |              |  |  | Owned   |  |  | WoodProcessing                  |
| Woodstock, NewBrunswick    |  |  |                          |  | 7,800     |              |  |  | Owned   |  |  | WoodProcessing                  |
| Administrative             |  |  |                          |  |      |              |  |  |    |  |  |                            |
| Columbus,OH                |  |  |                          |  | 40,000    |              |  |  | Leased  |  |  | AdministrativeOffices           |
| JointVentures              |  |  |                          |  |      |              |  |  |    |  |  |                            |
| 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 planto close the administrative office in Columbus, OH, wood mills inFrankfort, NY and Delaware, OH as well as the manufacturing facility inFrankfort, NY.

Item 3.    LEGAL PROCEEDINGS

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

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contract, civil conspiracy and common lawfraud. In the complaint, Jacuzzi sought an unspecified amount ofdamages, that a letter of credit should be posted to secure ourremaining rental obligations under the lease for the distributioncenter 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 thecomplaint, and the Wind Point defendants filed preliminary objectionsseeking to dismiss the claims asserted against them. By order datedDecember  9,  2004, the court denied Wind Point’spreliminary objections to the complaint. On January  6,2005, Jacuzzi served interrogatories and document demands upon all thedefendants. In February  2005, the defendants responded to theseinterrogatories and document demands. On May  15,  2006, weentered into a Settlement and Release Agreement (the‘‘Agreement’’) with Jacuzzi. Under theterms of the Agreement, Jacuzzi paid to us $6.2  million assettlement payment and dismissed the court actions against alldefendants related to the acquisition of ATT Holding Co. by affiliatesof Castle Harlan, Inc. In return, we agreed to release Jacuzzi from anydamages related to any environmental indemnities or wheelbarrow claims.A portion of the settlement payment offset the recording of additionalenvironmental liabilities as a result of the release of theenvironmental indemnities and the balance was recorded as otherincome.

During December  2004, a customer of Union’swas named in litigation that involved the company’s products.The complaint asserted causes of action against the defendant forimproper advertisement to the consumer. The allegation suggests thatadvertisements lead the consumer to believe that the hand tools soldwere manufactured in the boundaries of the United States. Theallegation asserts cause of action against the customer for common lawfraud. In the event that courts would deem a judgment against ourcustomer, there is a possibility that the customer would seek legalrecourse for a unspecified amount in contributory damages.

Fromapproximately 1993 through 1999, we manufactured and sold 647,000wheelbarrows with poly wheel hubs. Various claims were submitted, andlawsuits filed, to recover for injuries sustained while inflating tireson these wheelbarrows. In 2002, we participated in a voluntary‘‘fast track’’ recall of these wheelbarrowswith the Consumer Product Safety Commission. We again voluntarilyrecalled these wheelbarrows in June  2004 in cooperation with theConsumer Product Safety Commission. However, less than 1% of thetotal products sold were returned, leaving an unknown number inservice. To date, we have responded to 31 claims involving thisproduct. All open claims have been resolved. We are currently named asa defendant in one wheelbarrow claim. Although we believe that we havesufficient insurance coverage in place to cover these claims, asuccessful claim may exceed the limits of our coverage.

We areinvolved in various claims and legal actions that arise in the ordinarycourse of business. We do not believe that the ultimate resolution ofany of these actions will have a material adverse effect on ourconsolidated financial position, results of operations, liquidity orcapital resources.

|               |                                                   |
|---------------|---------------------------------------------------|
| Item 4.  | SUBMISSION OFMATTERS TO A VOTE OF SECURITYHOLDERS |

None.

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PARTII

|               |                                                                                                                      |
|---------------|----------------------------------------------------------------------------------------------------------------------|
| Item 5.  | MARKET FOR THEREGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS ANDISSUER PURCHASES OF EQUITY SECURITIES |

There is no establishedpublic trading market for our common stock. All of our 1,000outstanding shares of common stock are held by our parent. We have notdeclared a dividend on our common stock. We are generally restrictedfrom paying dividends by certain of our credit facility covenants andthe indentures pursuant to which the 10% Senior SubordinatedNotes due 2012, which are referred to in this Form 10-K as the‘‘Senior Subordinated Notes,’’ and theSenior Floating Rate Notes due 2012, referred to as‘‘Senior Floating Rate Notes’’, wereissued. However, we may pay dividends in the future if we are permittedto do so under our debt covenants.

|              |                         |
|--------------|-------------------------|
| Item6.  | SELECTED FINANCIAL DATA |

The selectedconsolidated financial data below should be read in conjunction withItem 7, ‘‘Management’s Discussion and Analysis ofFinancial Condition and Results of Operations’’ andItem  8, ‘‘Financial Statements’’ andthe related notes included in this Form 10-K.

The following tablesets forth selected consolidated financial data of our parent. Ourparent was incorporated on December  20,  2001 for thepurpose of acquiring certain assets and liabilities of PredecessorCompany II from USI on January  14,  2002. Our parent,under Predecessor Company I, did not have any operations prior toJanuary  14,  2002. Separate financial information for AmesTrue Temper, Inc. is not presented since our parent has no operationsor assets separate from its investment in Ames True Temper, Inc. andsince the Senior Subordinated Notes and the Senior Floating Rate Notesare guaranteed by our parent.

The selected consolidated financialdata presented below for the period ended January  13,2002 have been derived from Predecessor Company II’s auditedcombined financial statements for the period ended January13,  2002 that are not included in this Form 10-K. The selectedconsolidated financial data presented below for the period endedSeptember  28,  2002 (which is not included in this Form10-K), the fiscal year ended September  27,  2003 and theperiod ended June  27,  2004 of our parent, underPredecessor Company I have been derived from our parent’saudited consolidated financial statements, while under control ofPredecessor Company I. The selected consolidated financial datapresented below for the period ended September  25,  2004,fiscal year ended October  1,  2005 and fiscal year endedSeptember  30,  2006 have been derived from ourparent’s audited consolidated financial statements. Ourparent’s historical results included below and elsewhere in thisForm 10-K are not necessarily indicative of our parent’s futureperformance.

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|                                            |  |  |                       |   |         |                      |  |  |                 |   |          |             |  |  |               |   |         |                 |  |  |                 |   |         |   |  |  |  |   |          |   |  |  |  |   |          |   |  |  |  |   |          |   |
|--------------------------------------------|--|--|-----------------------|---|---------|----------------------|--|--|-----------------|---|----------|-------------|--|--|---------------|---|---------|-----------------|--|--|-----------------|---|---------|---|--|--|--|---|----------|---|--|--|--|---|----------|---|--|--|--|---|----------|---|
|                                       |  |  | PredecessorCompany II |   |         | Predecessor CompanyI |  |  |            |   |          |        |
|                                       |  |  | PeriodEnded           |   |         | PeriodEnded          |  |  | FiscalYearEnded |   |          | PeriodEnded |  |  | PeriodEnded   |   |         | FiscalYearEnded |  |  | FiscalYearEnded |
|                                       |  |  | January13,            |   |         | September 28,        |  |  | September27,    |   |          | June 27,    |  |  | September 25, |   |         | October 1,      |  |  | September 30,   |
|                                       |  |  | 2002                  |   |         | 2002                 |  |  | 2003            |   |          | 2004        |  |  | 2004          |   |         | 2005            |  |  | 2006            |
| IncomeStatementData:                       |  |  |                       |   |    |                      |  |  |                 |   |     |             |  |  |               |   |    |                 |  |  |                 |   |    |   |  |  |  |   |     |   |  |  |  |   |     |   |  |  |  |   |     |   |
| Netsales                                   |  |  |                       | $ | 75,600  |                      |  |  |                 | $ | 279,354  |             |  |  |               | $ | 407,426 |                 |  |  |                 | $ | 355,443 |   |  |  |  | $ | 83,044   |   |  |  |  | $ | 450,604  |   |  |  |  | $ | 483,601  |   |
| Costof goodssold                           |  |  |                       |   | 58,200  |                      |  |  |                 |   | 223,414  |             |  |  |               |   | 294,487 |                 |  |  |                 |   | 256,248 |   |  |  |  |   | 73,009   |   |  |  |  |   | 344,544  |   |  |  |  |   | 355,617  |   |
| Grossprofit                                |  |  |                       |   | 17,400  |                      |  |  |                 |   | 55,940   |             |  |  |               |   | 112,939 |                 |  |  |                 |   | 99,195  |   |  |  |  |   | 10,035   |   |  |  |  |   | 106,060  |   |  |  |  |   | 127,984  |   |
| Selling,general and administrativeexpenses |  |  |                       |   | 19,100  |                      |  |  |                 |   | 46,462   |             |  |  |               |   | 72,262  |                 |  |  |                 |   | 54,022  |   |  |  |  |   | 16,565   |   |  |  |  |   | 77,319   |   |  |  |  |   | 96,593   |   |
| Amortizationof intangibleassets            |  |  |                       |   | — |                      |  |  |                 |   | —  |             |  |  |               |   | 3,508   |                 |  |  |                 |   | 3,303   |   |  |  |  |   | 477      |   |  |  |  |   | 1,754    |   |  |  |  |   | 1,836    |   |
| Otheroperating 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   |   |
| Interestexpense                            |  |  |                       |   | 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 incometaxes            |  |  |                       |   | (1,600  | )                    |  |  |                 |   | 2,609    |             |  |  |               |   | 27,060  |                 |  |  |                 |   | 33,309  |   |  |  |  |   | (12,858  | ) |  |  |  |   | (128,155 | ) |  |  |  |   | (4,577   | ) |
| Incometaxes 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   | ) |
| OtherData:                                 |  |  |                       |   |    |                      |  |  |                 |   |     |             |  |  |               |   |    |                 |  |  |                 |   |    |   |  |  |  |   |     |   |  |  |  |   |     |   |  |  |  |   |     |   |
| Cashflows provided by (usedin):            |  |  |                       |   |    |                      |  |  |                 |   |     |             |  |  |               |   |    |                 |  |  |                 |   |    |   |  |  |  |   |     |   |  |  |  |   |     |   |  |  |  |   |     |   |
| Operatingactivities                        |  |  |                       | $ | 2,100   |                      |  |  |                 | $ | 70,935   |             |  |  |               | $ | 7,205   |                 |  |  |                 | $ | (14,290 | ) |  |  |  | $ | 20,842   |   |  |  |  | $ | 30,391   |   |  |  |  |   | ($15,752 | ) |
| Investingactivities                        |  |  |                       |   | (2,000  | )                    |  |  |                 |   | (169,859 | )           |  |  |               |   | (44,561 | )               |  |  |                 |   | 640     |   |  |  |  |   | (307,991 | ) |  |  |  |   | (11,410  | ) |  |  |  |   | 65,141   |   |
| Financingactivities                        |  |  |                       |   | 500     |                      |  |  |                 |   | 131,548  |             |  |  |               |   | 5,705   |                 |  |  |                 |   | 12,649  |   |  |  |  |   | 288,030  |   |  |  |  |   | 861      |   |  |  |  |   | 64,674   |   |
| Depreciationandamortization                |  |  |                       |   | 900     |                      |  |  |                 |   | 3,000    |             |  |  |               |   | 10,993  |                 |  |  |                 |   | 9,256   |   |  |  |  |   | 3,103    |   |  |  |  |   | 12,031   |   |  |  |  |   | 12,143   |   |
| Capitalexpenditures                        |  |  |                       |   | 2,000   |                      |  |  |                 |   | 4,647    |             |  |  |               |   | 7,053   |                 |  |  |                 |   | 4,219   |   |  |  |  |   | 1,624    |   |  |  |  |   | 11,600   |   |  |  |  |   | 15,797   |   |
| Ratioof earnings to fixed Charges(1)       |  |  |                       |   | — |                      |  |  |                 |   | —  |             |  |  |               |   | 1.6x    |                 |  |  |                 |   | 2.1x    |   |  |  |  |   | —  |   |  |  |  |   | —  |   |  |  |  |   | —  |   |
| BalanceSheet Data (at end ofperiod):       |  |  |                       |   |    |                      |  |  |                 |   |     |             |  |  |               |   |    |                 |  |  |                 |   |    |   |  |  |  |   |     |   |  |  |  |   |     |   |  |  |  |   |     |   |
| Cashand cash equivalents                   |  |  |                       | $ | 3,200   |                      |  |  |                 | $ | 32,593   |             |  |  |               | $ | 1,688   |                 |  |  |                 | $ | 903     |   |  |  |  | $ | 1,250    |   |  |  |  | $ | 21,394   |   |  |  |  | $ | 5,638    |   |
| Workingcapital(2)                          |  |  |                       |   | 119,800 |                      |  |  |                 |   | 63,327   |             |  |  |               |   | 92,718  |                 |  |  |                 |   | 133,612 |   |  |  |  |   | 107,593  |   |  |  |  |   | 88,731   |   |  |  |  |   | 147,703  |   |
| Totalassets                                |  |  |                       |   | 286,100 |                      |  |  |                 |   | 191,154  |             |  |  |               |   | 228,081 |                 |  |  |                 |   | 279,911 |   |  |  |  |   | 483,237  |   |  |  |  |   | 375,025  |   |  |  |  |   | 458,321  |   |
| Totaldebt                                  |  |  |                       |   | 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) | Forpurposes of computing the ratio of earnings to fixed charges, earningsconsist of income (loss) before income taxes plus fixed charges. Fixedcharges consist of interest (expensed and capitalized) on allindebtedness, plus preferred stock dividends and a proportion of rentalexpenses deemed to be representative of the interest factor. Theearnings 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 thefiscal year ended September  30,  2006, respectively. SeeItem 7 ‘‘Management Discussion and Analysis of FinancialCondition and Results of Operations’’ for a discussion ofthe purchase accounting items and commodity costs that caused adeficiency for the period ended September  30,2006. |

|     |                                                                                                                                                                                  |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Working capital is defined ascurrent assets, excluding cash and cash equivalents, less currentliabilities, excluding short-term borrowings and current portion oflong-term debt. |

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|              |                                                                                            |
|--------------|--------------------------------------------------------------------------------------------|
| Item7.  | MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS |

The followingdiscussion relates to the consolidated financial performance andresults of operations of our parent, ATT Holding Co. A separatediscussion for Ames True Temper, Inc. is not presented since our parenthas no operations or assets separate from its investment in Ames TrueTemper, Inc. and since the Senior Subordinated Notes and SeniorFloating Rate Notes are guaranteed by our parent. The followingdiscussion includes forward-looking statements that involve certainrisks and uncertainties. See ‘‘Forward-LookingStatements.’’

Overview

Ames True Temper isa leading North American manufacturer and marketer of non-powered lawnand garden tools and accessories. We offer the following 14 distinctproduct 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 ourproducts 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) industrialdistributors.

Predecessor and SuccessorPeriods

Financial statements for periods prior toJune  28,  2004 are referred to as the financial statementsof Predecessor Company I. Financial statements for periods subsequentto June  27,  2004 are referred to as the financialstatements of the Company. For comparison purposes, we have presentedthe financial information and results of operations for fiscal 2004 ona combined basis, consisting of the Predecessor Company I’saudited financial results of operations for the period fromSeptember  28,  2003 through June  27,  2004and the Company’s audited financial results of operations forthe period from June  28,  2004 through September25,  2004. We have determined that this presentation is moremeaningful than disclosing these periods separately, as the combinedamounts represent a 52-week period that is comparable to our otherfiscal years presented.

The purchase price of Predecessor CompanyI from Wind Point Partners included a write-up to the fair market valueof inventory acquired, which resulted in an increase in cost of goodssold of $10.1  million, or 2.3% of sales, during fiscal2004. That amount represents the manufacturing profits acquired.Additionally, the purchase price allocated to the fair value oftradenames and other finite lived assets was approximately $69.7million and $13.1  million, respectively. Additionally, a$34.9  million write-up was recorded to adjust fixed assets tofair value.

Restructuring

Following theacquisition of Predecessor Company II by certain members of managementand Wind Point Partners, our new management embarked on a restructuringplan that resulted in the closure of a corporate office, consolidationof certain under-utilized manufacturing facilities and the increase inthe sourcing of certain products and components from overseassuppliers.

In connection with the acquisition of PredecessorCompany I, the Company reevaluated the restructuring reservespreviously set up by Predecessor Company I. These restructuringreserves were originally established to reduce total workforce andclose certain facilities. The Company, as of the date of acquisition ofPredecessor Company I, began to assess and formulate an exit andrestructuring plan that included additional reductions of workforce,facility closures and changes in business strategies. At June28,  2004 the Company recorded a liability of $4.8  millionrelated to the reductions of workforce and facility closures and$4.8  million related to changes in business strategies for aproduct line. These plans also resulted in a $6.8  milliondecrease to the beginning balance of the pension asset for the periodended September  25,  2004. Adjustments were made to thesereserves as the cost estimates were refined and finalized. AtSeptember  30,  2006, the restructuring reserves were$3.5  million. The Company expects to complete these plans in thenext 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 tothe reductions in workforce and a facility consolidation plan. Duringfiscal 2006, the Company revised and refined these restructuringreserves, as additional information was available. At September30,  2006 the restructuring reserve was $1.2  million. TheCompany expects to complete these plans in the next one to twoyears.

Business Unit Acquisitions

During fiscal2003, we acquired three separate businesses: Dynamic Design, Greenlifeand Outdoor Inspirations. Dynamic Design and Outdoor Inspirations addednew product lines to our portfolio, adding planters and garden hoses,respectively. The acquisition of Greenlife added significant access tolow cost manufacturing facilities in China through three separate jointventures in which Greenlife was a partner. This acquisition has helpedus to increase our sourcing of product from 2% in fiscal 2001 toover 40% in fiscal 2006, based on net sales. During fiscal 2006,we acquired substainally all the assets and properties of Hound DogProducts, Inc. in order to add this product line to our portfolio.During fiscal 2006, we acquired the stock of Acorn in order to expandour existing product line portfolio.

Accounting Treatmentfor Joint Ventures

In August  2003, we purchasedGreenlife, which had investments in three cooperative joint ventures inChina with certain exclusive marketing rights to sell, outside ofChina, products manufactured by the three separate joint ventures. Wepurchased shares of 25%, 30%, and 35% in the threejoint ventures. During fiscal 2005, we purchased a 25% interestin a fourth joint venture in Dalian, China. We do not share in eitherthe profit or the loss of any of the joint ventures. We have minorityrepresentation on the board of directors of each of the joint ventures.Therefore, the investment is treated under the cost method in ourfinancial statements. See Item 1, ‘‘Business—JointVentures.’’

Seasonality

Ourrevenue stream is seasonal. In fiscal 2006, 61% of net saleswere recorded in the second and third quarter. Weather plays a part inthe amount and timing of our sales. For example, during the winterseason, lack of snow or lower than average snowfall may result inreduced sales of certain of our products, such as snow shovels andother tools. During the spring and summer season, unseasonably cool orwarm temperatures, water shortages or floods may reduce or impact thetiming of sales.

Acquisition by Castle Harlan

OnJune  1,  2004, our parent and its equity holders enteredinto a stock purchase agreement with CHATT Holdings Inc., referred toas the ‘‘buyer,’’ and its parent, CHATTHoldings LLC, referred to as the ‘‘buyerparent.’’ The buyer and buyer parent were newly formedentities established by Castle Harlan Partners IV, L.P., or CHP IV.Pursuant to the stock purchase agreement, the buyer acquired, onJune  28,  2004, all of the outstanding equity interests ofour parent for a purchase price of $380.0  million plustransaction costs of $6.3  million and working capitaladjustments of $27.8  million. Upon completion of theacquisition, approximately 87% of the equity interests of thebuyer parent was owned by CHP IV and its affiliates, and the remainderwas issued to members of our management who previously held capitalstock in our parent, in lieu of cash consideration that they otherwisewould have been entitled to receive in the acquisition. In addition, ina few cases, certain members of management that did not currently holdequity in our parent purchased an equity interest in the buyer parentfor cash. In order to finance the acquisition, repay our outstandingdebt and pay related fees andexpenses:

|  |              |                                                                                                                                                                                                                              |
|--|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | we entered into a$215.0  million senior credit facility consisting of a$75.0  million revolving credit facility and a $140.0million term loan, as described in ‘‘—Debt andOther 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 itsaffiliates and management. |

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

ClosingPurchase Price and Adjustments

The purchase price for theacquisition was $380.0  million in cash (excluding fees andexpenses of $6.3  million), subject to the working capital andother adjustments described below. Approximately $92.8  millionof the consideration was allocated to the repayment or assumption ofall of our and our parent’s outstanding debt and accruedinterest at the time of the acquisition with the remainder allocated tothe purchase of the equity interests of our parent.

The purchaseprice payable by the buyer for the equity of our parent was subject tothe following adjustments:

|  |              |                                                                                                 |
|--|--------------|-------------------------------------------------------------------------------------------------|
|  | •  | an upwardadjustment based on our parent’s consolidated cash-on-hand as ofJune  28,  2004; |

|  |              |                                                                                                                                                                        |
|--|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | an upwardor downward adjustment based on the estimated amount by which ourparent’s consolidated working capital as of June28,  2004 deviated from $100.5million; |

|  |              |                                                                                                                                                                                                                                                  |
|--|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | a downward adjustment ofapproximately $14.0  million, reflecting the estimated value ofour management’s equity investment discussed more fully below in‘‘—Rollover of Equity; Management EquityInvestment.’’ |

In accordance with the stock purchaseagreement, ten business days prior to the anticipated closing of theacquisition, the sellers provided the buyer with an estimate of theworking capital adjustment that would be made to the purchase price onJune  28,  2004. Based on that estimate, an additional$19.3  million was added to the purchase price. A final purchaseprice adjustment payment of approximately $7.3  million,reflecting the buyer’s review of the actual deviation of ourparent’s consolidated working capital as of June28,  2004 from $100.5  million, was made by buyer to WindPoint Investors V, L.P., as representative of the sellers, inSeptember  2004. A portion of this adjustment was funded throughadditional borrowings under the revolving portion of our senior creditfacility. Three additional amounts totalling $1.3  million havebeen paid in fiscal 2006 relating to certain tax benefits that wererequired to be remitted to the seller.

Rollover of Equity;Management Equity Investment

In connection with theacquisition, approximately 13% of the equity interests in thebuyer parent, was issued to members of our management who previouslyheld capital stock in our parent, in lieu of cash consideration thatthey otherwise would have been entitled to receive in the acquisitionand, in a few cases, certain members of management that did notcurrently hold equity in our parent purchased an equity interest inbuyer parent for cash.

The transaction was accounted for as apurchase in accordance with SFAS 141, Business Combinations, andEITF Issue 88-16, Basis in Leveraged Buyout Transactions. Assuch, the acquired assets and assumed liabilities have been recorded atfair market value for the interests acquired and preliminary estimatesof assumed liabilities by new investors and at the carryover basis forcontinuing investors. The acquired assets and assumed liabilities wereassigned new book values in the same proportion as the residualinterests of the continuing investors and the new interests acquired bythe new investors. Under EITF 88-16, our assets and liabilities wererevalued at the merger date to the fair value to the extent of themajority stockholder’s 87% controlling interest. Theremaining 13% is accounted for at the continuingstockholders’ carryover basis. The excess of the purchase priceover the historical basis of the net assets acquired has been appliedto adjust net assets to their fair values to the extent of the majoritystockholder’s 87% ownership.

See Item 12,‘‘Security Ownership of Certain Beneficial Owners andManagement and Related Stockholder Matters’’ and Item 13,‘‘Certain Relationships and RelatedTransactions’’ for additional information concerningequity ownership and transactions involvingmanagement.

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Stock PurchaseAgreement

The stock purchase agreement contains customaryrepresentations and warranties, covenants and indemnities by and forthe benefit of the buyer, the buyer parent, the sellers, our parent andus.

The sellers’ indemnification obligations, which areseveral and not joint, for breaches of representations and warrantiesgenerally survive until 60 days following the earlier of (1) thebuyer’s receipt of the audited financial statements of ourparent and its subsidiaries for fiscal 2005 and (2)February  28,  2006, except for representations andwarranties relating to certain title matters which surviveindefinitely, certain employee benefits, tax and third partyindemnification matters which survive for 60 days beyond the applicablestatute of limitations and certain environmental matters which survivefor three years following the closing of the acquisition. Thesellers’ obligations to indemnify the buyer and thebuyer’s obligation to indemnify the sellers are not triggered,subject to certain exceptions, until the other suffers losses in theaggregate of more than $2.0  million, but only to the extent thatsuch losses exceed $0.5  million. The buyer’s and thesellers’ aggregate indemnification obligations are generallycapped at $30.0  million in the aggregate, respectively, subjectto certain exceptions. The sellers have authorized Wind Point PartnersV, L.P., Predecessor Company I’s majority equity holder, to acton their behalf on substantially all indemnification and other mattersarising under the stock purchase agreement.

On June28,  2004, the buyer deposited $7.0  million of the closingpurchase price with a third party escrow agent to secure thesellers’ indemnification obligations and certain othercontingent payment obligations of the sellers under the stock purchaseagreement. The escrow agreement expires and the funds remaining inescrow, if any, will be distributed to the sellers on February28,  2006, except that if any dispute between the buyer and thesellers’ representative, acting as representative for allsellers, exists on that date as to any claim of the buyer to anyescrowed funds, the amount in dispute will continue to be held inescrow until the dispute is resolved either by agreement of the buyerand sellers’ representative or by a final, non-appealable orderof a court of competent jurisdiction. At September  30,2006, $0.6  million remained in the escrow account and wassubsequently paid to the seller in November  2006.

Thestock purchase agreement also provides that the buyer is entitled toindemnification from the sellers, without regard to any threshold, capor time limitation, for any losses incurred by the buyer or itsaffiliates in connection with certain pre-acquisition liabilitiesincluding (1) the sale by us of our Davisville, West Virginia warehouseand distribution facility; (2) an action brought against us by a formeremployee involving personal injury and other tort-based claims forwhich the availability of insurance has been disputed by our insurancecarrier; (3) environmental liabilities resulting from conditions whichfirst occurred during the ownership of our parent and its subsidiariesby the sellers; and (4) certain tax liabilities relating to any taxableperiod ending on or prior to the closing of the acquisition for which atax return was not due on or prior to the closing of theacquisition.

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

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

(1) ourpending breach of contract action against Connecticut General LifeInsurance Company seeking damages in the amount of approximately$0.9  million;

(2) amounts claimed to be owed to us bycustoms authorities for the 2003 calendar year and the portion of the2004 calendar year during which we were owned by the sellers pursuantto anti-dumping legislation commonly known as the ‘‘ByrdAmendment’’ that have not been paid to us;and

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

The sellers have agreed toindemnify the buyer, our parent and us, without regard to anythreshold, cap or time limitation, for any losses incurred inconnection with these matters, including the costs of prosecuting thepursuit of these matters.

Acquisitions Made by theCompany

On April  7,  2006, we acquired Acorn, theparent company of Union, a business engaged in the manufacture anddistribution of non-powered lawn and garden tools, pursuant to anAgreement and Plan of Merger (the ‘‘Acorn MergerAgreement’’) among us, Acorn and ATTUT Holdings, Inc., aDelaware corporation and wholly-owned subsidiary of ours(‘‘Merger Sub’’). Pursuant to the AcornMerger Agreement, we acquired all of the issued and outstanding capitalstock 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 wasconsummated simultaneously with the execution of the Acorn MergerAgreement. The aggregate cash consideration paid by us on the day ofthe transaction was $46.4  million.

On April12,  2006, HD Acquisition Corp.(‘‘HDAC’’), a wholly-owned subsidiary ofours, completed the acquisition of substantially all of the assets andproperty of Hound Dog, a business that designs, markets and distributesnon-powered lawn and garden tools. The transaction was consummatedsimultaneously with the execution of an Asset Purchase Agreement (the‘‘Asset Purchase Agreement’’) among HDAC,Hound Dog and the shareholders of Hound Dog. The cash considerationpaid by HDAC on the day of the transaction was $5.2million.

These businesses were acquired to expand theCompany’s product lines. The operating results of the acquiredcompanies have been included in the accompanying consolidatedstatements of operations from the respective dates of acquisition.Prior to the end of our fiscal year, Acorn, Union and HDAC were mergedinto Ames True Temper.

Results of Operations

Thefollowing table presents the major components of our statement ofoperations together with each component’s percentage of netsales for fiscal 2004, fiscal 2005, and fiscal2006:

|                                                  |  |  |                                         |   |         |                                 |  |  |                                   |  |         |   |  |  |  |   |         |   |  |  |  |  |         |   |  |  |  |   |         |   |  |  |  |  |         |   |
|--------------------------------------------------|--|--|-----------------------------------------|---|---------|---------------------------------|--|--|-----------------------------------|--|---------|---|--|--|--|---|---------|---|--|--|--|--|---------|---|--|--|--|---|---------|---|--|--|--|--|---------|---|
|                                             |  |  | Combined52Weeks EndedSeptember 25, 2004 |   |         | Fiscal YearEndedOctober 1, 2005 |  |  | Fiscal YearEndedSeptember 30,2006 |
|                                             |  |  | (unaudited)                             |   |         | (53weeks)                       |  |  | (52weeks)                         |
|                                             |  |  | (dollarsin millions)                    |
| Netsales                                         |  |  |                                         | $ | 438.5   |                                 |  |  |                                   |  | 100.0   | % |  |  |  | $ | 450.6   |   |  |  |  |  | 100.0   | % |  |  |  | $ | 483.6   |   |  |  |  |  | 100.0   | % |
| Costof goodssold                                 |  |  |                                         |   | 329.3   |                                 |  |  |                                   |  | 75.1    | % |  |  |  |   | 344.5   |   |  |  |  |  | 76.5    | % |  |  |  |   | 355.6   |   |  |  |  |  | 73.5    | % |
| Grossprofit                                      |  |  |                                         |   | 109.2   |                                 |  |  |                                   |  | 24.9    | % |  |  |  |   | 106.1   |   |  |  |  |  | 23.5    | % |  |  |  |   | 128.0   |   |  |  |  |  | 26.5    | % |
| Selling,general, andadministrative expenses |  |  |                                         |   | 70.5    |                                 |  |  |                                   |  | 16.1    | % |  |  |  |   | 77.3    |   |  |  |  |  | 17.2    | % |  |  |  |   | 96.2    |   |  |  |  |  | 19.9    | % |
| Specialcharges                                   |  |  |                                         |   | 0.8     |                                 |  |  |                                   |  | 0.2     | % |  |  |  |   | — |   |  |  |  |  | 0.0     | % |  |  |  |   | — |   |  |  |  |  | — | % |
| Amortizationof intangibleassets                  |  |  |                                         |   | 3.8     |                                 |  |  |                                   |  | 0.9     | % |  |  |  |   | 1.8     |   |  |  |  |  | 0.4     | % |  |  |  |   | 1.9     |   |  |  |  |  | 0.4     | % |
| Impairmentcharges                                |  |  |                                         |   | — |                                 |  |  |                                   |  | 0.0     | % |  |  |  |   | 122.7   |   |  |  |  |  | 27.2    | % |  |  |  |   | 6.4     |   |  |  |  |  | 1.3     | % |
| Operatingincome(loss)                            |  |  |                                         |   | 34.1    |                                 |  |  |                                   |  | 7.7     | % |  |  |  |   | (95.7   | ) |  |  |  |  | -21.2   | % |  |  |  |   | 23.5    |   |  |  |  |  | 4.9     | % |
| Interestexpense                                  |  |  |                                         |   | 13.4    |                                 |  |  |                                   |  | 3.1     | % |  |  |  |   | 32.5    |   |  |  |  |  | 7.2     | % |  |  |  |   | 33.8    |   |  |  |  |  | 7.0     | % |
| Otherexpense(income)                             |  |  |                                         |   | 0.2     |                                 |  |  |                                   |  | — | % |  |  |  |   | (0.1    | ) |  |  |  |  | — | % |  |  |  |   | (5.7    | ) |  |  |  |  | -1.2    | % |
| Incomebeforetaxes                                |  |  |                                         |   | 20.5    |                                 |  |  |                                   |  | 4.6     | % |  |  |  |   | (128.2  | ) |  |  |  |  | -28.4   | % |  |  |  |   | (4.6    | ) |  |  |  |  | -0.9    | % |
| Incometax expense(benefit)                       |  |  |                                         |   | 8.9     |                                 |  |  |                                   |  | 2.0     | % |  |  |  |   | (2.9    | ) |  |  |  |  | -0.6    | % |  |  |  |   | — |   |  |  |  |  | — | % |
| Netincome(loss)                                  |  |  |                                         | $ | 11.6    |                                 |  |  |                                   |  | 2.6     | % |  |  |  |   | (125.2  | ) |  |  |  |  | -27.8   | % |  |  |  |   | (4.6    | ) |  |  |  |  | -0.9    | % |
|                                                  |

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

Net Sales.    Net salesfor the fifty-two week period ended September  30,  2006increased $33.0  million, or 7.3%, to $483.6million compared to $450.6  million for the fifty-three weeksended October  1,  2005. Overall net sales increasedprimarily due to the acquisition of UnionTools and Hound Dog, whichcontributed additional net revenues of $30.8 and $3.8 respectively. Theincrease was partially offset by an extra week of sales in the prioryear.

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

Selling, General and Administrative(‘‘SG&A’’)Expenses.    SG&A expenses for the fifty-two weeks endedSeptember  30,  2006 increased $18.9  million to$96.2  million from $77.3  million for the fifty-threeweeks ended October  1,  2005. The increase relatesprimarily to $8.3  million and $0.5  million of additionalexpenses incurred as a result of the acquisition of UnionTools andHound Dog, respectively. Additional expenses were incurred for a1% rate increase of sales commission for a major customer in theamount of $2.2  million, a one-time buy-back from a majorcustomer of $2.3  million and accrued management expense of$2.1  million.

Amortization of IntangibleAssets.    During the fifty-two weeks ended September30,  2006, we recorded $1.9  million in amortizationexpense, as compared to $1.8  million during the fifty-threeweeks ended October  1,  2005.

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

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

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

Income Tax (Benefit) Expense.    During fiscal 2006, werecorded a deferred tax asset valuation allowance, an adjustment ofstate tax liabilities in conjunction with the completion of certainstate tax audits and an adjustment related to a change in the estimatedstate tax rates, resulting in no net income tax benefit or expense.Income tax benefit for the fifty-three weeks ended October1,  2005 was $2.9  million, or approximately 2.3% ofloss before taxes. During fiscal 2005, we incurred goodwill impairmentcharges that were not deductible for tax purposes, which resulted in asignificantly lower tax benefit. Without this goodwill impairmentcharge, the prior year tax benefit would have been approximately35%.

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

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

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Gross Profit.    Gross profitfor the fifty-three weeks ended October  1,  2005 decreased$3.1  million to $106.1  million from $109.2  millionfor the fifty-two weeks ended September  25,  2004. Thisdecrease 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 purchaseaccounting in fiscal 2004. Gross profit as a percentage of net salesdecreased to 23.5% from 24.9% during thisperiod.

Selling, General and Administrative(‘‘SG&A’’)Expenses.    SG&A expenses for the fifty-three weeks endedOctober  1,  2005 increased $6.8  million to$77.3  million from $70.5  million for the fifty-two weeksended September  25,  2004. The increase relates primarilyto an additional week of expenses, an increase in distribution expensesas a result of the expansion of our largest distribution center,increased depreciation expenses as a result of the write-up to fairvalue of assets from the sale of our company to affiliates of CastleHarlan and increased compensation expense and professional service feesattributable to public reporting requirements, partially offset by costsavings initiatives. Additionally, during fiscal 2004 we recorded again of $4.8  million on the sale of our idle distribution centerin Davisville, WV and one of our manufacturing facilities inParkersburg, WV.

Amortization of IntangibleAssets.    During the fifty-three weeks ended October1,  2005, we recorded $1.8  million in amortizationexpense, as compared to $3.8  million during the fifty-two weeksended September  25,  2004. This decrease was due to theacquisition by affiliates of Castle Harlan, which reflects a change invaluation and lives of the finite assets acquired, asrequired.

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

InterestExpense.    Interest expense for fifty-three weeks endedOctober  1,  2005 increased $19.1  million to$32.5  million from $13.4  million during the fifty-twoweeks ended September  25,  2004. The increase was a resultof increased debt in connection with the acquisition by affiliates ofCastle Harlan and the write off of $4.1  million of deferredfinancing fees as a result of the repayment of the Term Loan B underthe senior credit facility in connection with the issuance of theSenior Floating Rate Notes.

Income Tax (Benefit)Expense.    Income tax benefit for the fifty-three weeks endedOctober  1,  2005 was $2.9  million, or approximately2.3% of loss before taxes. Income tax expense for the fifty-twoweeks ended September  25,  2004 was $8.9  million,or approximately 43.4% of income before taxes. During fiscal2005, we incurred goodwill impairment charges that were not deductiblefor tax purposes, which resulted in a significantly lower tax benefit.Without this goodwill impairment charge, the current year tax benefitwould have been approximately 35%. Additionally, during thefifty-two weeks ended September  25,  2004, we incurredadditional tax expense of $1.4  million due to a limitation offoreign tax credits related to our Canadian subsidiary, which resultedin a higher effective tax rate.

Liquidity and CapitalResources

Our principal liquidity requirements are to serviceour debt and meet our working capital and capital expenditure needs.Subject to our performance, which, if adversely affected, couldadversely affect the availability of funds, we expect to be able tomeet our liquidity requirements for the foreseeable future through cashprovided by operations and through borrowings available under oursenior secured credit facility. We cannot assure you, however, thatthis will be the case.

Cash Flows

Cash used inoperating activities for fiscal 2006 was $15.8  million, comparedto cash provided by operating activities of $30.1 million forfiscal 2005. The increase of cash used in operating activities in theamount of $45.9  million was primarily due to increased workingcapital requirements associated with the integration of Acorn. Cashused in investing activities for fiscal 2006 was $65.1  millioncompared to cash used of $11.4  million for fiscal 2005. Theincrease of $53.7  million was due to the purchase of Acorn andHound Dog, higher than average capital expenditures associated with thestart 

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up of a new facility and the implementationof an ERP system. Cash provided by financing activities for fiscal 2006was $64.7  million compared to cash provided by financingactivities for fiscal 2005 in the amount of $1.1  million. Theincrease of $63.6  million was primarily the result of increasedborrowings under our revolving credit facility to fund the acquisitionsof Acorn and Hound Dog.

Cash provided from operating activitiesfor fiscal 2005 was $30.1  million, compared to$6.6 million for fiscal 2004. The increase in cash provided fromoperating activities was primarily due to decreased working capitallevels, including a reduction of inventory and accounts receivablebalances, coupled with an increase in accounts payable. Cash used ininvesting activities of $11.4  million and $307.4  millionfor fiscal 2005 and 2004, respectively, was due to the purchase offixed assets and the acquisitions of businesses, partially offset byproceeds from the sale of fixed assets. During fiscal 2005, weincreased our capital spending as we commenced production at a newmanufacturing facility in Central Pennsylvania. During fiscal 2004, ourparent was acquired by affiliates of Castle Harlan. Additionally,during fiscal 2004 we received $5.1  million in proceeds for thesale of our idle distribution center in Davisville, WV and one of ourmanufacturing facilities in Parkersburg, WV. Cash provided by financingactivities was $1.1  million and $300.7  million for fiscal2005 and 2004, respectively. These proceeds were due primarily to debtborrowings and capital contributions, offset by repayments of long-termdebt and debt issuance costs. During fiscal 2005, we repaid term loan Bunder our senior credit facility by issuing Senior Floating Rate Notes.. During fiscal 2004, in connection with the sale of our parent, wereceived capital contributions and entered into the senior creditfacility and issued the Senior Subordinated Notes, which were used torepay our existing debt and fund the acquisition notedabove.

Debt and Other Obligations

SeniorSecured Credit Facility Prior to Amendment and Restatement onApril  7,  2006

On June  28,  2004,we entered into a $215.0  million senior secured credit facilitywith various banks, financial institutions and other lenders. Thesenior secured credit facility consisted of a $140.0  millionterm loan B facility, which would have matured on June28,  2011, and a $75.0  million revolving credit facility,which would have matured on June  28,  2010. OnJanuary  14,  2005, simultaneously with the completion ofthe offering of the Senior Floating Rate Notes referred to below, werepaid the term loan in full and entered into an amendment (the‘‘Amendment No. 1’’) to the terms of thesenior secured credit facility.

The interest rates applicable tothe senior secured credit facility prior to the amendment andrestatement were the Eurodollar Rate plus the Applicable Rate, or atour 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 Bankof 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 perannum equal to the rate determined by the administrative agent to bethe offered rate that appears on the Telerate Screen that displays anaverage British Bankers Association Interest Settlement Rate fordeposits in dollars. With respect to the revolving credit facility(including swing line loans), the ‘‘ApplicableRate’’ means (i) until December  28,  2004,3.00% per annum, in the case of Eurodollar Rate loans, and2.00% per annum, in the case of Alternate Base Rate advances,and (ii) thereafter, a percentage per annum to be determined inaccordance with a pricing grid based on the leverage ratio.

Certain customary fees are payable to the lenders and the agentsunder the senior secured credit facility, as amended, including withoutlimitation, a commitment for our revolving credit facility and letterof credit fees. The senior secured credit facility contains variousaffirmative and negative covenants customary for similar creditfacilities (subject to customary exceptions and certain existingobligations and liabilities), including, but not limited to,restrictions on: liens, loans, acquisitions, mergers, sales, transfers,dividends, distributions, changes in the nature of our business andtransactions with affiliates.

The senior secured creditfacility, 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 $41.0million and the maintenance of a minimum fixed charge coverage ratio(defined as EBITDA less capital expenditures to cash taxesplus cash interest expense plus scheduled principalpayments and prepayments plus dividends and distributions onequity) of 1.00:1.00.

Pursuant to Amendment No. 1, availabilityunder the senior secured credit facility was restricted to the lesserof $75.0  million and the borrowing base amount, which was equalto (a) 85% of the amount of eligible receivables, plus (b) thelower of (i) 55% of the cost or fair market value of eligibleinventory 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 Bankof America, N.A., as administrative agent, and not objected to by therequired lenders. In addition, the senior secured credit facility, asamended, required that we meet certain financial covenant tests,including without limitation, the maintenance of minimum EBITDA andminimum fixed charge coverage ratio, as defined by the amended CreditAgreement described below.

Amendment No. 2, datedDecember  1,  2005, temporarily reduced the minimumconsolidated EBITDA requirement for the four quarters endingDecember  31,  2005 and April  1,  2006 to$36.0  million and $38.0  million, respectively. Commencingwith the four quarters ending July  1,  2006, the minimumconsolidated EBITDA resumed at the $41.0  million level. Thisamendment also provided for certain exclusions of capital expendituresand expenses for covenant compliance purposes.

Senior SecuredCredit Facility as Amended and Restated on April  7,2006

On April  7,  2006, we entered into anamended and restated credit agreement with Bank of America, N.A., asadministrative 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., asguarantor, and each lender from time to time thereto (the‘‘Credit Agreement’’). The Credit Agreementamends and restates our existing credit facility with, among others,Bank of America, N.A. Pursuant to the Credit Agreement, the lendersmade available a five-year revolving credit facility of up to$130.0  million, including a sub-facility for letters of creditin an amount not to exceed $15.0  million and a sub-facility forswing-line loans in an amount not to exceed $15.0  million. TheBorrowers’ obligations under the Credit Agreement are guaranteedby ATT Holding Co. The credit facilities are collateralized bysubstantially all of our assets, including our domestic subsidiaries,and guaranteed by ATT Holding Co. Future domestic subsidiaries will berequired to guarantee the obligations and grant a lien on substantiallyall of their assets.

The interest rate applicable to the loansunder the Credit Agreement is either: (1) the‘‘Eurodollar Rate’’ plus a margin of1.75% to 2.75% or (2) the ‘‘BaseRate’’ plus a margin of 0.50% to 1.50%. Theinitial applicable margin for loans based on the Eurodollar Rate willbe 2.25%, and the applicable margin for loans based on the BaseRate will be 1.00%. ‘‘EurodollarRate’’ is defined as the London interbank offered rate,adjusted for statutory reserve requirements. The ‘‘BaseRate’’ is the higher of: (1) prime rate publiclyannounced by Bank of America, N.A. or (2) the Federal Funds effectiverate plus 0.50%, adjusted for statutory reserve requirements.The applicable margin may under certain limited circumstances beincreased slightly, if Bank of America, N.A. cannot otherwise syndicatethe credit facility. We estimate a 1% change in interest rateswould impact us by approximately $0.85  million.

As setforth in the Credit Agreement, the total outstanding amount of allloans and letter of credit obligations under the Credit Agreement shallnot exceed the lesser of (1) $130.0  million and (2)  theborrowing base, which includes specific percentages of eligibleinventory, eligible equipment, eligible accounts receivable andeligible real estate of the Borrowers, minus (b) certain reserves, allas set forth in the Credit Agreement.

The terms of the CreditAgreement include various covenants that restrict our ability to, amongother things, incur additional liens, incur additional indebtedness andmake additional investments. In addition, the Borrowers are prohibitedfrom incurring capital expenditures exceeding $19.125  million infiscal 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 theunused portion to the following year). In addition, under certaincircumstances the Borrowers will be required to have consolidatedEBITDA of at least $41.0  million for each period of four fiscalquarters. The Credit Agreement also includes customary events ofdefault, including, without limitation, payment defaults, crossdefaults to other indebtedness and bankruptcy related defaults. As ofSeptember  30,  2006, we were in compliance with all of ourfinancial covenants. As of September  30,  2006, we had$66.6  million of borrowings on the revolving portion of oursenior credit facility, with $2.4  million of letters of creditoutstanding 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 therevolving credit facility. In addition, the Company had $2.0million of letters of credit outstanding with another financialinstitution as of September  30,  2006. These letters ofcredit were supported by $2.1  million of restricted cash in theform of an escrow deposit at this financialinstitution.

Senior Subordinated Notes

OnJune  28,  2004, we completed a private offering of$150.0  million in aggregate principal amount at maturity of10% Senior Subordinated Notes due July  15,  2012.The Senior Subordinated Notes are fully and unconditionally guaranteedby our parent, ATT Holding Co., on a senior subordinated basis. OnAugust  10,  2004, we filed a registration statement withrespect to new notes having substantially identical terms as theoriginal notes, as part of an offer to exchange registered notes forthe privately issued original Senior Subordinated Notes. The new notesevidence the same debt as the original Senior Subordinated Notes, areentitled to the benefits of the indenture governing the original SeniorSubordinated Notes and are treated under the indenture as a singleclass with the original notes. The exchange offer was completed onNovember  24,  2004.

The Senior Subordinated Notesare unsecured senior subordinated obligations and rank behind all ofour existing and future senior debt, including borrowings under thesenior credit facility, equally with any of our future seniorsubordinated debt, ahead of any of our future debt that expresslyprovides for subordination to the Senior Subordinated Notes andeffectively behind all of the existing and future liabilities of oursubsidiaries, including trade payables.

We pay interest on theSenior Subordinated Notes semi-annually in cash, in arrears, onJanuary 15 and July  15 at an annual rate of 10.0%.The indenture governing Senior Subordinated Notes contains variousaffirmative and negative covenants, subject to a number of importantlimitations and exceptions, including but not limited to those limitingour ability and the ability of our restricted subsidiaries to borrowmoney, guarantee debt or sell preferred stock, create liens, paydividends on or redeem or repurchase stock, make certain investments,sell stock in our restricted subsidiaries, restrict dividends or otherpayments from restricted subsidiaries, enter into transactions withaffiliates and sell assets or merge with other companies.

Theindenture governing the Senior Subordinated Notes contains variousevents of default, including but not limited to those related tonon-payment of principal, interest or fees; violations of certaincovenants; certain bankruptcy-related events; invalidity of liens;non-payment of certain legal judgments; and cross defaults with certainother indebtedness. We may redeem the Senior Subordinated Notes on orafter July  15,  2008, except we may redeem up to35% of the Senior Subordinated Notes prior to July15,  2007 with the proceeds of one or more public equityofferings. We are required to redeem the Senior Subordinated Notesunder certain circumstances involving changes ofcontrol.

Senior Floating Rate Notes

OnJanuary  14,  2005, we completed a private offering of$150.0  million principal amount at maturity of our SeniorFloating Rate Notes due 2012, which was issued at a 0.5%discount. Net proceeds for the offering were used to repay our termloan B in full, repay a portion of our revolving credit facility andpay related fees and expenses. The Senior Floating Rate Notes are fullyand unconditionally guaranteed by our parent on a senior unsecuredbasis. On March  25,  2005 we filed a registrationstatement with respect to new notes having substantially identicalterms as the original 

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notes, as part of an offer to exchangeregistered notes for the privately issued original Senior Floating RateNotes. The new notes evidence the same debt as the original SeniorFloating Rate Notes, are entitled to the benefits of the indenturegoverning the original Senior Floating Rate Notes and are treated underthe indenture as a single class with the original notes. The exchangeoffer was completed on May  23,  2005.

The SeniorFloating Rate Notes are unsecured, unsubordinated obligations and areeffectively subordinated to all of our existing and future secureddebt, to the extent of the assets securing such debt, includingborrowings under the senior secured credit facility, pari passuwith all future senior unsecured indebtedness, senior in right ofpayment to all existing and future senior subordinated debt, includingour Senior Subordinated Notes due 2012, and effectively behind all ofthe existing and future liabilities of our subsidiaries, includingtrade payables.

We pay interest on the Senior Floating Rate Notesquarterly in cash, in arrears, on January  15, April  15,July  15 and October  15 at a rate per annum, resetquarterly, equal to LIBOR plus 4.0%, starting on April15,  2005. The indenture governing the Senior Floating Rate Notescontains various affirmative and negative covenants, subject to anumber of important limitations and exceptions, including but notlimited to those limiting our ability and the ability of our restrictedsubsidiaries to borrow money, guarantee debt or sell preferred stock,create liens, pay dividends on or redeem or repurchase stock, makespecified types of investments, sell stock in our restrictedsubsidiaries, restrict dividends or other payments from restrictedsubsidiaries, enter into transactions with affiliates and sell assetsor merge with other companies.

The indenture governing the SeniorFloating Rate Notes contains various events of default, including butnot limited to those related to non-payment of principal, interest orfees; failure to perform or observe certain covenants; inaccuracy ofrepresentations and warranties in any material respect, cross defaultswith 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 FloatingRate Notes, in whole or in part, at any time on or after January15,  2007. In addition, we may redeem up to 35% of theSenior Floating Rate Notes prior to January  15,  2007 withthe net proceeds of one or more public equity offerings. We arerequired to redeem the Senior Floating Rate Notes under certaincircumstances involving changes of control.

OtherDebt

On July  19,  2005, we entered into a$2.7  million Term Note, Loan and Security Agreement andSubordination Agreement with a Lender. This note is payable in monthlyinstallments over five years. The interest rate per annum is equal to2.5% and secured by certain collateral, which was agreed to bythe Administrative Agent of the Senior Secured Credit Facility, asamended and restated. Under the terms of this note, we are required tocreate 108 jobs at the new manufacturing facility in Pennsylvaniawithin three years of the completion of the facility. The Term Notecontains customary events of default (subject to customary exceptions,thresholds and grace periods), including, without limitation,nonpayment of principal, interest, fees and failure to perform orobserve certain covenants. As of September  30,  2006, wewere in compliance with these covenants.

Interest RateSwaps

In connection with the offering of the Senior FloatingRate Notes, on January  11,  2005, we entered into interestrate swaps (the ‘‘Swaps’’) with Bank ofAmerica, N.A. and Wachovia Bank, N.A to hedge variable interest ratedebt. Pursuant to the Swap with Bank of America, N.A., which becameeffective on January  17,  2006, we swap 3 month LIBORrates 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 $66.7million for the period from January  15,  2008 toJanuary  15,  2009 and approximately $33.3  millionfor the period from January  15,  2009 throughJanuary  15,  2010. Pursuant to the Swap with WachoviaBank, N.A., effective January  15,  2006, we swap 3 monthLIBOR rates for fixed interest rates of 4.29% for a notionalamount of $50  million for the period from January15,  2006 through January  15,  2008, approximately$33.3  million for the period from January  15,  2008to 

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January  15,  2009 andapproximately $16.7  million for the period from January15,  2009 through January  15,  2010. These swaps fixthe variable rate portion of the Senior Floating Rate Notes, whilethere is an additional margin of 4.00% that is fixed.

Theinterest rate swaps are accounted for in accordance with Statement ofFinancial Accounting Standard (‘‘SFAS’’)No. 133, Accounting for Derivative Instruments and HedgingActivities, as amended by SFAS No. 138, Accounting for CertainDerivative Instruments and Certain Hedging Activities and SFAS No.149, Amendment of Statement 133 on Derivative Instruments andHedging Activities (collectively, ‘‘SFAS133’’). SFAS 133 establishes accounting and reportingstandards for derivative instruments and hedging activities. SFAS 133requires that all derivatives be recognized as either assets orliabilities at fair value.  For the fiscal years endedSeptember  30,  2006 and October 1, 2005, the interest rateswaps were recorded as an asset of $2.6 and $1.1  million,respectively. The change in fair value was accumulated as othercomprehensive income of $0.9 and $0.7  million, net of deferredtaxes of $0.6 and $0.4  million, for the fiscal years endedSeptember  30,  2006 and October  1,  2005,respectively. The fair market values of the interest rate swapagreements, which were obtained from broker quotes are included on theconsolidated balance sheet as of September  30,  2006 andOctober  1,  2005. The changes in fair market value arereflected in other non-current assets and other comprehensiveloss.

Recent Accounting Pronouncements

InSeptember  2006, the Financial Accounting Standards Board(‘‘FASB’’) issued Statement of FinancialAccounting Standards (‘‘SFAS’’) No. 158,Employers’ Accounting for Defined Benefit Pension and OtherPostretirement Plans, an amendment of SFAS statements No. 87, 88,106 and 132(R) to improve financial reporting by requiring an employerto recognize the overfunded or underfunded status of a defined benefitpost retirement plan as an asset or liability. SFAS 158 requiresemployers to recognize changes in the funded status as of the date ofthe year end financial statements. SFAS 158 is effective for fiscalyears ending after December  15,  2006. The Company iscurrently evaluating what effect the adoption of SFAS 158 will have onthe Company’s consolidated financial statements, which will notbe determined until the September 29, 2007 measurement date of theassets and benefit obligations of the defined benefit plans.

InJuly  2006, the FASB issued FASB Interpretation No. 48,‘‘Accounting for Uncertainty in IncomeTaxes,’’ an interpretation of FASB Statement No.109,’’ (FIN 48). FIN 48 prescribes a recognitionthreshold and measurement attribute for the financial statementrecognition and measurement of a tax position taken or expected to betaken in a tax return. FIN 48 is effective for fiscal years beginningafter December  15,  2006. The Company is currentlyevaluating what effect, if any, adoption of FIN 48 will have on theCompany’s consolidated financial statements.

InNovember  2004, the FASB issued SFAS No. 151, InventoryCosts, an amendment of ARB No. 43 Chapter 4. This Statement amendsthe guidance in ARB No. 43, Chapter 4, Inventory Pricing, toclarify the accounting for abnormal amounts of idle facility expense,freight, handling costs, and wasted material (spoilage). This Statementrequires that those items be recognized as current-period chargesregardless of whether they meet the criterion of ‘‘soabnormal’’ as defined in ARB No. 43. In addition, thisStatement requires that allocation of fixed production overheads to thecosts of conversion be based on the normal capacity of the productionfacilities. The Company implemented SFAS 151 during the fiscal yearended September  30,  2006 with no material impact on theconsolidated financial statements.

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ContractualCommitments

The following table represents our contractualcommitments associated with our debt and other obligations as ofSeptember  30,2006.

|                             |  |  |                       |   |         |                               |  |  |                              |   |         |                              |  |  |                              |   |         |                             |  |  |            |   |         |  |  |  |  |   |         |  |  |  |  |   |         |  |  |  |  |   |         |  |
|-----------------------------|--|--|-----------------------|---|---------|-------------------------------|--|--|------------------------------|---|---------|------------------------------|--|--|------------------------------|---|---------|-----------------------------|--|--|------------|---|---------|--|--|--|--|---|---------|--|--|--|--|---|---------|--|--|--|--|---|---------|--|
|                        |  |  | Total                 |   |         | October2006 to September 2007 |  |  | October 2007toSeptember 2008 |   |         | October 2008toSeptember 2009 |  |  | October 2009toSeptember 2010 |   |         | October 2010toSeptember2011 |  |  | Thereafter |
|                        |  |  | (dollars inthousands) |
| ContractualObligations      |  |  |                       |   |    |                               |  |  |                              |   |    |                              |  |  |                              |   |    |                             |  |  |            |   |    |  |  |  |  |   |    |  |  |  |  |   |    |  |  |  |  |   |    |  |
| Revolvingcreditfacility     |  |  |                       | $ | 66,608  |                               |  |  |                              | $ | 66,608  |                              |  |  |                              | $ | — |                             |  |  |            | $ | — |  |  |  |  | $ | — |  |  |  |  | $ | — |  |  |  |  | $ | — |  |
| SeniorFloating RateNotes    |  |  |                       |   | 150,000 |                               |  |  |                              |   | — |                              |  |  |                              |   | — |                             |  |  |            |   | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | 150,000 |  |
| SeniorSubordinatedNotes     |  |  |                       |   | 150,000 |                               |  |  |                              |   | — |                              |  |  |                              |   | — |                             |  |  |            |   | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | 150,000 |  |
| TermNote                    |  |  |                       |   | 2,103   |                               |  |  |                              |   | 483     |                              |  |  |                              |   | 540     |                             |  |  |            |   | 601     |  |  |  |  |   | 479     |  |  |  |  |   | — |  |  |  |  |   | — |  |
| Operatingleases             |  |  |                       |   | 101,789 |                               |  |  |                              |   | 10,495  |                              |  |  |                              |   | 10,211  |                             |  |  |            |   | 10,179  |  |  |  |  |   | 8,496   |  |  |  |  |   | 8,336   |  |  |  |  |   | 54,072  |  |
| Openpurchaseorders          |  |  |                       |   | 55,804  |                               |  |  |                              |   | 55,804  |                              |  |  |                              |   | — |                             |  |  |            |   | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | — |  |
| Otherpurchasecommitments    |  |  |                       |   | 3,544   |                               |  |  |                              |   | 1,772   |                              |  |  |                              |   | 1,772   |                             |  |  |            |   | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | — |  |
| Totalcontractualobligations |  |  |                       | $ | 529,848 |                               |  |  |                              | $ | 135,162 |                              |  |  |                              | $ | 12,523  |                             |  |  |            | $ | 10,780  |  |  |  |  | $ | 8,975   |  |  |  |  | $ | 8,336   |  |  |  |  | $ | 354,072 |  |
| Commitments                 |  |  |                       |   |    |                               |  |  |                              |   |    |                              |  |  |                              |   |    |                             |  |  |            |   |    |  |  |  |  |   |    |  |  |  |  |   |    |  |  |  |  |   |    |  |
| Outstandingletters ofcredit |  |  |                       | $ | 4,392   |                               |  |  |                              | $ | 4,392   |                              |  |  |                              | $ | — |                             |  |  |            | $ | — |  |  |  |  | $ | — |  |  |  |  | $ | — |  |  |  |  | $ | — |  |
| Totalcommitments            |  |  |                       | $ | 4,392   |                               |  |  |                              | $ | 4,392   |                              |  |  |                              | $ | — |                             |  |  |            | $ | — |  |  |  |  | $ | — |  |  |  |  | $ | — |  |  |  |  | $ | — |  |
|                             |

Off-BalanceSheet Arrangements

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

Critical Accounting Policies andEstimates

The preparation of our consolidated financialstatements in conformity with GAAP requires management to makeestimates and assumptions about future events that affect the amountsreported in the financial statements and accompanying footnotes. Futureevents and their effects cannot be determined with absolute certainty.Therefore, the determination of estimates requires the exercise ofjudgment. Actual results could differ from those estimates, and suchdifferences may be material to the financial statements. The process ofdetermining significant estimates is fact specific and takes intoaccount factors such as historical experience, current and expectedeconomic conditions, product mix and, in some cases, actuarialtechniques. We evaluate these significant factors as facts andcircumstances dictate. Historically, actual results have not differedsignificantly from those determined using estimates.

Thefollowing are the accounting policies that most frequently require usto make estimates and judgments and are critical to understanding ourfinancial condition, results of operation and cashflows.

Allowance for Doubtful Accounts and Other CustomerReserves

Accounts receivable are reported net of anallowance for doubtful accounts, customer program reserves and cashdiscounts. The allowance for doubtful accounts is based onmanagement’s estimate, using certain assumptions, of the amountof receivables that will actually be collected. This reserve is basedon historical collection activity adjusted for current conditions.Accounts are considered past due based on how payments are receivedcompared to the customer’s credit terms. Accounts are writtenoff when management determines the account is uncollectible. If thefinancial condition of one of our significant customers were todeteriorate, resulting in an inability to make payments, then anadditional reserve would be required. Customer program reserves aremanagement’s estimates of amounts due for volume discounts andco-op advertising programs to certain of its customers. Cash discountsare management’s estimate of the customers ability to pay withinthe billing terms in order to receive the discount.

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Long-Lived Assets

SFASNo. 144, Accounting for the Impairment or Disposal of Long-LivedAssets, requires that companies consider whether indicators ofimpairment of long-lived assets held for use are present. If suchindicators are present, companies determine whether the sum of theestimated undiscounted future cash flows attributable to such assets isless than their carrying amount, and if so, companies recognize animpairment loss based on the excess of the carrying amount of theassets over their fair value. Accordingly, management will periodicallyevaluate the ongoing value of property and equipment. During fiscal2006, the Company recorded an impairment charge of $414 related tocertain fixed assets.

Goodwill and Other IntangibleAssets

Effective January  14,  2002, we adoptedSFAS 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 usefullives. Under the provisions of SFAS No. 142, intangible assets,including goodwill, that are not subject to amortization will be testedfor impairment annually, or more frequently if events or changes incircumstances indicate that the asset might be impaired, using atwo-step impairment assessment, which requires management to makejudgments in determining what assumptions to use in the calculation.The first step of the goodwill impairment test, used to identifypotential impairment, compares the fair value of a reporting unit withits carrying amount, including goodwill. If the fair value of thereporting unit exceeds its carrying amount, goodwill of the reportingunit is considered not impaired, and the second step of the impairmenttest is not necessary. If the carrying amount of a reporting unitexceeds its fair value, the second step of the goodwill impairment testis performed to measure the amount of impairment loss, if any. TheCompany completed the annual impairment tests, which resulted inimpairment to goodwill of $0 and $119.8  million for the fiscalyears ended September  30,  2006 and October1,  2005, respectively, and the impairment of trade names of$6.0  million for the fiscal year ended September30,  2006.

We cannot predict the occurrence of certainfuture events that might adversely affect the reported value ofgoodwill and indefinite lived intangible assets, which totaled $126.8and $111.9  million at September  30,  2006 andOctober  1,  2005, respectively. Such events include, butare not limited to, strategic decisions made in response to economicand competitive conditions, the impact of the economic environment onour customer base, a material negative change in our relationships withsignificant customers; or economic conditions that may affect theassumptions used in the discounted cash flowcalculation.

Pensions

We have several definedbenefit plans, under which participants earn a retirement benefit basedupon a formula set forth in the plan. We record expense related tothese plans using actuarially determined amounts that are calculatedunder the provisions of SFAS No. 87, Employer’sAccounting for Pensions. Key assumptions used in the actuarialvaluations include the discount rate, the expected rate of return onplan assets and rate of increase in future compensation levels. Theserates are based on market interest rates, and therefore fluctuations inmarket interest rates could impact the amount of pension expenserecorded for these plans.

The accumulated benefit obligation ofthe defined benefit plans is a discounted amount calculated using themarket interest rates described above. An increase in the marketinterest rates, assuming no other changes in the estimates, reduces theamount of the accumulated benefit obligation and the related requiredexpense. A decrease in the market interest rates, assuming no otherchanges in the estimates, increases the amount of the accumulatedbenefit obligation and the related requiredexpense.

Inventory Reserves

We reduce ourinventory value for estimated obsolete and slow moving inventory in anamount equal to the difference between the cost of inventory and theestimated market value based upon 

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assumptions about future demand and marketconditions. If actual market conditions are less favorable than thoseprojected by management, additional inventory write-downs may berequired.

Revenue Recognition

We recognizerevenues and freight billed to customers, net of provisions for cashdiscounts, returns, volume or trade customer discounts, co-opadvertising and other sales discounts, upon shipment to customers ordelivery of products to customers depending upon the terms of the sale.In accordance with EITF No. 00-10, Accounting for Shipping andHandling Fees and Costs, we record amounts billed to customersrelated to shipping and handling as revenue and all expenses related toshipping and handling as a cost of products sold or selling, generaland administrative expense. See Footnote 2 to the ConsolidatedFinancial Statements.

Income Taxes

We accountfor income taxes in accordance with SFAS No. 109, Accounting forIncome Taxes, which requires that deferred tax assets andliabilities be recognized using enacted tax rates for the effect oftemporary differences between book and tax bases of recorded assets andliabilities. SFAS No. 109 also requires that deferred tax assets bereduced by a valuation allowance, if it is more likely than not thatsome portion or all of the deferred tax assets will not berecognized.

We evaluate on a quarterly basis the realizability ofour deferred tax assets by assessing our valuation allowance and byadjusting the amount of such allowance, if necessary. The factors usedto assess the likelihood of realization are our forecast of futuretaxable income and available tax planning strategies that could beimplemented to realize the net deferred taxassets.

Derivatives

Our cash flows and earningsare subject to fluctuations resulting from changes in interest rates,foreign currency exchange rates and raw material costs. We manage theexposure to these market risks through internally established policiesand procedures and, when deemed appropriate, through the use ofderivative financial instruments. Our policy does not allow speculationin derivative instruments for profit or execution of derivativeinstrument contracts for which there are no underlying exposures. We donot use financial instruments for trading purposes and are not a partyto any leveraged derivatives.

We hold two interest rate swapsthat are accounted for in accordance with SFAS No. 133, Accountingfor Derivative Instruments and Hedging Activities, as amended bySFAS No. 138, Accounting for Certain Derivative Instruments andCertain Hedging Activities and SFAS No. 149, Amendment ofStatement 133 on Derivative Instruments and Hedging Activities(collectively, ‘‘SFAS 133’’). SFAS 133establishes accounting and reporting standards for derivativeinstruments and hedging activities. SFAS 133 requires that allderivatives be recognized as either assets or liabilities at fairvalue. We have structured all of our existing interest rate swapagreements to be 100% effective. As a result, there is nocurrent impact to earnings resulting from hedge ineffectiveness. Thechange in values of the interest rate swaps is reflected in theactivity of other comprehensive income, net of tax.

|               |                                                           |
|---------------|-----------------------------------------------------------|
| Item7A.  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUTMARKET RISK |

Our cash flows and earnings are subject tofluctuations resulting from changes in interest rates, foreign currencyexchange rates and raw material costs.  We manage our exposureto these market risks through internally established policies andprocedures and, when deemed appropriate, through the use of derivativefinancial instruments. Our policy does not allow speculation inderivative instruments for profit or execution of derivative instrumentcontracts for which there are no underlying exposures.  We donot use financial instruments for trading purposes and are not a partyto any leveraged derivatives.  We monitor our underlying marketrisk exposures on an ongoing basis and believe that we can modify oradapt our hedging strategies as needed.

Our primary market riskis interest rate exposure with respect to our floating rate debt. Theinterest rate of the Senior Floating Rate Notes at September30,  2006 was 9.51%. In connection with 

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the offering of the Senior Floating RateNotes, we entered into two interest rate swaps. These swaps effectivelyfix the interest rate of the Senior Floating Rate Notes at notionalamounts of $150.0  million for two years beginning January15,  2006, subsequently amortizing at a rate of $50.0million per year until the maturity in 2010. See‘‘Management’s Discussion and Analysis ofFinancial Condition and Results of Operations—Debt and OtherObligations—Senior Floating Rate Notes’’ and‘‘—Interest Rate Swaps.’’

Weconduct foreign operations in Canada and Ireland and utilizeinternational suppliers and manufacturers. As a result, we are subjectto risk from changes in foreign exchange rates. These changes result incumulative translation adjustments, which are included in accumulatedother comprehensive income (loss). We do not consider the potentialloss resulting from a hypothetical 10% adverse change in quotedforeign currency exchange rates, as of September  30,2006, to be material.

We purchase certain raw materials such asresin, steel, and wood that are subject to price volatility caused byunpredictable factors. Where possible, we employ fixed rate rawmaterial purchase contracts and customer price adjustments to help usto manage this risk. We do not currently use derivatives to manage therisk of raw material pricefluctuations.

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Item8.    FINANCIAL STATEMENTS

ATT HoldingCo.

Consolidated Financial Statements

Contents

|                                                                                                                                                                                                                       |  |  |  |  |    |  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|----|--|
| Reportof Independent Registered Public AccountingFirm                                                                                                                                                                 |  |  |  |  | 35 |  |
| Consolidated Balance Sheets as ofSeptember 30, 2006 and October 1, 2005                                                                                                                                               |  |  |  |  | 36 |  |
| Consolidated Statements of Operationsfor the fiscal year ended September 30, 2006, the fiscalyear ended October 1, 2005, the period endedSeptember 25, 2004, and the period ended June27, 2004 (Predecessor CompanyI) |  |  |  |  | 37 |  |
| Consolidated Statements of Changes inStockholders’ (Deficit) Equity for the fiscal year endedSeptember 30, 2006, for the fiscal year endedOctober 1, 2005 and the period ended September25, 2004                |  |  |  |  | 38 |  |
| Consolidated Statement ofChanges in Stockholders’ Equity for the period ended June27, 2004 (Predecessor CompanyI)                                                                                               |  |  |  |  | 39 |  |
| Consolidated Statements of Cash Flowsfor the fiscal year ended September 30, 2006, the fiscalyear ended October 1, 2005, the period endedSeptember 25, 2004, the period ended June27, 2004 (Predecessor CompanyI)     |  |  |  |  | 40 |  |
| Notes to Consolidated FinancialStatements                                                                                                                                                                             |  |  |  |  | 41 |  |
|                                                                                                                                                                                                                       |

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Reportof Independent Registered Public AccountingFirm

Board of DirectorsATT HoldingCo.

We have audited the accompanying consolidated balancesheets of ATT Holding Co. (the ‘‘Company’’)as of September  30,  2006 and October  1,2005 and the related consolidated statements of operations, changes instockholders’ (deficit) equity and cash flows for the fiscalyear ended September 30, 2006, the fiscal year ended October1,  2005, the period June  28,  2004 toSeptember  25,  2004, and the period September28,  2003 to June  27,  2004 (Predecessor Company I).Our audits also included the financial statement schedule listed in theindex at Item 15(a). These financial statements and schedule are theresponsibility of the Company’s management. Our responsibilityis to express an opinion on these financial statements and schedulebased on our audits.

We conducted our audits in accordancewith auditing standards of the Public Company Accounting OversightBoard (United States). Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. We were not engaged toperform an audit of the Company’s internal control overfinancial reporting. Our audits included consideration of internalcontrol over financial reporting as a basis for designing auditprocedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of theCompany’s internal control over financial reporting.Accordingly, we express no such opinion. An audit also includesexamining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements, assessing the accountingprinciples used and significant estimates made by management, andevaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for ouropinion.

In our opinion, the consolidated financialstatements referred to above present fairly, in all material respects,the consolidated financial position of ATT Holding Co. atSeptember  30,  2006 and October  1,  2005, andthe consolidated results of its operations and its cash flows for thefiscal year ended September  30,  2006, the fiscal yearended October  1,  2005, the period ended September25,  2004, and the period ended June  27,  2004(Predecessor Company I), in conformity with U.S. generally acceptedaccounting principles. Also, in our opinion, the financial statementschedule, when considered in relation to the basic financial statementstaken as a whole, presents fairly in all material respects theinformation set forth therein.

|  | /s/ Ernst &Young LLP |
|--|--------------------------|

December  21,2006Philadelphia, Pennsylvania

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ATT HoldingCo.Consolidated Balance Sheets(In Thousands,Except Number of Shares and Per ShareAmounts)

|                                                                                                                                                                  |  |  |                   |   |          |                |  |  |  |   |          |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|-------------------|---|----------|----------------|--|--|--|---|----------|---|
|                                                                                                                                                             |  |  | September30, 2006 |   |          | October 1,2005 |
| Assets                                                                                                                                                           |  |  |                   |   |     |                |  |  |  |   |     |   |
| Currentassets:                                                                                                                                                   |  |  |                   |   |     |                |  |  |  |   |     |   |
| Cash and cashequivalents                                                                                                                                         |  |  |                   | $ | 5,638    |                |  |  |  | $ | 21,394   |   |
| Restrictedcash                                                                                                                                                   |  |  |                   |   | 2,081    |                |  |  |  |   | —  |   |
| Tradereceivables,net                                                                                                                                             |  |  |                   |   | 66,418   |                |  |  |  |   | 49,677   |   |
| Inventories                                                                                                                                                      |  |  |                   |   | 141,239  |                |  |  |  |   | 91,146   |   |
| Deferredincome taxes                                                                                                                                             |  |  |                   |   | 11,063   |                |  |  |  |   | 6,265    |   |
| Prepaidexpenses and other currentassets                                                                                                                          |  |  |                   |   | 6,673    |                |  |  |  |   | 6,472    |   |
| Totalcurrent assets                                                                                                                                              |  |  |                   |   | 233,112  |                |  |  |  |   | 174,954  |   |
| Property, plant andequipment,net                                                                                                                                 |  |  |                   |   | 72,680   |                |  |  |  |   | 61,907   |   |
| Intangibles, net                                                                                                                                                 |  |  |                   |   | 78,450   |                |  |  |  |   | 81,129   |   |
| Goodwill                                                                                                                                                         |  |  |                   |   | 58,359   |                |  |  |  |   | 41,735   |   |
| Other noncurrentassets                                                                                                                                           |  |  |                   |   | 15,720   |                |  |  |  |   | 15,300   |   |
| Totalassets                                                                                                                                                      |  |  |                   | $ | 458,321  |                |  |  |  | $ | 375,025  |   |
| Liabilitiesand stockholders’deficit                                                                                                                        |  |  |                   |   |     |                |  |  |  |   |     |   |
| Currentliabilities:                                                                                                                                              |  |  |                   |   |     |                |  |  |  |   |     |   |
| Trade accountspayable                                                                                                                                            |  |  |                   | $ | 39,773   |                |  |  |  | $ | 34,697   |   |
| Accruedpayroll and relatedtaxes                                                                                                                                  |  |  |                   |   | 3,249    |                |  |  |  |   | 2,368    |   |
| Accruedinterestpayable                                                                                                                                           |  |  |                   |   | 7,325    |                |  |  |  |   | 5,832    |   |
| Accruedexpenses and other currentliabilities                                                                                                                     |  |  |                   |   | 29,424   |                |  |  |  |   | 21,932   |   |
| Revolvingloan                                                                                                                                                    |  |  |                   |   | 66,608   |                |  |  |  |   | —  |   |
| Currentportion of long-termdebt                                                                                                                                  |  |  |                   |   | 528      |                |  |  |  |   | 515      |   |
| Totalcurrentliabilities                                                                                                                                          |  |  |                   |   | 146,907  |                |  |  |  |   | 65,344   |   |
| Deferredincome taxes                                                                                                                                             |  |  |                   |   | 26,325   |                |  |  |  |   | 20,297   |   |
| Long-termdebt                                                                                                                                                    |  |  |                   |   | 301,012  |                |  |  |  |   | 301,433  |   |
| Accruedretirementbenefits                                                                                                                                        |  |  |                   |   | 7,812    |                |  |  |  |   | 17,280   |   |
| Otherliabilities                                                                                                                                                 |  |  |                   |   | 6,992    |                |  |  |  |   | 7,325    |   |
| Totalliabilities                                                                                                                                                 |  |  |                   |   | 489,048  |                |  |  |  |   | 411,679  |   |
| Stockholders’deficit:                                                                                                                                      |  |  |                   |   |     |                |  |  |  |   |     |   |
| Preferredstock-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 |  |  |                   |   | —  |                |  |  |  |   | —  |   |
| Commonstock-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  |  |  |                   |   | —  |                |  |  |  |   | —  |   |
| Commonstock-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    |  |  |                   |   | —  |                |  |  |  |   | —  |   |
| Additionalpaid-incapital                                                                                                                                         |  |  |                   |   | 110,500  |                |  |  |  |   | 110,500  |   |
| Predecessorbasisadjustment                                                                                                                                       |  |  |                   |   | (13,539  | )              |  |  |  |   | (13,539  | ) |
| Retaineddeficit                                                                                                                                                  |  |  |                   |   | (137,597 | )              |  |  |  |   | (133,020 | ) |
| Accumulatedother comprehensive income(loss)                                                                                                                      |  |  |                   |   | 9,909    |                |  |  |  |   | (595     | ) |
| Totalstockholders’deficit                                                                                                                                  |  |  |                   |   | (30,727  | )              |  |  |  |   | (36,654  | ) |
| Totalliabilities and stockholders’deficit                                                                                                                  |  |  |                   | $ | 458,321  |                |  |  |  | $ | 375,025  |   |
|                                                                                                                                                                  |

Seeaccompanying notes.

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Table of Contents

ATT HoldingCo.Consolidated Statements of Operations(Inthousands)

|                                             |  |  |                                  |   |         |                              |  |  |                             |   |          |                        |  |  |  |   |         |   |  |  |  |   |         |   |
|---------------------------------------------|--|--|----------------------------------|---|---------|------------------------------|--|--|-----------------------------|---|----------|------------------------|--|--|--|---|---------|---|--|--|--|---|---------|---|
|                                        |  |  |                             |   |         |                         |  |  | PredecessorCompanyI         |
|                                        |  |  | FiscalyearendedSeptember 30,2006 |   |         | FiscalyearendedOctober1,2005 |  |  | PeriodendedSeptember25,2004 |   |          | PeriodendedJune27,2004 |
|                                        |  |  | (52weeks)                        |   |         | (53weeks)                    |  |  | (13weeks)                   |   |          | (39weeks)              |
| Netsales                                    |  |  |                                  | $ | 483,601 |                              |  |  |                             | $ | 450,604  |                        |  |  |  | $ | 83,044  |   |  |  |  | $ | 355,443 |   |
| Costof goodssold                            |  |  |                                  |   | 355,617 |                              |  |  |                             |   | 344,544  |                        |  |  |  |   | 73,009  |   |  |  |  |   | 256,248 |   |
| Grossprofit                                 |  |  |                                  |   | 127,984 |                              |  |  |                             |   | 106,060  |                        |  |  |  |   | 10,035  |   |  |  |  |   | 99,195  |   |
| Selling,general, and administrativeexpenses |  |  |                                  |   | 96,593  |                              |  |  |                             |   | 77,319   |                        |  |  |  |   | 16,560  |   |  |  |  |   | 58,808  |   |
| (Gain)loss on disposal of fixedassets       |  |  |                                  |   | (370    | )                            |  |  |                             |   | 23       |                        |  |  |  |   | (7      | ) |  |  |  |   | (4,786  | ) |
| Amortizationof intangibleassets             |  |  |                                  |   | 1,836   |                              |  |  |                             |   | 1,754    |                        |  |  |  |   | 477     |   |  |  |  |   | 3,303   |   |
| Impairmentcharges                           |  |  |                                  |   | 6,377   |                              |  |  |                             |   | 122,678  |                        |  |  |  |   | — |   |  |  |  |   | — |   |
| Specialcharges                              |  |  |                                  |   | — |                              |  |  |                             |   | —  |                        |  |  |  |   | — |   |  |  |  |   | 799     |   |
| Operatingincome(loss)                       |  |  |                                  |   | 23,548  |                              |  |  |                             |   | (95,714  | )                      |  |  |  |   | (6,995  | ) |  |  |  |   | 41,071  |   |
| Interestexpense                             |  |  |                                  |   | 33,781  |                              |  |  |                             |   | 32,527   |                        |  |  |  |   | 5,899   |   |  |  |  |   | 7,563   |   |
| Other(income)expense                        |  |  |                                  |   | (5,656  | )                            |  |  |                             |   | (86      | )                      |  |  |  |   | (36     | ) |  |  |  |   | 199     |   |
| (Loss)income beforetaxes                    |  |  |                                  |   | (4,577  | )                            |  |  |                             |   | (128,155 | )                      |  |  |  |   | (12,858 | ) |  |  |  |   | 33,309  |   |
| Incometax (benefit)expense                  |  |  |                                  |   | — |                              |  |  |                             |   | (2,955   | )                      |  |  |  |   | (5,038  | ) |  |  |  |   | 13,928  |   |
| Net(loss)income                             |  |  |                                  | $ | (4,577  | )                            |  |  |                             | $ | (125,200 | )                      |  |  |  | $ | (7,820  | ) |  |  |  | $ | 19,381  |   |
|                                             |

Seeaccompanyingnotes.

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Table of Contents

ATT HoldingCo.Consolidated Statements of Changes inStockholders’ (Deficit) Equity(In Thousands, ExceptNumber ofShares)

|                                                       |  |  |                         |  |         |                     |  |  |                     |   |         |                          |  |  |                            |  |         |                           |  |  |                                             |   |         |                                         |  |  |  |  |         |  |  |  |  |   |         |  |  |  |  |   |         |  |  |  |  |   |         |   |  |  |  |   |          |   |  |  |  |   |         |   |  |  |  |   |          |   |
|-------------------------------------------------------|--|--|-------------------------|--|---------|---------------------|--|--|---------------------|---|---------|--------------------------|--|--|----------------------------|--|---------|---------------------------|--|--|---------------------------------------------|---|---------|-----------------------------------------|--|--|--|--|---------|--|--|--|--|---|---------|--|--|--|--|---|---------|--|--|--|--|---|---------|---|--|--|--|---|----------|---|--|--|--|---|---------|---|--|--|--|---|----------|---|
|                                                  |  |  | SeriesA Preferred Stock |  |         | Class ACommon Stock |  |  | Class B CommonStock |   |         | AdditionalPaid-inCapital |  |  | PredecessorBasisAdjustment |  |         | RetainedEarnings(Deficit) |  |  | Accumulated OtherComprehensiveIncome (Loss) |   |         | TotalStockholders’Equity(Deficit) |
|                                                  |  |  | Shares                  |  |         | Amount              |  |  | Shares              |   |         | Amount                   |  |  | Shares                     |  |         | Amount                    |
| Balanceat June 27, 2004 (Predecessor CompanyI)   |  |  |                         |  | 62,495  |                     |  |  |                     | $ | — |                          |  |  |                            |  | 726,556 |                           |  |  |                                             | $ | — |                                         |  |  |  |  | 267,448 |  |  |  |  | $ | — |  |  |  |  | $ | 63,544  |  |  |  |  | $ | — |   |  |  |  | $ | 37,501   |   |  |  |  | $ | 2,674   |   |  |  |  | $ | 103,719  |   |
| Acquisitionby CHATT HoldingsInc.                      |  |  |                         |  | — |                     |  |  |                     |   | — |                          |  |  |                            |  | — |                           |  |  |                                             |   | — |                                         |  |  |  |  | — |  |  |  |  |   | — |  |  |  |  |   | 46,956  |  |  |  |  |   | (13,539 | ) |  |  |  |   | (37,501  | ) |  |  |  |   | (2,674  | ) |  |  |  |   | (6,758   | ) |
| Netloss                                               |  |  |                         |  | — |                     |  |  |                     |   | — |                          |  |  |                            |  | — |                           |  |  |                                             |   | — |                                         |  |  |  |  | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | — |   |  |  |  |   | (7,820   | ) |  |  |  |   | — |   |  |  |  |   | (7,820   | ) |
| Othercomprehensiveincome:                             |  |  |                         |  |    |                     |  |  |                     |   |    |                          |  |  |                            |  |    |                           |  |  |                                             |   |    |                                         |  |  |  |  |    |  |  |  |  |   |    |  |  |  |  |   |    |  |  |  |  |   |    |   |  |  |  |   |     |   |  |  |  |   |    |   |  |  |  |   |     |   |
| Foreigncurrency translationadjustment                 |  |  |                         |  | — |                     |  |  |                     |   | — |                          |  |  |                            |  | — |                           |  |  |                                             |   | — |                                         |  |  |  |  | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | — |   |  |  |  |   | —  |   |  |  |  |   | 2,248   |   |  |  |  |   | 2,248    |   |
| Comprehensiveloss                                     |  |  |                         |  |    |                     |  |  |                     |   |    |                          |  |  |                            |  |    |                           |  |  |                                             |   |    |                                         |  |  |  |  |    |  |  |  |  |   |    |  |  |  |  |   |    |  |  |  |  |   |    |   |  |  |  |   |     |   |  |  |  |   |    |   |  |  |  |   | (5,572   | ) |
| Balanceat September 25,2004                      |  |  |                         |  | 62,495  |                     |  |  |                     | $ | — |                          |  |  |                            |  | 726,556 |                           |  |  |                                             | $ | — |                                         |  |  |  |  | 267,448 |  |  |  |  | $ | — |  |  |  |  | $ | 110,500 |  |  |  |  | $ | (13,539 | ) |  |  |  | $ | (7,820   | ) |  |  |  | $ | 2,248   |   |  |  |  | $ | 91,389   |   |
| Netloss                                               |  |  |                         |  | — |                     |  |  |                     |   | — |                          |  |  |                            |  | — |                           |  |  |                                             |   | — |                                         |  |  |  |  | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | — |   |  |  |  |   | (125,200 | ) |  |  |  |   | — |   |  |  |  |   | (125,200 | ) |
| Othercomprehensive (loss)income:                      |  |  |                         |  |    |                     |  |  |                     |   |    |                          |  |  |                            |  |    |                           |  |  |                                             |   |    |                                         |  |  |  |  |    |  |  |  |  |   |    |  |  |  |  |   |    |  |  |  |  |   |    |   |  |  |  |   |     |   |  |  |  |   |    |   |  |  |  |   |     |   |
| Foreigncurrency translationadjustment                 |  |  |                         |  | — |                     |  |  |                     |   | — |                          |  |  |                            |  | — |                           |  |  |                                             |   | — |                                         |  |  |  |  | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | — |   |  |  |  |   | —  |   |  |  |  |   | 4,841   |   |  |  |  |   | 4,841    |   |
| Minimumpension liability, net of taxbenefit           |  |  |                         |  | — |                     |  |  |                     |   | — |                          |  |  |                            |  | — |                           |  |  |                                             |   | — |                                         |  |  |  |  | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | — |   |  |  |  |   | —  |   |  |  |  |   | (8,371  | ) |  |  |  |   | (8,371   | ) |
| Changein fair value of interest rate swaps, net oftax |  |  |                         |  | — |                     |  |  |                     |   | — |                          |  |  |                            |  | — |                           |  |  |                                             |   | — |                                         |  |  |  |  | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | — |   |  |  |  |   | —  |   |  |  |  |   | 687     |   |  |  |  |   | 687      |   |
| Comprehensiveloss                                     |  |  |                         |  |    |                     |  |  |                     |   |    |                          |  |  |                            |  |    |                           |  |  |                                             |   |    |                                         |  |  |  |  |    |  |  |  |  |   |    |  |  |  |  |   |    |  |  |  |  |   |    |   |  |  |  |   |     |   |  |  |  |   |    |   |  |  |  |   | (128,043 | ) |
| Balanceat October  1,2005                             |  |  |                         |  | 62,495  |                     |  |  |                     | $ | — |                          |  |  |                            |  | 726,556 |                           |  |  |                                             | $ | — |                                         |  |  |  |  | 267,448 |  |  |  |  | $ | — |  |  |  |  | $ | 110,500 |  |  |  |  | $ | (13,539 | ) |  |  |  | $ | (133,020 | ) |  |  |  | $ | (595    | ) |  |  |  | $ | (36,654  | ) |
| Netloss                                               |  |  |                         |  | — |                     |  |  |                     |   | — |                          |  |  |                            |  | — |                           |  |  |                                             |   | — |                                         |  |  |  |  | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | — |   |  |  |  |   | (4,577   | ) |  |  |  |   | — |   |  |  |  |   | (4,577   | ) |
| Othercomprehensiveincome:                             |  |  |                         |  |    |                     |  |  |                     |   |    |                          |  |  |                            |  |    |                           |  |  |                                             |   |    |                                         |  |  |  |  |    |  |  |  |  |   |    |  |  |  |  |   |    |  |  |  |  |   |    |   |  |  |  |   |     |   |  |  |  |   |    |   |  |  |  |   |     |   |
| Foreigncurrency translationadjustment                 |  |  |                         |  | — |                     |  |  |                     |   | — |                          |  |  |                            |  | — |                           |  |  |                                             |   | — |                                         |  |  |  |  | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | — |   |  |  |  |   | —  |   |  |  |  |   | 1,772   |   |  |  |  |   | 1,772    |   |
| Minimumpension liability, net oftax                   |  |  |                         |  | — |                     |  |  |                     |   | — |                          |  |  |                            |  | — |                           |  |  |                                             |   | — |                                         |  |  |  |  | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | — |   |  |  |  |   | —  |   |  |  |  |   | 7,794   |   |  |  |  |   | 7,794    |   |
| Changein fair value of interest rate swaps, net oftax |  |  |                         |  | — |                     |  |  |                     |   | — |                          |  |  |                            |  | — |                           |  |  |                                             |   | — |                                         |  |  |  |  | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | — |   |  |  |  |   | —  |   |  |  |  |   | 938     |   |  |  |  |   | 938      |   |
| Comprehensiveincome                                   |  |  |                         |  |    |                     |  |  |                     |   |    |                          |  |  |                            |  |    |                           |  |  |                                             |   |    |                                         |  |  |  |  |    |  |  |  |  |   |    |  |  |  |  |   |    |  |  |  |  |   |    |   |  |  |  |   |     |   |  |  |  |   |    |   |  |  |  |   | 5,927    |   |
| Balanceat September  30,2006                          |  |  |                         |  | 62,495  |                     |  |  |                     | $ | — |                          |  |  |                            |  | 726,556 |                           |  |  |                                             | $ | — |                                         |  |  |  |  | 267,448 |  |  |  |  | $ | — |  |  |  |  | $ | 110,500 |  |  |  |  | $ | (13,539 | ) |  |  |  | $ | (137,597 | ) |  |  |  | $ | 9,909   |   |  |  |  | $ | (30,727  | ) |
|                                                       |

Seeaccompanying notes.

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ATT HoldingCo.Consolidated Statement of Changes inStockholders’ Equity (PredecessorCompany I)(In Thousands, Except Number ofShares)

|                                             |  |  |                        |  |         |                     |  |  |                     |   |         |                          |  |  |                  |  |         |                                     |  |  |                                |   |         |  |  |  |  |  |         |  |  |  |  |   |         |  |  |  |  |   |         |  |  |  |  |   |         |  |  |  |  |   |         |   |  |  |  |   |         |   |
|---------------------------------------------|--|--|------------------------|--|---------|---------------------|--|--|---------------------|---|---------|--------------------------|--|--|------------------|--|---------|-------------------------------------|--|--|--------------------------------|---|---------|--|--|--|--|--|---------|--|--|--|--|---|---------|--|--|--|--|---|---------|--|--|--|--|---|---------|--|--|--|--|---|---------|---|--|--|--|---|---------|---|
|                                        |  |  | SeriesA PreferredStock |  |         | Class A CommonStock |  |  | Class B CommonStock |   |         | AdditionalPaid-inCapital |  |  | RetainedEarnings |  |         | AccumulatedOtherComprehensiveIncome |  |  | TotalStockholders’Equity |
|                                        |  |  | Shares                 |  |         | Amount              |  |  | Shares              |   |         | Amount                   |  |  | Shares           |  |         | Amount                              |
| Balanceat September 27,2003            |  |  |                        |  | 62,495  |                     |  |  |                     |   | — |                          |  |  |                  |  | 726,706 |                                     |  |  |                                |   | — |  |  |  |  |  | 267,448 |  |  |  |  |   | — |  |  |  |  |   | 63,543  |  |  |  |  |   | 18,120  |  |  |  |  |   | 2,510   |   |  |  |  |   | 84,173  |   |
| Issuanceof commonstock                      |  |  |                        |  | — |                     |  |  |                     |   | — |                          |  |  |                  |  | 600     |                                     |  |  |                                |   | — |  |  |  |  |  | — |  |  |  |  |   | — |  |  |  |  |   | 1       |  |  |  |  |   | — |  |  |  |  |   | — |   |  |  |  |   | 1       |   |
| Purchaseof treasurystock                    |  |  |                        |  | — |                     |  |  |                     |   | — |                          |  |  |                  |  | (750    | )                                   |  |  |                                |   | — |  |  |  |  |  | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | — |   |  |  |  |   | — |   |
| Netincome                                   |  |  |                        |  | — |                     |  |  |                     |   | — |                          |  |  |                  |  | — |                                     |  |  |                                |   | — |  |  |  |  |  | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | 19,381  |  |  |  |  |   | — |   |  |  |  |   | 19,381  |   |
| Othercomprehensive (loss)income:            |  |  |                        |  |    |                     |  |  |                     |   |    |                          |  |  |                  |  |    |                                     |  |  |                                |   |    |  |  |  |  |  |    |  |  |  |  |   |    |  |  |  |  |   |    |  |  |  |  |   |    |  |  |  |  |   |    |   |  |  |  |   |    |   |
| Foreigncurrency translationadjustment       |  |  |                        |  | — |                     |  |  |                     |   | — |                          |  |  |                  |  | — |                                     |  |  |                                |   | — |  |  |  |  |  | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | 217     |   |  |  |  |   | 217     |   |
| Minimumpension liability, net of taxbenefit |  |  |                        |  | — |                     |  |  |                     |   | — |                          |  |  |                  |  | — |                                     |  |  |                                |   | — |  |  |  |  |  | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | — |  |  |  |  |   | (53     | ) |  |  |  |   | (53     | ) |
| Comprehensiveincome                         |  |  |                        |  |    |                     |  |  |                     |   |    |                          |  |  |                  |  |    |                                     |  |  |                                |   |    |  |  |  |  |  |    |  |  |  |  |   |    |  |  |  |  |   |    |  |  |  |  |   |    |  |  |  |  |   |    |   |  |  |  |   | 19,545  |   |
| Balanceat June 27,2004                 |  |  |                        |  | 62,495  |                     |  |  |                     | $ | — |                          |  |  |                  |  | 726,556 |                                     |  |  |                                | $ | — |  |  |  |  |  | 267,448 |  |  |  |  | $ | — |  |  |  |  | $ | 63,544  |  |  |  |  | $ | 37,501  |  |  |  |  | $ | 2,674   |   |  |  |  | $ | 103,719 |   |
|                                             |

Seeaccompanying notes.

39

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ATT HoldingCo.Consolidated Statements of Cash Flows(InThousands)

|                                                                                                 |  |  |                                  |   |         |                               |  |  |                              |   |          |                         |  |  |  |   |          |   |  |  |  |   |         |   |
|-------------------------------------------------------------------------------------------------|--|--|----------------------------------|---|---------|-------------------------------|--|--|------------------------------|---|----------|-------------------------|--|--|--|---|----------|---|--|--|--|---|---------|---|
|                                                                                            |  |  |                             |   |         |                          |  |  | PredecessorCompanyI          |
|                                                                                            |  |  | FiscalyearendedSeptember 30,2006 |   |         | FiscalyearendedOctober 1,2005 |  |  | PeriodendedSeptember 25,2004 |   |          | Period endedJune27,2004 |
| Operatingactivities                                                                             |  |  |                                  |   |    |                               |  |  |                              |   |     |                         |  |  |  |   |     |   |  |  |  |   |    |   |
| Net(loss)income                                                                                 |  |  |                                  | $ | (4,577  | )                             |  |  |                              | $ | (125,200 | )                       |  |  |  | $ | (7,820   | ) |  |  |  | $ | 19,381  |   |
| Adjustmentsto reconcile net (loss) income to net cash (used in) provided byoperatingactivities: |  |  |                                  |   |    |                               |  |  |                              |   |     |                         |  |  |  |   |     |   |  |  |  |   |    |   |
| Depreciationexpense                                                                             |  |  |                                  |   | 12,143  |                               |  |  |                              |   | 10,277   |                         |  |  |  |   | 2,626    |   |  |  |  |   | 5,953   |   |
| Amortizationof intangibleassets                                                                 |  |  |                                  |   | 1,836   |                               |  |  |                              |   | 1,754    |                         |  |  |  |   | 477      |   |  |  |  |   | 3,303   |   |
| Amortizationof loanfees                                                                         |  |  |                                  |   | 2,440   |                               |  |  |                              |   | 6,496    |                         |  |  |  |   | 453      |   |  |  |  |   | 661     |   |
| Provisionfor baddebts                                                                           |  |  |                                  |   | (120    | )                             |  |  |                              |   | (88      | )                       |  |  |  |   | 66       |   |  |  |  |   | (95     | ) |
| Provisionfor deferredtaxes                                                                      |  |  |                                  |   | (1,916  | )                             |  |  |                              |   | (1,105   | )                       |  |  |  |   | (4,080   | ) |  |  |  |   | 5,281   |   |
| Noncashinterestexpense                                                                          |  |  |                                  |   | 271     |                               |  |  |                              |   | 355      |                         |  |  |  |   | —  |   |  |  |  |   | 206     |   |
| (Gain)loss on disposal of fixedassets                                                           |  |  |                                  |   | (370    | )                             |  |  |                              |   | 23       |                         |  |  |  |   | (7       | ) |  |  |  |   | (4,786  | ) |
| Amortizationof bonddiscount                                                                     |  |  |                                  |   | 107     |                               |  |  |                              |   | 80       |                         |  |  |  |   | —  |   |  |  |  |   | — |   |
| Impairmentcharges                                                                               |  |  |                                  |   | 6,377   |                               |  |  |                              |   | 122,678  |                         |  |  |  |   | —  |   |  |  |  |   | — |   |
| Changesin assets and liabilities, net of effects ofacquisitions:                                |  |  |                                  |   |    |                               |  |  |                              |   |     |                         |  |  |  |   |     |   |  |  |  |   |    |   |
| Accountsreceivable                                                                              |  |  |                                  |   | 955     |                               |  |  |                              |   | 8,247    |                         |  |  |  |   | 35,233   |   |  |  |  |   | (40,754 | ) |
| Inventories                                                                                     |  |  |                                  |   | (31,649 | )                             |  |  |                              |   | 7,071    |                         |  |  |  |   | 4,082    |   |  |  |  |   | (18,737 | ) |
| Prepaidexpenses and otherassets                                                                 |  |  |                                  |   | 161     |                               |  |  |                              |   | (7,908   | )                       |  |  |  |   | 1,235    |   |  |  |  |   | (21     | ) |
| Accountspayable                                                                                 |  |  |                                  |   | (2,015  | )                             |  |  |                              |   | 5,771    |                         |  |  |  |   | (11,528  | ) |  |  |  |   | 14,588  |   |
| Accruedexpenses and otherliabilities                                                            |  |  |                                  |   | 605     |                               |  |  |                              |   | 1,696    |                         |  |  |  |   | 105      |   |  |  |  |   | 729     |   |
| Netcash (used in) provided by operatingactivities                                               |  |  |                                  |   | (15,752 | )                             |  |  |                              |   | 30,147   |                         |  |  |  |   | 20,842   |   |  |  |  |   | (14,291 | ) |
| Investingactivities                                                                             |  |  |                                  |   |    |                               |  |  |                              |   |     |                         |  |  |  |   |     |   |  |  |  |   |    |   |
| Acquisitionof businesses, net of cashacquired                                                   |  |  |                                  |   | (50,126 | )                             |  |  |                              |   | (225     | )                       |  |  |  |   | (306,374 | ) |  |  |  |   | (236    | ) |
| Restrictedcash inescrow                                                                         |  |  |                                  |   | (2,081  | )                             |  |  |                              |   | —  |                         |  |  |  |   | —  |   |  |  |  |   | — |   |
| Purchaseof fixedassets                                                                          |  |  |                                  |   | (15,797 | )                             |  |  |                              |   | (11,600  | )                       |  |  |  |   | (1,624   | ) |  |  |  |   | (4,219  | ) |
| Proceedsfrom sale of fixedassets                                                                |  |  |                                  |   | 2,763   |                               |  |  |                              |   | 523      |                         |  |  |  |   | 7        |   |  |  |  |   | 5,095   |   |
| Investmentin joint ventures                                                                     |  |  |                                  |   | 100     |                               |  |  |                              |   | (108     | )                       |  |  |  |   | —  |   |  |  |  |   | — |   |
| Netcash (used in) provided by investingactivities                                               |  |  |                                  |   | (65,141 | )                             |  |  |                              |   | (11,410  | )                       |  |  |  |   | (307,991 | ) |  |  |  |   | 640     |   |
| Financingactivities                                                                             |  |  |                                  |   |    |                               |  |  |                              |   |     |                         |  |  |  |   |     |   |  |  |  |   |    |   |
| Repaymentsof long-termdebt                                                                      |  |  |                                  |   | (515    | )                             |  |  |                              |   | (140,206 | )                       |  |  |  |   | (60,936  | ) |  |  |  |   | (15,731 | ) |
| Borrowings(repayments) on revolver,net                                                          |  |  |                                  |   | 66,608  |                               |  |  |                              |   | (6,300   | )                       |  |  |  |   | (24,021  | ) |  |  |  |   | 28,380  |   |
| Borrowingson long-term debt                                                                     |  |  |                                  |   | — |                               |  |  |                              |   | 152,074  |                         |  |  |  |   | 290,000  |   |  |  |  |   | — |   |
| Debtissuancecosts                                                                               |  |  |                                  |   | (1,419  | )                             |  |  |                              |   | (4,463   | )                       |  |  |  |   | (13,598  | ) |  |  |  |   | — |   |
| Proceedsfrom issuance of capitalstock                                                           |  |  |                                  |   | — |                               |  |  |                              |   | —  |                         |  |  |  |   | —  |   |  |  |  |   | 1       |   |
| Capitalcontributions frombuyer                                                                  |  |  |                                  |   | — |                               |  |  |                              |   | —  |                         |  |  |  |   | 96,585   |   |  |  |  |   | — |   |
| Netcash provided by financingactivities                                                         |  |  |                                  |   | 64,674  |                               |  |  |                              |   | 1,105    |                         |  |  |  |   | 288,030  |   |  |  |  |   | 12,650  |   |
| Effectof exchange rate changes oncash                                                           |  |  |                                  |   | 463     |                               |  |  |                              |   | 302      |                         |  |  |  |   | (534     | ) |  |  |  |   | 216     |   |
| (Decrease)increase in cash and cashequivalents                                                  |  |  |                                  |   | (15,756 | )                             |  |  |                              |   | 20,144   |                         |  |  |  |   | 347      |   |  |  |  |   | (785    | ) |
| Cashand cash equivalents at beginning ofperiod                                                  |  |  |                                  |   | 21,394  |                               |  |  |                              |   | 1,250    |                         |  |  |  |   | 903      |   |  |  |  |   | 1,688   |   |
| Cashand cash equivalents at end ofperiod                                                        |  |  |                                  | $ | 5,638   |                               |  |  |                              | $ | 21,394   |                         |  |  |  | $ | 1,250    |   |  |  |  | $ | 903     |   |
|                                                                                                 |

Seeaccompanying notes.

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ATTHolding Co.

Notes to ConsolidatedStatements

(Dollars inThousands, Except Share Data)

|          |                                      |
|----------|--------------------------------------|
| 1.  | Formation andDescription of Business |

ATT Holding Co. and itssubsidiaries (the ‘‘Company’’) manufactureand market non-powered lawn and garden tools and accessories primarilyin North America and Europe. The Company refers to operationssubsequent to June 27, 2004. Operations from September28,  2003 to June 27, 2004 are referred to as‘‘PredecessorCompany I’’.

The accompanyingconsolidated financial statements present the financial position of theCompany as of September  30,  2006 and October1,  2005, and the results of operations, changes instockholders’ (deficit) equity, and cash flows of the Companyfor the fiscal year ended September  30,  2006, fiscal yearended 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 thePredecessor Company I from September  28,  2003 toJune  27,  2004.

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

On June 28, 2004, the Company completed thesale of all outstanding common and preferred stock and warrants ofPredecessor Company I to affiliates of Castle Harlan, a New Yorkprivate-equity investment firm. CHATT Holdings Inc., the‘‘buyer’’, and CHATT Holdings LLC, the‘‘buyer parent’’, were created to make theacquisition of the Company. Approximately 87% of the equityinterests of the buyer parent are owned by affiliates of Castle Harlan,and the remainder were issued to members of our management who heldcapital stock in the Predecessor Company I, in lieu of cashconsideration that they otherwise would have been entitled to receivein the acquisition. In addition, certain members of management that didnot hold equity in Predecessor Company I purchased an equityinterest in the buyer parent for cash.

The transaction wasvalued at approximately $380,000, plus $6,345 in transaction costs anda working capital adjustment of $27,771. In connection with the sale,Ames True Temper, Inc., which is a 100% owned subsidiary of theCompany, entered into a new credit facility, at which time all existingindebtedness was repaid. In connection with the new facility, ATTHolding Co. fully and unconditionally guaranteed the $150,00010% Senior Subordinated Notes due 2012 (and subsequently the$150,000 Senior Floating Rate Notes due 2012). ATT Holding Co. has noother subsidiaries other than Ames True Temper, Inc. and has noindependent assets or operations separate from the investment in AmesTrue Temper, Inc. Ames True Temper, Inc. is restricted by the CreditAgreement dated as of June 28, 2004, as amended to date, toprovide funds to ATT Holding Co., except for the provisions describedtherein.

The Company’s fiscal year generally endson the Saturday nearest toSeptember 30.

|          |                                |
|----------|--------------------------------|
| 2.  | Significant AccountingPolicies |

Use of Estimates

The preparation offinancial statements in conformity with accounting principles generallyaccepted in the United States requires management to make estimates andassumptions that affect the amounts reported in the financialstatements and accompanying notes. Actual results could differ fromthose estimates.

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ATTHolding Co.

Notes to ConsolidatedStatements (Continued)

Principles ofConsolidation

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

Cash and CashEquivalents

Cash equivalents represent short-term, highlyliquid investments, which have maturities of 90 days or less whenpurchased. The Company had restricted cash in the form of an escrowdeposit for an outstanding letter of credit. The carrying amount ofcash and cash equivalents approximates fair value.

AccountsReceivable

Accounts receivable are reported net of anallowance for doubtful accounts, customer program reserves and cashdiscounts. The allowance for doubtful accounts is based onmanagement’s estimate of the amount of receivables that willactually be collected including consideration of historical levels ofwrite-off. Accounts are considered past due based on how payments arereceived compared to the customer’s credit terms. Accounts arewritten 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 amountsdue for volume discounts and co-op advertising programs to certain ofits customers. Cash discounts are management’s estimate of thecustomers ability to pay within the billing terms in order to receivethe discount.

Inventories

Inventories are statedat the lower of cost, which is determined by the first-in, first-outmethod, or market.

Investments

The Companyaccounts for its investments in accordance with the cost method. Theinvestments are included in other non-current assets. The Company hasinvestments in four cooperative joint ventures in China with certainexclusive marketing rights to sell, outside China, productsmanufactured by the four separate joint ventures. The Company’sinterests in the joint ventures range between 25% and35%. The Company does not share in either the profit or loss andhas minority representation on the Board of Directors of each of thejoint ventures.

Property, Plant andEquipment

Property, plant and equipment are stated on thebasis of cost less accumulated depreciation provided under thestraight-line method. Buildings and building improvements aredepreciated based on lives of 25 and 10 years, respectively. Landimprovements and leasehold improvements are depreciated based on livesof 15 and 10 years (or less, depending on the life of thelease), respectively. Machinery and equipment is depreciated based onlives ranging from three to seven years, and furniture and fixturesbased on a life of five years. Expenditures for major additions andimprovements are capitalized, while minor replacements, maintenance,and repairs are charged to expense as incurred. When property isretired or otherwise disposed of, the costs and accumulateddepreciation are removed from the accounts. Any resulting gain or lossis recognized currently. Construction in progress is comprised ofongoing development costs associated with upgrades andadditions.

Long-Lived Assets

Statement ofFinancial Accounting Standards (‘‘SFAS’’)No. 144, Accounting for the Impairment or Disposal ofLong-Lived Assets, requires that companies consider whetherindicators of impairment of 

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ATTHolding Co.

Notes to ConsolidatedStatements (Continued)

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

Goodwill and Other IntangibleAssets

Effective January 14, 2002, PredecessorCompany I, and the Company adopted SFAS No. 141, BusinessCombinations, and SFAS No. 142, Goodwill and OtherIntangible Assets. SFAS No. 141, which addresses financialaccounting and reporting for business combinations, requires the use ofthe purchase method of accounting for business combinations initiatedafter June 30, 2001 and prohibits the use of thepooling-of-interests method. SFAS No. 141 also includes guidanceon the initial recognition and measurement of goodwill and otherintangible assets.

SFAS No. 142 prohibits theamortization of goodwill and intangible assets with indefinite usefullives and requires that these assets be tested for impairment. Inaddition to goodwill, the Company has tradenames that are deemed tohave indefinite lives. Intangible assets with finite lives areamortized over their useful lives. Under the provisions of SFASNo. 142, intangible assets, including goodwill, that are notsubject to amortization will be tested for impairment annually, or morefrequently if events or changes in circumstances indicate that theasset might be impaired, using a two-step impairment assessment. Thefirst step of the impairment test, used to identify potentialimpairment, compares the fair value of a reporting unit with itscarrying amount, including the indefinite-lived assets. If the fairvalue of the reporting unit exceeds its carrying amount, theindefinite-lived assets of the reporting unit is considered notimpaired, and the second step of the impairment test is not necessary.If the carrying amount of a reporting unit exceeds its fair value, thesecond step of the goodwill impairment test is performed to measure theamount of impairment loss, if any. The Company uses financialprojections and certain cash flow measures in its determination of thefair value of these assets. During fiscal year 2005, the Companyperformed the required impairment test of goodwill and other intangibleassets using a discounted cash flow analysis. The analysis included thedecreased profitability as a result of increased commodity prices,which caused financials results to differ materially from the expectedresults at the time of the purchase of the Company in June  2004.This resulted in goodwill impairment of $119,753. The Company completedthe annual impairment tests at September  30,  2006, whichresulted in an impairment in trade names of $5,948. The impairment oftrade names was primarily the result of a shift in branding strategy bycertain customers during the fiscal year.

Debt IssuanceCosts

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

Income Tax

Deferred tax assets andliabilities are computed based on the difference between the financialreporting and tax bases of assets and liabilities using enacted taxrates and laws. Deferred income tax expense or benefit is based onchanges in deferred tax assets and liabilities from period toperiod.

Revenue and Cost Recognition

Revenue isrecognized upon shipment of products or delivery of products to thecustomer depending on the terms of the sale. The Company offers volumediscounts and co-op advertising programs to 

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ATTHolding Co.

Notes to ConsolidatedStatements (Continued)

certain of its customers. The discounts andco-op advertising program expense are estimated and accrued for at thetime of sale to the customer based on expected annual rates atestablished volume thresholds. The adequacy of the accruals isre-assessed quarterly, monitoring the customer’s progress towardearning any applicable volume rebate. Discounts provided to customersare recorded as a reduction of sales, while expenses associated withco-op advertising are recorded as part of selling, general andadmininstrative expenses in accordance with Emerging Issues Task Force(‘‘EITF’’) 01-9. Provisions are made forestimated sales returns and allowances at the time of the sale. Suchamounts, which are included in net sales, totaled $6,144, $8,511,$3,325, and $4,489 for the fiscal year ended September30,  2006, the fiscal year ended October  1,  2005,the period ended September 25, 2004, and the period endedJune 27, 2004, respectively.

Shipping and HandlingCosts

All shipping and handling costs are expensed asincurred. Costs incurred to ship product from the manufacturingfacility and distribution centers to the customer and from plants andour main distribution center to our West Coast distribution facilityare included in costs of goods sold and totaled $21,258, $18,773,$3,889 and $14,224 for the fiscal year ended September30,  2006, the fiscal year ended October  1,  2005,the period ended September 25, 2004 and the period endedJune 27, 2004, respectively. Costs to ship the product frommanufacturing facilities to the main distribution center is included inselling, 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 periodended September 25, 2004, and the period ended June 27,2004, respectively.

Advertising Costs

Advertisingcosts 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 endedSeptember 25, 2004, and the period ended June 27, 2004,respectively.

Research and DevelopmentCosts

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

ForeignCurrency Translation

The financial statements of theCompany’s foreign operations are measured using the localcurrency as the functional currency. Assets and liabilities of foreignsubsidiaries are translated at the exchange rates as of the balancesheet date. Resulting translation adjustments, net of the relatedincome tax effects, are recorded in the currency translation adjustmentaccount, a separate component of Accumulated Other Comprehensive Income(Loss). Income and expense items are translated at average monthlyexchange rates. Gains and losses from foreign currency transactions areincluded in net income.

Accumulated Other Comprehensive Income(Loss)

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

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ATTHolding Co.

Notes to ConsolidatedStatements (Continued)

|                                    |  |  |                  |   |         |                  |  |  |                     |   |         |                  |  |  |               |   |         |   |  |  |  |   |        |   |  |  |  |   |        |   |
|------------------------------------|--|--|------------------|---|---------|------------------|--|--|---------------------|---|---------|------------------|--|--|---------------|---|---------|---|--|--|--|---|--------|---|--|--|--|---|--------|---|
|                               |  |  | BeginningBalance |   |         | Before-TaxAmount |  |  | TaxBenefit(Expense) |   |         | Net-of-TaxAmount |  |  | EndingBalance |
| September30,2006                   |  |  |                  |   |    |                  |  |  |                     |   |    |                  |  |  |               |   |    |   |  |  |  |   |   |   |  |  |  |   |   |   |
| Currencytranslationadjustment      |  |  |                  | $ | 7,089   |                  |  |  |                     | $ | 1,772   |                  |  |  |               | $ | — |   |  |  |  | $ | 1,772  |   |  |  |  | $ | 8,861  |   |
| Minimumpension liabilityadjustment |  |  |                  |   | (8,371  | )                |  |  |                     |   | 12,666  |                  |  |  |               |   | (4,872  | ) |  |  |  |   | 7,794  |   |  |  |  |   | (577   | ) |
| Interestrateswaps                  |  |  |                  |   | 687     |                  |  |  |                     |   | 1,513   |                  |  |  |               |   | (575    | ) |  |  |  |   | 938    |   |  |  |  |   | 1,625  |   |
|                               |  |  |                  | $ | (595    | )                |  |  |                     | $ | 15,951  |                  |  |  |               | $ | (5,447  | ) |  |  |  | $ | 10,504 |   |  |  |  | $ | 9,909  |   |
| October1,2005                      |  |  |                  |   |    |                  |  |  |                     |   |    |                  |  |  |               |   |    |   |  |  |  |   |   |   |  |  |  |   |   |   |
| Currencytranslationadjustment      |  |  |                  | $ | 2,248   |                  |  |  |                     | $ | 4,841   |                  |  |  |               | $ | — |   |  |  |  | $ | 4,841  |   |  |  |  | $ | 7,089  |   |
| Minimumpension liabilityadjustment |  |  |                  |   | — |                  |  |  |                     |   | (13,502 | )                |  |  |               |   | 5,131   |   |  |  |  |   | (8,371 | ) |  |  |  |   | (8,371 | ) |
| Interestrateswaps                  |  |  |                  |   | — |                  |  |  |                     |   | 1,108   |                  |  |  |               |   | (421    | ) |  |  |  |   | 687    |   |  |  |  |   | 687    |   |
|                               |  |  |                  | $ | 2,248   |                  |  |  |                     | $ | (7,553  | )                |  |  |               | $ | 4,710   |   |  |  |  | $ | (2,843 | ) |  |  |  | $ | (595   | ) |
| September 25,2004             |  |  |                  |   |    |                  |  |  |                     |   |    |                  |  |  |               |   |    |   |  |  |  |   |   |   |  |  |  |   |   |   |
| Currencytranslationadjustment      |  |  |                  | $ | — |                  |  |  |                     | $ | 3,696   |                  |  |  |               | $ | (1,448  | ) |  |  |  | $ | 2,248  |   |  |  |  | $ | 2,248  |   |
| PredecessorCompany I          |  |  |                  |   |    |                  |  |  |                     |   |    |                  |  |  |               |   |    |   |  |  |  |   |   |   |
| June 27,2004                  |  |  |                  |   |    |                  |  |  |                     |   |    |                  |  |  |               |   |    |   |  |  |  |   |   |   |  |  |  |   |   |   |
| Currencytranslationadjustment      |  |  |                  | $ | 2,536   |                  |  |  |                     | $ | 372     |                  |  |  |               | $ | (155    | ) |  |  |  | $ | 217    |   |  |  |  | $ | 2,753  |   |
| Minimumpension liabilityadjustment |  |  |                  |   | (26     | )                |  |  |                     |   | (90     | )                |  |  |               |   | 37      |   |  |  |  |   | (53    | ) |  |  |  |   | (79    | ) |
|                               |  |  |                  | $ | 2,510   |                  |  |  |                     | $ | 282     |                  |  |  |               | $ | (118    | ) |  |  |  | $ | 164    |   |  |  |  | $ | 2,674  |   |
|                                    |

FairValue of Financial Instruments

The Company’sfinancial instruments include cash and cash equivalents, accountsreceivable, accounts payable and long-term debt. The Company usesinterest rate swap agreements to manage risk on its floating-ratedebt.

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

SegmentReporting

Operating segments are defined as components ofan enterprise for which separate financial information is availablethat is evaluated regularly by chief operating decision makers indeciding how to allocate resources in assessing performance. All of theCompany’s operations are classified within one businesssegment.

Labor Availability

The industry is laborintensive and requires an adequate supply of labor. As ofSeptember  30,  2006, approximately 29% of theCompany’s employees are subject to collective bargainingagreements.

Material Suppliers

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

Stock-BasedCompensation

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

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ATTHolding Co.

Notes to ConsolidatedStatements (Continued)

three criteria: (1) time vesting based on afive year term, (2) performance vesting based on the results of AmesTrue Temper, Inc. and (3) vesting based upon a targeted rate of returnupon change of control. There are certain acceleration clauses in theevent of a change of control. As of September  30,  2006and October  1,  2005, there were 161,756 and 136,014incentive units, respectively, issued to management and members of theCHATT Holdings LLC Board of Directors that are not employees of AmesTrue Temper, Inc. or Castle Harlan, Inc. Additionally, an affiliate ofCastle Harlan holds 27,768 and 59,273 units at September30,  2006 and October  1,  2005 , respectively, thatwill be used for future awards. These units may not be sold, pledged orotherwise transferred under securities law. Additional restrictions andlimitations are set forth in the agreement. These units are accountedfor under Financial Accounting Standards Board (FASB) InterpretationNo. 44 of APB No. 25, Accounting for Stock Issued to Employees.For the fiscal years ended September  30,  2006 andOctober  1,  2005, there was no expense recorded related tothese units.

Derivatives

The Company’s cashflows and earnings are subject to fluctuations resulting from changesin interest rates, foreign currency exchange rates and raw materialcosts. The Company manages the exposure to these market risks throughinternally established policies and procedures and, when deemedappropriate, through the use of derivative financial instruments. TheCompany’s policy does not allow speculation in derivativeinstruments for profit or execution of derivative instrument contractsfor which there are no underlying exposures. The Company does not usefinancial instruments for trading purposes and are not a party to anyleveraged derivatives.

During fiscal 2005, the Companyentered into two interest rate swaps that are accounted for inaccordance with SFAS No. 133, Accounting for Derivative Instrumentsand Hedging Activities, as amended by SFAS No. 138, Accountingfor Certain Derivative Instruments and Certain Hedging Activitiesand SFAS No. 149, Amendment of Statement 133 on DerivativeInstruments and Hedging Activities (collectively,‘‘SFAS 133’’). SFAS 133 establishesaccounting and reporting standards for derivative instruments andhedging activities. SFAS 133 requires that all derivatives berecognized as either assets or liabilities at fairvalue.

The accounting for gains and losses associated withchanges in the fair value of the derivative and the effect on theconsolidated financial statements depends on its hedge designation andwhether the hedge is highly effective in achieving offsetting changesin the fair value of cash flows of the asset or liability hedged. Anydeferred gains or losses associated with derivative instruments, whichon infrequent occasions may be terminated prior to maturity, arerecognized in income in the period in which the underlying hedgedtransaction is recognized. In the event a designated hedged item issold, extinguished, or matures prior to the termination of the relatedderivative instrument, such instrument would be closed and theresulting gain or loss would be recognized in income.

TheCompany has structured all existing interest rate swap agreements to beperfectly effective. As a result, there is no current impact toearnings resulting from hedge ineffectiveness. The Company periodicallyreassesses the effectiveness of the swap. If the swaps were deemed tobe ineffective a gain or loss would be recognized in income. The changein values of the interest rate swaps is reflected in the activity ofother comprehensive income, net of deferred taxes. For the fiscal yearsended 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 othercomprehensive income of $938 and $687, net of deferred taxes of $575and $421, for the fiscal years ended September  30,  2006and October  1,  2005, respectively. The fair market valuesof the interest rate swap agreements, which were obtained from brokerquotes are included on the consolidated balance sheet as ofSeptember  30,  2006 and October  1,  2005. Thechanges in fair market values are reflected in other non-current assetsand other comprehensive loss.

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Notes to ConsolidatedStatements (Continued)

Recent AccountingPronouncements

In September  2006, SFAS No. 158,Employers’ Accounting for Defined Benefit Pension and OtherPostretirement Plans, an amendment of SFAS statements No. 87, 88,106 and 132(R) to improve financial reporting by requiring an employerto recognize the overfunded or underfunded status of a defined benefitpost retirement plan as an asset or liability was issued. The Statementrequires employers to recognize changes in the funded status as of thedate of the year end financial statements. SFAS 158 is effective forfiscal years ending after December  15,  2006. The Companyis currently evaluating what effect, if any, adoption of SFAS 158 willhave on the Company’s consolidated financial statements, whichwill not be determined until the September 29, 2007 measurement date ofthe assets and benefit obligations of the defined benefitplans.

In July  2006, the FASB issued FASBInterpretation No. 48, ‘‘Accounting for Uncertainty inIncome Taxes’’, an interpretation of FASB StatementNo. 109,’’ (FIN 48). FIN 48 prescribes a recognitionthreshold and measurement attribute for the financial statementrecognition and measurement of a tax position taken or expected to betaken in a tax return. FIN 48 is effective for fiscal years beginningafter December  15,  2006. The Company is currentlyevaluating what effect, if any, adoption of FIN 48 will have on theCompany’s consolidated financial statements.

InNovember  2004, the FASB issued SFAS No. 151, InventoryCosts, an amendment of ARB No. 43 Chapter 4. This Statement amendsthe guidance in ARB No. 43, Chapter 4, Inventory Pricing, toclarify the accounting for abnormal amounts of idle facility expense,freight, handling costs, and wasted material (spoilage). This Statementrequires that those items be recognized as current-period chargesregardless of whether they meet the criterion of ‘‘soabnormal.’’ as defined in ARB No. 43. In addition, thisStatement requires that allocation of fixed production overheads to thecosts of conversion be based on the normal capacity of the productionfacilities. The Company implemented this provision during the fiscalyear ended September  30,  2006 with no material impactfrom SFAS 151on the consolidated financialstatements.

Reclassifications

Certain prior periodamounts in the accompanying financial statements have been reclassifiedto conform to the Company’s fiscal 2006presentation.

|          |                     |
|----------|---------------------|
| 3.  | Purchase Accounting |

Acquisitionof Acorn and Hound Dog

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

On April  12,2006, HD Acquisition Corp. (‘‘HDAC’’), awholly-owned subsidiary of ATT, completed the acquisition ofsubstantially all of the assets and intellectual property of Hound DogProducts, Inc. (‘‘Hound Dog’’), a businessthat designs, markets and distributes non-powered lawn and gardentools. 

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Notes to ConsolidatedStatements (Continued)

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

These businesses were acquired to expand theCompany’s product lines. The operating results of the acquiredcompanies have been included in the accompanying consolidatedstatements of operations from the respective dates of acquisition.Theacquisitions of Acorn and Hound Dog are being accounted for aspurchases in accordance with SFAS No. 141, BusinessCombinations. The financial statements as of September30,  2006 reflect a preliminary allocation of the purchase pricebased upon available information and are subject to further refinement.The Company expects any refinements to occur in the first half offiscal 2007 and primarly relate to pending litigation, state escheataudit results and the closure of certain facilities. The Companyadjusted inventory by $824 to write up the acquired inventory to itsestimated selling price less the costs of disposal and profit allowancefor the selling effort of the Company. This resulted in an increase incost of goods sold of $824 during fiscal year 2006. This amountrepresents the manufacturing profits acquired. The Hound Dogacquisition is subject to purchase price adjustments that arecontingent upon the achievement of certain financial goals. Anycontingent payment realized will be added to the cost of theacquisitions in excess of the fair value of the net assets acquired.Goodwill resulting from this transaction is not deductible for incometax purposes. The following represents the preliminary allocation ofpurchase price for the Acorn and Hound Dogacquisitions:

|                                                                                        |  |  |  |   |         |   |
|----------------------------------------------------------------------------------------|--|--|--|---|---------|---|
| Revolverdebt used for purchase price including acquisition costs, net of cashacquired  |  |  |  | $ | 50,126  |   |
| Other liabilitiesassumed                                                               |  |  |  |   | 19,535  |   |
| Fair value of assetsacquired, primarily accounts receivable, inventory and fixedassets |  |  |  |   | (47,434 | ) |
| Identified intangibleassets, primarily tradenames andpatents                           |  |  |  |   | (4,830  | ) |
| Cost inexcess of fair value of net assets acquired(goodwill)                           |  |  |  | $ | 17,397  |   |
|                                                                                        |

Inconnection with the Acorn acquisition, the Company formulatedrestructuring plans for the integration of the acquired business. SeeFootnote 4 for additional information regarding theseplans.

The following unaudited pro forma financialinformation reflects the results of operations as if the acquisition ofAcorn had occurred as of the beginning of the periods being presented.Pro forma adjustments include only the effects of events directlyattributed to the transaction that are factually supportable andexpected to have a continuing impact.

The pro forma datareflected in the table below includes adjustments to conform theacquired business’ accounting policies to the Company’saccounting policies, and interest expense on the acquisition debt andthe related income tax effects.

|        |  |  |                                     |   |         |                                 |  |  |           |   |        |          |  |  |  |   |         |  |  |  |  |   |          |   |
|--------|--|--|-------------------------------------|---|---------|---------------------------------|--|--|-----------|---|--------|----------|--|--|--|---|---------|--|--|--|--|---|----------|---|
|   |  |  | FiscalYear Ended September 30, 2006 |   |         | Fiscal Year Ended October1,2005 |
|   |  |  | (Unaudited)                         |   |         | (Unaudited)                     |
|   |  |  | NetSales                            |   |         | Net loss                        |  |  | Net Sales |   |        | Net loss |
|   |  |  |                                     | $ | 522,648 |                                 |  |  |           | $ | (5,531 | )        |  |  |  | $ | 537,444 |  |  |  |  | $ | (125,023 | ) |
|        |

Theunaudited pro forma financial information does not necessarily reflectthe operating results that would have occurred had the acquisition beenconsummated as of the above date, nor is such information indicative offuture operating results. Pro-forma information, reflecting the resultsof operations of Hound Dog, is not provided as this acquisition did notmaterially impact the Company’s results ofoperations.

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

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Notes to ConsolidatedStatements (Continued)

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

Acquisition ofPredecessor Company I

On June 28, 2004, theCompany completed the sale of all outstanding common and preferredstock of Predecessor Company I to affiliates of Castle Harlan, aprivate equity group. CHATT Holdings Inc., the‘‘buyer’’, and CHATT Holdings LLC, the‘‘buyer parent’’, were created to make theacquisition of the Company. Approximately 87% of the equityinterests of the buyer parent are owned by affiliates of Castle Harlan,and the remainder were issued to members of our management who heldcapital stock in the Predecessor Company I, in lieu of cashconsideration that they otherwise would have been entitled to receivein the acquisition. In addition, in a few cases, certain members ofmanagement that did not hold equity in Predecessor Company Ipurchased an equity interest in the buyer parent forcash.

The following represents the allocation of purchaseprice for the acquisition of the Company on June 28, 2004, asdescribedabove:

|                                                                                        |  |  |  |   |         |  |
|----------------------------------------------------------------------------------------|--|--|--|---|---------|--|
| Capitalcontributions from buyer                                                        |  |  |  | $ | 96,585  |  |
| Revolverdebt used                                                                      |  |  |  |   | 25,338  |  |
| Long-term debtissued                                                                   |  |  |  |   | 290,000 |  |
| Liabilities assumed, net ofpay off of debt of PredecessorCompany I                |  |  |  |   | 109,983 |  |
|                                                                                   |  |  |  |   | 521,906 |  |
| Fairvalue of assets acquired, primarily accounts receivable, inventory andfixed assets |  |  |  |   | 284,838 |  |
| Tradenames                                                                             |  |  |  |   | 69,406  |  |
| Customerrelationships                                                                  |  |  |  |   | 11,144  |  |
| Patents                                                                                |  |  |  |   | 878     |  |
| Non-competeagreements                                                                  |  |  |  |   | 981     |  |
| Cost inexcess of fair value of net assets acquired(goodwill)                           |  |  |  | $ | 154,659 |  |
|                                                                                        |

Thetransaction was accounted for as a purchase in accordance with SFASNo. 141, Business Combinations, and EITF Issue 88-16,Basis in Leveraged Buyout Transactions. As such, the acquiredassets and assumed liabilities have been recorded at fair market valuefor the interests acquired and preliminary estimates of assumedliabilities by new investors and at the carryover basis for continuinginvestors. The acquired assets and assumed liabilities were assignednew book values in the same proportion as the residual interests of thecontinuing investors and the new interests acquired by the newinvestors. Under EITF 88-16, the Company was revalued at the mergerdate to the fair value to the extent of the majoritystockholder’s 87.35% controlling interest in the Company.The remaining 12.65% is accounted for at the continuingstockholders’ carryover basis in the Company. The excess of thepurchase price over the historical basis of the net assets acquired hasbeen applied to adjust net assets to their fair values to the extent ofthe majority stockholder’s 87.35% ownership. Goodwillresulting from this transaction is not deductible for income taxpurposes. Goodwill resulting from the acquisitions made by PredecessorCompany I is expected to be deductible for income taxpurposes.

In connection with Predecessor Company Iacquisition, the Company formulated restructuring plans for theintegration of the acquired business. See Footnote 4 for additionalinformation regarding these plans.

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Notes to ConsolidatedStatements (Continued)

|          |               |
|----------|---------------|
| 4.  | Restructuring |

RestructuringRelated to Acquisition of Predecessor Company II and DynamicDesign

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

In2003, in connection with the acquisition of Dynamic Design, PredecessorCompany I committed to exit plans for the closure of certainacquired administrative offices and the consolidation of certainacquired distribution facilities. Costs related to these plans consistof employee severance and benefits, and exit costs (primarily leaseexpenses under existing contracts), and totaled $434 and were added tothe purchase price of Dynamic Design.

At June 27,2004, the remaining restructuring reserves of $2,223 were included inaccrued liabilities and relate to portions of the exit plans that werenot yet completed. At the date of acquisition of PredecessorCompany I, these reserves were reevaluated and included in thepurchase price. Changes to the restructuring reserves are asfollows:

|                                         |  |  |  |   |        |   |
|-----------------------------------------|--|--|--|---|--------|---|
| Balanceas of September 28,2002     |  |  |  | $ | 2,774  |   |
| Adjustments to 2002reserves (see below) |  |  |  |   | 1,730  |   |
| 2003 exitplans                          |  |  |  |   | 434    |   |
| Payments                                |  |  |  |   | (2,524 | ) |
| Balanceas of September 27,2003     |  |  |  |   | 2,414  |   |
| Payments                                |  |  |  |   | (191   | ) |
| Balance as ofJune 27,2004          |  |  |  | $ | 2,223  |   |
|                                         |

Duringthe allocation period, Predecessor Company I recordedadjustments to the original purchase accounting totaling $1,340 basedon refinement of the original estimated purchase information. Thenature of the adjustments are as follow: increase of restructuringaccruals for severance of $1,730; decrease of self-insurance reservesof $(558); increase in reserves for potential product liability forplastic-rim wheelbarrow tires of $1,617; decrease of prepaid pensionassets for curtailment related to restructuring plans of $(782);decrease of reserves for an employee injury suit of $(745) and otheradjustments of $78. These adjustments have been allocated to thepurchase price of Predecessor Company II resulting in anincrease to fixed assets.

Restructuring Related toAcquisition of Predecessor Company I

In connection withthe acquisition of Predecessor Company I, the Companyreevaluated the restructuring reserves previously set up by PredecessorCompany I. These restructuring reserves were originallyestablished to reduce total workforce and close certain facilities. TheCompany, as of the date of acquisition of Predecessor Company I, beganto assess and formulate an exit and restructuring plan that includesadditional reductions of workforce, facility closures and changes inbusiness strategies. This updated exit and restructuring plan isintended to increase operating efficiencies. At June 28, 2004, theCompany recorded a liability of $4,782 related to the reductions ofworkforce and facility closures and $4,795 related to changes inbusiness strategies for a product line. These plans also resulted in a$6,825 decrease to the beginning balance of the pension asset for acurtailment to 

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Notes to ConsolidatedStatements (Continued)

the Company’s pension plan inconjunction with the planned closures of certain manufacturingfacilities for the period ended September  25,  2004.Adjustments of $2,066, primarily to the reserves associated with plantclosures, were made to these reserves as the cost estimates wererefined and finalized during the fiscal year ended October1,  2005.

In the fiscal year ended September30,  2006, payouts in the amount of $2,802 were related to costsassociated with plant closures. The Company expects to complete theseplans in the next one to three years. In accordance with EITF 95-3, anyreductions of these plans made after the one year period from the dateof acquisition resulted in a decrease to goodwill. The followingschedule shows the changes to the restructuring reserve since the dateof acquisition, which is included in accrued liabilities and otherlong-termliabilities:

|                                                     |  |  |  |   |        |   |
|-----------------------------------------------------|--|--|--|---|--------|---|
| Balanceas of June 27,2004                      |  |  |  | $ | 2,223  |   |
| Additions                                           |  |  |  |   | 7,354  |   |
| Balanceas of June 28, 2004, date ofacquisition |  |  |  |   | 9,577  |   |
| Payments                                            |  |  |  |   | (79    | ) |
| Balanceas of September 25,2004                 |  |  |  |   | 9,498  |   |
| Accretion ofinterest                                |  |  |  |   | 355    |   |
| Current yearprovisions                              |  |  |  |   | 80     |   |
| Purchase accountingadjustments                      |  |  |  |   | (2,066 | ) |
| Payments                                            |  |  |  |   | (1,027 | ) |
| Balanceas of October  1,2005                        |  |  |  | $ | 6,840  |   |
| Accretion ofinterest                                |  |  |  |   | 271    |   |
| Purchase accountingadjustments                      |  |  |  |   | (832   | ) |
| Payments                                            |  |  |  |   | (2,809 | ) |
| Balanceas of September  30,2006                     |  |  |  | $ | 3,470  |   |
|                                                     |

RestructuringRelated to Acquisition of Acorn

At date of acquisition,the Company recorded a reserve of $1,547 associated with certainfacility closures and reductions in workforce as part of a facilityconsolidation plan. The Company appropriately met the conditions asoutlined in EITF 95-3 to record such charges as liabilities in apurchase accounting combination. This plan was executed beginning inthe third quarter of fiscal 2006 and is expected to be completed infiscal 2007. As the Company obtains additional information regardingcosts to close certain facilities, adjustments may be made to therestructuring reserves. These restructuring reserves were included inaccrued expenses and other current liabilities and related to portionsof the exit plan that have not yet been completed. In addition, certainemployees were given retention packages totaling approximately $2,987to transition their current roles over 4-12 months. These costs arebeing recognized over the retention period and have not been includedin the purchase price or as a reduction to the net assets acquired.During fiscal 2006, the Company’s operating results reflect acharge of $2,315 related to the recognition of these retentionpackages. Severance payments for these retention packages began in theCompany’s fourth quarter of fiscal 2006 and will carry intofiscal 2007. The balance of the restructuring reserve atSeptember  30,  2006 is $1,175 which is included in accruedliabilities and other long termliabilities.

|                                     |  |  |  |   |       |   |
|-------------------------------------|--|--|--|---|-------|---|
| Balanceas of April  7,2006          |  |  |  | $ | 1,547 |   |
| Adjustments to purchaseaccounting   |  |  |  |   | (40   | ) |
| Payments                            |  |  |  |   | (332  | ) |
| Balanceas of September 30,2006 |  |  |  | $ | 1,175 |   |
|                                     |

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Notes to Consolidated Statements(Continued)

|          |                                                    |
|----------|----------------------------------------------------|
| 5.  | Trade Receivablesand Concentrations of Credit Risk |

Trade receivables areasfollows:

|                               |  |  |                  |   |         |                 |  |  |  |   |         |   |
|-------------------------------|--|--|------------------|---|---------|-----------------|--|--|--|---|---------|---|
|                          |  |  | September30,2006 |   |         | October 1, 2005 |
| Tradereceivables              |  |  |                  | $ | 83,809  |                 |  |  |  | $ | 66,544  |   |
| Allowancefor doubtfulaccounts |  |  |                  |   | (1,269  | )               |  |  |  |   | (1,335  | ) |
| Other salesreserves           |  |  |                  |   | (16,122 | )               |  |  |  |   | (15,532 | ) |
|                          |  |  |                  | $ | 66,418  |                 |  |  |  | $ | 49,677  |   |
|                               |

TheCompany operates principally in the United States, and to a lesserextent, in Europe and Canada. The Company performs periodic creditevaluations of its customers’ financial condition and generallydoes not require collateral. Credit losses have been withinmanagement’s estimates.

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

|          |             |
|----------|-------------|
| 6.  | Inventories |

Inventories are asfollows:

|                       |  |  |                   |   |         |                 |  |  |  |   |        |   |
|-----------------------|--|--|-------------------|---|---------|-----------------|--|--|--|---|--------|---|
|                  |  |  | September30, 2006 |   |         | October 1, 2005 |
| Finishedgoods         |  |  |                   | $ | 94,903  |                 |  |  |  | $ | 59,671 |   |
| Work inprocess        |  |  |                   |   | 21,398  |                 |  |  |  |   | 15,613 |   |
| Rawmaterials          |  |  |                   |   | 33,626  |                 |  |  |  |   | 22,908 |   |
|                  |  |  |                   |   | 149,927 |                 |  |  |  |   | 98,192 |   |
| Lessinventoryreserves |  |  |                   |   | (8,688  | )               |  |  |  |   | (7,046 | ) |
|                  |  |  |                   | $ | 141,239 |                 |  |  |  | $ | 91,146 |   |
|                       |

|          |                              |
|----------|------------------------------|
| 7.  | Property,Plant and Equipment |

A summary of property, plant andequipment is asfollows:

|                                 |  |  |                   |   |         |                 |  |  |  |   |         |   |
|---------------------------------|--|--|-------------------|---|---------|-----------------|--|--|--|---|---------|---|
|                            |  |  | September30, 2006 |   |         | October 1, 2005 |
| Land andimprovements            |  |  |                   | $ | 2,462   |                 |  |  |  | $ | 1,637   |   |
| Buildingsandimprovements        |  |  |                   |   | 14,781  |                 |  |  |  |   | 14,561  |   |
| Machineryandequipment           |  |  |                   |   | 67,027  |                 |  |  |  |   | 53,095  |   |
| Furnitureand fixtures           |  |  |                   |   | 608     |                 |  |  |  |   | 218     |   |
| Computerhardware                |  |  |                   |   | 1,253   |                 |  |  |  |   | 563     |   |
| Computersoftware                |  |  |                   |   | 3,641   |                 |  |  |  |   | 1,760   |   |
| Construction inprogress         |  |  |                   |   | 7,847   |                 |  |  |  |   | 5,828   |   |
|                            |  |  |                   |   | 97,619  |                 |  |  |  |   | 77,662  |   |
| Lessaccumulateddepreciation     |  |  |                   |   | (24,939 | )               |  |  |  |   | (15,755 | ) |
| Netproperty, plant andequipment |  |  |                   | $ | 72,680  |                 |  |  |  | $ | 61,907  |   |
|                                 |

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Notes to Consolidated Statements(Continued)

|          |                               |
|----------|-------------------------------|
| 8.  | Goodwill and OtherIntangibles |

In accordance with SFAS No. 142, theCompany is required to test goodwill and indefinite lived intangibleassets for impairment on at least an annual basis. The Companyperformed the required impairment test of goodwill and other intangibleassets using discounted cash flow analysis for the fiscal years endedSeptember  30,  2006 and October  1,  2005. TheCompany recorded trade name impairment of $5,948 for the fiscal yearended September  30,  2006. The impairment of trade nameswas primarily the result of a shift in branding strategies by certaincustomers during the fiscal year. The Company recorded goodwillimpairment of $119,753 for the fiscal year ended October1,  2005. The goodwill analysis in fiscal 2005 included thedecreased profitability as a result of increased commodity prices,which caused financial results to differ materially from the expectedresults at the time of the purchase of the Company in June  2004.There can be no assurance that future impairment tests will not resultin a charge to earnings.The cost of other acquired intangible assets,including primarily customer and vendor relationships, covenants not tocompete and employment agreements, is amortized on a straight-linebasis over the estimated lives of 2 to 19 years. Amortization of otherintangibles amounted to $1,836 and $1,754 for the fiscal years endedSeptember  30,  2006 and October  1,  2005,respectively. Amortization of other intangibles amounted to $477 forthe period ended September  25,  2004. The PredecessorCompany I amortization of other intangibles amounted to $3,303 for theperiod ended June 27, 2004.

The estimated aggregateamortization expense for each of the succeeding fiscal years is asfollows: $1,488 in 2007; $1,337 in 2008; $1,221 in 2009; $1,211 in2010; $1,200 in 2011 and $3,480 thereafter.

The changes incarrying amount of goodwill are asfollows:

|                                                           |  |  |  |   |          |   |
|-----------------------------------------------------------|--|--|--|---|----------|---|
| Goodwill,after allocations to fair value on June  28,2004 |  |  |  | $ | 154,659  |   |
| Currency translationadjustments                           |  |  |  |   | 1,904    |   |
| Goodwillat September  25,2004                             |  |  |  | $ | 156,563  |   |
| Currencytranslation adjustments                           |  |  |  |   | 3,348    |   |
| Revision ofpurchase price allocations                     |  |  |  |   | 1,577    |   |
| Impairmentofgoodwill                                      |  |  |  |   | (119,753 | ) |
| Goodwillat October  1,2005                                |  |  |  | $ | 41,735   |   |
| Currencytranslation adjustments                           |  |  |  |   | 548      |   |
| Revision ofpurchase price allocations                     |  |  |  |   | (1,321   | ) |
| Goodwillassociated with Union and HoundDog                |  |  |  |   | 17,397   |   |
| Goodwill atSeptember  30,2006                             |  |  |  | $ | 58,359   |   |
|                                                           |

Duringfiscal 2006, the Company reduced the initial purchase price allocationin the amount of $1,321 due to the refinement of restructuringreserves. In addition, the Company added goodwill of $16,597 and $800for the acquisition of Union and Hound Dog, respectively.

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Notes to Consolidated Statements(Continued)

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

|                                   |  |  |                     |   |        |                         |  |  |  |   |         |  |
|-----------------------------------|--|--|---------------------|---|--------|-------------------------|--|--|--|---|---------|--|
|                              |  |  | GrossCarryingAmount |   |        | AccumulatedAmortization |
| Indefinitelived intangibleassets: |  |  |                     |   |   |                         |  |  |  |   |    |  |
| Tradenames                        |  |  |                     | $ | 68,513 |                         |  |  |  | $ | — |  |
| Finitelived intangibleassets:     |  |  |                     |   |   |                         |  |  |  |   |    |  |
| Technology(patents)               |  |  |                     |   | 1,356  |                         |  |  |  |   | 619     |  |
| Non-competeagreements             |  |  |                     |   | 976    |                         |  |  |  |   | 902     |  |
| Customerrelationships             |  |  |                     |   | 11,672 |                         |  |  |  |   | 2,546   |  |
|                              |  |  |                     |   | 14,004 |                         |  |  |  |   | 4,067   |  |
|                              |  |  |                     | $ | 82,517 |                         |  |  |  | $ | 4,067   |  |
|                                   |

Thefollowing table reflects the components of intangible assets other thangoodwill at October 1,2005:

|                                   |  |  |                     |   |        |                         |  |  |  |   |         |  |
|-----------------------------------|--|--|---------------------|---|--------|-------------------------|--|--|--|---|---------|--|
|                              |  |  | GrossCarryingAmount |   |        | AccumulatedAmortization |
| Indefinitelived intangibleassets: |  |  |                     |   |   |                         |  |  |  |   |    |  |
| Tradenames                        |  |  |                     | $ | 70,172 |                         |  |  |  | $ | — |  |
| Finitelived intangibleassets:     |  |  |                     |   |   |                         |  |  |  |   |    |  |
| Technology(patents)               |  |  |                     |   | 984    |                         |  |  |  |   | 336     |  |
| Non-competeagreements             |  |  |                     |   | 887    |                         |  |  |  |   | 493     |  |
| Customerrelationships             |  |  |                     |   | 11,317 |                         |  |  |  |   | 1,402   |  |
|                              |  |  |                     |   | 13,188 |                         |  |  |  |   | 2,231   |  |
|                              |  |  |                     | $ | 83,360 |                         |  |  |  | $ | 2,231   |  |
|                                   |

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Notes to Consolidated Statements(Continued)

|          |             |
|----------|-------------|
| 9.  | IncomeTaxes |

Income before income taxes and the relatedprovision for income taxes consist of thefollowing:

|                                                |  |  |                                   |   |         |                                 |  |  |                                   |   |          |                              |  |  |  |   |         |   |  |  |  |   |        |  |
|------------------------------------------------|--|--|-----------------------------------|---|---------|---------------------------------|--|--|-----------------------------------|---|----------|------------------------------|--|--|--|---|---------|---|--|--|--|---|--------|--|
|                                           |  |  |                              |   |         |                            |  |  | PredecessorCompany I              |
|                                           |  |  | Fiscalyearended September 30,2006 |   |         | Fiscalyearended October 1, 2005 |  |  | PeriodendedSeptember 25,2004 |   |          | PeriodendedJune 27,2004 |
| (Loss)income before provision for incometaxes: |  |  |                                   |   |    |                                 |  |  |                                   |   |     |                              |  |  |  |   |    |   |  |  |  |   |   |  |
| 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 |  |
| Incometax 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 |  |
|                                                |

Thereported income tax provisions differ from the amount based on UnitedStates federal income tax rates asfollows:

|                                                 |  |  |                                     |   |         |                                 |  |  |                                   |   |         |                               |  |  |  |   |         |   |  |  |  |   |         |  |
|-------------------------------------------------|--|--|-------------------------------------|---|---------|---------------------------------|--|--|-----------------------------------|---|---------|-------------------------------|--|--|--|---|---------|---|--|--|--|---|---------|--|
|                                            |  |  |                                |   |         |                            |  |  | PredecessorCompany I              |
|                                            |  |  | Fiscalyear ended September 30, 2006 |   |         | Fiscal yearended October 1,2005 |  |  | PeriodendedSeptember 25,2004 |   |         | PeriodendedJune 27, 2004 |
| Statutoryfederal income tax (benefit)expense    |  |  |                                     | $ | (1,556  | )                               |  |  |                                   | $ | (43,572 | )                             |  |  |  | $ | (4,372  | ) |  |  |  | $ | 11,658  |  |
| Non-deductiblegoodwill impairmentloss           |  |  |                                     |   | — |                                 |  |  |                                   |   | 40,715  |                               |  |  |  |   | — |   |  |  |  |   | — |  |
| Stateincome tax expense (net of federalbenefit) |  |  |                                     |   | (1,395  | )                               |  |  |                                   |   | (710    | )                             |  |  |  |   | (342    | ) |  |  |  |   | 717     |  |
| Nondeductibleother                              |  |  |                                     |   | (102    | )                               |  |  |                                   |   | (20     | )                             |  |  |  |   | 22      |   |  |  |  |   | — |  |
| Foreignincome taxdifferential                   |  |  |                                     |   | (135    | )                               |  |  |                                   |   | (177    | )                             |  |  |  |   | — |   |  |  |  |   | 908     |  |
| Changein estimated taxrate                      |  |  |                                     |   | (1,199  | )                               |  |  |                                   |   | — |                               |  |  |  |   | — |   |  |  |  |   | — |  |
| Valuationallowance                              |  |  |                                     |   | 4,509   |                                 |  |  |                                   |   | 750     |                               |  |  |  |   | — |   |  |  |  |   | — |  |
| Other                                           |  |  |                                     |   | (122    | )                               |  |  |                                   |   | 59      |                               |  |  |  |   | (346    | ) |  |  |  |   | 645     |  |
|                                            |  |  |                                     | $ | — |                                 |  |  |                                   | $ | (2,955  | )                             |  |  |  | $ | (5,038  | ) |  |  |  | $ | 13,928  |  |
|                                                 |

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ATTHolding Co.

Notes to Consolidated Statements(Continued)

The following table sets forth thetax effects of temporary differences that give rise to significantportions of the deferred tax assets andliabilities:

|                                                                   |  |  |                  |   |         |                |  |  |  |   |         |   |
|-------------------------------------------------------------------|--|--|------------------|---|---------|----------------|--|--|--|---|---------|---|
|                                                              |  |  | September30,2006 |   |         | October 1,2005 |
| Deferred taxassets:                                               |  |  |                  |   |    |                |  |  |  |   |    |   |
| Accountsreceivable                                                |  |  |                  | $ | 190     |                |  |  |  | $ | 279     |   |
| Inventories                                                       |  |  |                  |   | 2,467   |                |  |  |  |   | 2,037   |   |
| Accruedliabilities and restructuringexpenses                      |  |  |                  |   | 7,907   |                |  |  |  |   | 8,559   |   |
| Othernon-currentitems                                             |  |  |                  |   | 734     |                |  |  |  |   | 568     |   |
| Pension                                                           |  |  |                  |   | 6,210   |                |  |  |  |   | 5,131   |   |
| Netoperating losscarryforwards                                    |  |  |                  |   | 8,341   |                |  |  |  |   | 4,009   |   |
| Totaldeferred taxassets                                           |  |  |                  |   | 25,849  |                |  |  |  |   | 20,583  |   |
| Deferredtax liabilities:                                          |  |  |                  |   |    |                |  |  |  |   |    |   |
| Plant andequipment, principally due to differences indepreciation |  |  |                  |   | 9,276   |                |  |  |  |   | 10,378  |   |
| Pensions                                                          |  |  |                  |   | 3,353   |                |  |  |  |   | 611     |   |
| Intangibleassets                                                  |  |  |                  |   | 18,896  |                |  |  |  |   | 19,314  |   |
| Derivativefinancialinstruments                                    |  |  |                  |   | 997     |                |  |  |  |   | 421     |   |
| Othercurrentitems                                                 |  |  |                  |   | 1,041   |                |  |  |  |   | 1,242   |   |
| Totaldeferred taxliabilities                                      |  |  |                  |   | 33,563  |                |  |  |  |   | 31,966  |   |
| Valuationallowance                                                |  |  |                  |   | 7,548   |                |  |  |  |   | 2,649   |   |
| Netdeferred taxliabilities                                        |  |  |                  | $ | (15,262 | )              |  |  |  | $ | (14,032 | ) |
|                                                                   |

Duringthe fiscal year ended September  30,  2006, the fiscal yearended October  1,  2005, the period endedSeptember 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 endedSeptember  30,  2006 and October  1,  2005, noprovision had been made for U.S. federal and state income taxes onapproximately $8,349 and $7,363 of foreign earnings, respectively,which are expected to be reinvested outside of the United Satesindefinitely. Upon distribution of those earnings in the form ofdividends or otherwise, the Company would be subject to U.S. incometaxes (subject to an adjustment for foreign tax credits), state incometaxes and withholding taxes to various foreign countries. Determinationof the amount of unrecognized deferred U.S. income tax liability is notpracticable because of the complexities associated with itshypothetical calculation.

The Company has federal netoperating loss carryforwards of approximately $18,421, which begin toexpire in 2025. In addition, with the acquisition of Union, the Companyhas approximately $1,100 of net operating losses limited by theprovisions of Section 382 of the Internal Revenue Code which providesfor the annual limitations on the deductibility of the net operatinglosses and certain tax deductions. These limitations apply until theearlier of utilization or expiration of the net operating losses. TheCompany has state net operating loss carryforwards of approximately$34,173 with various expiration dates according to staterules.

The valuation allowance is primarily attributableto the uncertainty regarding the realization of the net operatinglosses. The Company has performed the required assessment regarding therealization of the net operating losses and has concluded that it ismore likely than not that the net operating losses, net of thevaluation allowance, will be realized.

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ATTHolding Co.

Notes to Consolidated Statements(Continued)

|           |                  |
|-----------|------------------|
| 10.  | DebtArrangements |

Senior Secured Credit Facility Amended andRestated

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

On January  14,  2005, simultaneously with thecompletion of the offering of the Senior Floating Rate Notes referredto below, ATT entered into an amendment (‘‘AmendmentNo.1’’) to the terms of the Senior Secured CreditFacility. As amended, availability under the Senior Secured CreditFacility was restricted to the lesser of $75,000 and the borrowing-baseamount, which was equal to (a) 85% of the amount of eligiblereceivables, plus (b) the lower of (i) 55% of the cost or fairmarket value of eligible inventory and (ii) if an inventory appraisalhas been performed, 80% of the orderly liquidation value of AmesTrue Temper, Inc.’s inventory, plus (c) a percentage of eligibleequipment or real property determined by Bank of America, N.A., asadministrative agent, and not objected to by the required lenders. OnDecember  1,  2005, the Company entered into Amendment No.2 to the terms of the Senior Secured Credit Facility, which temporarilychanged certain financial covenants for the Company’s fiscal2006 performance. The Senior Secured Credit Facility was amended andrestated on April  7,  2006 as describedbelow.

Senior Subordinated Notes

On June28,  2004, we completed a private offering of $150.0million in aggregate principal amount at maturity of 10% SeniorSubordinated Notes due July  15,  2012. The SeniorSubordinated Notes are fully and unconditionally guaranteed by theCompany on a senior subordinated basis. On August  10,2004, we filed a registration statement with respect to new noteshaving substantially identical terms as the original notes, as part ofan offer to exchange registered notes for the privately issued originalSenior Subordinated Notes. The new notes evidence the same debt as theoriginal Senior Subordinated Notes, are entitled to the benefits of theindenture governing the original Senior Subordinated Notes and aretreated 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 unsecuredsenior subordinated obligations and rank behind all of our existing andfuture senior debt, including borrowings under the Senior SecuredCredit Facility and the Amended and Restated Senior Secured CreditAgreement, equally with any of our future senior subordinated debt,ahead of any of our future debt that expressly provides forsubordination to the new Senior Subordinated Notes and effectivelybehind all of the existing and future liabilities of our subsidiaries,including trade payables. The Company also guarantees the new SeniorSubordinated Notes on a senior subordinated basis. This guarantee ranksbehind all existing and future senior debt of the Company, includingthe guarantee of the Senior Secured Credit Facility and the SeniorFloating Rate Notes, equal to all future senior subordinatedindebtedness and ahead of all future debt that expressly provides thatit is subordinated to the guarantee.

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

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Notes to Consolidated Statements(Continued)

Notes contains various affirmative andnegative covenants, subject to a number of important limitations andexceptions, including but not limited to those limiting our ability andthe ability of our restricted subsidiaries to borrow money, guaranteedebt or sell preferred stock, create liens, pay dividends on or redeemor repurchase stock, make certain investments, sell stock in ourrestricted subsidiaries, restrict dividends or other payments fromrestricted subsidiaries, enter into transactions with affiliates andsell assets or merge with other companies.

The indenturegoverning the new Senior Subordinated Notes contains various events ofdefault, including but not limited to those related to non-payment ofprincipal, interest or fees; violations of certain covenants; certainbankruptcy-related events; invalidity of liens; non-payment of certainlegal judgments; and cross defaults with certain other indebtedness. Wemay redeem the Senior Subordinated Notes on or after July15,  2008, except we may redeem up to 35% of the newSenior Subordinated Notes prior to July  15,  2007 with theproceeds of one or more public equity offerings. We are required toredeem the new Senior Subordinated Notes under certain circumstancesinvolving changes of control.

Senior Floating RateNotes

On January  14,  2005, ATT completedthe offering of $150,000 Senior Floating Rate Notes due 2012. Theproceeds of this offering were used by the Company to repay the entirebalance of Term Loan B, which amounted to $139,300. Additionally, theproceeds were used to pay transaction fees and repay a portion of therevolving credit facility. As a result of the transaction, the Companyrecorded a charge of $4,102 to interest expense to write-off theportion of prepaid bank fees related to Term Loan B.

TheSenior Floating Rate Notes, issued at a 0.5% discount, bearinterest at a floating rate per annum, reset quarterly, equal to LIBORplus 4%, which was 9.51% at September  30,2006. The Senior Floating Rate Notes pay interest quarterly in cash inarrears on January  15, April  15, July  15 andOctober  15 of each year. The Senior Floating Rate Notes matureon January  15,  2012, unless earlier redeemed orrepurchased, and are subject to the terms and conditions set forth inthe Indenture. The Company guarantees the Senior Floating RateNotes.

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

InterestRate Swaps

In connection with the issuance of the SeniorFloating Rate Notes, ATT entered into interest rate swaps (the‘‘Swaps’’) with Bank of America, N.A. andWachovia Bank, N.A. Pursuant to the Swap with Bank of America, N.A.,which became effective on January  17,  2006, ATT swaps3-month LIBOR rates for fixed interest rates of 4.31% on anotional amount of $100,000 for the period from January17,  2006 through January  15,  2008, $66,667 for theperiod from January  16,  2008 to January  15,2009 and $33,333 for the period from January  16,  2009through January  15,  2010. Pursuant to the Swap withWachovia Bank, N.A., effective January  15,  2006, ATTswaps 3 month LIBOR rates for fixed interest rates of 4.29% on anotional amount of $50,000 for the period from January15,  2006 through January  15,  2008, $33,333 for theperiod from January  16,  2008 to January  15,2009 and $16,667 for the period from January  16,  2009through January  15,  2010. These swaps fix the variablerate portion of the Senior Floating Rate Notes, while there is anadditional margin of 4.00% that is fixed.

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ATTHolding Co.

Notes to Consolidated Statements(Continued)

Term Note

On July19,  2005, the Company entered into a $2,700 Term Note, Loan andSecurity Agreement and Subordination Agreement with a Lender. This noteis payable in monthly installments over five years. The interest rateper annum is equal to 2.5% and secured by certain collateral,which was agreed to by the Administrative Agent of the Senior SecuredCredit Facility. Under the terms of this note, the Company is requiredto create 108 jobs at the new manufacturing facility in Pennsylvaniawithin three years of the completion of the facility. The Term Notecontains customary events of default (subject to customary exceptions,thresholds and grace periods), including, without limitation:nonpayment of principal, interest, fees and failure to perform orobserve certain covenants. As of September  30,  2006, theCompany was in compliance with these covenants.

Amended andRestated Senior Secured Credit Agreement

On April7,  2006, in conjunction with the acquisition of Acorn, ATTentered into an amended and restated Senior Secured Credit Agreementwith Bank of America, N.A., as administrative agent, swing line lenderand letter of credit issuer, Acorn, Union, and Ames True TemperProperties, Inc. (‘‘ATTP’’); together withATT (the ‘‘Borrowers’’), the Company, asguarantor, and each lender from time to time thereto (the‘‘Credit Agreement’’). The Credit Agreementamends and restates ATT’s existing credit facility with, amongothers, Bank of America, N.A. Pursuant to the Credit Agreement, thelenders made available a five-year revolving credit facility of up to$130,000 in order to finance the acquisition of Acorn, pay fees andexpenses associated with the acquisition, repay outstanding debt andprovide for ongoing working capital.

Borrowingsoutstanding under the revolving credit facility as of September30,  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 andOctober  1,  2005, respectively. The total amount availableunder the revolving credit facility at September  30,  2006was $45,365. The interest rate for base rate loans under the revolvingcredit facility is calculated as the higher of 1) the prevailingFederal Funds rate plus 50 basis points or 2) the administrativeagent’s prime interest rate plus an applicable rate determinedby the Company’s consolidated leverage ratio as defined in theCredit Agreement. The interest rate for base rate loans under therevolving credit facility was 9.25% at September30,  2006.

Total indebtedness is asfollows:

|                                                  |  |  |                  |   |         |                |  |  |  |   |         |   |
|--------------------------------------------------|--|--|------------------|---|---------|----------------|--|--|--|---|---------|---|
|                                             |  |  | September30,2006 |   |         | October 1,2005 |
| Revolvingloan facility dated 4/7/06, expires2011 |  |  |                  | $ | 66,608  |                |  |  |  | $ | — |   |
| Term Note due2010                                |  |  |                  |   | 2,103   |                |  |  |  |   | 2,618   |   |
| Senior FloatingRate Notes due 2012               |  |  |                  |   | 150,000 |                |  |  |  |   | 150,000 |   |
| 10% SeniorSubordinated Notes due2012             |  |  |                  |   | 150,000 |                |  |  |  |   | 150,000 |   |
| Totaldebt                                        |  |  |                  |   | 368,711 |                |  |  |  |   | 302,618 |   |
| Less short-termrevolving loanfacility            |  |  |                  |   | (66,608 | )              |  |  |  |   | — |   |
| Currentportion of long-termdebt                  |  |  |                  |   | (528    | )              |  |  |  |   | (515    | ) |
| Less unamortizeddiscount                         |  |  |                  |   | (563    | )              |  |  |  |   | (670    | ) |
| Long-termdebt                                    |  |  |                  | $ | 301,012 |                |  |  |  | $ | 301,433 |   |
|                                                  |

TheCredit Agreement and the Senior Subordinated Notes contain variousaffirmative and negative covenants customary for similar creditfacilities (subject to customary exceptions and certain existingobligations 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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ATTHolding Co.

Notes to Consolidated Statements(Continued)

and other dispositions of property or assets;dividends, distributions, redemptions and other restricted payments;changes in the nature of the Company’s business; transactionswith affiliates; and prepayment, redemption or repurchase of certaindebt. In addition, the Credit Agreement and term note require that theCompany meet certain financial covenants. Capital expenditures aresubject to fiscal year limitations of $19,125 in 2006, $16,125 in 2007and $15,000 thereafter. In the event the Company triggers Cash Dominionas defined in the Credit Agreement, the Company is required to maintaina minimum consolidated EBITDA of $41,000 for any period of fourquarters ending on the last day of any fiscal quarter. As ofSeptember  30,  2006, the Company was in compliance withall applicable debt covenants.

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

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ATTHolding Co.

Notes to Consolidated Statements(Continued)

|           |                   |
|-----------|-------------------|
| 11.  | LeaseArrangements |

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

Rental expense for operating leases was $11,894,$10,714, $2,496, and $6,748 for the fiscal year ended September30,  2006, for the fiscal year ended October  1,2005, the period ended September 25, 2004, and the period endedJune 27, 2004, respectively.

Future minimum rentalcommitments under noncancelable operating leases as of September30,  2006 are asfollows:

|                            |  |  |  |   |         |  |
|----------------------------|--|--|--|---|---------|--|
| 2007                       |  |  |  | $ | 10,495  |  |
| 2008                       |  |  |  |   | 10,211  |  |
| 2009                       |  |  |  |   | 10,179  |  |
| 2010                       |  |  |  |   | 8,496   |  |
| 2011                       |  |  |  |   | 8,336   |  |
| Thereafter                 |  |  |  |   | 54,072  |  |
| Totalminimum leasepayments |  |  |  | $ | 101,789 |  |
|                            |

|           |                                          |
|-----------|------------------------------------------|
| 12.  | Pensionand Other Postretirement Benefits |

The Company has threenoncontributory defined benefit plans covering substantially all of itsUnited  States employees. The benefits under these plans arebased primarily on years of credited service and compensation asdefined under the respective plan provisions. The Company’sfunding policy is to contribute amounts to the plans sufficient to meetthe minimum funding requirements set forth in the Employee RetirementIncome Security Act of 1974, plus such amounts as the Company maydetermine to be appropriate from time to time. The Company alsosponsors two Supplemental Executive Retirement Plans, which arenonqualified, unfunded plans designed to provide certain seniorexecutives defined pension benefits in excess of the limits definedunder Sections 415 and 401(a)(17) of the Internal Revenue Code. TheCompany also provides healthcare and life insurance benefits forcertain groups of retirees through several plans. The benefits are atfixed amounts per retiree and are partially contributory by theretiree.The following table provides a reconciliation of changes in theprojected benefit obligation, fair value of plan assets and the fundedstatus of the Company’s U.S. qualified defined-benefitpension (valuation dates June  30,  2006 andJune 30, 2005), non-qualified defined-benefit pension, andpostretirement benefit plans with the amounts recognized in theCompany’s consolidated balance sheets at September30,  2006 and October  1,  2005:

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ATTHolding Co.

Notes to Consolidated Statements(Continued)

|                                                  |  |  |                  |   |         |                |  |  |                  |   |         |               |  |  |  |   |         |   |  |  |  |   |         |   |
|--------------------------------------------------|--|--|------------------|---|---------|----------------|--|--|------------------|---|---------|---------------|--|--|--|---|---------|---|--|--|--|---|---------|---|
|                                             |  |  | PensionBenefits  |   |         | OtherBenefits  |
|                                             |  |  | September30,2006 |   |         | October 1,2005 |  |  | September30,2006 |   |         | October1,2005 |
| Change in projected benefitobligation            |  |  |                  |   |    |                |  |  |                  |   |    |               |  |  |  |   |    |   |  |  |  |   |    |   |
| Benefitobligation at beginning ofperiod          |  |  |                  | $ | 128,641 |                |  |  |                  | $ | 106,492 |               |  |  |  | $ | 3,028   |   |  |  |  | $ | 2,464   |   |
| Acquisitionofbusiness                            |  |  |                  |   | 25,753  |                |  |  |                  |   | — |               |  |  |  |   | 206     |   |  |  |  |   | — |   |
| Servicecost,net                                  |  |  |                  |   | 2,782   |                |  |  |                  |   | 2,518   |               |  |  |  |   | 3       |   |  |  |  |   | 23      |   |
| Interestcost                                     |  |  |                  |   | 6,962   |                |  |  |                  |   | 6,050   |               |  |  |  |   | 150     |   |  |  |  |   | 148     |   |
| Participantcontribution                          |  |  |                  |   | — |                |  |  |                  |   | — |               |  |  |  |   | 10      |   |  |  |  |   | — |   |
| Curtailment,purchaseaccounting                   |  |  |                  |   | — |                |  |  |                  |   | 798     |               |  |  |  |   | — |   |  |  |  |   | 393     |   |
| Assumptionchanges                                |  |  |                  |   | (15,388 | )              |  |  |                  |   | 17,034  |               |  |  |  |   | (1,532  | ) |  |  |  |   | 298     |   |
| Actuarialloss(gain)                              |  |  |                  |   | (3,496  | )              |  |  |                  |   | 1,644   |               |  |  |  |   | (20     | ) |  |  |  |   | (111    | ) |
| Benefitspaid                                     |  |  |                  |   | (8,185  | )              |  |  |                  |   | (5,895  | )             |  |  |  |   | (66     | ) |  |  |  |   | (187    | ) |
| Benefitobligation at end ofperiod                |  |  |                  | $ | 137,069 |                |  |  |                  | $ | 128,641 |               |  |  |  | $ | 1,779   |   |  |  |  | $ | 3,028   |   |
| Changein fair value of planassets                |  |  |                  |   |    |                |  |  |                  |   |    |               |  |  |  |   |    |   |  |  |  |   |    |   |
| Fairvalue at beginning ofperiod                  |  |  |                  | $ | 108,672 |                |  |  |                  | $ | 104,719 |               |  |  |  | $ | — |   |  |  |  | $ | — |   |
| Acquisitionofbusiness                            |  |  |                  |   | 22,767  |                |  |  |                  |   | — |               |  |  |  |   | — |   |  |  |  |   | — |   |
| Actualreturn on planassets                       |  |  |                  |   | 7,538   |                |  |  |                  |   | 10,432  |               |  |  |  |   | — |   |  |  |  |   | — |   |
| Employercontributions                            |  |  |                  |   | 223     |                |  |  |                  |   | — |               |  |  |  |   | 56      |   |  |  |  |   | 187     |   |
| Participantcontribution                          |  |  |                  |   | — |                |  |  |                  |   | — |               |  |  |  |   | 10      |   |  |  |  |   | — |   |
| Benefitspaid                                     |  |  |                  |   | (8,185  | )              |  |  |                  |   | (5,895  | )             |  |  |  |   | (66     | ) |  |  |  |   | (187    | ) |
| Planexpenses                                     |  |  |                  |   | (525    | )              |  |  |                  |   | (584    | )             |  |  |  |   | — |   |  |  |  |   | — |   |
| Fairvalue at end ofperiod                        |  |  |                  | $ | 130,490 |                |  |  |                  | $ | 108,672 |               |  |  |  | $ | — |   |  |  |  | $ | — |   |
| Fundedstatus ofplan                              |  |  |                  |   |    |                |  |  |                  |   |    |               |  |  |  |   |    |   |  |  |  |   |    |   |
| Planassets less than projected benefitobligation |  |  |                  | $ | (6,579  | )              |  |  |                  | $ | (19,969 | )             |  |  |  | $ | (1,779  | ) |  |  |  | $ | (3,028  | ) |
| Unrecognizedprior servicecost                    |  |  |                  |   | 360     |                |  |  |                  |   | — |               |  |  |  |   | 4       |   |  |  |  |   | — |   |
| Unrecognizednet (gain)loss                       |  |  |                  |   | 2,759   |                |  |  |                  |   | 19,521  |               |  |  |  |   | (1,510  | ) |  |  |  |   | 42      |   |
| Netamountrecognized                              |  |  |                  | $ | (3,460  | )              |  |  |                  | $ | (448    | )             |  |  |  | $ | (3,285  | ) |  |  |  | $ | (2,986  | ) |
|                                                  |

|                                              |  |  |                  |   |        |                |  |  |                  |   |         |               |  |  |  |   |         |   |  |  |  |   |         |   |
|----------------------------------------------|--|--|------------------|---|--------|----------------|--|--|------------------|---|---------|---------------|--|--|--|---|---------|---|--|--|--|---|---------|---|
|                                         |  |  | PensionBenefits  |   |        | OtherBenefits  |
|                                         |  |  | September30,2006 |   |        | October 1,2005 |  |  | September30,2006 |   |         | October1,2005 |
| Amounts recognized inbalance sheet consistof |  |  |                  |   |   |                |  |  |                  |   |    |               |  |  |  |   |    |   |  |  |  |   |    |   |
| Accruedbenefitliability                      |  |  |                  | $ | (4,315 | )              |  |  |                  | $ | (13,788 | )             |  |  |  | $ | (3,285  | ) |  |  |  | $ | (2,986  | ) |
| Accumulatedother comprehensiveincome         |  |  |                  |   | 855    |                |  |  |                  |   | 13,340  |               |  |  |  |   | — |   |  |  |  |   | — |   |
| Netamountrecognized                          |  |  |                  | $ | (3,460 | )              |  |  |                  | $ | (448    | )             |  |  |  | $ | (3,285  | ) |  |  |  | $ | (2,986  | ) |
|                                              |

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ATTHolding Co.

Notes to Consolidated Statements(Continued)

The weighted-average assumptionsused in determining the net periodic pension cost for theCompany’s defined benefit and retiree plans, covering employeesin the United States are presentedbelow.

|                              |  |  |                 |  |  |               |  |  |         |  |  |      |  |         |   |
|------------------------------|--|--|-----------------|--|--|---------------|--|--|---------|--|--|------|--|---------|---|
|                         |  |  | PensionBenefits |  |  | OtherBenefits |
|                         |  |  | 2006            |  |  | 2005          |  |  | 2006    |  |  | 2005 |
| Discountrate                 |  |  | 5%-6%           |  |  | 6.25%         |  |  | 5%- 6%  |  |  |      |  | 6.25    | % |
| Rate ofcompensation increase |  |  | 2.75% -4%       |  |  | 3.50%         |  |  | — |  |  |      |  | — |   |
| Expectedreturn on assets     |  |  | 8.5% -9%        |  |  | 9.00%         |  |  | — |  |  |      |  | — |   |
|                              |

Theweighted-average assumptions used in determining the plan obligationsfor the Company’s defined benefit and retiree plans, coveringemployees in the United States, at the measurement dates of June30,  2006 and June 30, 2005 are presentedbelow.

|                              |  |  |                 |  |  |               |  |  |      |  |         |      |  |  |  |  |         |   |
|------------------------------|--|--|-----------------|--|--|---------------|--|--|------|--|---------|------|--|--|--|--|---------|---|
|                         |  |  | PensionBenefits |  |  | OtherBenefits |
|                         |  |  | 2006            |  |  | 2005          |  |  | 2006 |  |         | 2005 |
| Discountrate                 |  |  | 6.15%           |  |  | 5.00%         |  |  |      |  | 6.15    | %    |  |  |  |  | 5.00    | % |
| Rateof compensation increase |  |  | 3.5% -4%        |  |  | 2.75%         |  |  |      |  | — |      |  |  |  |  | — |   |
|                              |

Theaccumulated benefit obligations for the Company’sU.S. defined benefit plans at the measurement dates were$132,054 at June  30,  2006 and $122,460 at June30,  2005.

Amounts recognized in the incomestatement consist of:

|                                  |  |  |                                  |   |         |                               |  |  |                                  |   |         |                               |  |  |  |   |         |  |  |  |  |   |         |  |
|----------------------------------|--|--|----------------------------------|---|---------|-------------------------------|--|--|----------------------------------|---|---------|-------------------------------|--|--|--|---|---------|--|--|--|--|---|---------|--|
|                             |  |  | PensionBenefits                  |   |         | OtherBenefits                 |
|                             |  |  | FiscalyearendedSeptember 30,2006 |   |         | FiscalyearendedOctober 1,2005 |  |  | FiscalyearendedSeptember 30,2006 |   |         | FiscalyearendedOctober 1,2005 |
| Servicecost                      |  |  |                                  | $ | 3,307   |                               |  |  |                                  | $ | 3,102   |                               |  |  |  | $ | 3       |  |  |  |  | $ | 23      |  |
| Interestcost                     |  |  |                                  |   | 6,962   |                               |  |  |                                  |   | 6,050   |                               |  |  |  |   | 150     |  |  |  |  |   | 148     |  |
| Actualreturn on plan assets      |  |  |                                  |   | (10,173 | )                             |  |  |                                  |   | (10,432 | )                             |  |  |  |   | — |  |  |  |  |   | — |  |
| Assetgaindeferred                |  |  |                                  |   | 513     |                               |  |  |                                  |   | 1,253   |                               |  |  |  |   | 0       |  |  |  |  |   | — |  |
| Netperiodic benefit cost(credit) |  |  |                                  | $ | 609     |                               |  |  |                                  | $ | (27     | )                             |  |  |  | $ | 153     |  |  |  |  | $ | 171     |  |
|                                  |

TheCompany anticipates making contributions of $97 to the U.S. definedbenefit pension plan and $4  to its retiree plan during thefiscal year beginning on October  1,  2006.

The following benefit payments, which reflect expected futureservice, as appropriate, are expected to be paid to participants in theU.S. pension and retireeplans:

|                                     |  |  |                 |   |        |                        |  |  |  |   |     |  |
|-------------------------------------|--|--|-----------------|---|--------|------------------------|--|--|--|---|-----|--|
|                                |  |  | PensionBenefits |   |        | PostretirementBenefits |
| 2007                                |  |  |                 | $ | 9,033  |                        |  |  |  | $ | 145 |  |
| 2008                                |  |  |                 |   | 9,023  |                        |  |  |  |   | 143 |  |
| 2009                                |  |  |                 |   | 8,987  |                        |  |  |  |   | 141 |  |
| 2010                                |  |  |                 |   | 8,905  |                        |  |  |  |   | 136 |  |
| 2011                                |  |  |                 |   | 8,922  |                        |  |  |  |   | 134 |  |
| Fiveyear period beginningthereafter |  |  |                 |   | 46,973 |                        |  |  |  |   | 639 |  |
|                                     |

TheCompany’s Irish subsidiary administers a defined benefit pensionplan. The following table provides a reconciliation of changes in theprojected benefit obligation, fair value of plan assets and the fundedstatus of this pension plan. The measurement dates wereSeptember  30,  2006 and September  30,2005.

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ATTHolding Co.

Notes to Consolidated Statements(Continued)

|                                                    |  |  |                  |   |         |               |  |  |  |   |        |   |
|----------------------------------------------------|--|--|------------------|---|---------|---------------|--|--|--|---|--------|---|
|                                               |  |  | September30,2006 |   |         | October1,2005 |
| Change in projected benefitobligation              |  |  |                  |   |    |               |  |  |  |   |   |   |
| Benefit obligationat beginning ofperiod            |  |  |                  | $ | 7,610   |               |  |  |  | $ | 5,558  |   |
| Service cost,net                                   |  |  |                  |   | 206     |               |  |  |  |   | 268    |   |
| Interestcost                                       |  |  |                  |   | 282     |               |  |  |  |   | 299    |   |
| Assumptionchanges                                  |  |  |                  |   | (273    | )             |  |  |  |   | 1,522  |   |
| Actuarial (gain)loss                               |  |  |                  |   | (515    | )             |  |  |  |   | 530    |   |
| Benefitspaid                                       |  |  |                  |   | (186    | )             |  |  |  |   | (339   | ) |
| Effect of foreigncurrency                          |  |  |                  |   | 343     |               |  |  |  |   | (228   | ) |
| Benefitobligation at end ofperiod                  |  |  |                  | $ | 7,467   |               |  |  |  | $ | 7,610  |   |
| Changein fair value of plan assets                 |  |  |                  |   |    |               |  |  |  |   |   |   |
| Fair value at beginning ofperiod                   |  |  |                  | $ | 5,808   |               |  |  |  | $ | 5,017  |   |
| Actual returnon plan assets                        |  |  |                  |   | 630     |               |  |  |  |   | 1,152  |   |
| Employercontributions                              |  |  |                  |   | 405     |               |  |  |  |   | 101    |   |
| Planparticipants’contributions               |  |  |                  |   | — |               |  |  |  |   | 24     |   |
| Benefitspaid                                       |  |  |                  |   | (223    | )             |  |  |  |   | (339   | ) |
| Effect of foreigncurrency                          |  |  |                  |   | 283     |               |  |  |  |   | (147   | ) |
| Fairvalue at end ofperiod                          |  |  |                  | $ | 6,903   |               |  |  |  | $ | 5,808  |   |
| Fundedstatus of plan                               |  |  |                  |   |    |               |  |  |  |   |   |   |
| Plan assets(less than) projected benefitobligation |  |  |                  | $ | (564    | )             |  |  |  | $ | (1,802 | ) |
| Unrecognizednetloss                                |  |  |                  |   | 352     |               |  |  |  |   | 1,457  |   |
| Netamountrecognized                                |  |  |                  | $ | (212    | )             |  |  |  | $ | (345   | ) |
| Amountsrecognized in balance sheet consist of      |  |  |                  |   |    |               |  |  |  |   |   |   |
| Accrued benefitliability                           |  |  |                  | $ | (212    | )             |  |  |  | $ | (507   | ) |
| Accumulatedother comprehensiveincome               |  |  |                  |   | — |               |  |  |  |   | 162    |   |
| Netamountrecognized                                |  |  |                  | $ | (212    | )             |  |  |  | $ | (345   | ) |
|                                                    |

Theweighted-average assumptions used in determining the net periodicpension cost for the Irish pension plan are presentedbelow.

|                             |  |  |       |  |  |       |
|-----------------------------|--|--|-------|--|--|-------|
|                        |  |  | 2006  |  |  | 2005  |
| Discountrate                |  |  | 4.00% |  |  | 5.00% |
| Rateof compensationincrease |  |  | 3.75% |  |  | 3.75% |
| Expectedreturn onassets     |  |  | 6.30% |  |  | 6.50% |
|                             |

Theweighted-average assumptions used in determining the plan obligationsfor the Irish pension plan are listedbelow.

|                             |  |  |       |  |  |       |
|-----------------------------|--|--|-------|--|--|-------|
|                        |  |  | 2006  |  |  | 2005  |
| Discountrate                |  |  | 4.50% |  |  | 4.00% |
| Rateof compensationincrease |  |  | 3.75% |  |  | 3.75% |
|                             |

Atthe measurement date of September  30,  2006, theaccumulated benefit obligation was $6,289.

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ATTHolding Co.

Notes to Consolidated Statements(Continued)

Amounts recognized in the incomestatement consistof:

|                                                |  |  |                                  |   |      |                               |  |  |  |   |         |   |
|------------------------------------------------|--|--|----------------------------------|---|------|-------------------------------|--|--|--|---|---------|---|
|                                           |  |  | FiscalyearendedSeptember 30,2006 |   |      | FiscalyearendedOctober 1,2005 |
| Servicecost                                    |  |  |                                  | $ | 249  |                               |  |  |  | $ | 243     |   |
| Interestcost                                   |  |  |                                  |   | 282  |                               |  |  |  |   | 299     |   |
| Actual return on planassets                    |  |  |                                  |   | (630 | )                             |  |  |  |   | (1,152  | ) |
| Asset gaindeferred                             |  |  |                                  |   | 273  |                               |  |  |  |   | 812     |   |
| Amortization ofunrecognized prior servicecosts |  |  |                                  |   | 48   |                               |  |  |  |   | — |   |
| Netperiodic benefitcost                        |  |  |                                  | $ | 222  |                               |  |  |  | $ | 202     |   |
|                                                |

TheIrish subsidiary anticipates making contributions of $203 to the planduring the fiscal year beginning on October  1,2006.

The following benefit payments, which reflectexpected future service, as appropriate, are expected to be paid toplanparticipants:

|                                     |  |  |  |   |       |  |
|-------------------------------------|--|--|--|---|-------|--|
| 2006                                |  |  |  | $ | 181   |  |
| 2007                                |  |  |  |   | 200   |  |
| 2008                                |  |  |  |   | 223   |  |
| 2009                                |  |  |  |   | 250   |  |
| 2010                                |  |  |  |   | 282   |  |
| Fiveyear period beginningthereafter |  |  |  |   | 1,502 |  |
|                                     |

The tables aboveset forth the historical components of net periodic pension cost and areconciliation of the funded status of the pension and otherpostretirement benefit plans for the employees associated with theCompany and are not necessarily indicative of the amounts to berecognized by the Company on a prospective basis.

Theassets of the Ames True Temper, Inc. Pension Plan are invested andmanaged by Mellon Bank, which acts as both trustee and administrator.The Ames True Temper Benefits Committee meets quarterly to reviewcurrent investment policy and to monitor Mellon Bank’s fundperformance. The assets of UnionTools, Inc. Retirement Plan and Trustand Pension Plan and Trust are invested and managed by DiversifiedInvestment Advisors, which acts as both trustee and administrator. Theassets of all plans are invested in a manner consistent with theFiduciary Standards of the Employee Retirement Income Security Act of1974. Investment strategy is based on a rolling time horizon of threeto five years. The investment objective is to achieve the highestpossible return commensurate with the assumed level of risk. Based onkey characteristics such as work force growth, plan maturity, andassets vs. liabilities, a slightly conservative to normal riskportfolio asset mix structure has been adopted.

The assetallocations attributable to the Company’s U.S. pensionplan, excluding the Union plans, at June 30, 2006 and the targetallocation of plan assets for the period beginning July1,  2006, by asset category, are as follows (as permitted by SFASNo. 132 (revised 2003), Employers’ Disclosures aboutPensions and Other Postretirement Benefits—an amendment of FASBStatements No. 87, 88, and 106, the Company has deferredreporting of this information for its Irish pension planassets):

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ATTHolding Co.

Notes to Consolidated Statements(Continued)

|                               |  |  |                              |  |  |                                |
|-------------------------------|--|--|------------------------------|--|--|--------------------------------|
|                          |  |  | TargetAllocationJune30, 2006 |  |  | Percentage ofAssets July1,2006 |
| Domestic equitysecurities     |  |  | 58%                          |  |  | 58%                            |
| Fixedincomesecurities         |  |  | 30%                          |  |  | 30%                            |
| Internationalequitysecurities |  |  | 12%                          |  |  | 12%                            |
|                               |

Theasset allocation attributed to the Union pension plans at June30,  2006 and the target allocation of plan assets for the periodbeginning July  1,  2006, by asset category, are asfollows:

|                   |  |  |                              |  |  |                                |
|-------------------|--|--|------------------------------|--|--|--------------------------------|
|              |  |  | TargetAllocationJune30, 2006 |  |  | Percentage ofAssets July1,2006 |
| Equity securities |  |  | 65%                          |  |  | 66%- 79%                       |
| Debt securities   |  |  | 5%                           |  |  | 5% -8%                         |
| Other             |  |  | 30%                          |  |  | 13%- 29%                       |
|                   |

The Company has a definedcontribution savings plan that covers substantially all of its eligibleU.S. employees. The purpose of the plan is generally to provideadditional financial security to employees during retirement.Participants in the savings plan may elect to contribute, on a pre-taxbasis, a certain percent of their annual earnings with the Companymatching a portion of these contributions. Expenses under the planrelated 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 theperiods ended September  25,  2004 and June27,  2004, respectively.

The Company’sCanadian subsidiary, Garant Inc., operates a group-registeredretirement savings plan. The Company matches 50% of nonunionemployee contributions, up to 3% of an employee’s basesalary. The expenses related to the plan for the Company for the fiscalyear ended September  30,  2006, the fiscal year endedOctober  1,  2005 and the periods ended September25,  2004 and June  27,  2004 were $56, $80, $21 and$40, respectively.

|           |                           |
|-----------|---------------------------|
| 13.  | Stockholders’Equity |

On June 28, 2004, CHATT HoldingsInc. purchased 726,556 shares of Class A Common Stock, 124,859 warrantsto purchase shares of Class A Common Stock, 267,448 shares of Class BCommon Stock and 62,495 shares of Series A Preferred Stock, whichconstituted all of the outstanding securities of ATT Holding Co. Therewere no changes to the legal composition of these equity securities.The number of authorized shares of ATT Holding Co. remained unchangedas a result of the sale of the Company.

Series A PreferredStock

The Company is authorized to issue 100,000 sharesof Series A Preferred Stock at a par value of $0.0001. There were62,495 shares issued and outstanding as of September  30,2006 and October  1,  2005. Dividends on each share of theSeries A Preferred Stock were accrued on a daily basis at the rate of10% per annum of the Liquidation Value thereof plus allaccumulated and unpaid dividends thereon from and including the date ofissuance of such share to and including the first to occur of (i) thedate on which the Liquidation Value of such share (plus all accrued andunpaid dividends thereon) is paid to the holder thereof in connectionwith the liquidation of the Company or the redemption of such share bythe Company or (ii) the date on which such share is otherwise acquiredby the Company. Predecessor Company I had $16,925 accumulatedand unpaid dividends as of June 27, 2004, which were paid out onJune 28, 2004, the day of sale. The Company had $15,718 and$8,296 accumulated, unrecorded and unpaid dividends as ofSeptember  30,  2006 and October  1,  2005,respectively.

Upon any liquidation, dissolution or windingup of the Company, each holder of Series A Preferred Stock shall beentitled to be paid, before any distribution or payment is made uponany junior 

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ATTHolding Co.

Notes to Consolidated Statements(Continued)

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

Class A and B CommonStock

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

The Company isauthorized to issue 300,000 shares of Class B Common Stock at a parvalue of $0.0001. There were 267,448 shares issued and outstanding asof September  30,  2006 and October  1,2005.

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

Warrants

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

|           |                     |
|-----------|---------------------|
| 14.  | Segment Information |

TheCompany’s operations are classified into one business segment.These operations are conducted primarily in the United States, and to alesser extent, in Canada and Europe. The following table presentscertain data by geographicareas:

|                                     |  |  |                    |   |         |          |  |  |                             |   |         |  |  |  |  |   |         |   |
|-------------------------------------|--|--|--------------------|---|---------|----------|--|--|-----------------------------|---|---------|--|--|--|--|---|---------|---|
|                                |  |  | IdentifiableAssets |   |         | NetSales |  |  | Earnings Before IncomeTaxes |
| Fiscal year ended September 30,2006 |  |  |                    |   |    |          |  |  |                             |   |    |  |  |  |  |   |    |   |
| UnitedStates                        |  |  |                    | $ | 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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ATTHolding Co.

Notes to Consolidated Statements(Continued)

|                                  |  |  |                    |   |         |          |  |  |                            |   |         |  |  |  |  |   |          |   |
|----------------------------------|--|--|--------------------|---|---------|----------|--|--|----------------------------|---|---------|--|--|--|--|---|----------|---|
|                             |  |  | IdentifiableAssets |   |         | NetSales |  |  | EarningsBefore IncomeTaxes |
| Fiscal yearended October  1,2005 |  |  |                    |   |    |          |  |  |                            |   |    |  |  |  |  |   |     |   |
| UnitedStates                     |  |  |                    | $ | 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 | ) |
|                                  |

|                                    |  |  |                    |   |         |          |  |  |                           |   |        |  |  |  |  |   |         |   |
|------------------------------------|--|--|--------------------|---|---------|----------|--|--|---------------------------|---|--------|--|--|--|--|---|---------|---|
|                               |  |  | IdentifiableAssets |   |         | NetSales |  |  | EarningsBeforeIncomeTaxes |
| Period endedSeptember 25,2004 |  |  |                    |   |    |          |  |  |                           |   |   |  |  |  |  |   |    |   |
| UnitedStates                       |  |  |                    | $ | 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 | ) |
|                                    |

|                                |  |  |                    |   |         |           |  |  |                             |   |         |  |  |  |  |   |        |  |
|--------------------------------|--|--|--------------------|---|---------|-----------|--|--|-----------------------------|---|---------|--|--|--|--|---|--------|--|
|                           |  |  | IdentifiableAssets |   |         | Net Sales |  |  | Earnings Before IncomeTaxes |
| Predecessor CompanyI           |  |  |                    |   |    |           |  |  |                             |   |    |  |  |  |  |   |   |  |
| Period ended June 27,2004 |  |  |                    |   |    |           |  |  |                             |   |    |  |  |  |  |   |   |  |
| UnitedStates                   |  |  |                    | $ | 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 thefollowing:

|                             |  |  |                                     |   |        |                                  |  |  |                               |   |         |                          |  |  |  |   |         |   |  |  |  |   |         |  |
|-----------------------------|--|--|-------------------------------------|---|--------|----------------------------------|--|--|-------------------------------|---|---------|--------------------------|--|--|--|---|---------|---|--|--|--|---|---------|--|
|                        |  |  |                                |   |        |                             |  |  | PredecessorCompanyI           |
|                        |  |  | Fiscal yearended September 30, 2006 |   |        | Fiscal year ended October 1,2005 |  |  | Period endedSeptember 25,2004 |   |         | PeriodendedJune 27, 2004 |
| Foreign exchange (gain)loss |  |  |                                     | $ | (76    | )                                |  |  |                               | $ | (46     | )                        |  |  |  | $ | (82     | ) |  |  |  | $ | 71      |  |
| Legalsettlement             |  |  |                                     |   | (5,587 | )                                |  |  |                               |   | — |                          |  |  |  |   | — |   |  |  |  |   | — |  |
| Other                       |  |  |                                     |   | 7      |                                  |  |  |                               |   | (40     | )                        |  |  |  |   | 46      |   |  |  |  |   | 128     |  |
| Total                       |  |  |                                     | $ | (5,656 | )                                |  |  |                               | $ | (86     | )                        |  |  |  | $ | (36     | ) |  |  |  | $ | 199     |  |
|                             |

OnMay  15,  2006, the Company entered into a Settlement andRelease Agreement (the ‘‘Agreement’’) withJacuzzi Brands, Inc (‘‘Jacuzzi’’). Underthe terms of the Agreement, Jacuzzi paid to the Company $6,165 assettlement payment and dismissed the court actions against alldefendants related to the acquisition of the Company by affiliates ofCastle Harlan, Inc. In return, the Company agreed to release Jacuzzifrom any damages related to any environmental indemnities orwheelbarrow claims. A portion of the settlement payment in the amountof $578 offset the recording of additional environmental liabilities asa result of the release of the environmental indemnities. The remainingbalance of the settlement, $5,587, was recorded as other income duringfiscal year 2006.

|           |                           |
|-----------|---------------------------|
| 16.  | Related PartyTransactions |

The Company entered into a managementagreement with Castle Harlan, Inc., an affiliate of a shareholder, toprovide business and organizational strategy, financial and investmentmanagement, 

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ATTHolding Co.

Notes to Consolidated Statements(Continued)

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

Wind Point Partners, a shareholderof Predecessor Company I, provided certain management services toPredecessor Company I. Fees incurred for the period ended June27,  2004 were $606.

|           |                              |
|-----------|------------------------------|
| 17.  | Commitments andContingencies |

During December  2004, a customer ofUnion’s was named in litigation that involved theCompany’s products. The complaint asserted causes of actionagainst the defendant for improper advertisement to the consumer. Theallegation suggests that advertisements lead the consumer to believethat the hand tools sold were manufactured in the boundaries of theUnited States. The allegation asserts cause of action against thecustomer for common law fraud. In the event that courts would deem ajudgment against our customer, there is a possibility that the customerwould seek legal recourse for a unspecified amount in contributorydamages.

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

The Company hasfuture minimum purchase obligations and royalty payments under certainsupply contracts associated with its operations. The future minimumpurchases under this contract as of September  30,  2006are as follows: $1,772 for 2007 and $1,772 for2008.

|           |                 |
|-----------|-----------------|
| 18.  | Special Charges |

Duringthe period ended June 27, 2004, the Company incurrednon-capitalizable transaction expenses of $799 related to the sale ofthe Company.

|               |                                                                                    |
|---------------|------------------------------------------------------------------------------------|
| Item 9.  | CHANGES IN ANDDISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURE |

None

|               |                         |
|---------------|-------------------------|
| Item9A.  | CONTROLS AND PROCEDURES |

Under thesupervision and with the participation of management, including ourprincipal executive officer and principal financial officer, we haveevaluated the effectiveness of the design and operation of ourdisclosure controls and procedures as of the end of the period coveredby this report, and based on their evaluation, the principal executiveofficer and principal financial officer have concluded that thesecontrols and procedures are effective. There were no significantchanges in internal controls or in other factors that couldsignificantly affect these controls subsequent to the date of theirevaluation.

|                |                  |
|----------------|------------------|
| Item 9B.  | OTHERINFORMATION |

None

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PARTIII

|                |                                                   |
|----------------|---------------------------------------------------|
| Item 10.  | DIRECTORS AND EXECUTIVEOFFICERS OF THE REGISTRANT |

The following table sets forthcertain information regarding our board of directors, the board ofdirectors of our parent, the board of directors of the buyer and theboard of directors of the buyer parent. In addition, the table setsforth information regarding our executive officers and certain of ourother senior officers. Richard Dell is the sole member of our, ourparent’s and the buyer’s board ofdirectors.

|                      |  |  |     |  |    |          |  |  |                                                                                                                                                                                                |
|----------------------|--|--|-----|--|----|----------|--|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Name                 |  |  | Age |  |    | Position |
| RichardDell          |  |  |     |  | 60 |          |  |  | Presidentand Chief Executive Officer; Member of our board of directors, theboard of directors of our parent, the board of directors of the buyerand the board of directors of the buyer parent |
| DuaneGreenly         |  |  |     |  | 56 |          |  |  | Chief OperatingOfficer                                                                                                                                                                         |
| David M.Nuti         |  |  |     |  | 47 |          |  |  | Chief FinancialOfficer                                                                                                                                                                         |
| Geoff Brownrigg      |  |  |     |  | 43 |          |  |  | VicePresident, Marketing                                                                                                                                                                       |
| JosephWersosky       |  |  |     |  | 48 |          |  |  | Vice President, NationalSales                                                                                                                                                                  |
| Christopher Frew     |  |  |     |  | 41 |          |  |  | VicePresident, Wholesale, Industrial and InternationalSales                                                                                                                                    |
| Jean Gaudreault      |  |  |     |  | 50 |          |  |  | Presidentand General Manager, Garant (Canada)                                                                                                                                                  |
| TomO’Connor    |  |  |     |  | 60 |          |  |  | Managing Director, True Temper Ltd.(Ireland)                                                                                                                                                   |
| Chris Ebling         |  |  |     |  | 55 |          |  |  | VicePresident, Human Resources                                                                                                                                                                 |
| MichaelDoyle         |  |  |     |  | 51 |          |  |  | Vice President, InformationTechnology                                                                                                                                                          |
| Daniel Yurovich      |  |  |     |  | 44 |          |  |  | VicePresident, Manufacturing                                                                                                                                                                   |
| WilliamKley          |  |  |     |  | 59 |          |  |  | Vice President,Logistics                                                                                                                                                                       |
| Troy W. Bryce        |  |  |     |  | 38 |          |  |  | ChiefAccounting Officer                                                                                                                                                                        |
| Denise Z.MacIvor     |  |  |     |  | 46 |          |  |  | Director, Corporate Services, Treasury andRisk Management                                                                                                                                      |
| John K.Castle        |  |  |     |  | 66 |          |  |  | Member of the Board of Directors of the buyerparent                                                                                                                                            |
| Justin B. Wender     |  |  |     |  | 37 |          |  |  | Member ofthe Board of Directors of the buyer parent                                                                                                                                            |
| WilliamM.  Pruellage |  |  |     |  | 33 |          |  |  | Member of the Board of Directorsof the buyer parent                                                                                                                                            |
| John E.Morningstar   |  |  |     |  | 30 |          |  |  | Member of the Board of Directors of thebuyer parent                                                                                                                                            |
| Robert Elman         |  |  |     |  | 68 |          |  |  | Memberof the Board of Directors of the buyer parent                                                                                                                                            |
| EdwardLeBlanc        |  |  |     |  | 60 |          |  |  | Member of the Board of Directors of thebuyer parent                                                                                                                                            |
| Kenneth Roman        |  |  |     |  | 75 |          |  |  | Memberof the Board of Directors of the buyerparent                                                                                                                                             |
|                      |

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

DuaneGreenly has been our Chief Operating Officer since acquiring us, inpartnership with Richard Dell and Wind Point Partners, inJanuary  2002. From 1998 through 2001, Mr.  Greenly wasPresident and CEO of Barry Controls, which served the retail,industrial, and OEM markets. From 1996 through 1998, he was Presidentof Morgan Manufacturing. Mr.  Greenly has held numerous positionswith Newell Rubbermaid, and was most recently Business Manager –Window Hardware. Mr.  Greenly also held engineering, productdevelopment, and operational roles with BF Goodrich and MillikenTextiles.

David Nuti was appointed to the position ofChief Financial Officer of Ames True Temper effective March1,  2006. Mr.  Nuti most recently served as CFO and SeniorVice President, Administration for Rubicon Technology from 2004 to2006. 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 atFiskars and from 1991 to 1999, Mr.  Nuti was with Rubbermaid,Inc. in various senior financial and operational roles. Mr.  Nutibegan his career with Container Corporation of America and AnchorHocking Packaging Company and holds an MBA from Lewis University.

Geoff Brownrigg is our Vice President, Marketing. He joinedthe Company in February  2005. Prior thereto, from 1999 to 2004,Mr.  Brownrigg held various progressively responsible positionswith Huffy Corporation, most recently as President & GeneralManager of Huffy Service Solutions (HSS). Before joining HSS,Mr.  Brownrigg was Vice President, Sales & Marketing for TrueTemper Hardware (TTH) prior to the sale of TTH to US Industries. Priorto 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 andsubsequently at Black & Decker Canada where he held progressivelyresponsible sales management roles in their housewares and power toolgroups.

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

Christopher Frew is the VicePresident, Wholesale, Industrial and International Sales. Mr.Frew joined True Temper in 1995 as a Sales Manager, and has served withus as a Director of Sales, Sales Manager in the Northeast, andInternational Sales Manager.

Jean Gaudreault has been thePresident and General Manager of Garant Canada since 1996. From 1991 to1996, Mr.  Gaudreault was part owner of Venmar Ventilation wherehe held the position of Vice President, Sales & Marketing until thecompany was sold. From 1980 to 1991, Mr.  Gaudreault served invarious positions with Denco Canada, including the last two years withDenco SA in France, where he held the position of General Manger,responsible for the restructuring of operations inFrance.

Thomas O’Connor has been the ManagingDirector of True Temper Ltd., Ireland since July  2005.Mr.  O’Connor joined the True Temper Ltd. in 1985 andserved in various sales and marketing functions most recently as Salesand 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 EmployeeRelations Representative and progressed through several roles beforebecoming Vice President of Human Resources in 1992. Prior to joiningTrue Temper, Mr.  Ebling served in various human resourcepositions with Pullman Standard, Capital Products and DonleeIndustries.

Michael Doyle joined us in November2006 as Vice President of Information Technology. Prior to joining us,Mr.  Doyle ran his own information technology practice, DoyleTechnology Consulting, focused on mergers, acquisitions anddivestitures from 2002 to 2006. Before forming Doyle TechnologyConsulting, he was Director, Information Technology Infrastructure forAgere Systems and was a key player in the spin off of Agere from LucentTechnologies from 1997 to 2002. Mr.  Doyle has also held varioussenior information technology positions with General Electric, ARINCand Black & Decker, along with a technology solutions group role atEMC.

Daniel Yurovich is our Vice President ofManufacturing. He joined us in April of 2006. Prior to joining us,Mr.  Yurovich held the position of President/CEO of BarryControls Defense and Industrial, a subsidiary of Hutchinson S.A., from2001 to April  2006. Before joining Barry Controls, Mr.Yurovich was a key player in the turn around and sale of MorganManufacturing as the Director of Support Services. Mr.  Yurovichstarted his career at Amerock, a division of Newell, after leaving theMarine Corps, where he attained the rank of Major. Mr Yurovich is a USNaval Academy Graduate and has a Masters degree in finance andaccounting.

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William Kley has been our VicePresident of Logistics since June  2006. Mr Kley joined ourCompany 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 KendallDivision of Tyco International from 1995 to 1999. From 1993 to 1994, heserved as Director of Materials Management for Sara Lee’s ArisIsotoner Division and from 1986 to 1993 was Director of Logistics forPhilips Electronics’ Lighting Division. Mr.  Kley startedhis career in manufacturing and distribution with Johnson &Johnson.

Troy W. Bryce joined our company as ChiefAccounting Officer in December  2004. Prior to joining us,Mr.  Bryce held various positions with Corning Incorporated from1999 to 2004, most recently as Director of Global Finance for theworldwide frequency control business. Prior to Corning, he heldpositions of increasing responsibility in accounting and finance withSnyders of Hanover, Inc. and Cardinal Technologies, Inc. He started hiscareer as an auditor with Ernst & Young LLP. Mr.  Bryce is alicensed CPA in Pennsylvania.

Denise Z. MacIvor became ourDirector, Corporate Services, Treasury and Risk Management inDecember  2004. Ms.  MacIvor joined our company in 2001 asTreasurer. Prior to joining our company, Ms.  MacIvor served asthe Assistant Treasurer for Metrocall, Inc. from 1997 to 1999 and invarious treasury and finance functions at Mercedes-Benz of NorthAmerica, Inc., most recently as Assistant Treasurer.

John K.Castle is a member of the board of the directors of the buyerparent. Mr.  Castle is Chairman and Chief Executive Officer ofCastle 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 investmentbanking firms. At that time, he also served as a director of theEquitable Life Assurance Society of the U.S. Mr.  Castle is aboard 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 ofthe Massachusetts Institute of Technology. He has served for twenty-twoyears as a trustee of New York Medical College, including eleven ofthose years as Chairman of the Board. He is a member of the Board ofthe Whitehead Institute for Biomedical Research, and was FoundingChairman of the Whitehead Board of Associates. He is also a member ofThe New York Presbyterian Hospital Board of Trustees and FormerChairman of the Columbia-Presbyterian Health Sciences Advisory Council.Mr.  Castle received his bachelor’s degree from theMassachusetts Institute of Technology, his MBA as a Baker Scholar withHigh Distinction from Harvard, and two Honorary Doctorate degrees ofHumane Letters.

Justin B. Wender is a member of the boardof directors of the buyer parent.  Mr. Wender is the Presidentof 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 financematters. He is a board member of McCormick &Schmick’s Seafood Restaurants, Inc., Morton’s RestaurantGroup, Ames True Temper, Caribbean Restaurants Polypipe BuildingProducts Limited and Baker & Taylor. In addition, hecurrently serves as Chair of the International Center for the Disabled,is Trustee of Carleton College and a Board Member of the Pew Center onGlobal Climate Change. Mr. Wender is a Cum Laude graduate ofCarleton College with a B.A. in Political Science and has his M.B.A.from the Wharton School of the University ofPennsylvania.

William M.  Pruellage is a member ofthe board of directors of the buyer parent. Mr.  Pruellage is aManaging Director of Castle Harlan, Inc. Mr.  Pruellage is also aboard member of Universal Compression, Inc., Advanced AccessorySystems, LLC and Wilshire Restaurant Group, Inc. Prior to joiningCastle Harlan in July  1997, Mr.  Pruellage worked in theMergers & Acquisitions group of Merrill Lynch & Co., where heassisted clients in strategic planning and corporate mergers.Mr.  Pruellage is a Summa Cum Laude graduate of GeorgetownUniversity.

John E. Morningstar is a member of theboard of directors of the buyer parent. Mr.  Morningstar is aVice President of Castle Harlan, Inc. Mr.  Morningstar is also aboard member of Associated Packaging Technologies, Inc. andPolypipe Building Products Limited. Prior to joining CastleHarlan in July  2000, Mr.  Morningstar worked in the RetailInvestment Banking department of Merrill Lynch 

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

Robert Elman is a member of the board ofdirectors of the buyer parent. Mr.  Elman served as Chairman andChief Executive Officer of DESA International from its formation in1985 until his retirement in 1999. Mr.  Elman, in a leveragedbuyout, co-founded DESA Industries in 1969. In 1975, AMCA Internationalacquired DESA Industries and he became a Senior Group Vice Presidentresponsible for the Consumer, Automotive products, Aerospace and FoodPackaging Divisions. Prior to joining DESA, Mr.  Elman workedwith ITT corp. and Singer Company in various management positions inthe United States and Europe. He received his Bachelor’s Degreein Mechanical Engineering from Rensselaer Polytechnic Institute and hisM.B.A. from Harvard Business School.

Edward LeBlanc is amember of the board of directors of the buyer parent. Mr.LeBlanc served as President, Residential and Commercial Division ofKidde, Inc. from September  2000 until his retirement inDecember of 2005. Mr. LeBlanc served as President and CEO ofRegent Lighting Corporation from 1997 until 2000. Prior to joiningRegent, Mr.  LeBlanc held a number of positions withMacklanburg-Duncan over a 19-year period including President and ChiefOperating Officer. Mr.  LeBlanc also serves on the Boards of IPSInc. and Pro Build Corporation.

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

Audit Committee FinancialExpert

The audit committee of CHATT Holding LLC, the buyerparent of ATT Holding Co., which we refer to as the Audit Committee,effectively functions as our audit committee. The Audit Committeeconsists of Edward LeBlanc (Chairman), Robert Elman and JohnMorningstar. The Audit Committee of CHATT Holding LLC has determinedthat Mr.  LeBlanc is considered an ‘‘auditcommittee financial expert’’, as defined in Section 401(h) of Regulation S-K. The Audit Committee has not determined thatMr.  LeBlanc qualifies as‘‘independent’’ as defined in the listingstandards of the New York Stock Exchange.

Code ofEthics

The Audit Committee of CHATT Holdings LLC, the buyerparent of ATT Holding Co. has adopted a ‘‘code ofethics’’ applicable to Ames True Temper, Inc. and itsaffiliates. The Audit Committee has established a hotline where, on aconfidential basis, anyone with concerns involving internal controls,accounting or auditing matters, can contact a third-party law firmwithout screening or review by management. A copy of the code of ethicswas included as exhibit 14 of the fiscal 2004 Form 10-K and isincorporated by reference in this Form 10-K.

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|                |                       |
|----------------|-----------------------|
| Item 11.  | EXECUTIVECOMPENSATION |

The following table sets forth informationregarding compensation for the last three fiscal years awarded to,earned by or paid to our chief executive officer and our other fourmost highly compensated executive officers at the end of fiscal2006:

|                                     |  |  |                    |  |      |                       |  |  |          |  |         |                            |  |  |                              |  |         |  |  |  |  |  |         |  |  |  |  |  |         |  |
|-------------------------------------|--|--|--------------------|--|------|-----------------------|--|--|----------|--|---------|----------------------------|--|--|------------------------------|--|---------|--|--|--|--|--|---------|--|--|--|--|--|---------|--|
|                                |  |  | AnnualCompensation |  |      | Long-TermCompensation |  |  |     |
| Nameand Principal Position          |  |  | Year               |  |      | Salary ($)            |  |  | Bonus($) |  |         | RestrictedStock Awards ($) |  |  | AllOtherCompensation (1) ($) |
| RichardDell                         |  |  |                    |  | 2006 |                       |  |  |          |  | 473,562 |                            |  |  |                              |  | 265,194 |  |  |  |  |  | — |  |  |  |  |  | 6,300   |  |
| Presidentand Chief ExecutiveOfficer |  |  |                    |  | 2005 |                       |  |  |          |  | 459,768 |                            |  |  |                              |  | — |  |  |  |  |  | — |  |  |  |  |  | 6,300   |  |
|                                |  |  |                    |  | 2004 |                       |  |  |          |  | 448,053 |                            |  |  |                              |  | 223,961 |  |  |  |  |  | — |  |  |  |  |  | — |  |
| DuaneGreenly                        |  |  |                    |  | 2006 |                       |  |  |          |  | 253,694 |                            |  |  |                              |  | 152,216 |  |  |  |  |  | — |  |  |  |  |  | 6,300   |  |
| ChiefOperatingOfficer               |  |  |                    |  | 2005 |                       |  |  |          |  | 246,304 |                            |  |  |                              |  | — |  |  |  |  |  | — |  |  |  |  |  | 6,300   |  |
|                                |  |  |                    |  | 2004 |                       |  |  |          |  | 240,759 |                            |  |  |                              |  | 166,610 |  |  |  |  |  | — |  |  |  |  |  | — |  |
| DavidNuti(2)                        |  |  |                    |  | 2006 |                       |  |  |          |  | 130,927 |                            |  |  |                              |  | 103,659 |  |  |  |  |  | — |  |  |  |  |  | 222,926 |  |
| ChiefFinancialOfficer               |  |  |                    |  | 2005 |                       |  |  |          |  | — |                            |  |  |                              |  | — |  |  |  |  |  | — |  |  |  |  |  | — |  |
|                                |  |  |                    |  | 2004 |                       |  |  |          |  | — |                            |  |  |                              |  | — |  |  |  |  |  | — |  |  |  |  |  | — |  |
| JeanGaudreault                      |  |  |                    |  | 2006 |                       |  |  |          |  | 223,062 |                            |  |  |                              |  | 179,489 |  |  |  |  |  | — |  |  |  |  |  | 8,857   |  |
| Presidentand General Manager,Garant |  |  |                    |  | 2005 |                       |  |  |          |  | 202,922 |                            |  |  |                              |  | 104,611 |  |  |  |  |  | — |  |  |  |  |  | 4,971   |  |
|                                |  |  |                    |  | 2004 |                       |  |  |          |  | 196,084 |                            |  |  |                              |  | 95,981  |  |  |  |  |  | — |  |  |  |  |  | 7,763   |  |
| GeoffBrownrigg(3)                   |  |  |                    |  | 2006 |                       |  |  |          |  | 189,056 |                            |  |  |                              |  | 76,627  |  |  |  |  |  | — |  |  |  |  |  | 70,606  |  |
| VicePresident,Marketing             |  |  |                    |  | 2005 |                       |  |  |          |  | 160,204 |                            |  |  |                              |  | 37,000  |  |  |  |  |  | — |  |  |  |  |  | 4,250   |  |
|                                |  |  |                    |  | 2004 |                       |  |  |          |  | — |                            |  |  |                              |  | — |  |  |  |  |  | — |  |  |  |  |  | — |  |
|                                     |

|  |
|--|
|  |  |
|  |

|     |                                                                                                              |
|-----|--------------------------------------------------------------------------------------------------------------|
| (1) | AllOther Compensation includes car allowances and reimbursement ofrelocation expenses for certainexecutives. |

|     |                                             |
|-----|---------------------------------------------|
| (2) | Mr.  Nuti joinedour company in March  2006. |

|     |                                                  |
|-----|--------------------------------------------------|
| (3) | Mr.Brownrigg joined our company in February2005. |

Compensation of Directors

Board members whoare not employees of Ames True Temper or Castle Harlan receive anannual retainer of $35,000. All members of our and our parents’boards of directors will be reimbursed for actual expenses incurred inconnection with attendance at meetings of the respective boards onwhich they serve and of committees thereof.

CompensationCommittee Interlocks and Insider Participation

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

Employment Agreements

Wehave employment agreements with Richard Dell, Duane Greenly, DavidNuti, Jean Gaudreault, Geoff Brownrigg, Joseph Wersosky, and DanielYurovich. The term of each executive’s agreement is three yearsand 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 toterminate 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 isCDN$230,000 and Mr.  Yurovich’s is $170,500. Theiragreements provide 

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that their base salary is subject to increasefrom time to time, solely at our discretion. During the employmentperiod, each executive is eligible to receive a cash bonus based on theachievement of budgeted performance goals, as well as additionalbonuses based on the achievement of performance goals and objectivesapproved by the buyer parent’s board of directors. Eachexecutive is eligible to receive employee benefits comparable to thebenefits provided to our other senior executive officers and to thebenefits provided to him or her immediately prior to the date of his orher agreement and will be reimbursed by us for any business expensesreasonably incurred.

As the result of the merger of Acorn andUnionTools, 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 thruNovember  30,  2006. Mr.  Jacob’s agreementprovides customary termination events, including death, permanentdisability and cause. Mr.  Jacob will be entitled to receiveAccrued Benefits and a Severance Payment payable in tweleve monthlyinstallments upon completion of his employment period. We also have anemployment agreement with A. Corydon Meyer, who accepted the positionof Senior Executive Vice President of Business Development, with theCompany. His annual base salary is $364,000.

With respect to eachof the executives, in the event of a termination of employment byreason of death or ‘‘permanentdisability,’’ as defined in the agreements, by us for‘‘due cause,’’ as defined in theagreements, or by the executive voluntarily, we will have no furtherobligation to the executive (or the executive’s estate) exceptfor salary and benefits accrued through the termination date. In thecase of a termination based on permanent disability, the executive willalso be entitled to any benefits provided under our disabilityinsurance policy. If the executive is terminated by us without duecause or if he or she terminates employment for ‘‘goodreason,’’ as defined in the agreements for the periodspecified in the applicable executive’s employment agreement,then the executive will be entitled to receive as severance pay his orher base salary and benefits for the period specified in the applicableexecutive’s employment agreement, payable at our regular payrollintervals. If the executive obtains employment at any time during theseverance period, our severance obligations will be reduced by theamount of compensation or benefits received by the executive under hisor her new employment arrangement. For two years after the terminationof employment, each executive will be subject to a non-competition andnon-solicitation restriction.

EmploymentPlans

Retirement Plans

Effective January14,  2002, we established the Ames True Temper, Inc. Pension Planand Trust which we refer to as the pension plan. Assets necessary tofund the pension plan were transferred from the Lawn and Garden PensionPlan, formerly known as the USI Group Pension Plan, which we refer toas the lawn and garden plan, the Predecessor Company II plan in whichour employees participated. Accumulated years of benefit service underthe lawn and garden plan are included in the benefit formula of thepension plan, which generally covers employees who have completedeither one year of service or one hour of service, depending upon hisor 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 fiveyears of service) equal to the product of his or her years of benefitservice and the applicable multiplier, subject to offset in certaininstances for payments that are required by law (other than socialsecurity 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 thedate the employee last worked for the company. Eligible salariedemployees and certain other hourly employees are entitled to a pensionat the normal retirement age of 65 equal to 1.20% of averagemonthly compensation, as defined below, up to the social securityintegration level times years of benefit service, plus 1.85% ofaverage monthly compensation, in excess of the social securityintegration level times years of benefit service, up to a total of 30years of benefit service. ‘‘Average monthlycompensation’’ is the highest average monthly salaryreceived 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 theAmes True Temper, Inc. Retirement Savings and Investment Plan andsalary reduction contributions to any Section 125 Plan, but excludesincome realized under any incentive plan or stock option plan,severance pay in excess of six months, welfare benefits, accruedvacation for periods in excess of one year, moving expenses, taxablefringe benefits, reimbursements and other expense allowances anddeferred compensation. This compensation is comparable to the‘‘Annual Compensation’’ shown in theSummary Compensation Table. After completing five years of service, anemployee whose employment with the participating company has terminatedis entitled to a benefit, as of the employee’s normal retirementdate, equal to the benefit earned to the date of termination ofemployment, or an actuarially reduced benefit commencing at any timeafter age 55 or 60, depending upon the employee’s work location,if the participant is eligible for early retirement under the pensionplan. Certain death benefits are available to eligible survivingspouses of participants.

Since various laws and regulations setlimits on the amounts allocable to a participant under the pensionplan, we have established the Ames True Temper, Inc. SupplementalExecutive Retirement Plan, or SERP. The SERP provides retirementbenefits on an unfunded basis to Messrs. Dell, Greenly, and Reed (whosebenefits under the pension plan would be restricted by the limits) uponretirement from our company of an amount equal to the differencebetween the annual retirement benefits permitted under the pension planand the amount that would have been paid if the limitations imposedwere at a level stated in the SERP rather than the laws andregulations. The limits in the SERP are different for each participant.Benefits under the SERP generally become 100% vested after fiveyears of service, at early retirement, at normal retirement, upondeath, upon disability or upon a ‘‘change incontrol’’, as defined in the SERP.

The amounts setforth in the table are the amounts which would be paid to salariedemployees pursuant to the pension plan and the SERP (for a participantwith no additional limits in the SERP) at a participant’s normalretirement age assuming the indicated average annual compensation andthe indicated years of benefit service and assuming that the straightlife annuity form of benefit will be elected and that SERP benefitswill be paid in the form of anannuity.

|          |  |  |                |   |         |          |  |  |          |   |         |          |  |  |         |   |         |         |  |  |  |   |         |  |  |  |  |   |         |  |  |  |  |   |         |  |
|----------|--|--|----------------|---|---------|----------|--|--|----------|---|---------|----------|--|--|---------|---|---------|---------|--|--|--|---|---------|--|--|--|--|---|---------|--|--|--|--|---|---------|--|
|     |  |  | YearsofService |
| Salary   |  |  | 15Years        |   |         | 20 Years |  |  | 25 Years |   |         | 30 Years |  |  | 35Years |   |         | 40Years |
| $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) | AtSeptember  30,  2006 Messrs. Dell, Greenly and Reed had4.75, 4.75 and .92 years of benefit service,respectively. |

|                |                                                                                              |
|----------------|----------------------------------------------------------------------------------------------|
| Item 12.  | SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATEDSTOCKHOLDER MATTERS |

All of our issued and outstanding capitalstock is held by our parent. Our parent’s capitalizationconsists of 1,600,000 shares of Class A Common Stock, $.0001 par valueper share, 300,000 shares of Class B Common Stock, $.0001 par value pershare, and 100,000 shares of Series A Preferred Stock, $.0001 par valueper share. Our parent (ATT Holding Co.) is a direct wholly ownedsubsidiary of buyer (CHATT Holdings Inc.), and buyer is a direct whollyowned subsidiary of buyer parent (CHATT Holdings LLC) and approximately87% and 13%, respectively, of the equity interests ofbuyer parent are owned by CHAMES Holdings I LLC and its affiliates (anaffiliate of Castle Harlan), and certain members ofmanagement.

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The following table sets forth informationwith respect to the beneficial ownership of buyer parent’sequity interests by:

|  |              |                                                                                                         |
|--|--------------|---------------------------------------------------------------------------------------------------------|
|  | •  | each person who isknown by us to beneficially own 5% or more of buyerparent’s outstanding equity; |

|  |              |                                                       |
|--|--------------|-------------------------------------------------------|
|  | •  | eachmember of buyer parent’s board ofdirectors; |

|  |              |                                                                                                   |
|--|--------------|---------------------------------------------------------------------------------------------------|
|  | •  | each of our executiveofficers named in the table under Item 11 – ExecutiveCompensation; and |

|  |              |                                                                                             |
|--|--------------|---------------------------------------------------------------------------------------------|
|  | •  | all members of buyerparent’s board of directors and our executive officers as agroup. |

Beneficial ownership is determined in accordance with therules of the SEC. Accordingly, the following table does not reflectcertain Class B management incentive units of buyer parent that aresubject to vesting or units that have been repurchased from certaindeparted members of management. To our knowledge, each of the holdersof units of ownership interests listed below has sole voting andinvestment power as to the units owned unless otherwise noted. Theholders of Class A-1 and A units will not ordinarily have the right tovote on matters to be voted on by unitholders. Holders of Class A-1, Aand Class B units will also have different rights with respect todistributions.

|                                                                              |  |  |                           |  |           |                                         |  |  |                        |  |       |                                     |  |  |  |  |           |  |  |  |  |  |       |   |
|------------------------------------------------------------------------------|--|--|---------------------------|--|-----------|-----------------------------------------|--|--|------------------------|--|-------|-------------------------------------|--|--|--|--|-----------|--|--|--|--|--|-------|---|
| Nameand Address of Beneficial Owner                                          |  |  | Numberof Class A1,A Units |  |           | Percentage ofTotalClass A1, A Units (%) |  |  | Number of Class BUnits |  |       | Percentage ofTotal Class B Units(%) |
| CHAMES Holdings ILLC(1)(2)                                                   |  |  |                           |  | 961,564   |                                         |  |  |                        |  | 87.03 | %                                   |  |  |  |  | 961,564   |  |  |  |  |  | 87.03 | % |
| JohnK.Castle(1)(3)                                                           |  |  |                           |  | 961,564   |                                         |  |  |                        |  | 87.03 | %                                   |  |  |  |  | 961,564   |  |  |  |  |  | 87.03 | % |
| RichardDell(1)                                                               |  |  |                           |  | 60,398    |                                         |  |  |                        |  | 5.47  | %                                   |  |  |  |  | 60,398    |  |  |  |  |  | 5.47  | % |
| DuaneGreenly(1)                                                              |  |  |                           |  | 22,706    |                                         |  |  |                        |  | 2.06  | %                                   |  |  |  |  | 22,706    |  |  |  |  |  | 2.06  | % |
| DavidNuti                                                                    |  |  |                           |  | 1,000     |                                         |  |  |                        |  |       | *                                   |  |  |  |  | 1,000     |  |  |  |  |  |       | * |
| JeanGaudreault(1)                                                            |  |  |                           |  | 4,723     |                                         |  |  |                        |  |       | *                                   |  |  |  |  | 4,723     |  |  |  |  |  |       | * |
| GeoffBrownrigg(1)                                                            |  |  |                           |  | 400       |                                         |  |  |                        |  |       | *                                   |  |  |  |  | 400       |  |  |  |  |  |       | * |
| JustinB.Wender(1)                                                            |  |  |                           |  | 0         |                                         |  |  |                        |  |       | *                                   |  |  |  |  | 0         |  |  |  |  |  |       | * |
| WilliamM.Pruellage(1)                                                        |  |  |                           |  | 0         |                                         |  |  |                        |  |       | *                                   |  |  |  |  | 0         |  |  |  |  |  |       | * |
| JohnMorningstar(1)                                                           |  |  |                           |  | 0         |                                         |  |  |                        |  |       | *                                   |  |  |  |  | 0         |  |  |  |  |  |       | * |
| RobertElman(1)                                                               |  |  |                           |  | 1,000     |                                         |  |  |                        |  |       | *                                   |  |  |  |  | 1,000     |  |  |  |  |  |       | * |
| EdwardLeBlanc(1)                                                             |  |  |                           |  | 500       |                                         |  |  |                        |  |       | *                                   |  |  |  |  | 500       |  |  |  |  |  |       | * |
| KennethRoman(1)                                                              |  |  |                           |  | 2,000     |                                         |  |  |                        |  |       | *                                   |  |  |  |  | 2,000     |  |  |  |  |  |       | * |
| Alldirectors and executive officers as a group (including those listedabove) |  |  |                           |  | 1,078,100 |                                         |  |  |                        |  | 97.58 | %                                   |  |  |  |  | 1,078,100 |  |  |  |  |  | 97.58 | % |
|                                                                              |

|  |
|--|
|  |  |
|  |

|   |                                                                   |
|---|-------------------------------------------------------------------|
| * | Denotesbeneficial ownership of less than 1% of the class ofunits. |

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

|     |                                                                                                                                                                                                                                                      |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | CHP IV isthe direct parent of CHAMES Holdings I LLC and includes units ofownership interests held by related entities and persons, all of whichmay be deemed to be beneficially owned by CHP IV. CHP IV disclaimsbeneficial ownership of theseunits. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3) | John K. Castle, a member ofbuyer parent’s board of directors, is the controllingstockholder of Castle Harlan Partners IV, G.P., Inc., the generalpartner of the general partner of CHP IV, the indirect parent of thebuyer parent, and as such may be deemed a beneficial owner of the unitsof the buyer parent owned by CHP IV and its affiliates. Mr.Castle disclaims beneficial ownership of all units in excess of hisproportionate partnership share of CHP IV. |

|               |                                               |
|---------------|-----------------------------------------------|
| Item13.  | CERTAIN RELATIONSHIPS AND RELATEDTRANSACTIONS |

Management Agreement

On June28,  2004, at the closing of the acquisition, we entered into amanagement agreement with Castle Harlan, Inc., as manager, under whichCastle Harlan provides business and organizational strategy, financialand investment management, advisory, merchant and investment bankingservices to 

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the buyer parent, the buyer, our parent andus. As compensation for those services, we will pay to Castle Harlan(1) for services rendered during the first year of the term of theagreement, a management fee equal to 1.5% of the aggregateequity contributions made upon closing of the acquisition by CHP IV andits affiliates (including their limited partners), payable onJune  28,  2005, (2) for services rendered during thesecond year of the term of the agreement, a management fee equal to1.5% of the aggregate equity contributions made on June28,  2004 by CHP IV and its affiliates (including their limitedpartners), payable quarterly in advance and (3) for services renderedafter the second full year of the agreement, an annual management feeequal to 3.0% of the aggregate equity contributions made onJune  28,  2004 by CHP IV and its affiliates (includingtheir limited partners), payable quarterly in advance. Under themanagement agreement, we will also pay Castle Harlan, for servicesrendered in connection with the transactions, a one-time transactionfee, payable on June  28,  2004, equal to 3% of theaggregate equity contributions made on June  28,  2004 byCHP IV and its affiliates (including their limited partners). Inaddition, if at any time after the closing of the acquisition, CHP IVor its affiliates (including their limited partners) make anyadditional equity contributions to any of us, our parent, the buyer orthe buyer parent, we will pay Castle Harlan an annual management feeequal to 3% of each such equity contribution. We will also payor reimburse Castle Harlan for all out-of-pocket fees and expensesincurred by Castle Harlan and any advisors, consultants, legal counseland other professionals engaged by Castle Harlan to assist in theprovision of services under the management agreement. During fiscal2006, we recorded expenses of $1.9  million related to CastleHarlan’s annual management fee.

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

Management Equity

Inconnection with the acquisition, certain members of management,including our executive officers, made an equity investment in theaggregate amount of approximately $14.0  million in buyer parent,through the exchange of shares of our parent’s capital stockheld by management and, in a few cases, certain members of managementthat did not hold equity in our parent purchased an equity interest inbuyer parent for cash. During fiscal 2006, new or promoted members ofAmes True Temper management purchased equity units of CHATT HoldingsLLC.

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|                |                                       |
|----------------|---------------------------------------|
| Item 14.  | PRINCIPALACCOUNTANT FEES AND SERVICES |

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

The Audit Committee approves all services rendered byE&Y to us and approves all fees paid to E&Y. The AuditCommittee requires that management obtain the prior approval of theAudit Committee for all audit and permissible non-audit services to beprovided by E&Y. The Audit Committee considers and approvesanticipated audit and permissible non-audit services to be provided byE&Y during the year and estimated fees. The Audit Committee willnot approve non-audit engagements that would violate rules of theSecurities and Exchange Commission or impair the independence ofE&Y.

For the fiscal years ended September  30,2006 and October  1,  2005, E&Y was paid the followingfees for services providedus:

|                      |  |  |            |   |         |            |  |  |  |   |         |  |
|----------------------|--|--|------------|---|---------|------------|--|--|--|---|---------|--|
|                 |  |  | Fiscal2006 |   |         | Fiscal2005 |
| AuditFees(1)         |  |  |            | $ | 679,394 |            |  |  |  | $ | 493,214 |  |
| Audit-RelatedFees(2) |  |  |            |   | 415,315 |            |  |  |  |   | 62,224  |  |
| TaxFees(3)           |  |  |            |   | 98,460  |            |  |  |  |   | 27,240  |  |
| All OtherFees        |  |  |            |   | — |            |  |  |  |   | — |  |
|                      |

|  |
|--|
|  |  |
|  |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Includesfees for professional services performed for the audit of our annualfinancial statements and services that are normally provided inconnection with statutory and regulatory filings or engagements. Duringfiscal 2006, certain services were performed in connection with ouracquisition of Acorn Products, Inc. During fiscal 2005, certainservices were provided in connection with the offering of our SeniorFloating Rate Notes and registration statements associated with theaforementioned notes and the Senior SubordinatedNotes. |

|     |                                                                                                                                                                                                               |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Includes fees for professionalservice performed for the review of inventory control procedures aswell as certain services surrounding the future compliance with section404 of the Sarbanes-Oxley Act of2002. |

|     |                                                                                                         |
|-----|---------------------------------------------------------------------------------------------------------|
| (3) | For fiscal 2006 and 2005., taxfees consist principally of fees related to tax consulting andcompliance. |

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PARTIV

|                |                                           |
|----------------|-------------------------------------------|
| Item 15.  | EXHIBITS AND FINANCIAL STATEMENTSCHEDULES |

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

1.    Financial Statements:

A listof the Consolidated Financial Statements, related notes and Report ofIndependent Registered Public Accounting Firm is set forth in Item 8 ofthis report on Form 10-K.

2.    Financial StatementSchedules:

Schedule II — Valuation and QualifyingAccounts

All other schedules for which provision is made in theapplicable accounting regulations of the Securities and ExchangeCommission are not required under the related instructions, areinapplicable, are not material, or the information called for therebyis otherwise included in the financial statements and, therefore, havebeen omitted.

3.    Index to Exhibits:

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

|               |  |  |                                                                                                                                                                                                                                                                |  |  |        |
|---------------|--|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--------|
| ExhibitNumber |  |  | Description                                                                                                                                                                                                                                                    |  |  |   |
| 2.1           |  |  | Agreementand Plan of Merger, dated as of April  7,  2006, by andamong Acorn Products, Inc., Ames True Temper, Inc. and ATTUT Holdings,Inc.                                                                                                                     |  |  | G      |
| 3.1           |  |  | Certificateof Incorporation of Ames True Temper,Inc.                                                                                                                                                                                                           |  |  | A      |
| 3.2           |  |  | By-laws of AmesTrue Temper,Inc.                                                                                                                                                                                                                                |  |  | A      |
| 3.3           |  |  | Certificate ofIncorporation of ATT HoldingCo.                                                                                                                                                                                                                  |  |  | A      |
| 3.4           |  |  | By-laws of ATTHolding Co.                                                                                                                                                                                                                                      |  |  | A      |
| 4.1           |  |  | Indenturedated as of June  28,  2004 among Ames True Temper, Inc.,as Issuer, ATT Holding Co., as Guarantor and The Bank of New York, asTrustee                                                                                                                 |  |  | A      |
| 4.2           |  |  | Form of10% Senior Subordinated Notes due 2012 (included in Exhibit4.1)                                                                                                                                                                                         |  |  | A      |
| 4.3           |  |  | RegistrationRights Agreement, dated June  28,  2004, among Ames TrueTemper, Inc., ATT Holding Co. and the InitialPurchasers                                                                                                                                    |  |  | 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 ofSenior Floating Rate Notes due 2012 (included in Exhibit4.4)                                                                                                                                                                                            |  |  | C      |
| 4.6           |  |  | RegistrationRights Agreement, dated January  14,  2005, among Ames TrueTemper, Inc., ATT Holding Co. and the InitialPurchasers                                                                                                                                 |  |  | C      |
| 10.1          |  |  | StockPurchase Agreement, dated as of June  21,  2004, by andamong  ATT Holding Co., the Warrantholders of ATT Holding Co.,Windpoint Investors V, L.P., as Sellers’ Representative, CHATTHoldings LLC, as Buyer Parent, and CHATT Holdings Inc., asBuyer. |  |  | B      |
|               |

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|               |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |        |
|---------------|--|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--------|
| ExhibitNumber |  |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |  |   |
| 10.2          |  |  | CreditAgreement, dated as of June  28,  2004, by and among AmesTrue Temper, Inc., ATT Holding Co., the lenders from time to time partythereto (each a ‘‘Lender’’ andcollectively, the ‘‘Lenders’’), Bank ofAmerica, N.A., in its capacity as Administrative Agent, Swing LineLender and L/C Issuer, General Electric Capital Corporation, asDocumentation Agent, Wachovia Bank, National Association, asSyndication Agent and Banc of America Securities LLC, as Sole LeadArranger and Sole BookManager |  |  | B      |
| 10.2.1        |  |  | AmendmentNo. 1 to Credit Agreement, dated January  14,  2005, by andamong Ames True Temper, Inc., ATT Holding Co., as a guarantor, thebanks, financial institutions and other institutional lenders partiesto the Credit Agreement dated as of June  28,  2004, andBank of America, N.A., as administrativeagent.                                                                                                                                                                                                                                       |  |  | C      |
| 10.2.2        |  |  | Amendment No.2 to Credit Agreement, dated December  1,  2005, by andamong Ames True Temper, Inc., ATT Holding Co., as a guarantor, thebanks, financial institutions and other institutional lenders partiesto the Credit Agreement dated as of June  28,  2004, andBank of America, N.A., as administrativeagent.                                                                                                                                                                                                                                       |  |  | D      |
| 10.2.3        |  |  | Amended andRestated 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, swingline lender and l/c issuer, and the other lenders partythereto.                                                                                                                                                                                                        |  |  | H      |
| 10.3          |  |  | SecurityAgreement, dated as of June  28,  2004, made by Ames TrueTemper, Inc., the other persons listed on the signature pages thereofto Bank of America, N.A., as CollateralAgent                                                                                                                                                                                                                                                                                                                                                                      |  |  | B      |
| 10.4          |  |  | IntellectualProperty Security Agreement, dated June  28,  2004, made bythe persons listed on the signature pages thereof in favor of Bank ofAmerica, N.A., as CollateralAgent                                                                                                                                                                                                                                                                                                                                                                           |  |  | B      |
| 10.5          |  |  | SubsidiaryGuaranty, dated as of June  28,  2004, made by the personslisted on the signature pages thereof under the caption‘‘Subsidiary Guarantor’’ in favor of theSecured Parties                                                                                                                                                                                                                                                                                                                                              |  |  | B      |
| 10.6          |  |  | Chargeof Shares in respect of the shares of True Temper Limited made onJune  28,  2004 between Ames True Temper, Inc. and Bank ofAmerica, N.A., as securitytrustee                                                                                                                                                                                                                                                                                                                                                                                      |  |  | B      |
| 10.7+         |  |  | Amended andRestated Employment Agreement, dated June  28,  2004,between Ames True Temper, Inc. and Richard C.Dell                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  | B      |
| 10.8+         |  |  | Amended andRestated Employment Agreement, dated June  28,  2004,between Ames True Temper, Inc. and Judy A.Schuchart                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |  | B      |
| 10.9+         |  |  | Amended andRestated Employment Agreement, dated June  28,  2004,between Ames True Temper, Inc. and Duane R.Greenly                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |  | B      |
| 10.10+        |  |  | Amended andRestated Employment Agreement, dated June  28,  2004,between Ames True Temper, Inc. and George Reed,Jr.                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |  | B      |
| 10.11+        |  |  | Amended andRestated Employment Agreement, dated June  28,  2004,between Ames True Temper, Inc. and JosephWersosky                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  | B      |
|               |

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|               |  |  |                                                                                                                                                                         |  |  |        |
|---------------|--|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--------|
| ExhibitNumber |  |  | Description                                                                                                                                                             |  |  |   |
| 10.12+        |  |  | ManagementAgreement, dated June  28,  2004, by and among CastleHarlan, Inc., ATT Holding Co., Ames True Temper, Inc. and CHATTHoldingsInc.                              |  |  | B      |
| 10.13+        |  |  | Amended andRestated 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. andGeoffBrownrigg                                                                           |  |  | E      |
| 10.15*+       |  |  | Amendedand Restated Employment Agreement, dated April  7,  2006,between Ames True Temper, Inc. and A. Corydon Meyer.                                                    |  |  |   |
| 10.16*+       |  |  | Amended and RestatedEmployment Agreement, dated April  7,  2006, between AmesTrue Temper, Inc. and John G.Jacob.                                                        |  |  |   |
| 10.17*+       |  |  | Amended andRestated Employment Agreement, dated May  5,  2006, betweenAmes True Temper, Inc. and David M.Nuti.                                                          |  |  |   |
| 12.1*         |  |  | StatementRegarding Computation ofRatios                                                                                                                                 |  |  |   |
| 14.1          |  |  | Code ofEthics                                                                                                                                                           |  |  | B.1    |
| 21.1          |  |  | List ofsubsidiaries of theCompany                                                                                                                                       |  |  | A      |
| 31.1*         |  |  | Certificationof Chief Executive Officer pursuant to Section 302 of theSarbanes-Oxley Act of2002                                                                         |  |  |   |
| 31.2*         |  |  | Certification ofChief Financial Officer pursuant to Section 302 and 404 of theSarbanes-Oxley Act of2002                                                                 |  |  |   |
| 32.1*         |  |  | Certification ofChief Executive Officer pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act2002                        |  |  |   |
| 32.2*         |  |  | Certification ofChief Financial Officer pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act2002                        |  |  |   |
| *             |  |  | Filedherewith                                                                                                                                                           |  |  |   |
| (A)           |  |  | Previouslyfiled as an exhibit to the Registrants’ Registration Statementon Form S-4 (Reg. No. 333-118086) filed with the SEC on August10,  2004.                  |  |  |   |
| (B)           |  |  | Previouslyfiled as an exhibit to Amendment No. 1 to the Registrants’Registration Statement on Form S-4 (Reg. No. 333-118086) filed with theSEC on October  7,2004 |  |  |   |
| (B.1)         |  |  | Previously files as anexhibit to Registrant’s Annual Report on Form 10-K for thefiscal year ended September 25, 2004, filed with the SEC onDecember  23,2004      |  |  |   |
| (C)           |  |  | Previously filed as anexhibit to the Registrant’s Current Report on  Form 8-Kfiled with the SEC on January  18,2005                                               |  |  |   |
| (D)           |  |  | Previously filed as anexhibit to the Registrant’s Current Report on  Form 8-Kfiled with the SEC on December  7,2005                                               |  |  |   |
| (E)           |  |  | Previously filed as anexhibit to the Registrant’s Current Report on  Form 8-Kfiled with the SEC on March  28,2005                                                 |  |  |   |
|               |

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|               |  |  |                                                                                                                                                                      |  |  |        |
|---------------|--|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--------|
| ExhibitNumber |  |  | Description                                                                                                                                                          |  |  |   |
| (F)           |  |  | Previously filed as anexhibit to the Registrant’s Annual Report on  Form 10-Kfor the fiscal year ended October 1, 2005, filed with the SEC onDecember  22,2005 |  |  |   |
| (G)           |  |  | Previously filed as anexhibit to the Registrant’s Current Report on  Form 8-Kfiled with the SEC on April  7,2006                                               |  |  |   |
| (H)           |  |  | Previously filed as anexhibit to the Registrant’s Current Report on  Form 8-Kfiled with the SEC on , April  14,2006                                            |  |  |   |
|               |

(b)    Reference is made to Item15(a)(3) above.

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

|  |
|--|
|  |  |
|  |

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SIGNATURES

Pursuant to therequirements of Section 13 or 15(d) of the Securities Exchange Act of1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto dulyauthorized.

|                          |  |  |                                                                                                                                                                                            |
|--------------------------|--|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                     |  |  | AmesTrue Temper,Inc.                                                                                                                                                                       |
| Date:December  22,  2006 |  |  | By:    /s/ RichardDell                         |
|                     |  |  | RichardDell                                                                                                                                                                                |
|                     |  |  | President and Chief ExecutiveOfficer(Authorized Signatory)                                                                                                                                 |
|                          |

Pursuant tothe requirements of the Securities Exchange Act of 1934, this reporthas been signed below, by the following persons on behalf of theregistrant and in the capacities and on the datesindicated.

|                                                                                                                                                                                                                                                                                                                             |  |  |                                                                             |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|-----------------------------------------------------------------------------|
| Signature                                                                                                                                                                                                                                                                                                                   |  |  | Title                                                                       |
| /s/Richard Dell                                            Richard DellDated: December  22,2006 |  |  | Director, President and ChiefExecutive Officer (Principal ExecutiveOfficer) |
| /s/ DavidM.Nuti                                           David M.  Nuti Dated:  December22,  2006   |  |  | Chief Financial Officer (Principal FinancialOfficer)                        |
|                                                                                                                                                                                                                                                                                                                             |

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SCHEDULEII — VALUATION AND QUALIFYING ACCOUNTS

For the Fiscalyear Ended September  30,  2006, the Fiscal year EndedOctober  1,  2005,and the Periods EndedSeptember  25,  2004 and June  27,  2004.(Dollar amounts inthousands)

|                                       |  |  |                               |   |         |                                        |  |  |            |   |        |           |  |  |                        |  |        |   |  |  |  |  |        |   |  |  |  |   |        |  |
|---------------------------------------|--|--|-------------------------------|---|---------|----------------------------------------|--|--|------------|---|--------|-----------|--|--|------------------------|--|--------|---|--|--|--|--|--------|---|--|--|--|---|--------|--|
| Allowancefor doubtfulaccounts         |  |  | Balance at beginning ofperiod |   |         | Additions charged to costs andexpenses |  |  | Deductions |   |        | Other (1) |  |  | Balance atend ofperiod |
| ATTHoldingCo.                         |  |  |                               |   |    |                                        |  |  |            |   |   |           |  |  |                        |  |   |   |  |  |  |  |   |   |  |  |  |   |   |  |
| Fiscalyear ended September  30,2006   |  |  |                               | $ | 1,335   |                                        |  |  |            | $ | (120   | )         |  |  |                        |  | (2     | ) |  |  |  |  | 56     |   |  |  |  | $ | 1,269  |  |
| Fiscalyear ended October  1,2005      |  |  |                               |   | 1,410   |                                        |  |  |            |   | (88    | )         |  |  |                        |  | (48    | ) |  |  |  |  | 61     |   |  |  |  |   | 1,335  |  |
| Periodended September  25,2004        |  |  |                               |   | — |                                        |  |  |            |   | 66     |           |  |  |                        |  | (449   | ) |  |  |  |  | 1,793  |   |  |  |  |   | 1,410  |  |
| ATTHolding Co. (Predecessor CompanyI) |  |  |                               |   |    |                                        |  |  |            |   |   |           |  |  |                        |  |   |   |  |  |  |  |   |   |  |  |  |   |   |  |
| Periodended June  27,2004             |  |  |                               |   | 2,091   |                                        |  |  |            |   | (95    | )         |  |  |                        |  | (50    | ) |  |  |  |  | (51    | ) |  |  |  |   | 1,895  |  |
|                                       |

|                                        |  |  |                            |   |       |           |  |  |            |  |       |          |  |  |                         |  |         |  |  |  |  |  |         |  |  |  |  |  |       |  |
|----------------------------------------|--|--|----------------------------|---|-------|-----------|--|--|------------|--|-------|----------|--|--|-------------------------|--|---------|--|--|--|--|--|---------|--|--|--|--|--|-------|--|
| Valuationallowance ofdeferred taxasset |  |  | Balanceatbeginningofperiod |   |       | Additions |  |  | Deductions |  |       | Other(1) |  |  | Balance atend of period |
| Fiscal yearended September  30,2006    |  |  |                            | $ | 2,649 |           |  |  |            |  | 4,509 |          |  |  |                         |  | — |  |  |  |  |  | 390     |  |  |  |  |  | 7,548 |  |
| Fiscalyear ended October  1,2005       |  |  |                            |   | 1,899 |           |  |  |            |  | 750   |          |  |  |                         |  | — |  |  |  |  |  | — |  |  |  |  |  | 2,649 |  |
|                                        |

|  |
|--|
|  |  |
|  |

|     |                                                                                       |
|-----|---------------------------------------------------------------------------------------|
| (1) | Primarilythe impact of currency changes as well as acquisitions of certainbusinesses. |

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