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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-Q







|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended October 3, 2009

OR



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

For the transition period from              to

Commission File Number 333-124878





American Tire Distributors Holdings, Inc.







|                       |  |                                           
|---------------------- |  | ------------------------------------------
|A Delaware Corporation |  | IRS Employer Identification No. 59-3796143

12200 Herbert Wayne Court

Suite 150

Huntersville, North Carolina 28078

(704) 992-2000





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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No   ̈

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

Large accelerated filer   ̈  Accelerated filer   ̈  Non-accelerated filer  x  Smaller reporting company   ̈

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

Number of common shares outstanding at November 11, 2009: 999,527









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TABLE OF CONTENTS



|         |  |                                                                                                                                                       |  |     
|-------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|         |  |                                                                                                                                                       |  | Page
|PART I.  |  | FINANCIAL INFORMATION                                                                                                                                 |  |     
|         |  |                                                                                                                                                      
|ITEM 1.  |  | Financial Statements                                                                                                                                  |  |     
|         |  | Condensed Consolidated Balance Sheets (unaudited)As of October 3, 2009 and January 3,
2009                                                           |  | 4   
|         |  | Condensed Consolidated Statements of Operations (unaudited)For the Quarters and Nine Months Ended October
 3, 2009 and October 4, 2008               |  | 5   
|         |  | Condensed Consolidated Statement of Stockholders Equity and Other Comprehensive Income (Loss) (unaudited)For
 the Nine Months Ended October 3, 2009 |  | 6   
|         |  | Condensed Consolidated Statements of Cash Flows (unaudited)For the Nine Months Ended October 3, 2009 and
 October 4, 2008                            |  | 7   
|         |  | Notes to Condensed Consolidated Financial Statements (unaudited)                                                                                      |  | 8   
|         |  |                                                                                                                                                      
|ITEM 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of
Operations                                                                 |  | 26  
|         |  |                                                                                                                                                      
|ITEM 3.  |  | Quantitative and Qualitative Disclosures about Market Risk                                                                                            |  | 36  
|         |  |                                                                                                                                                      
|ITEM 4.  |  | Controls and Procedures                                                                                                                               |  | 36  
|         |  |                                                                                                                                                      
|PART II. |  | OTHER INFORMATION                                                                                                                                     |  |     
|         |  |                                                                                                                                                      
|ITEM 1.  |  | Legal Proceedings                                                                                                                                     |  | 38  
|         |  |                                                                                                                                                      
|ITEM 1A. |  | Risk Factors                                                                                                                                          |  | 38  
|         |  |                                                                                                                                                      
|ITEM 6.  |  | Exhibits                                                                                                                                              |  | 38  
|         |  |                                                                                                                                                      
|         |  | Signatures                                                                                                                                            |  | 39  

As used in this report on Form 10-Q, the terms Holdings,
Company, we, us, our, and similar terms refer to American Tire Distributors Holdings, Inc. and its subsidiaries, unless the context indicates otherwise. The term ATD refers to American Tire
Distributors, Inc. and its subsidiaries.



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Cautionary Statements on Forward-Looking Information

This Form 10-Q contains forward-looking statements relating to our business and financial outlook, and that are based on our current
expectations, estimates, forecast and projections. In some cases, you can identify forward-looking statements by terminology such as may, will, should, expects, plans,
anticipates, believes, estimates, predicts, potential, continue or other comparable terminology. These forward-looking statements are not guarantees of future performance and
involve risks, uncertainties, estimates and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements. You should not place undue reliance on any
of these forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any such statement to reflect new information, or the occurrence of future events or
changes in circumstances.

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements to encourage companies to provide prospective information about their companies without fear of litigation. We would like to take advantage of the safe harbor provisions of the Private Securities Litigation
Reform Act in connection with the forward-looking statements included in this document.

Factors that could cause actual
results to differ materially from those indicated by the forward-looking statements or that could contribute to such differences include, but are not limited to, integration of new systems, unanticipated expenditures, acquisitions and the successful
integration of acquisitions into the business, changing relationships with customers, suppliers and strategic partners, changes to governmental regulation of the tire industry, the impact of competitive products, changes to the competitive
environment, the acceptance of new products in the market, the economy and world events, as well as those items identified under the heading Risk Factors as reported in our Annual Report on Form 10-K filed on April 3, 2009.



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PART I. FINANCIAL INFORMATION



|Item 1. | Financial Statements.
|------- | ---------------------

American Tire Distributors Holdings, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(amounts in thousands, except share and per share amounts)



|                                                                                                                                   |  |                |           |   |                |   |           |  
|---------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | --------- | - | -------------- | - | --------- | -
|                                                                                                                                   |  | October 3,2009 |           |   | January 3,2009 |  
|Assets                                                                                                                             |  |                |           |   |                |   |           |  
|Current assets:                                                                                                                    |  |                |           |   |                |   |           |  
|Cash and cash equivalents                                                                                                          |  | $              | 6,446     |   |                | $ | 8,495     |  
|Restricted cash                                                                                                                    |  |                | 10,250    |   |                |   | 10,250    |  
|Accounts receivable, net of allowance for doubtful accounts of $1,712 and $2,314                                                   |  |                | 202,524   |   |                |   | 178,895   |  
|Inventories                                                                                                                        |  |                | 366,893   |   |                |   | 456,077   |  
|Assets held for sale                                                                                                               |  |                | 2,976     |   |                |   | 14,712    |  
|Deferred income taxes                                                                                                              |  |                | 15,207    |   |                |   | 14,198    |  
|Other current assets                                                                                                               |  |                | 10,629    |   |                |   | 13,431    |  
|                                                                                                                                   |  |                |           |   |                |   |           |  
|Total current assets                                                                                                               |  |                | 614,925   |   |                |   | 696,058   |  
|                                                                                                                                   |  |                |           |   |                |   |           |  
|Property and equipment, net                                                                                                        |  |                | 55,185    |   |                |   | 57,616    |  
|Goodwill                                                                                                                           |  |                | 375,737   |   |                |   | 369,961   |  
|Other intangible assets, net                                                                                                       |  |                | 230,237   |   |                |   | 243,033   |  
|Other assets                                                                                                                       |  |                | 20,483    |   |                |   | 24,192    |  
|                                                                                                                                   |  |                |           |   |                |   |           |  
|Total assets                                                                                                                       |  | $              | 1,296,567 |   |                | $ | 1,390,860 |  
|                                                                                                                                   |  |                |           |   |                |   |           |  
|Liabilities and Stockholders Equity                                                                                               |  |                |           |   |                |   |           |  
|Current liabilities:                                                                                                               |  |                |           |   |                |   |           |  
|Accounts payable                                                                                                                   |  | $              | 332,233   |   |                | $ | 360,391   |  
|Accrued expenses                                                                                                                   |  |                | 30,730    |   |                |   | 43,105    |  
|Liabilities held for sale                                                                                                          |  |                | 783       |   |                |   | 1,199     |  
|Current maturities of long-term debt                                                                                               |  |                | 8,112     |   |                |   | 3,050     |  
|                                                                                                                                   |  |                |           |   |                |   |           |  
|Total current liabilities                                                                                                          |  |                | 371,858   |   |                |   | 407,745   |  
|                                                                                                                                   |  |                |           |   |                |   |           |  
|Long-term debt                                                                                                                     |  |                | 581,304   |   |                |   | 639,384   |  
|Deferred income taxes                                                                                                              |  |                | 70,724    |   |                |   | 74,818    |  
|Other liabilities                                                                                                                  |  |                | 18,718    |   |                |   | 20,486    |  
|Redeemable preferred stock; 20,000 shares authorized, issued and outstanding                                                       |  |                | 25,918    |   |                |   | 23,941    |  
|Commitments and contingencies (see Note 12)                                                                                        |  |                |           |   |                |   |           |  
|Stockholders equity:                                                                                                              |  |                |           |   |                |   |           |  
|Series A Common Stock, par value $.01 per share; 1,500,000 shares authorized; 691,173 shares issued and 690,700 shares
outstanding |  |                | 7         |   |                |   | 7         |  
|Series B Common Stock, par value $.01 per share; 315,000 shares authorized; 307,327 shares issued and outstanding                  |  |                | 3         |   |                |   | 3         |  
|Series D Common Stock, par value $.01 per share; 1,500 shares authorized, issued and outstanding                                   |  |                |          |   |                |   |          |  
|Common Stock, par value $.01 per share; 1,816,500 shares authorized, no shares have been issued                                    |  |                |          |   |                |   |          |  
|Additional paid-in capital                                                                                                         |  |                | 218,321   |   |                |   | 218,022   |  
|Warrants                                                                                                                           |  |                | 4,631     |   |                |   | 4,631     |  
|Accumulated earnings                                                                                                               |  |                | 7,334     |   |                |   | 4,990     |  
|Accumulated other comprehensive loss                                                                                               |  |                | (2,151    | ) |                |   | (3,067    | )
|Treasury stock, at cost, 473 shares of Series A Common Stock                                                                       |  |                | (100      | ) |                |   | (100      | )
|                                                                                                                                   |  |                |           |   |                |   |           |  
|Total stockholders equity                                                                                                         |  |                | 228,045   |   |                |   | 224,486   |  
|                                                                                                                                   |  |                |           |   |                |   |           |  
|Total liabilities and stockholders equity                                                                                         |  | $              | 1,296,567 |   |                | $ | 1,390,860 |  
|                                                                                                                                   |  |                |           |   |                |   |           |  

The accompanying notes are an integral part of these condensed consolidated financial
statements.



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American Tire Distributors Holdings, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(amounts in thousands)



|                                                                                                          |  |                            |         |   |                            |   |         |                                |  |   |                                |   |  |   |           |  
|--------------------------------------------------------------------------------------------------------- |  | -------------------------- | ------- | - | -------------------------- | - | ------- | ------------------------------ |  | - | ------------------------------ | - |  | - | --------- | -
|                                                                                                          |  | QuarterEndedOctober 3,2009 |         |   | QuarterEndedOctober 4,2008 |   |         | Nine MonthsEndedOctober 3,2009 |  |   | Nine MonthsEndedOctober 4,2008 |  
|Net sales                                                                                                 |  | $                          | 549,490 |   |                            | $ | 501,959 |                                |  | $ | 1,645,046                      |   |  | $ | 1,517,300 |  
|Cost of goods sold, excluding depreciation included in selling, general and administrative expenses below |  |                            | 451,252 |   |                            |   | 408,099 |                                |  |   | 1,364,554                      |   |  |   | 1,249,110 |  
|                                                                                                          |  |                            |         |   |                            |   |         |                                |  |   |                                |   |  |   |           |  
|Gross profit                                                                                              |  |                            | 98,238  |   |                            |   | 93,860  |                                |  |   | 280,492                        |   |  |   | 268,190   |  
|Selling, general and administrative expenses                                                              |  |                            | 72,315  |   |                            |   | 67,642  |                                |  |   | 233,602                        |   |  |   | 204,084   |  
|                                                                                                          |  |                            |         |   |                            |   |         |                                |  |   |                                |   |  |   |           |  
|Operating income                                                                                          |  |                            | 25,923  |   |                            |   | 26,218  |                                |  |   | 46,890                         |   |  |   | 64,106    |  
|Other expense:                                                                                            |  |                            |         |   |                            |   |         |                                |  |   |                                |   |  |   |           |  
|Interest expense                                                                                          |  |                            | (13,465 | ) |                            |   | (14,532 | )                              |  |   | (41,345                        | ) |  |   | (44,402   | )
|Other, net                                                                                                |  |                            | (333    | ) |                            |   | (219    | )                              |  |   | (845                           | ) |  |   | (953      | )
|                                                                                                          |  |                            |         |   |                            |   |         |                                |  |   |                                |   |  |   |           |  
|Income from operations before income taxes                                                                |  |                            | 12,125  |   |                            |   | 11,467  |                                |  |   | 4,700                          |   |  |   | 18,751    |  
|Income tax provision                                                                                      |  |                            | 6,828   |   |                            |   | 4,950   |                                |  |   | 2,356                          |   |  |   | 8,200     |  
|                                                                                                          |  |                            |         |   |                            |   |         |                                |  |   |                                |   |  |   |           |  
|Net income                                                                                                |  | $                          | 5,297   |   |                            | $ | 6,517   |                                |  | $ | 2,344                          |   |  | $ | 10,551    |  
|                                                                                                          |  |                            |         |   |                            |   |         |                                |  |   |                                |   |  |   |           |  



The
accompanying notes are an integral part of these condensed consolidated financial statements.



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American Tire Distributors Holdings, Inc.

Condensed Consolidated Statement of Stockholders Equity and Other Comprehensive Income (Loss)

(Unaudited)

(amounts
in thousands, except share amounts)



|                                                                              |  |              |  |                          |    |          |   |                     |  |                                   |       |  |                      |       |  |       |        |   |  |   |      |   |  |   |        
|----------------------------------------------------------------------------- |  | ------------ |  | ------------------------ | -- | -------- | - | ------------------- |  | --------------------------------- | ----- |  | -------------------- | ----- |  | ----- | ------ | - |  | - | ---- | - |  | - | -------
|                                                                              |  | Common Stock |  | AdditionalPaid-InCapital |    | Warrants |   | AccumulatedEarnings |  | AccumulatedOtherComprehensiveLoss |       |  | TreasuryStockat
Cost |       |  | Total
|                                                                              |  | Shares       |  | Amount                   |    |          |   |                     |  |                                  
|Balance, January 3, 2009                                                      |  | 999,527      |  | $                        | 10 |          | $ | 218,022             |  | $                                 | 4,631 |  | $                    | 4,990 |  | $     | (3,067 | ) |  | $ | (100 | ) |  | $ | 224,486
|Comprehensive income:                                                         |  |              |  |                          |    |          |   |                     |  |                                   |       |  |                      |       |  |       |        |   |  |   |      |   |  |   |        
|Net income                                                                    |  |             |  |                          |   |          |   |                    |  |                                   |      |  |                      | 2,344 |  |       |       |   |  |   |     |   |  |   | 2,344  
|Change in value of derivative instrument, net of income taxes of $0.3 million |  |             |  |                          |   |          |   |                    |  |                                   |      |  |                      |      |  |       | 534    |   |  |   |     |   |  |   | 534    
|Unrealized gain on rabbi trust assets, net of income taxes of $0.2 million    |  |             |  |                          |   |          |   |                    |  |                                   |      |  |                      |      |  |       | 382    |   |  |   |     |   |  |   | 382    
|                                                                              |  |              |  |                          |    |          |   |                     |  |                                   |       |  |                      |       |  |       |        |   |  |   |      |   |  |   |        
|Total comprehensive income                                                    |  |             |  |                          |   |          |   |                    |  |                                   |      |  |                      |      |  |       |       |   |  |   |     |   |  |   | 3,260  
|Stock-based compensation expense                                              |  |             |  |                          |   |          |   | 299                 |  |                                   |      |  |                      |      |  |       |       |   |  |   |     |   |  |   | 299    
|                                                                              |  |              |  |                          |    |          |   |                     |  |                                   |       |  |                      |       |  |       |        |   |  |   |      |   |  |   |        
|Balance, October 3, 2009                                                      |  | 999,527      |  | $                        | 10 |          | $ | 218,321             |  | $                                 | 4,631 |  | $                    | 7,334 |  | $     | (2,151 | ) |  | $ | (100 | ) |  | $ | 228,045
|                                                                              |  |              |  |                          |    |          |   |                     |  |                                   |       |  |                      |       |  |       |        |   |  |   |      |   |  |   |        



The
accompanying notes are an integral part of these condensed consolidated financial statements.



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American Tire Distributors Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(amounts in thousands)



|                                                                                            |  |                                |            |   |                                |   |            |  
|------------------------------------------------------------------------------------------- |  | ------------------------------ | ---------- | - | ------------------------------ | - | ---------- | -
|                                                                                            |  | Nine MonthsEndedOctober 3,2009 |            |   | Nine MonthsEndedOctober 4,2008 |  
|Cash flows from operating activities:                                                       |  |                                |            |   |                                |   |            |  
|Net income                                                                                  |  | $                              | 2,344      |   |                                | $ | 10,551     |  
|Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |                                |            |   |                                |   |            |  
|Depreciation and amortization of intangibles                                                |  |                                | 23,573     |   |                                |   | 18,717     |  
|Amortization of other assets                                                                |  |                                | 3,627      |   |                                |   | 3,626      |  
|Benefit for deferred income taxes                                                           |  |                                | (4,721     | ) |                                |   | (3,417     | )
|Accretion of 8% cumulative preferred stock                                                  |  |                                | 331        |   |                                |   | 331        |  
|Accrued dividends on 8% cumulative preferred stock                                          |  |                                | 1,648      |   |                                |   | 1,522      |  
|Provision for doubtful accounts                                                             |  |                                | 1,368      |   |                                |   | 1,113      |  
|Other, net                                                                                  |  |                                | 1,922      |   |                                |   | (16        | )
|Change in operating assets and liabilities:                                                 |  |                                |            |   |                                |   |            |  
|Accounts receivable                                                                         |  |                                | (25,516    | ) |                                |   | (25,960    | )
|Inventories                                                                                 |  |                                | 85,911     |   |                                |   | (66,060    | )
|Other current assets                                                                        |  |                                | 1,002      |   |                                |   | (840       | )
|Accounts payable and accrued expenses                                                       |  |                                | 10,946     |   |                                |   | (15,053    | )
|Other, net                                                                                  |  |                                | (2,428     | ) |                                |   | (1,662     | )
|                                                                                            |  |                                |            |   |                                |   |            |  
|Net cash provided by (used in) operating activities                                         |  |                                | 100,007    |   |                                |   | (77,148    | )
|                                                                                            |  |                                |            |   |                                |   |            |  
|Cash flows from investing activities:                                                       |  |                                |            |   |                                |   |            |  
|Acquisitions, net of cash acquired                                                          |  |                                | 134        |   |                                |   | (168       | )
|Purchase of property and equipment                                                          |  |                                | (5,565     | ) |                                |   | (10,011    | )
|Purchase of assets held for sale                                                            |  |                                | (830       | ) |                                |   | (3,020     | )
|Proceeds from sale of assets held for sale                                                  |  |                                | 8,146      |   |                                |   | 1,977      |  
|Proceeds from sale of property and equipment                                                |  |                                | 167        |   |                                |   | 109        |  
|                                                                                            |  |                                |            |   |                                |   |            |  
|Net cash provided by (used in) investing activities                                         |  |                                | 2,052      |   |                                |   | (11,113    | )
|                                                                                            |  |                                |            |   |                                |   |            |  
|Cash flows from financing activities:                                                       |  |                                |            |   |                                |   |            |  
|Borrowings from revolving credit facility                                                   |  |                                | 1,624,378  |   |                                |   | 1,466,910  |  
|Repayments of revolving credit facility                                                     |  |                                | (1,676,094 | ) |                                |   | (1,380,329 | )
|Outstanding checks                                                                          |  |                                | (49,719    | ) |                                |   | 9,397      |  
|Payments of other long-term debt                                                            |  |                                | (2,673     | ) |                                |   | (3,385     | )
|                                                                                            |  |                                |            |   |                                |   |            |  
|Net cash (used in) provided by financing activities                                         |  |                                | (104,108   | ) |                                |   | 92,593     |  
|                                                                                            |  |                                |            |   |                                |   |            |  
|Net (decrease) increase in cash and cash equivalents                                        |  |                                | (2,049     | ) |                                |   | 4,332      |  
|Cash and cash equivalents, beginning of period                                              |  |                                | 8,495      |   |                                |   | 4,749      |  
|                                                                                            |  |                                |            |   |                                |   |            |  
|Cash and cash equivalents, end of period                                                    |  | $                              | 6,446      |   |                                | $ | 9,081      |  
|                                                                                            |  |                                |            |   |                                |   |            |  
|Supplemental disclosures of cash flow information                                          |  |                                |            |   |                                |   |            |  
|Cash payments for interest                                                                  |  | $                              | 40,818     |   |                                | $ | 50,190     |  
|                                                                                            |  |                                |            |   |                                |   |            |  
|Cash payments for taxes, net                                                                |  | $                              | 5,294      |   |                                | $ | 11,386     |  
|                                                                                            |  |                                |            |   |                                |   |            |  
|Supplemental disclosures of noncash activities                                             |  |                                |            |   |                                |   |            |  
|Capital expenditures financed by debt                                                       |  | $                              | 1,369      |   |                                | $ | 2,258      |  
|                                                                                            |  |                                |            |   |                                |   |            |  

The accompanying notes are an integral part of these condensed consolidated financial
statements.



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American Tire Distributors Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Nature of Business:

American Tire Distributors Holdings, Inc. (also referred to herein as Holdings, or the Company) is a Delaware
corporation that owns 100% of the issued and outstanding capital stock of American Tire Distributors, Inc., a Delaware corporation (ATD). Holdings has no significant assets or operations other than its ownership of ATD. ATD is primarily
engaged in the wholesale distribution of tires, custom wheels, and related automotive service equipment and has one reportable segment.

2.
Basis of Presentation:

The accompanying unaudited condensed consolidated financial statements have been prepared in
accordance with the rules and regulations of the Securities and Exchange Commission (SEC) for reporting on Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position,
results of operations, and changes in financial position in conformity with accounting principles generally accepted in the United States. In the opinion of management, all adjustments, consisting of only normal recurring adjustments, necessary for
a fair presentation of the financial position of the Company, the results of its operations and cash flows have been made. These financial statements should be read in conjunction with the financial statements and notes thereto included in the
Companys Annual Report on Form 10-K. The consolidated results of operations and cash flows for the quarter and nine months ended October 3, 2009 are not necessarily indicative of the operating results and cash flows that will be reported
for the full fiscal year. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States.

The Companys fiscal year is based on either a 52- or 53-week period ending on the Saturday closest to each
December 31. Therefore, the financial results of 53-week fiscal years, and the associated 14-week quarters, will not be comparable to the prior and subsequent 52-week fiscal years and the associated quarters having only 13 weeks. The quarters
ended October 3, 2009 and October 4, 2008 contain operating results for 13 weeks. The nine months ended October 3, 2009 and October 4, 2008 contain operating results for 39 weeks and 40 weeks, respectively.

The Company evaluated subsequent events through November 17, 2009, the date the accompanying financial statements were issued.

3. Stock Options:

In March 2009, the Company granted options to James Micali, a member of the Companys Board of Directors, to purchase 1,000 shares of Series A Common Stock. The options expire no later than 7 years and 30 calendar days from the date of
grant and vest in equal installments over three years commencing on December 31, 2009. In addition, the Company authorized the grant of options to Alain Redheuil, who served as a member of the Companys Board of Directors, to purchase 875
shares of Series A Common Stock. The options authorized by the Board of Directors expire on the 30th calendar day after the seventh anniversary of March 31, 2005, and vest upon the closing of an approved sale of the Company. The options
described above were granted pursuant to the terms of the 2005 Management Stock Incentive Plan.

In determining the fair value
of stock options issued during 2009, the Company used the Black-Scholes option pricing model. The fair value of the options granted to Mr. Micali and Mr. Redheuil during 2009, estimated on the date of grant using the Black-Scholes option
pricing model, was $188.05 and $262.73 per share, respectively. The fair value of options granted was determined using the following assumptions: a risk-free



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interest rate of 2.55%; no dividend yield; expected lives of 7 years and 30 calendar days (for Mr. Micali) and 3 years and 30 calendar days (for Mr. Redheuil); and 35% volatility. As
the Company does not have sufficient historical volatility data for its own common stock, the stock price volatility utilized in the calculation is based on the Companys peer group in the industry in which it does business. For the quarter and
nine months ended October 3, 2009, the Company recorded compensation expense related to stock option grants of $0.0 million and $0.3 million, respectively, which is included in selling, general and administrative expenses within the
accompanying condensed consolidated statements of operations.

4. Inventories:

Inventories consist primarily of automotive tires, custom wheels, automotive service equipment and related products and are valued at the
lower of cost, determined on the first-in, first-out (FIFO) method, or net realizable value. The Company performs periodic assessments to determine the existence of obsolete, slow-moving and non-saleable inventories and records necessary provisions
to reduce such inventories to net realizable value. A majority of the Companys tire vendors allow for the return of tire products, subject to certain limitations. All of the Companys inventories are held as collateral under the Amended
Revolver (as defined below).

5. Assets Held for Sale:

As of October 3, 2009, the Company has a residential property, with a carrying value of $0.3 million classified as asset held for sale. The Company acquired this property as part of an employee
relocation package. The Company is actively marketing this property and anticipates that it will be sold within a twelve-month period.

As part of the acquisition of Am-Pac Tire Dist., Inc. (Am-Pac Tire), the Company acquired certain retail stores and operations. As it is managements intention to divest of these stores during fiscal 2009 and therefore in
conjunction with the requirements of the accounting standards for the disposal of long-lived assets, the related retail store assets, including the allocation of purchase price, and the related liabilities are classified as held for sale within the
accompanying condensed consolidated balance sheets. See Note 6 for more information regarding the acquisition of Am-Pac Tire and the subsequent sale, during the second quarter of 2009, of a portion of these retail stores and operations. Also, see
Note 14 for information regarding the sale of substantially all of the remaining retail stores of Am-Pac Tire subsequent to October 3, 2009. Included within assets held for sale as of October 3, 2009 and January 3, 2009 are balances
for inventory ($1.1 million and $3.4 million, respectively), balances for accounts receivable ($0.2 million and $0.5 million, respectively) and balances for fixed assets ($0.5 million and $2.0 million, respectively).

6. Acquisitions

On
December 18, 2008, the Company completed the purchase of all of the issued and outstanding capital stock of Am-Pac Tire pursuant to the terms of a Stock Purchase Agreement dated December 18, 2008. The aggregate purchase price of this
acquisition, subject to adjustment, was approximately $74.7 million, consisting of $71.1 million in cash, of which $9.8 million is held in escrow and $59.1 million was used to pay off Am-Pac Tires outstanding debt, and $3.6 million in direct
acquisition costs. The amount held in escrow has been excluded in the preliminary allocation of the cost of the assets acquired and liabilities assumed as it represents contingent consideration for which the contingency has not been resolved. Unless
the Company makes a proper claim for indemnity, as described in the Stock Purchase Agreement, prior to the eighteen (18) month anniversary of the closing, any amounts remaining in escrow plus any of the proceeds earned thereon will be released
to the sellers. This acquisition significantly strengthened the Companys presence in markets it currently serves and allowed the Company to expand its operations into St. Louis, Missouri and western Texas.

The purchase price allocation, which is considered preliminary as it relates to the fair value assessment of inventory items acquired and
the resolution regarding the amount held in escrow, has been recorded in the accompanying condensed consolidated financial statements based on estimated fair values for the assets acquired



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and liabilities assumed and resulted in goodwill of $5.8 million. Effective July 31, 2009, the Company completed and settled, with the seller, the closing date balance sheet and
determination of purchase price regarding the acquisition of Am-Pac Tire. In conjunction with this settlement, the Company received $0.9 million as a result of the closing date balance sheet and purchase price adjustment procedures included within
the Stock Purchase Agreement. This amount has been reflected, during the third quarter of 2009, as an adjustment to the cash consideration paid in the acquisition of Am-Pac Tire.

As part of the acquisition of Am-Pac Tire, the Company acquired certain retail stores and operations. As it is managements intention
to divest of these stores during fiscal 2009 and in conjunction with accounting standards, the related assets, including the allocation of purchase price, and the related liabilities of the retail operations are classified as held for sale within
the accompanying condensed consolidated balance sheets as of October 3, 2009 and January 3, 2009. Also, during the second quarter of 2009, the Company sold 26 of the acquired 37 retail stores with a carrying value of $10 million for
proceeds of $7.3 million. The difference in proceeds and carrying value has been recorded as an adjustment to goodwill in the second quarter of 2009. In addition, subsequent to October 3, 2009, the Company sold substantially all of the remaining
retail stores of Am-Pac Tire (see Note 14). Based upon the anticipated proceeds from the sale of these remaining stores, the Company adjusted the carrying value as of October 3, 2009. The difference in proceeds and carrying value, of approximately
$3.0 million, has been recorded as an adjustment to goodwill in the third quarter of 2009.

The preliminary purchase price
allocation is as follows (in thousands):



|                                                                                                       |  |   |         |  
|------------------------------------------------------------------------------------------------------ |  | - | ------- | -
|Total cash consideration                                                                               |  | $ | 71,095  |  
|Less: Debt paid by seller                                                                              |  |   | (59,055 | )
|                                                                                                       |  |   |         |  
|Net cash consideration                                                                                 |  |   | 12,040  |  
|Plus: Transaction fees                                                                                 |  |   | 3,575   |  
|Less: Net book value of assets acquired                                                                |  |   | (9,281  | )
|Plus: Pre-acquisition intangibles that were written off in purchase accounting                         |  |   | 13,172  |  
|                                                                                                       |  |   |         |  
|Excess of purchase price over net book value of assets acquired, excluding pre-acquisition intangibles |  |   | 19,506  |  
|Allocation of excess purchase price to assets acquired and liabilities assumed:                        |  |   |         |  
|Restricted cash                                                                                        |  |   | (9,750  | )
|Accounts receivable                                                                                    |  |   | 1,076   |  
|Income tax receivable                                                                                  |  |   | 8,419   |  
|Property and equipment                                                                                 |  |   | (4,073  | )
|Inventory                                                                                              |  |   | 4,076   |  
|Assets held for sale                                                                                   |  |   | (980    | )
|Customer lists                                                                                         |  |   | (9,591  | )
|Trademarks and tradenames                                                                              |  |   | (4,464  | )
|Exit costs and termination benefits                                                                    |  |   | 10,658  |  
|Favorable leases                                                                                       |  |   | (232    | )
|Net deferred taxes                                                                                     |  |   | (8,870  | )
|                                                                                                       |  |   |         |  
|Total adjustments                                                                                      |  |   | (13,731 | )
|                                                                                                       |  |   |         |  
|Goodwill                                                                                               |  | $ | 5,775   |  
|                                                                                                       |  |   |         |  

The following unaudited pro forma supplementary data for the quarter and nine months
ended October 4, 2008 gives effect to the Am-Pac Tire acquisition as if it had occurred as of December 30, 2007 (the first day of the Companys 2008 fiscal year). The pro forma supplementary data is provided for informational purposes
only and should not be construed to be indicative of the Companys results of operations had the acquisition been consummated on the date assumed and does not project the Companys results of operations for any future date.



|           |  |                            |         |                                |   |          
|---------- |  | -------------------------- | ------- | ------------------------------ | - | ---------
|           |  | QuarterEndedOctober 4,2008 |         | Nine MonthsEndedOctober 4,2008
|           |  | (in thousands)            
|Sales      |  | $                          | 584,097 |                                | $ | 1,761,321
|Net income |  |                            | 4,018   |                                |   | 6,491    



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On October 8, 2008, the Company completed the purchase of certain assets and the
assumption of certain liabilities of Remington Tire Distributors, Inc., d/b/a Grays Wholesale Tire Distributors (Grays Tire) pursuant to the terms of an Asset Purchase Agreement dated as of October 8, 2008. This
acquisition expanded the Companys service across the state of Texas and Oklahoma and complemented its existing distribution centers located within the states of Texas and Oklahoma.

The purchase price allocation has been recorded in the accompanying condensed consolidated financial statements based on estimated fair
values for the assets acquired and liabilities assumed and has resulted in negative goodwill of $3.9 million and a customer relationship intangible asset of $5.5 million. In accordance with accounting standards for business combinations, the
negative goodwill was allocated on a pro rata basis to the noncurrent nonfinancial assets, such as property and equipment and other intangible assets, acquired in the Grays Tire acquisition which reduced the customer relationship intangible
asset to $1.7 million. Amortization for the customer relationship intangible asset is deductible for income tax purposes. The Grays Tire acquisition does not rise to the level of being a material business combination.

The Am-Pac Tire and Grays Tire acquisitions were financed through borrowings under ATDs Amended Revolver (as defined below).
These acquisitions have been accounted for under the purchase method of accounting and, accordingly, the results of operations for the acquired businesses have been included in the accompanying condensed consolidated statements of operations from
the date of acquisition.

7. Goodwill and Other Intangible Assets:

The Company has recorded, at October 3, 2009, goodwill of $375.7 million, including $5.8 million in connection with the purchase of
Am-Pac Tire (see Note 6 for further information). Approximately $27.2 million of net goodwill is deductible for income tax purposes in future periods.

Other intangible assets represent customer lists, tradenames, noncompete agreements and software. Intangible assets with indefinite lives are not amortized and are tested for impairment at least annually.
All other intangible assets with finite lives are being amortized on a straight-line or accelerated basis over their estimated useful lives as shown in the table below. The following table sets forth the gross amount and accumulated amortization of
the intangible assets at October 3, 2009 and January 3, 2009 (in thousands):



|                                    |  |                            |             |                 |                         |                 |             |        |                         |   |         |  |   |       
|----------------------------------- |  | -------------------------- | ----------- | --------------- | ----------------------- | --------------- | ----------- | ------ | ----------------------- | - | ------- |  | - | ------
|                                    |  | EstimatedUsefulLife(years) |             | October 3, 2009 |                         | January 3, 2009
|                                    |  |                            | GrossAmount |                 | AccumulatedAmortization |                 | GrossAmount |        | AccumulatedAmortization
|Customer lists                      |  | 17                         |             | $               | 244,896                 |                 | $           | 62,019 |                         | $ | 244,397 |  | $ | 48,590
|Noncompete agreements               |  | 3-5                        |             |                 | 613                     |                 |             | 613    |                         |   | 613     |  |   | 596   
|Tradenames                          |  | 1                          |             |                 | 150                     |                 |             |       |                         |   |        |  |   |      
|Software                            |  | 1                          |             |                 | 77                      |                 |             | 77     |                         |   | 77      |  |   | 77    
|                                    |  |                            |             |                 |                         |                 |             |        |                         |   |         |  |   |       
|Total amortizable intangible assets |  |                            |             | $               | 245,736                 |                 | $           | 62,709 |                         | $ | 245,087 |  | $ | 49,263
|                                    |  |                            |             |                 |                         |                 |             |        |                         |   |         |  |   |       

In addition, at October 3, 2009 and January 3, 2009, the Company had $47.2
million of indefinite lived intangible assets, consisting of tradenames.

In first quarter 2009, the Company implemented a
change in accounting estimate relating to certain of its customer list intangible assets. The primary reason for this change relates to an analysis of current customer attrition rates within some of the Companys less significant acquisitions.
During the quarter and nine months ended October 3, 2009, the effect of this change in estimate was to increase amortization expense by $0.7 million and $2.2 million, respectively.

Estimated intangible asset amortization expense for each of the next five fiscal years is expected to be $4.5 million for the remaining
three months in 2009, $17.6 million in 2010, $15.6 million in 2011, $15.2 million in 2012 and $14.7 million in 2013.



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8. Long-term Debt and Other Financing Arrangements:

Revolving Credit Facility

On May 9, 2007, ATD entered into the Fifth Amendment to the Fourth Amended and Restated Loan and Security Agreement (the Amended Revolver). The Borrowers to the Amended Revolver are ATD
and its subsidiaries. The Amended Revolver provides for a senior secured revolving credit facility of up to $400.0 million (of which up to $25.0 million may be utilized in the form of commercial and standby letters of credit), subject to a borrowing
base formula. The Amended Revolver is collateralized primarily by ATDs inventories and accounts receivable. As of October 3, 2009, the outstanding Amended Revolver balance was $225.2 million. In addition, ATD had certain letters of credit
outstanding at October 3, 2009 in the aggregate amount of $7.9 million and $123.8 million was available for additional borrowings.

Borrowings under the Amended Revolver bear interest, at ATDs option, at either (i) the Base Rate, as defined, plus the applicable margin (0.0% as of October 3, 2009) or (ii) the
Eurodollar Rate, as defined, plus the applicable margin (1.50% as of October 3, 2009). At October 3, 2009 and January 3, 2009, borrowings under the Amended Revolver were at a weighted average interest rate of 1.9% and 3.6%,
respectively. The applicable margin for the loans varies based upon a performance grid, as defined in the Amended Revolver.

All obligations under the Amended Revolver are guaranteed by Holdings and each of ATDs existing and future direct and indirect domestic subsidiaries that are not direct obligors thereunder. Obligations under the Amended Revolver are
also collateralized by a pledge of substantially all assets of the obligors, including all shares of ATDs capital stock and that of ATDs subsidiaries, subject to certain limitations.

In the event that ATD does not have at least $35.0 million available to be drawn under the Amended Revolver (subject to a cure) it would be
required to meet a fixed charge coverage ratio of 1.0:1.0. Additionally, the Amended Revolver restricts ATDs ability to incur additional debt; enter into guarantees; make loans and investments; declare dividends; modify certain material
agreements or organizational documents relating to preferred stock; and change the business it conducts, as well as other customary covenants. As of October 3, 2009 and January 3, 2009, ATD had more than $35.0 million available to
draw under the Amended Revolver and was therefore not subject to the covenant. The Amended Revolver is set to expire on December 31, 2011.

Senior Discount Notes

On March 31, 2005, Holdings issued
Senior Discount Notes with a maturity date of October 1, 2013 at an aggregate principal amount at maturity of $51.5 million. The Senior Discount Notes were issued at a substantial discount from their principal amount at maturity and generated
net proceeds of approximately $40.0 million. Prior to April 1, 2007, no interest accrued on the Senior Discount Notes. Instead, the Senior Discount Notes accreted at a rate of 13% compounded semi-annually to an aggregate accreted value of $51.5
million, the full principal amount at maturity. Subsequent to April 1, 2007, interest on the Senior Discount Notes accrues at a rate of 13% per annum and is payable, in cash, semi-annually in arrears on April 1 and October 1 of
each year, commencing on October 1, 2007.

The Senior Discount Notes are subject to redemption at any time at the option
of Holdings, in whole or in part, upon not less than 30 nor more than 60 days notice, at certain redemption prices plus accrued and unpaid interest. On April 1, 2010, if any Senior Discount Notes are outstanding, Holdings will be required
to redeem 12.165% of each of the then outstanding Senior Discount Notes aggregate accreted value at a redemption price of 100% of the accreted value of the portion of the Senior Discount Notes so redeemed. Accordingly, for the period ended
October 3, 2009, the Company has classified $6.3 million of the outstanding Senior Discount Notes as current maturities of long-term debt within the accompanying condensed consolidated balance sheet.

Senior Notes

On March 31, 2005, ATD issued Senior Notes in the aggregate principal amount of $150.0 million, resulting in net proceeds of approximately $144.2 million after debt issuance costs. The Senior Notes have an annual



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coupon rate of 10.75% and will mature on April 1, 2013. The Senior Notes will be subject to redemption at any time at the option of ATD, in whole or in part, upon not less than 30 nor more
than 60 days notice, at certain redemption prices plus accrued and unpaid interest. Interest on the Senior Notes is payable semi-annually in arrears on April 1 and October 1 of each year, commencing on October 1, 2005.

Senior Floating Rate Notes

On March 31, 2005, ATD issued Senior Floating Rate Notes in the aggregate principal amount of $140.0 million, resulting in net proceeds of approximately $134.5 million after debt issuance costs. The
Senior Floating Rate Notes will mature on April 1, 2012. Interest on the Senior Floating Rate Notes is payable quarterly in arrears at a rate equal to the three-month LIBOR, reset quarterly, plus 6.25%, on
January 1, April 1, July 1 and October 1 of each year, beginning on July 1, 2005. The interest rate on the Senior Floating Rate Notes ranged between 6.85% and 7.69% for the nine months ended October 3, 2009
and ranged between 8.95% and 11.48% for the nine months ended October 4, 2008. The Senior Floating Rate Notes are subject to redemption at any time at the option of ATD, in whole or in part, upon not less than 30 nor more than 60 days
notice, at certain redemption prices plus accrued and unpaid interest.

The indentures governing the Senior Notes, Senior
Floating Rate Notes, and the Senior Discount Notes contain specified restrictions with respect to the conduct of the Companys business and specified restrictive covenants limiting, among other things, the Companys ability to pay
dividends on or repurchase capital stock, repurchase or make early payments on subordinated debt, make investments, incur additional indebtedness, incur or assume liens on the Companys assets to secure debt, merge or consolidate with another
company, transfer or sell assets, and enter into transactions with affiliates. As of October 3, 2009 and January 3, 2009, ATD was in compliance with these covenants.

Derivative Instruments

In March 2008, the Financial Accounting Standards Board (FASB) issued a new accounting standard for the purpose of improving the financial reporting regarding derivative instruments and
hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entitys financial position, financial performance, and cash flows. The Company adopted the provisions of this standard effective
January 4, 2009 (the first day of its 2009 fiscal year). As a result of the adoption of this standard, the Company expanded its disclosures regarding derivative instruments and hedging activities which are presented below.

The Company is exposed to interest rate risk associated with fluctuations in the interest rates on its variable rate debt. In order to
manage a portion of this risk, the Company entered into interest rate swap agreements on October 11, 2005 (the 2005 Swap) and June 4, 2009 (the 2009 Swap). These interest rate swap agreements represent contracts to
exchange floating rate for fixed interest payments periodically over the life of the agreement without exchange of the underlying notional amount. The notional amounts of the interest rate swap agreements are used to measure interest to be paid or
received and does not represent the amount of exposure to credit loss. At October 3, 2009, the 2005 Swap in place covers a notional amount of $85.0 million of the $140.0 million of Senior Floating Rate Notes at a fixed interest rate of 4.79%
and expires on September 30, 2010. In accordance with accounting standards, the 2005 Swap has been designated as a cash flow hedge and has met the requirements to be accounted for under the short-cut method, resulting in no ineffectiveness in
the hedging relationship. Accordingly, the Company recognizes the fair value of the 2005 Swap in the accompanying condensed consolidated balance sheets and any changes in the fair value are recorded as adjustments to other comprehensive income
(loss).

At October 3, 2009, the 2009 Swap in place covers a notional amount of $100.0 million of variable rate
indebtedness at a fixed interest rate of 1.45% and expires on June 8, 2011. The 2009 Swap has not been designated for hedge accounting treatment. Accordingly, the Company recognizes the fair value of the 2009 Swap in the accompanying condensed
consolidated balance sheets and any changes in the fair value are recorded



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as adjustments to interest expense in the accompanying condensed consolidated statements of operations. For the quarter and nine month periods ended October 3, 2009, $0.4 million and $0.9
million, respectively, has been recorded as interest expense within the accompanying condensed consolidated statements of operations based upon the change in fair value for the 2009 Swap.

As of October 3, 2009, the Company holds no other derivative instruments and has historically not entered into derivatives for trading
or speculative purposes. In addition, during the next 12 months, management anticipates that a loss of approximately $3.6 million will be reclassified from accumulated other comprehensive loss into the consolidated statement of operations.

The fair value of the interest rate swap agreements is the estimated amount that the Company would pay or receive to
terminate the agreements at the reporting date. When the fair value of the interest rate swap agreements is an asset, the counterparty owes the Company, creating credit risk for the Company. Credit risk is the failure of the counterparty to perform
under the terms of the interest rate swap agreements. The Company has minimized this credit risk by entering into interest rate swap agreements with a highly respectable and well know counterparty.

At October 3, 2009 and January 3, 2009, the fair values of the Companys derivative instruments were recorded as follows (in
thousands):



|                                                  |  |                      |  |                 |       |                      |                   |           |   |      
|------------------------------------------------- |  | -------------------- |  | --------------- | ----- | -------------------- | ----------------- | --------- | - | -----
|                                                  |  | Derivative Liability
|                                                  |  | October 3, 2009      |  | January 3, 2009
|                                                  |  | BalanceSheetLocation |  | FairValue       |       | BalanceSheetLocation |                   | FairValue
|Derivative designated as a hedging instrument     |  |                      |  |                 |       |                      |                   |           |   |      
|Interest rate swap                                |  | Other liabilities    |  | $               | 3,470 |                      | Other liabilities |           | $ | 4,350
|Derivative not designated as a hedging instrument |  |                      |  |                 |       |                      |                   |           |   |      
|Interest rate swap                                |  | Other liabilities    |  |                 | 871   |                      | Other liabilities |           |   |     
|                                                  |  |                      |  |                 |       |                      |                   |           |   |      
|Total derivatives                                 |  |                      |  | $               | 4,341 |                      |                   |           | $ | 4,350
|                                                  |  |                      |  |                 |       |                      |                   |           |   |      

The pre-tax effect of the derivative instruments on the condensed consolidated
statement of operations for the quarter and nine months ended October 3, 2009 was as follows (in thousands):



|                                                |  |                                                          |  |                                                                                       |  |                                                                                     |      
|----------------------------------------------- |  | -------------------------------------------------------- |  | ------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------- | -----
|Interest Rate Swap Designated asCash Flow Hedge |  | Amount of Gain(Loss) Recognizedin OCI(Effective Portion) |  | Location of Gain(Loss) Reclassifiedfrom AccumulatedOCI into Income(Effective
Portion) |  | Amount of Gain(Loss) Reclassifiedfrom AccumulatedOCI into
Income(Effective Portion)
|Quarter ended October 3, 2009                   |  | $(550)                                                   |  | Interest expense                                                                      |  | $                                                                                   | 910  
|Nine Months ended October 3, 2009               |  | (1,499)                                                  |  | Interest expense                                                                      |  |                                                                                     | 2,379



|                                                       |  |                                                         |  |                                                       |      |  
|------------------------------------------------------ |  | ------------------------------------------------------- |  | ----------------------------------------------------- | ---- | -
|Interest Rate Swap Not Designated asHedging Instrument |  | Location of Gain(Loss) Recognized inIncome onDerivative |  | Amount of Gain(Loss) Recognizedin Income onDerivative |     
|Quarter ended October 3, 2009                          |  | Interest expense                                        |  | $                                                     | (376 | )
|Nine Months ended October 3, 2009                      |  | Interest expense                                        |  |                                                       | (871 | )



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9. Fair Value of Financial Instruments:

In September 2006, the FASB issued an accounting standard that defines fair value, establishes a framework for measuring fair value in
accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. This standard does not require any new fair value measurements; rather, it applies under other accounting
pronouncements that require or permit fair value measurements. The Company adopted this standard for nonfinancial assets and nonfinancial liabilities on January 4, 2009 (the first day of its 2009 fiscal year). The nonfinancial assets and
nonfinancial liabilities for which the Company will apply the fair value provisions of this standard include goodwill, intangible and other long-lived assets, liabilities for exit or disposal activities and business combinations. The adoption of
this standard for nonfinancial assets and nonfinancial liabilities did not have a material impact on the Companys results of operations or financial position.

The valuation techniques under this accounting standard are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable
inputs reflect the Companys market assumptions. This standard classifies these inputs into the following hierarchy:

Level 1 InputsQuoted prices for identical instruments in active markets.

Level 2
InputsQuoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers
are observable.

Level 3 InputsInstruments with primarily unobservable value drivers.

The following table presents the fair value and hierarchy levels for the Companys financial assets and liabilities, which are measured
at fair value on a recurring basis as of October 3, 2009 (in thousands):



|                         |  |                                                  |       |                                                            |   |                                           |  |                                        |       |  |   |    
|------------------------ |  | ------------------------------------------------ | ----- | ---------------------------------------------------------- | - | ----------------------------------------- |  | -------------------------------------- | ----- |  | - | ---
|                         |  | Fair Value Measurements at October 3, 2009 Using
|                         |  | October 3, 2009                                  |       | Quoted Pricesin ActiveMarkets forIdentical Assets(Level 1) |   | SignificantOtherObservableInputs(Level 2) |  | SignificantUnobservableInputs(Level 3)
|Assets                   |  |                                                  |       |                                                            |   |                                           |  |                                        |       |  |   |    
|Rabbi trust (a)          |  | $                                                | 3,059 |                                                            | $ | 3,059                                     |  | $                                      |      |  | $ |   
|                         |  |                                                  |       |                                                            |   |                                           |  |                                        |       |  |   |    
|Total Assets             |  | $                                                | 3,059 |                                                            | $ | 3,059                                     |  | $                                      |      |  | $ |   
|                         |  |                                                  |       |                                                            |   |                                           |  |                                        |       |  |   |    
|Liabilities              |  |                                                  |       |                                                            |   |                                           |  |                                        |       |  |   |    
|Interest rate swaps (b)  |  | $                                                | 4,341 |                                                            | $ |                                          |  | $                                      | 4,341 |  | $ |   
|Lease exit liability (c) |  |                                                  | 996   |                                                            |   |                                          |  |                                        |      |  |   | 996
|                         |  |                                                  |       |                                                            |   |                                           |  |                                        |       |  |   |    
|Total Liabilities        |  | $                                                | 5,337 |                                                            | $ |                                          |  | $                                      | 4,341 |  | $ | 996
|                         |  |                                                  |       |                                                            |   |                                           |  |                                        |       |  |   |    



|(a) | Based on the fair value of investments corresponding to employees investment elections. Amount is included within other non-current assets in the accompanying
condensed consolidated balance sheet.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Based on quoted prices for similar instruments from a financial institution that is a counterparty to the transactions. Amount is included within other non-current
liabilities in the accompanying condensed consolidated balance sheet.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Based on the fair value of the discounted cash flows over the remaining term of the leased property. Amount is included within accrued expenses and other non-current
liabilities in the accompanying condensed consolidated balance sheet.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The fair value of lease exit liabilities
within the Level 3 classification is based on a discounted cash flow model. The fair value of the lease exit liability is determined by summing the present value of the future



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minimum lease payments determined by the underlying property lease. As of October 3, 2009, the Company assumed a weighted average discount rate of 9.0%, an expected term of 2 years and no
anticipated sublease income. The following table provides a reconciliation of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):



|                  |  |                |       |  
|----------------- |  | -------------- | ----- | -
|                  |  | October 3,2009 |      
|Beginning Balance |  | $              | 1,102 |  
|Settlements       |  |                | (106  | )
|                  |  |                |       |  
|Ending Balance    |  | $              | 996   |  
|                  |  |                |       |  

The following table presents the estimated fair value of the Companys
long-term, senior notes at October 3, 2009 and January 3, 2009 based upon quoted market prices (in thousands):



|                           |  |                             |         |                                |   |                             |  |                                |         |  |   |        
|-------------------------- |  | --------------------------- | ------- | ------------------------------ | - | --------------------------- |  | ------------------------------ | ------- |  | - | -------
|                           |  | Fair Value atOctober 3,2009 |         | CarryingValue atOctober 3,2009 |   | Fair Value atJanuary 3,2009 |  | CarryingValue atJanuary 3,2009
|10.75% Senior Notes        |  | $                           | 138,750 |                                | $ | 150,000                     |  | $                              | 111,750 |  | $ | 150,000
|Senior Floating Rate Notes |  |                             | 119,000 |                                |   | 140,000                     |  |                                | 105,000 |  |   | 140,000
|13% Senior Discount Notes  |  |                             | 46,332  |                                |   | 51,480                      |  |                                | 37,066  |  |   | 51,480 

In addition, effective December 30, 2007, the Company adopted a new accounting
standard that provides entities with the option to measure many financial instruments and certain other items at fair value. Entities that choose the fair value option will recognize unrealized gains and losses on items for which the fair value
option was elected in earnings at each subsequent reporting date. The Company has currently chosen not to elect the fair value option for any items that are not already required to be measured at fair value in accordance with accounting principles
generally accepted in the United States.

10. Income Taxes:

The income tax provision recorded for the quarter and nine months ended October 3, 2009 of 56.3% and 50.1%, respectively, and the income
tax provision recorded for the quarter and nine months ended October 4, 2008 of 43.2% and 43.7%, respectively, are based on an annual estimated effective tax rate of 50.1% for 2009 and 43.7% for 2008, which takes into account year-to-date
income and projected results for the full year. The increase in the effective tax rate is due primarily to a lower projected pre-tax income level for 2009 as compared to 2008 and, to a lesser extent, a slightly higher state income tax effective
rate. The final effective tax rate for fiscal 2009 will depend on the actual amount of pre-tax income (loss) generated by the Company by tax jurisdiction for the full year.

At October 3, 2009, the Company had unrecognized tax benefits of $2.2 million, of which $1.7 million is included within accrued
expenses, which includes $0.2 million relating to accrued interest and penalties; the other $0.5 million is included within other liabilities within the accompanying condensed consolidated balance sheet. Of the Companys $2.2 million
unrecognized tax benefits as of October 3, 2009, only $0.3 million is anticipated to have an affect on the Companys effective tax rate, if recognized. In addition, of the Companys $2.2 million liability for uncertain tax positions,
approximately $1.9 million relates to temporary timing differences. During the next 12 months, management believes that it is reasonably possible that the amount of unrecognized tax benefits may decrease by approximately $0.1 million due to
expiration of statutes of limitations, all of which would reduce income tax expense.

While the Company believes that it has
adequately provided for all tax positions, amounts asserted by taxing authorities could be greater than the Companys accrued position. Accordingly, additional provisions of federal and state-related matters could be recorded in the future as
revised estimates are made or the underlying matters are settled or otherwise resolved.



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The Company files federal income tax returns, as well as multiple state jurisdiction tax
returns. The tax years 2005  2008 remain open to examination by the taxing jurisdictions to which the Company is subject.

11.
Redeemable Preferred Stock:

In connection with the acquisition of ATD, Holdings issued 20,000 shares of 8% cumulative
mandatorily redeemable preferred stock to The 1818 Mezzanine Fund II, L.P. (The 1818 Fund) in exchange for $15.4 million in cash less related transaction costs of $0.5 million. The cumulative preferred stock has a stated value of $1,000
per share and holders will be entitled to receive, when and if declared by the Board of Directors, cumulative dividends, payable in cash, at an annual rate of 8.0%. The dividends and accretion of the carrying amount to the redemption amount is
recorded as interest expense in the accompanying condensed consolidated statements of operations. Holdings Board of Directors is not obligated to declare dividends and the preferred stock provides no monetary penalties for a failure to declare
dividends. The cumulative preferred stock may be redeemed by Holdings at any time beginning on the first anniversary of the issuance of the stock and will be required to be redeemed upon a change of control of Holdings and at its maturity in 2015.
The 8% cumulative mandatorily redeemable preferred stock is classified as a noncurrent liability in the accompanying condensed consolidated balance sheets.

12. Commitments and Contingencies:

Guaranteed Lease Obligations

The Company remains liable as a guarantor on certain leases of Winston Tire Company, its discontinued retail segment.
As of October 3, 2009, total obligations of the Company as guarantor on these leases is approximately $6.0 million extending over 10 years. However, the Company has secured assignments or sublease agreements for the vast majority of these
commitments with contractual assigned or subleased rentals of approximately $5.5 million. A provision has been made for the net present value of the estimated shortfall.

Legal and Tax Proceedings

The Company is involved from time to time
in various lawsuits, including class action lawsuits, as well as various audits and reviews regarding its federal, state and local tax filings, arising out of the ordinary conduct of its business. Management does not expect that any of these matters
will have a material adverse effect on the Companys business or financial condition. As to tax filings, the Company believes that the various tax filings have been made in a timely fashion and in accordance with applicable federal, state and
local tax code requirements. Additionally, the Company believes that it has adequately provided for any reasonably foreseeable resolution of any tax disputes, but will adjust its reserves if events so dictate in accordance with accounting standards.
To the extent that the ultimate results differ from the original or adjusted estimates of the Company, the effect will be recorded in accordance with accounting standards.

13. Shipping and Handling Costs:

Certain Company shipping, handling and
other distribution costs are classified as selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. Such expenses totaled $25.8 million and $25.0 million for the quarters ended October 3,
2009 and October 4, 2008, respectively, and $74.3 million and $76.0 million for the nine months ended October 3, 2009 and October 4, 2008, respectively. Shipping revenue is classified in net sales.

14. Subsequent Event:

Subsequent to October 3, 2009, the Company sold 10 of the remaining 11 retail stores that were acquired through the Am-Pac Tire acquisition (see Note 6). In addition, on October 30, 2009, the Company shutdown the remaining acquired retail
store. The 10 retail stores were sold for proceeds of approximately $1.0 million. The difference in proceeds and carrying value, which approximated $3.0 million, has been recorded as an adjustment to goodwill in the third quarter of 2009.



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15. Recently Issued Accounting Pronouncements:

In June 2009, the FASB issued the FASB Accounting Standards Codification (Codification). The Codification will become the source
of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The
Codification is not intended to change or alter existing GAAP. The Codification is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of the Codification did not have a
material impact on the Companys consolidated financial statements.

In May 2009, the FASB issued authoritative guidance
for events that occur subsequent to the end of a reporting period. This authoritative guidance establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are
issued or are available to be issued. This authoritative guidance is effective for interim and annual reporting periods ended after June 15, 2009. The Company adopted this guidance on July 4, 2009 and has included the required disclosures
in Note 2.

In April 2009, the FASB issued authoritative guidance for fair value disclosures of financial instruments during
interim periods. This guidance extends the disclosure requirements for fair value of financial instruments to interim period financial statements, in addition to the existing requirements for annual periods and reiterates the requirement to disclose
the methods and significant assumptions used to estimate fair value. This guidance is effective for interim and annual periods ending after June 15, 2009. The Company adopted this guidance on July 4, 2009 and has included the required
disclosures in Note 9.

In April 2009, the FASB issued authoritative guidance for the recognition and presentation of
impairments that are other-than-temporary. This guidance amends the other-than-temporary impairment guidance for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments
on debt and equity securities. This accounting standard is effective for interim and annual periods ending after June 15, 2009. The Company adopted this accounting standard on July 4, 2009 with no material impact on its consolidated
financial statements.

In April 2008, the FASB issued authoritative guidance for the determination of useful lives of
intangible assets. This guidance amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. The intent of this guidance is to improve the
consistency between the useful life of a recognized intangible asset under the authoritative guidance for goodwill and other intangible assets and the period of expected cash flows used to measure the fair value of the asset under the authoritative
guidance for business combinations and other U.S. generally accepted accounting principles. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2008 and interim periods within those fiscal
years. The Company adopted this guidance on January 4, 2009 (the first day of its 2009 fiscal year). The adoption of this guidance did not have a material impact on the Companys results of operations and financial position.

In March 2008, the FASB issued authoritative guidance for disclosures of derivative instruments and hedging activities. This guidance is
intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entitys financial position, financial performance, and
cash flows. This guidance is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company adopted the provisions of this accounting standard on
January 4, 2009 (the first day of its 2009 fiscal year). As a result of the adoption, the Company expanded its disclosures regarding derivative instruments and hedging activities which are included in Note 8.

In December 2007, the FASB issued revisions to an accounting standard for business combinations. The revised accounting standard requires an
acquiring entity to recognize, with limited exceptions, all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value. In addition, the revised



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accounting standard will require acquisition costs to be expensed as incurred, acquired contingent liabilities to be recorded at fair value at the acquisition date and subsequently measured at
either the higher of such amount or the amount determined under existing guidance for non-acquired contingencies, restructuring costs associated with a business combination to be generally expensed subsequent to the acquisition date and changes in
deferred tax asset valuation allowances and income tax uncertainties after the acquisition date to generally affect income tax expense. This revised accounting standard also includes a substantial number of new disclosure requirements. The revised
accounting standard is effective for fiscal years beginning after December 15, 2008 and is to be applied prospectively. The Company adopted the revised accounting standard on January 4, 2009 (the first day of its 2009 fiscal year). The
adoption of this revised accounting standard did not have a material impact on the Companys results of operations or financial position; however, the impact in future periods will depend on the nature and size of business combinations
completed in future periods.

16. Subsidiary Guarantor Financial Information:

The following condensed consolidating financial statements are presented pursuant to Rule 3-10 of Regulation S-X and reflect the financial
position, results of operations, and cash flows of the Company. As allowed under our indenture agreements, during fiscal 2009, the Company merged certain subsidiary guarantors into the subsidiary issuer. As a result of this merger, the condensed
consolidating balance sheet as of January 3, 2009, the condensed consolidating statements of operations for the quarter and nine months ended October 4, 2008, and the condensed consolidating statement of cash flows for the nine months
ended October 4, 2008 have been retroactively adjusted to reflect the post-merger legal entity structure.

The financial
information is presented under the following column headings: Parent Company (Holdings), Subsidiary Issuer (ATD), and Subsidiary Guarantors (ATDs subsidiaries). The Subsidiary Issuer and all of the Subsidiary Guarantors are wholly-owned
subsidiaries of Holdings. The following describes the guarantor relationships of the Companys senior notes:



| |  |  | Senior Discount Notes in an aggregate principal amount of $51.5 million at maturity were issued by Holdings. Such notes are not guaranteed by the
Subsidiary Issuer or the Subsidiary Guarantors.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Senior Floating Rate Notes and Senior Notes in an aggregate principal amount of $290.0 million were issued by ATD and are fully and unconditionally
guaranteed on a joint and several basis by the Companys non-issuing, wholly-owned subsidiaries (Subsidiary Guarantors) on a senior basis and unconditionally guaranteed on a joint and several basis by Holdings on a subordinated
basis.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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The condensed consolidating financial information for the Company is as follows (amounts in
thousands):

Condensed consolidating balance sheets as of October 3, 2009 and January 3, 2009 are as follows:



|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|------------------------------------------ |  | --------------------- | ------- | - | ---------------- | - | --------- | -------------------- |  | - | ------------ | - |  | ------------ | -------- | - |  | - | --------- | -
|                                           |  | As of October 3, 2009 |        
|                                           |  | ParentCompany         |         |   | SubsidiaryIssuer |   |           | SubsidiaryGuarantors |  |   | Eliminations |   |  | Consolidated |         
|Assets                                     |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Current assets:                            |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Cash and cash equivalents                  |  | $                     |        |   |                  | $ | 6,208     |                      |  | $ | 238          |   |  | $            |         |   |  | $ | 6,446     |  
|Restricted cash                            |  |                       |        |   |                  |   | 500       |                      |  |   | 9,750        |   |  |              |         |   |  |   | 10,250    |  
|Accounts receivable, net                   |  |                       |        |   |                  |   | 202,615   |                      |  |   | (91          | ) |  |              |         |   |  |   | 202,524   |  
|Inventories                                |  |                       |        |   |                  |   | 367,060   |                      |  |   | (167         | ) |  |              |         |   |  |   | 366,893   |  
|Assets held for sale                       |  |                       |        |   |                  |   | 270       |                      |  |   | 2,706        |   |  |              |         |   |  |   | 2,976     |  
|Intercompany receivables                   |  |                       |        |   |                  |   |          |                      |  |   | 23,401       |   |  |              | (23,401  | ) |  |   |          |  
|Other current assets                       |  |                       |        |   |                  |   | 19,576    |                      |  |   | 6,260        |   |  |              |         |   |  |   | 25,836    |  
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Total current assets                       |  |                       |        |   |                  |   | 596,229   |                      |  |   | 42,097       |   |  |              | (23,401  | ) |  |   | 614,925   |  
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Property and equipment, net                |  |                       |        |   |                  |   | 46,079    |                      |  |   | 9,106        |   |  |              |         |   |  |   | 55,185    |  
|Goodwill and other intangible assets, net  |  |                       |        |   |                  |   | 586,567   |                      |  |   | 19,407       |   |  |              |         |   |  |   | 605,974   |  
|Investment in subsidiaries                 |  |                       | 307,422 |   |                  |   | 61,621    |                      |  |   |             |   |  |              | (369,043 | ) |  |   |          |  
|Other assets                               |  |                       | 1,572   |   |                  |   | 9,628     |                      |  |   | 9,283        |   |  |              |         |   |  |   | 20,483    |  
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Total assets                               |  | $                     | 308,994 |   |                  | $ | 1,300,124 |                      |  | $ | 79,893       |   |  | $            | (392,444 | ) |  | $ | 1,296,567 |  
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Liabilities and Stockholders Equity       |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Current liabilities:                       |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Accounts payable                           |  | $                     |        |   |                  | $ | 327,487   |                      |  | $ | 4,746        |   |  | $            |         |   |  | $ | 332,233   |  
|Accrued expenses                           |  |                       | 3,406   |   |                  |   | 22,740    |                      |  |   | 4,584        |   |  |              |         |   |  |   | 30,730    |  
|Liabilities held for sale                  |  |                       |        |   |                  |   |          |                      |  |   | 783          |   |  |              |         |   |  |   | 783       |  
|Current maturities of long-term debt       |  |                       | 6,263   |   |                  |   | 1,833     |                      |  |   | 16           |   |  |              |         |   |  |   | 8,112     |  
|Intercompany payables                      |  |                       | 145     |   |                  |   | 23,256    |                      |  |   |             |   |  |              | (23,401  | ) |  |   |          |  
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Total current liabilities                  |  |                       | 9,814   |   |                  |   | 375,316   |                      |  |   | 10,129       |   |  |              | (23,401  | ) |  |   | 371,858   |  
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Long-term debt                             |  |                       | 45,217  |   |                  |   | 536,060   |                      |  |   | 27           |   |  |              |         |   |  |   | 581,304   |  
|Deferred income taxes                      |  |                       |        |   |                  |   | 67,011    |                      |  |   | 3,713        |   |  |              |         |   |  |   | 70,724    |  
|Other liabilities                          |  |                       |        |   |                  |   | 14,315    |                      |  |   | 4,403        |   |  |              |         |   |  |   | 18,718    |  
|Redeemable preferred stock                 |  |                       | 25,918  |   |                  |   |          |                      |  |   |             |   |  |              |         |   |  |   | 25,918    |  
|Stockholders equity:                      |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Intercompany investment                    |  |                       |        |   |                  |   | 280,622   |                      |  |   | 64,810       |   |  |              | (345,432 | ) |  |   |          |  
|Common stock                               |  |                       | 10      |   |                  |   |          |                      |  |   |             |   |  |              |         |   |  |   | 10        |  
|Additional paid-in capital                 |  |                       | 218,321 |   |                  |   |          |                      |  |   |             |   |  |              |         |   |  |   | 218,321   |  
|Warrants                                   |  |                       | 4,631   |   |                  |   |          |                      |  |   |             |   |  |              |         |   |  |   | 4,631     |  
|Accumulated earnings (deficit)             |  |                       | 7,334   |   |                  |   | 28,951    |                      |  |   | (3,189       | ) |  |              | (25,762  | ) |  |   | 7,334     |  
|Accumulated other comprehensive loss       |  |                       | (2,151  | ) |                  |   | (2,151    | )                    |  |   |             |   |  |              | 2,151    |   |  |   | (2,151    | )
|Treasury stock, at cost                    |  |                       | (100    | ) |                  |   |          |                      |  |   |             |   |  |              |         |   |  |   | (100      | )
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Total stockholders equity                 |  |                       | 228,045 |   |                  |   | 307,422   |                      |  |   | 61,621       |   |  |              | (369,043 | ) |  |   | 228,045   |  
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Total liabilities and stockholders equity |  | $                     | 308,994 |   |                  | $ | 1,300,124 |                      |  | $ | 79,893       |   |  | $            | (392,444 | ) |  | $ | 1,296,567 |  
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  



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|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|------------------------------------------ |  | --------------------- | ------- | - | ---------------- | - | --------- | -------------------- |  | - | ------------ | - |  | ------------ | -------- | - |  | - | --------- | -
|                                           |  | As of January 3, 2009 |        
|                                           |  | ParentCompany         |         |   | SubsidiaryIssuer |   |           | SubsidiaryGuarantors |  |   | Eliminations |   |  | Consolidated |         
|Assets                                     |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Current assets:                            |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Cash and cash equivalents                  |  | $                     | 72      |   |                  | $ | 6,305     |                      |  | $ | 2,118        |   |  | $            |         |   |  | $ | 8,495     |  
|Restricted cash                            |  |                       |        |   |                  |   | 500       |                      |  |   | 9,750        |   |  |              |         |   |  |   | 10,250    |  
|Accounts receivable, net                   |  |                       |        |   |                  |   | 153,949   |                      |  |   | 24,946       |   |  |              |         |   |  |   | 178,895   |  
|Inventories                                |  |                       |        |   |                  |   | 393,608   |                      |  |   | 62,469       |   |  |              |         |   |  |   | 456,077   |  
|Assets held for sale                       |  |                       |        |   |                  |   | 442       |                      |  |   | 14,270       |   |  |              |         |   |  |   | 14,712    |  
|Intercompany receivable                    |  |                       |        |   |                  |   | 17,714    |                      |  |   |             |   |  |              | (17,714  | ) |  |   |          |  
|Other current assets                       |  |                       | 2       |   |                  |   | 21,215    |                      |  |   | 6,412        |   |  |              |         |   |  |   | 27,629    |  
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Total current assets                       |  |                       | 74      |   |                  |   | 593,733   |                      |  |   | 119,965      |   |  |              | (17,714  | ) |  |   | 696,058   |  
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Property and equipment, net                |  |                       |        |   |                  |   | 47,618    |                      |  |   | 9,998        |   |  |              |         |   |  |   | 57,616    |  
|Goodwill and other intangible assets, net  |  |                       |        |   |                  |   | 598,939   |                      |  |   | 14,055       |   |  |              |         |   |  |   | 612,994   |  
|Investment in subsidiaries                 |  |                       | 300,361 |   |                  |   | 65,074    |                      |  |   |             |   |  |              | (365,435 | ) |  |   |          |  
|Other assets                               |  |                       | 1,836   |   |                  |   | 12,886    |                      |  |   | 9,470        |   |  |              |         |   |  |   | 24,192    |  
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Total assets                               |  | $                     | 302,271 |   |                  | $ | 1,318,250 |                      |  | $ | 153,488      |   |  | $            | (383,149 | ) |  | $ | 1,390,860 |  
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Liabilities and Stockholders Equity       |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Current liabilities:                       |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Accounts payable                           |  | $                     |        |   |                  | $ | 311,141   |                      |  | $ | 49,250       |   |  | $            |         |   |  | $ | 360,391   |  
|Accrued expenses                           |  |                       | 1,723   |   |                  |   | 30,306    |                      |  |   | 11,076       |   |  |              |         |   |  |   | 43,105    |  
|Liabilities held for sale                  |  |                       |        |   |                  |   |          |                      |  |   | 1,199        |   |  |              |         |   |  |   | 1,199     |  
|Current maturities of long-term debt       |  |                       |        |   |                  |   | 3,034     |                      |  |   | 16           |   |  |              |         |   |  |   | 3,050     |  
|Intercompany payables                      |  |                       | 641     |   |                  |   |          |                      |  |   | 17,073       |   |  |              | (17,714  | ) |  |   |          |  
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Total current liabilities                  |  |                       | 2,364   |   |                  |   | 344,481   |                      |  |   | 78,614       |   |  |              | (17,714  | ) |  |   | 407,745   |  
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Long-term debt                             |  |                       | 51,480  |   |                  |   | 587,868   |                      |  |   | 36           |   |  |              |         |   |  |   | 639,384   |  
|Deferred income taxes                      |  |                       |        |   |                  |   | 70,844    |                      |  |   | 3,974        |   |  |              |         |   |  |   | 74,818    |  
|Other liabilities                          |  |                       |        |   |                  |   | 14,696    |                      |  |   | 5,790        |   |  |              |         |   |  |   | 20,486    |  
|Redeemable preferred stock                 |  |                       | 23,941  |   |                  |   |          |                      |  |   |             |   |  |              |         |   |  |   | 23,941    |  
|Stockholders equity:                      |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Intercompany investment                    |  |                       |        |   |                  |   | 280,624   |                      |  |   | 65,198       |   |  |              | (345,822 | ) |  |   |          |  
|Common stock                               |  |                       | 10      |   |                  |   |          |                      |  |   |             |   |  |              |         |   |  |   | 10        |  
|Additional paid-in capital                 |  |                       | 218,022 |   |                  |   |          |                      |  |   |             |   |  |              |         |   |  |   | 218,022   |  
|Warrants                                   |  |                       | 4,631   |   |                  |   |          |                      |  |   |             |   |  |              |         |   |  |   | 4,631     |  
|Accumulated earnings (deficit)             |  |                       | 4,990   |   |                  |   | 22,804    |                      |  |   | (124         | ) |  |              | (22,680  | ) |  |   | 4,990     |  
|Accumulated other comprehensive loss       |  |                       | (3,067  | ) |                  |   | (3,067    | )                    |  |   |             |   |  |              | 3,067    |   |  |   | (3,067    | )
|Treasury stock, at cost                    |  |                       | (100    | ) |                  |   |          |                      |  |   |             |   |  |              |         |   |  |   | (100      | )
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Total stockholders equity                 |  |                       | 224,486 |   |                  |   | 300,361   |                      |  |   | 65,074       |   |  |              | (365,435 | ) |  |   | 224,486   |  
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  
|Total liabilities and stockholders equity |  | $                     | 302,271 |   |                  | $ | 1,318,250 |                      |  | $ | 153,488      |   |  | $            | (383,149 | ) |  | $ | 1,390,860 |  
|                                           |  |                       |         |   |                  |   |           |                      |  |   |              |   |  |              |          |   |  |   |           |  



21



---

##### Table of Contents

Condensed consolidating statements of operations for the quarters ended October 3, 2009
and October 4, 2008 are as follows:



|                                                                                                          |  |                                       |        |   |                  |   |         |                      |  |   |              |   |  |              |        |   |  |   |         |  
|--------------------------------------------------------------------------------------------------------- |  | ------------------------------------- | ------ | - | ---------------- | - | ------- | -------------------- |  | - | ------------ | - |  | ------------ | ------ | - |  | - | ------- | -
|                                                                                                          |  | For the Quarter Ended October 3, 2009 |       
|                                                                                                          |  | ParentCompany                         |        |   | SubsidiaryIssuer |   |         | SubsidiaryGuarantors |  |   | Eliminations |   |  | Consolidated |       
|Net sales                                                                                                 |  | $                                     |       |   |                  | $ | 544,102 |                      |  | $ | 5,388        |   |  | $            |       |   |  | $ | 549,490 |  
|Cost of goods sold, excluding depreciation included in selling, general and administrative expenses below |  |                                       |       |   |                  |   | 449,847 |                      |  |   | 1,405        |   |  |              |       |   |  |   | 451,252 |  
|                                                                                                          |  |                                       |        |   |                  |   |         |                      |  |   |              |   |  |              |        |   |  |   |         |  
|Gross profit                                                                                              |  |                                       |       |   |                  |   | 94,255  |                      |  |   | 3,983        |   |  |              |       |   |  |   | 98,238  |  
|Selling, general and administrative expenses                                                              |  |                                       | 41     |   |                  |   | 66,817  |                      |  |   | 5,457        |   |  |              |       |   |  |   | 72,315  |  
|                                                                                                          |  |                                       |        |   |                  |   |         |                      |  |   |              |   |  |              |        |   |  |   |         |  
|Operating (loss) income                                                                                   |  |                                       | (41    | ) |                  |   | 27,438  |                      |  |   | (1,474       | ) |  |              |       |   |  |   | 25,923  |  
|Other expense:                                                                                            |  |                                       |        |   |                  |   |         |                      |  |   |              |   |  |              |        |   |  |   |         |  
|Interest expense                                                                                          |  |                                       | (2,432 | ) |                  |   | (11,032 | )                    |  |   | (1           | ) |  |              |       |   |  |   | (13,465 | )
|Other, net                                                                                                |  |                                       |       |   |                  |   | (286    | )                    |  |   | (47          | ) |  |              |       |   |  |   | (333    | )
|Equity earnings of subsidiaries                                                                           |  |                                       | 7,070  |   |                  |   | (1,261  | )                    |  |   |             |   |  |              | (5,809 | ) |  |   |        |  
|                                                                                                          |  |                                       |        |   |                  |   |         |                      |  |   |              |   |  |              |        |   |  |   |         |  
|Income (loss) from operations before income taxes                                                         |  |                                       | 4,597  |   |                  |   | 14,859  |                      |  |   | (1,522       | ) |  |              | (5,809 | ) |  |   | 12,125  |  
|Income tax (benefit) provision                                                                            |  |                                       | (700   | ) |                  |   | 7,789   |                      |  |   | (261         | ) |  |              |       |   |  |   | 6,828   |  
|                                                                                                          |  |                                       |        |   |                  |   |         |                      |  |   |              |   |  |              |        |   |  |   |         |  
|Net income (loss)                                                                                         |  | $                                     | 5,297  |   |                  | $ | 7,070   |                      |  | $ | (1,261       | ) |  | $            | (5,809 | ) |  | $ | 5,297   |  
|                                                                                                          |  |                                       |        |   |                  |   |         |                      |  |   |              |   |  |              |        |   |  |   |         |  
|                                                                                                          | 
|                                                                                                          |  | For the Quarter Ended October 4, 2008 |       
|                                                                                                          |  | ParentCompany                         |        |   | SubsidiaryIssuer |   |         | SubsidiaryGuarantors |  |   | Eliminations |   |  | Consolidated |       
|Net sales                                                                                                 |  | $                                     |       |   |                  | $ | 501,959 |                      |  | $ |             |   |  | $            |       |   |  | $ | 501,959 |  
|Cost of goods sold, excluding depreciation included in selling, general and administrative expenses below |  |                                       |       |   |                  |   | 408,099 |                      |  |   |             |   |  |              |       |   |  |   | 408,099 |  
|                                                                                                          |  |                                       |        |   |                  |   |         |                      |  |   |              |   |  |              |        |   |  |   |         |  
|Gross profit                                                                                              |  |                                       |       |   |                  |   | 93,860  |                      |  |   |             |   |  |              |       |   |  |   | 93,860  |  
|Selling, general and administrative expenses                                                              |  |                                       | 11     |   |                  |   | 67,631  |                      |  |   |             |   |  |              |       |   |  |   | 67,642  |  
|                                                                                                          |  |                                       |        |   |                  |   |         |                      |  |   |              |   |  |              |        |   |  |   |         |  
|Operating (loss) income                                                                                   |  |                                       | (11    | ) |                  |   | 26,229  |                      |  |   |             |   |  |              |       |   |  |   | 26,218  |  
|Other expense:                                                                                            |  |                                       |        |   |                  |   |         |                      |  |   |              |   |  |              |        |   |  |   |         |  
|Interest expense                                                                                          |  |                                       | (2,389 | ) |                  |   | (12,143 | )                    |  |   |             |   |  |              |       |   |  |   | (14,532 | )
|Other, net                                                                                                |  |                                       |       |   |                  |   | (219    | )                    |  |   |             |   |  |              |       |   |  |   | (219    | )
|Equity earnings of subsidiaries                                                                           |  |                                       | 7,909  |   |                  |   |        |                      |  |   |             |   |  |              | (7,909 | ) |  |   |        |  
|                                                                                                          |  |                                       |        |   |                  |   |         |                      |  |   |              |   |  |              |        |   |  |   |         |  
|Income from operations before income taxes                                                                |  |                                       | 5,509  |   |                  |   | 13,867  |                      |  |   |             |   |  |              | (7,909 | ) |  |   | 11,467  |  
|Income tax (benefit) provision                                                                            |  |                                       | (1,008 | ) |                  |   | 5,958   |                      |  |   |             |   |  |              |       |   |  |   | 4,950   |  
|                                                                                                          |  |                                       |        |   |                  |   |         |                      |  |   |              |   |  |              |        |   |  |   |         |  
|Net income                                                                                                |  | $                                     | 6,517  |   |                  | $ | 7,909   |                      |  | $ |             |   |  | $            | (7,909 | ) |  | $ | 6,517   |  
|                                                                                                          |  |                                       |        |   |                  |   |         |                      |  |   |              |   |  |              |        |   |  |   |         |  



22



---

##### Table of Contents

Condensed consolidating statements of operations for the nine months ended October 3,
2009 and October 4, 2008 are as follows:



|                                                                                                          |  |                                           |        |   |                  |   |           |                      |  |   |              |   |  |              |         |   |  |   |           |  
|--------------------------------------------------------------------------------------------------------- |  | ----------------------------------------- | ------ | - | ---------------- | - | --------- | -------------------- |  | - | ------------ | - |  | ------------ | ------- | - |  | - | --------- | -
|                                                                                                          |  | For the Nine Months Ended October 3, 2009 |       
|                                                                                                          |  | ParentCompany                             |        |   | SubsidiaryIssuer |   |           | SubsidiaryGuarantors |  |   | Eliminations |   |  | Consolidated |        
|Net sales                                                                                                 |  | $                                         |       |   |                  | $ | 1,531,875 |                      |  | $ | 113,171      |   |  | $            |        |   |  | $ | 1,645,046 |  
|Cost of goods sold, excluding depreciation included in selling, general and administrative expenses below |  |                                           |       |   |                  |   | 1,279,506 |                      |  |   | 85,048       |   |  |              |        |   |  |   | 1,364,554 |  
|                                                                                                          |  |                                           |        |   |                  |   |           |                      |  |   |              |   |  |              |         |   |  |   |           |  
|Gross profit                                                                                              |  |                                           |       |   |                  |   | 252,369   |                      |  |   | 28,123       |   |  |              |        |   |  |   | 280,492   |  
|Selling, general and administrative expenses                                                              |  |                                           | 318    |   |                  |   | 199,477   |                      |  |   | 33,807       |   |  |              |        |   |  |   | 233,602   |  
|                                                                                                          |  |                                           |        |   |                  |   |           |                      |  |   |              |   |  |              |         |   |  |   |           |  
|Operating (loss) income                                                                                   |  |                                           | (318   | ) |                  |   | 52,892    |                      |  |   | (5,684       | ) |  |              |        |   |  |   | 46,890    |  
|Other expense:                                                                                            |  |                                           |        |   |                  |   |           |                      |  |   |              |   |  |              |         |   |  |   |           |  
|Interest expense                                                                                          |  |                                           | (7,263 | ) |                  |   | (34,080   | )                    |  |   | (2           | ) |  |              |        |   |  |   | (41,345   | )
|Other, net                                                                                                |  |                                           | (2     | ) |                  |   | (147      | )                    |  |   | (696         | ) |  |              |        |   |  |   | (845      | )
|Equity earnings of subsidiaries                                                                           |  |                                           | 6,147  |   |                  |   | (3,190    | )                    |  |   |             |   |  |              | (2,957  | ) |  |   |          |  
|                                                                                                          |  |                                           |        |   |                  |   |           |                      |  |   |              |   |  |              |         |   |  |   |           |  
|(Loss) income from operations before income taxes                                                         |  |                                           | (1,436 | ) |                  |   | 15,475    |                      |  |   | (6,382       | ) |  |              | (2,957  | ) |  |   | 4,700     |  
|Income tax (benefit) provision                                                                            |  |                                           | (3,780 | ) |                  |   | 9,328     |                      |  |   | (3,192       | ) |  |              |        |   |  |   | 2,356     |  
|                                                                                                          |  |                                           |        |   |                  |   |           |                      |  |   |              |   |  |              |         |   |  |   |           |  
|Net income (loss)                                                                                         |  | $                                         | 2,344  |   |                  | $ | 6,147     |                      |  | $ | (3,190       | ) |  | $            | (2,957  | ) |  | $ | 2,344     |  
|                                                                                                          |  |                                           |        |   |                  |   |           |                      |  |   |              |   |  |              |         |   |  |   |           |  
|                                                                                                          | 
|                                                                                                          |  | For the Nine Months Ended October 4, 2008 |       
|                                                                                                          |  | ParentCompany                             |        |   | SubsidiaryIssuer |   |           | SubsidiaryGuarantors |  |   | Eliminations |   |  | Consolidated |        
|Net sales                                                                                                 |  | $                                         |       |   |                  | $ | 1,517,300 |                      |  | $ |             |   |  | $            |        |   |  | $ | 1,517,300 |  
|Cost of goods sold, excluding depreciation included in selling, general and administrative expenses below |  |                                           |       |   |                  |   | 1,249,110 |                      |  |   |             |   |  |              |        |   |  |   | 1,249,110 |  
|                                                                                                          |  |                                           |        |   |                  |   |           |                      |  |   |              |   |  |              |         |   |  |   |           |  
|Gross profit                                                                                              |  |                                           |       |   |                  |   | 268,190   |                      |  |   |             |   |  |              |        |   |  |   | 268,190   |  
|Selling, general and administrative expenses                                                              |  |                                           | 26     |   |                  |   | 204,058   |                      |  |   |             |   |  |              |        |   |  |   | 204,084   |  
|                                                                                                          |  |                                           |        |   |                  |   |           |                      |  |   |              |   |  |              |         |   |  |   |           |  
|Operating (loss) income                                                                                   |  |                                           | (26    | ) |                  |   | 64,132    |                      |  |   |             |   |  |              |        |   |  |   | 64,106    |  
|Other expense:                                                                                            |  |                                           |        |   |                  |   |           |                      |  |   |              |   |  |              |         |   |  |   |           |  
|Interest expense                                                                                          |  |                                           | (7,138 | ) |                  |   | (37,264   | )                    |  |   |             |   |  |              |        |   |  |   | (44,402   | )
|Other, net                                                                                                |  |                                           | (1     | ) |                  |   | (952      | )                    |  |   |             |   |  |              |        |   |  |   | (953      | )
|Equity earnings of subsidiaries                                                                           |  |                                           | 14,582 |   |                  |   |          |                      |  |   |             |   |  |              | (14,582 | ) |  |   |          |  
|                                                                                                          |  |                                           |        |   |                  |   |           |                      |  |   |              |   |  |              |         |   |  |   |           |  
|Income from operations before income taxes                                                                |  |                                           | 7,417  |   |                  |   | 25,916    |                      |  |   |             |   |  |              | (14,582 | ) |  |   | 18,751    |  
|Income tax (benefit) provision                                                                            |  |                                           | (3,134 | ) |                  |   | 11,334    |                      |  |   |             |   |  |              |        |   |  |   | 8,200     |  
|                                                                                                          |  |                                           |        |   |                  |   |           |                      |  |   |              |   |  |              |         |   |  |   |           |  
|Net income                                                                                                |  | $                                         | 10,551 |   |                  | $ | 14,582    |                      |  | $ |             |   |  | $            | (14,582 | ) |  | $ | 10,551    |  
|                                                                                                          |  |                                           |        |   |                  |   |           |                      |  |   |              |   |  |              |         |   |  |   |           |  



23



---

##### Table of Contents

Condensed consolidating statements of cash flows for the nine months ended October 3,
2009 and October 4, 2008 are as follows:



|                                                                                         |  |                                           |        |   |                  |   |            |                      |  |   |              |   |  |              |        |   |  |   |            |  
|---------------------------------------------------------------------------------------- |  | ----------------------------------------- | ------ | - | ---------------- | - | ---------- | -------------------- |  | - | ------------ | - |  | ------------ | ------ | - |  | - | ---------- | -
|                                                                                         |  | For the Nine Months Ended October 3, 2009 |       
|                                                                                         |  | ParentCompany                             |        |   | SubsidiaryIssuer |   |            | SubsidiaryGuarantors |  |   | Eliminations |   |  | Consolidated |       
|Cash flows from operating activities:                                                    |  |                                           |        |   |                  |   |            |                      |  |   |              |   |  |              |        |   |  |   |            |  
|Net income (loss)                                                                        |  | $                                         | 2,344  |   |                  | $ | 6,147      |                      |  | $ | (3,190       | ) |  | $            | (2,957 | ) |  | $ | 2,344      |  
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |                                           |        |   |                  |   |            |                      |  |   |              |   |  |              |        |   |  |   |            |  
|Depreciation and amortization of intangibles and other assets                            |  |                                           | 266    |   |                  |   | 24,705     |                      |  |   | 2,229        |   |  |              |       |   |  |   | 27,200     |  
|Provision for doubtful accounts                                                          |  |                                           |       |   |                  |   | 1,357      |                      |  |   | 11           |   |  |              |       |   |  |   | 1,368      |  
|Accretion of 8% cumulative preferred stock                                               |  |                                           | 331    |   |                  |   |           |                      |  |   |             |   |  |              |       |   |  |   | 331        |  
|Accrued dividends on 8% cumulative preferred stock                                       |  |                                           | 1,648  |   |                  |   |           |                      |  |   |             |   |  |              |       |   |  |   | 1,648      |  
|(Benefit) provision for deferred income taxes                                            |  |                                           |       |   |                  |   | (4,723     | )                    |  |   | 2            |   |  |              |       |   |  |   | (4,721     | )
|Other, net                                                                               |  |                                           | 299    |   |                  |   | 1,621      |                      |  |   | 2            |   |  |              |       |   |  |   | 1,922      |  
|Equity earnings of subsidiaries                                                          |  |                                           | (6,147 | ) |                  |   | 3,190      |                      |  |   |             |   |  |              | 2,957  |   |  |   |           |  
|Change in assets and liabilities:                                                        |  |                                           |        |   |                  |   |            |                      |  |   |              |   |  |              |        |   |  |   |            |  
|Accounts receivable                                                                      |  |                                           |       |   |                  |   | (50,048    | )                    |  |   | 24,532       |   |  |              |       |   |  |   | (25,516    | )
|Inventories                                                                              |  |                                           |       |   |                  |   | 26,467     |                      |  |   | 59,444       |   |  |              |       |   |  |   | 85,911     |  
|Other current assets                                                                     |  |                                           | 2      |   |                  |   | 1,957      |                      |  |   | (957         | ) |  |              |       |   |  |   | 1,002      |  
|Accounts payable and accrued expenses                                                    |  |                                           | 1,682  |   |                  |   | 51,346     |                      |  |   | (42,082      | ) |  |              |       |   |  |   | 10,946     |  
|Other, net                                                                               |  |                                           | (1     | ) |                  |   | (759       | )                    |  |   | (1,668       | ) |  |              |       |   |  |   | (2,428     | )
|                                                                                         |  |                                           |        |   |                  |   |            |                      |  |   |              |   |  |              |        |   |  |   |            |  
|Net cash provided by operations                                                          |  |                                           | 424    |   |                  |   | 61,260     |                      |  |   | 38,323       |   |  |              |       |   |  |   | 100,007    |  
|                                                                                         |  |                                           |        |   |                  |   |            |                      |  |   |              |   |  |              |        |   |  |   |            |  
|Cash flows from investing activities:                                                    |  |                                           |        |   |                  |   |            |                      |  |   |              |   |  |              |        |   |  |   |            |  
|Acquisitions, net of cash acquired                                                       |  |                                           |       |   |                  |   | (128       | )                    |  |   | 262          |   |  |              |       |   |  |   | 134        |  
|Purchase of property and equipment                                                       |  |                                           |       |   |                  |   | (5,384     | )                    |  |   | (181         | ) |  |              |       |   |  |   | (5,565     | )
|Purchase of assets held for sale                                                         |  |                                           |       |   |                  |   | (830       | )                    |  |   |             |   |  |              |       |   |  |   | (830       | )
|Proceeds from sale of property and equipment                                             |  |                                           |       |   |                  |   | 129        |                      |  |   | 38           |   |  |              |       |   |  |   | 167        |  
|Proceeds from disposal of assets held for sale                                           |  |                                           |       |   |                  |   | 846        |                      |  |   | 7,300        |   |  |              |       |   |  |   | 8,146      |  
|Intercompany                                                                             |  |                                           | (496   | ) |                  |   | 41,140     |                      |  |   | (40,644      | ) |  |              |       |   |  |   |           |  
|                                                                                         |  |                                           |        |   |                  |   |            |                      |  |   |              |   |  |              |        |   |  |   |            |  
|Net cash (used in) provided by investing activities                                      |  |                                           | (496   | ) |                  |   | 35,773     |                      |  |   | (33,225      | ) |  |              |       |   |  |   | 2,052      |  
|                                                                                         |  |                                           |        |   |                  |   |            |                      |  |   |              |   |  |              |        |   |  |   |            |  
|Cash flows from financing activities:                                                    |  |                                           |        |   |                  |   |            |                      |  |   |              |   |  |              |        |   |  |   |            |  
|Borrowings from revolving credit facility                                                |  |                                           |       |   |                  |   | 1,624,378  |                      |  |   |             |   |  |              |       |   |  |   | 1,624,378  |  
|Repayments of revolving credit facility                                                  |  |                                           |       |   |                  |   | (1,676,094 | )                    |  |   |             |   |  |              |       |   |  |   | (1,676,094 | )
|Outstanding checks                                                                       |  |                                           |       |   |                  |   | (42,750    | )                    |  |   | (6,969       | ) |  |              |       |   |  |   | (49,719    | )
|Payments of other long-term debt                                                         |  |                                           |       |   |                  |   | (2,664     | )                    |  |   | (9           | ) |  |              |       |   |  |   | (2,673     | )
|                                                                                         |  |                                           |        |   |                  |   |            |                      |  |   |              |   |  |              |        |   |  |   |            |  
|Net cash used in financing activities                                                    |  |                                           |       |   |                  |   | (97,130    | )                    |  |   | (6,978       | ) |  |              |       |   |  |   | (104,108   | )
|                                                                                         |  |                                           |        |   |                  |   |            |                      |  |   |              |   |  |              |        |   |  |   |            |  
|Net decrease in cash and cash equivalents                                                |  |                                           | (72    | ) |                  |   | (97        | )                    |  |   | (1,880       | ) |  |              |       |   |  |   | (2,049     | )
|Cash and cash equivalents, beginning of period                                           |  |                                           | 72     |   |                  |   | 6,305      |                      |  |   | 2,118        |   |  |              |       |   |  |   | 8,495      |  
|                                                                                         |  |                                           |        |   |                  |   |            |                      |  |   |              |   |  |              |        |   |  |   |            |  
|Cash and cash equivalents, end of period                                                 |  | $                                         |       |   |                  | $ | 6,208      |                      |  | $ | 238          |   |  | $            |       |   |  | $ | 6,446      |  
|                                                                                         |  |                                           |        |   |                  |   |            |                      |  |   |              |   |  |              |        |   |  |   |            |  



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|                                                                              |  |                                           |         |   |                  |   |            |                      |  |              |   |  |              |         |   |  |   |            |  
|----------------------------------------------------------------------------- |  | ----------------------------------------- | ------- | - | ---------------- | - | ---------- | -------------------- |  | ------------ | - |  | ------------ | ------- | - |  | - | ---------- | -
|                                                                              |  | For the Nine Months Ended October 4, 2008 |        
|                                                                              |  | ParentCompany                             |         |   | SubsidiaryIssuer |   |            | SubsidiaryGuarantors |  | Eliminations |   |  | Consolidated |        
|Cash flows from operating activities:                                         |  |                                           |         |   |                  |   |            |                      |  |              |   |  |              |         |   |  |   |            |  
|Net income.                                                                   |  | $                                         | 10,551  |   |                  | $ | 14,582     |                      |  | $            |  |  | $            | (14,582 | ) |  | $ | 10,551     |  
|Adjustments to reconcile net income to net cash used in operating activities: |  |                                           |         |   |                  |   |            |                      |  |              |   |  |              |         |   |  |   |            |  
|Depreciation and amortization of intangibles and other assets                 |  |                                           | 267     |   |                  |   | 22,076     |                      |  |              |  |  |              |        |   |  |   | 22,343     |  
|Provision for doubtful accounts                                               |  |                                           |        |   |                  |   | 1,113      |                      |  |              |  |  |              |        |   |  |   | 1,113      |  
|Accretion of 8% cumulative preferred stock                                    |  |                                           | 331     |   |                  |   |           |                      |  |              |  |  |              |        |   |  |   | 331        |  
|Accrued dividends on 8% cumulative preferred stock                            |  |                                           | 1,522   |   |                  |   |           |                      |  |              |  |  |              |        |   |  |   | 1,522      |  
|Benefit for deferred income taxes                                             |  |                                           |        |   |                  |   | (3,417     | )                    |  |              |  |  |              |        |   |  |   | (3,417     | )
|Other, net                                                                    |  |                                           | 22      |   |                  |   | (38        | )                    |  |              |  |  |              |         |   |  |   | (16        | )
|Equity earnings of subsidiaries                                               |  |                                           | (14,582 | ) |                  |   |           |                      |  |              |  |  |              | 14,582  |   |  |   |           |  
|Change in assets and liabilities:                                             |  |                                           |         |   |                  |   |            |                      |  |              |   |  |              |         |   |  |   |            |  
|Accounts receivable                                                           |  |                                           |        |   |                  |   | (25,960    | )                    |  |              |  |  |              |        |   |  |   | (25,960    | )
|Inventories                                                                   |  |                                           |        |   |                  |   | (66,060    | )                    |  |              |  |  |              |        |   |  |   | (66,060    | )
|Other current assets                                                          |  |                                           | (2      | ) |                  |   | (838       | )                    |  |              |  |  |              |        |   |  |   | (840       | )
|Accounts payable and accrued expenses                                         |  |                                           | (1,673  | ) |                  |   | (13,380    | )                    |  |              |  |  |              |        |   |  |   | (15,053    | )
|Other, net                                                                    |  |                                           | (2      | ) |                  |   | (1,660     | )                    |  |              |  |  |              |        |   |  |   | (1,662     | )
|                                                                              |  |                                           |         |   |                  |   |            |                      |  |              |   |  |              |         |   |  |   |            |  
|Net cash used in operations                                                   |  |                                           | (3,566  | ) |                  |   | (73,582    | )                    |  |              |  |  |              |        |   |  |   | (77,148    | )
|                                                                              |  |                                           |         |   |                  |   |            |                      |  |              |   |  |              |         |   |  |   |            |  
|Cash flows from investing activities:                                         |  |                                           |         |   |                  |   |            |                      |  |              |   |  |              |         |   |  |   |            |  
|Acquisitions, net of cash acquired                                            |  |                                           |        |   |                  |   | (168       | )                    |  |              |  |  |              |        |   |  |   | (168       | )
|Purchase of property and equipment                                            |  |                                           |        |   |                  |   | (10,011    | )                    |  |              |  |  |              |        |   |  |   | (10,011    | )
|Purchase of assets held for sale                                              |  |                                           |        |   |                  |   | (3,020     | )                    |  |              |  |  |              |        |   |  |   | (3,020     | )
|Proceeds from sale of property and equipment                                  |  |                                           |        |   |                  |   | 109        |                      |  |              |  |  |              |        |   |  |   | 109        |  
|Proceeds from disposal of assets held for sale                                |  |                                           |        |   |                  |   | 1,977      |                      |  |              |  |  |              |        |   |  |   | 1,977      |  
|Intercompany                                                                  |  |                                           | 3,565   |   |                  |   | (3,565     | )                    |  |              |  |  |              |        |   |  |   |           |  
|                                                                              |  |                                           |         |   |                  |   |            |                      |  |              |   |  |              |         |   |  |   |            |  
|Net cash provided by (used in) investing activities                           |  |                                           | 3,565   |   |                  |   | (14,678    | )                    |  |              |  |  |              |        |   |  |   | (11,113    | )
|                                                                              |  |                                           |         |   |                  |   |            |                      |  |              |   |  |              |         |   |  |   |            |  
|Cash flows from financing activities:                                         |  |                                           |         |   |                  |   |            |                      |  |              |   |  |              |         |   |  |   |            |  
|Borrowings from revolving credit facility                                     |  |                                           |        |   |                  |   | 1,466,910  |                      |  |              |  |  |              |        |   |  |   | 1,466,910  |  
|Repayments of revolving credit facility                                       |  |                                           |        |   |                  |   | (1,380,329 | )                    |  |              |  |  |              |        |   |  |   | (1,380,329 | )
|Outstanding checks                                                            |  |                                           |        |   |                  |   | 9,397      |                      |  |              |  |  |              |        |   |  |   | 9,397      |  
|Payments of other long-term debt                                              |  |                                           |        |   |                  |   | (3,385     | )                    |  |              |  |  |              |        |   |  |   | (3,385     | )
|                                                                              |  |                                           |         |   |                  |   |            |                      |  |              |   |  |              |         |   |  |   |            |  
|Net cash provided by financing activities                                     |  |                                           |        |   |                  |   | 92,593     |                      |  |              |  |  |              |        |   |  |   | 92,593     |  
|                                                                              |  |                                           |         |   |                  |   |            |                      |  |              |   |  |              |         |   |  |   |            |  
|Net (decrease) increase in cash and cash equivalents                          |  |                                           | (1      | ) |                  |   | 4,333      |                      |  |              |  |  |              |        |   |  |   | 4,332      |  
|Cash and cash equivalents, beginning of period                                |  |                                           | 73      |   |                  |   | 4,676      |                      |  |              |  |  |              |        |   |  |   | 4,749      |  
|                                                                              |  |                                           |         |   |                  |   |            |                      |  |              |   |  |              |         |   |  |   |            |  
|Cash and cash equivalents, end of period                                      |  | $                                         | 72      |   |                  | $ | 9,009      |                      |  | $            |  |  | $            |        |   |  | $ | 9,081      |  
|                                                                              |  |                                           |         |   |                  |   |            |                      |  |              |   |  |              |         |   |  |   |            |  



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|------- | --------------------------------------------------------------------------------------

As used in this report on Form 10-Q, the terms Holdings, Company, we, us,
our, and similar terms refer to American Tire Distributors Holdings, Inc., and its subsidiaries, unless the context indicates otherwise. The term ATD refers to American Tire Distributors, Inc. and its subsidiaries. The
following discussion and analysis of our consolidated results of operations, financial condition and liquidity should be read in conjunction with our Annual Report on Form 10-K and our condensed consolidated financial statements and notes thereto
contained in Part I of this report on Form 10-Q.

Our fiscal year is based on either a 52- or 53-week period ending on
the Saturday closest to each December 31. Therefore, the financial results of 53-week fiscal years, and the associated 14-week quarters, will not be exactly comparable to the prior and subsequent 52-week fiscal years and the associated quarters
having only 13 weeks. The quarters ended October 3, 2009 and October 4, 2008 contain operating results for 13 weeks. The nine months ended October 3, 2009 and October 4, 2008 contain operating results for 39 weeks and 40 weeks,
respectively.

Overview

According to Modern Tire Dealer,we are the largest distributor of tires to the U.S. replacement tire market, a $30.2 billion industry in 2008. The U.S. replacement tire market has historically
experienced stable growth primarily driven by several positive industry trends such as an increase in the number of vehicles on the road, an increase in the number of licensed drivers, an increase in the number of miles driven, and an increase in
the average age of vehicles. However, comparable unit replacement tire demand sequentially softened each quarter in 2008 and has continued at soft levels during 2009, with the first nine months of 2009 down 7.4% as compared to the first nine months
of 2008, as reported by the Rubber Manufacturers Association (RMA). During this same period, we have achieved a year-over-year increase of 11.7% in unit replacement tire demand. Our above-market results are due, in part, to the
inclusion of Am-Pac Tire (as defined below), which provided for growth of 19.9%, partially offset by the inclusion of three additional business days in our first nine months of 2008, which provided for a decline of 1.7%, as well as softer unit
demand this year as compared to last year due to the weakened economy. We believe the weakened industry demand has been due, in part, to continuing economic uncertainty resulting in a reduction in miles driven, which has contributed to the deferral
of tire purchases. We expect these conditions to continue to impact us for the rest of 2009. Despite these economic uncertainties, we will continue to implement our business strategies that are focused on achieving above market results during both
contracting and expanding market demand cycles.

High and ultra-high performance tires are our highest profit products and
have relatively shorter replacement cycles. According to Modern Tire Dealer, the number of units sold in this subcategory industry-wide was down 3.2% from 2007 to 2008 and, according to the RMA, are down 5.7% in the first nine months of 2009.
During our first nine months of 2009 and excluding Am-Pac Tire (as defined below) and the additional three business days in 2008, our high and ultra-high performance tire unit sales were up 1.9%. We expect the trend of selling more high and
ultra-high performance tires to be an ongoing area of strategic focus for us.

Our revenues are primarily generated from sales
of passenger car and light truck tires, which represent approximately 83.0% of our net sales for the quarter ended October 3, 2009. The remainder of net sales is primarily derived from other tire sales (11.5%), custom wheels (2.4%), automotive
service equipment (1.5%), and other products (1.4%). In addition, sales from our retail operations acquired from Am-Pac Tire (as defined below) in late 2008, which is classified as held for sale at October 3, 2009, represent 0.2% of our net
sales for the quarter ended October 3, 2009. We sell our products to a variety of customers and geographic markets. We have continued to expand and geographically diversify our operations in recent years by executing a strategy that includes
growth both through acquisitions and organically, including greenfield startups and expansions and updates of existing facilities to improve capabilities within local markets. Over the past five years, we have successfully acquired and integrated
ten businesses representing approximately $727 million in annual net sales (including approximately $55 million of retail sales from the Am-Pac Tire acquisition as defined below).



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On December 18, 2008, we completed the purchase of all of the issued and outstanding
capital stock of Am-Pac Tire Dist., Inc. (Am-Pac Tire) pursuant to the terms of a Stock Purchase Agreement dated December 18, 2008. This acquisition significantly strengthened our presence in markets we currently serve and allowed
us to expand our operations into St. Louis, Missouri and western Texas. The aggregate purchase price of this acquisition, subject to adjustment, was approximately $74.7 million, consisting of $71.1 million in cash, of which $9.8 million is held in
escrow and $59.1 million was used to pay off Am-Pac Tires outstanding debt, and $3.6 million in direct acquisition costs. The amount held in escrow has been excluded in the preliminary allocation of the cost of the assets acquired and
liabilities assumed as it represents contingent consideration for which the contingency has not been resolved. The preliminary purchase price allocation has been recorded in the accompanying condensed consolidated financial statements based on
estimated fair values for the assets acquired and liabilities assumed and has resulted in a customer relationship intangible asset of $9.6 million, an intangible tradename asset of $4.5 million and goodwill of $5.8 million. Effective July 31,
2009, we completed and settled, with the seller, the closing date balance sheet and determination of purchase price regarding the acquisition of Am-Pac Tire. In conjunction with this settlement, we received $0.9 million as a result of the closing
date balance sheet and purchase price adjustment procedures included within the Stock Purchase Agreement. This amount has been reflected, during the third quarter of 2009, as an adjustment to the cash consideration paid in the acquisition of Am-Pac
Tire.

On October 8, 2008, we completed the purchase of certain assets and the assumption of certain liabilities of
Remington Tire Distributors, Inc., d/b/a Grays Wholesale Tire Distributors (Grays Tire) pursuant to the terms of an Asset Purchase Agreement dated as of October 8, 2008. This acquisition expanded our service across the
states of Texas and Oklahoma and complemented our existing distribution centers located within the states of Texas and Oklahoma.

The purchase price allocation has been recorded in the accompanying condensed consolidated financial statements based on estimated fair values for the assets acquired and liabilities assumed and resulted in negative goodwill of $3.9 million
and a customer relationship intangible asset of $5.5 million. In accordance with accounting standards, the negative goodwill was allocated on a pro rata basis to the noncurrent nonfinancial assets, such as property and equipment and other intangible
assets, acquired in the Grays Tire acquisition which reduced the customer relationship intangible asset to $1.7 million.

The Am-Pac Tire and Grays Tire acquisitions were financed through borrowings under ATDs amended revolving credit facility. These acquisitions have been accounted for under the purchase method of accounting and, accordingly, the
results of operations for the acquired businesses have been included in the accompanying condensed consolidated statements of operations from the date of acquisition.



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Results of Operations

Quarter Ended October 3, 2009 Compared to Quarter Ended October 4, 2008

The following table sets forth the period change for each category of the statements of operations, as well as each category as a percentage of net sales (in thousands):



|                                                                                                          |  |                            |         |                        |                            |   |                        |                         |  |                |                                   |   |                |                                                         |    |  |       |   |  |       |  
|--------------------------------------------------------------------------------------------------------- |  | -------------------------- | ------- | ---------------------- | -------------------------- | - | ---------------------- | ----------------------- |  | -------------- | --------------------------------- | - | -------------- | ------------------------------------------------------- | -- |  | ----- | - |  | ----- | -
|                                                                                                          |  | QuarterEndedOctober 3,2009 |         |                        | QuarterEndedOctober
4,2008 |   |                        | Period OverPeriodChange |  |                | Period OverPeriodPercentageChange |   |                | Results as aPercentage of NetSales for theQuarter Ended |   
|                                                                                                          |  |                            |         | Favorable(unfavorable) |                            |   | Favorable(unfavorable) |                         |  | October 3,2009 |                                   |   | October 4,2008 |                                                        
|                                                                                                          |  | (Unaudited)                |         |                        | (Unaudited)                |   |                        |                         |  |                |                                   |   |                |                                                         |    |  |       |  
|Net sales                                                                                                 |  | $                          | 549,490 |                        |                            | $ | 501,959                |                         |  | $              | 47,531                            |   |                | 9.5                                                     | %  |  | 100.0 | % |  | 100.0 | %
|Cost of goods sold, excluding depreciation included in selling, general and administrative expenses below |  |                            | 451,252 |                        |                            |   | 408,099                |                         |  |                | (43,153                           | ) |                | (10.6                                                   | )  |  | 82.1  |   |  | 81.3  |  
|                                                                                                          |  |                            |         |                        |                            |   |                        |                         |  |                |                                   |   |                |                                                         |    |  |       |   |  |       |  
|Gross profit                                                                                              |  |                            | 98,238  |                        |                            |   | 93,860                 |                         |  |                | 4,378                             |   |                | 4.7                                                     |    |  | 17.9  |   |  | 18.7  |  
|Selling, general and administrative expenses                                                              |  |                            | 72,315  |                        |                            |   | 67,642                 |                         |  |                | (4,673                            | ) |                | (6.9                                                    | )  |  | 13.2  |   |  | 13.5  |  
|                                                                                                          |  |                            |         |                        |                            |   |                        |                         |  |                |                                   |   |                |                                                         |    |  |       |   |  |       |  
|Operating income                                                                                          |  |                            | 25,923  |                        |                            |   | 26,218                 |                         |  |                | (295                              | ) |                | (1.1                                                    | )  |  | 4.7   |   |  | 5.2   |  
|Other expense:                                                                                            |  |                            |         |                        |                            |   |                        |                         |  |                |                                   |   |                |                                                         |    |  |       |   |  |       |  
|Interest expense                                                                                          |  |                            | (13,465 | )                      |                            |   | (14,532                | )                       |  |                | 1,067                             |   |                | 7.3                                                     |    |  | (2.5  | ) |  | (2.9  | )
|Other, net                                                                                                |  |                            | (333    | )                      |                            |   | (219                   | )                       |  |                | (114                              | ) |                | (52.1                                                   | )  |  | (0.1  | ) |  | (0.0  | )
|                                                                                                          |  |                            |         |                        |                            |   |                        |                         |  |                |                                   |   |                |                                                         |    |  |       |   |  |       |  
|Income from operations before income taxes                                                                |  |                            | 12,125  |                        |                            |   | 11,467                 |                         |  |                | 658                               |   |                | 5.7                                                     |    |  | 2.2   |   |  | 2.3   |  
|Income tax provision                                                                                      |  |                            | 6,828   |                        |                            |   | 4,950                  |                         |  |                | (1,878                            | ) |                | (37.9                                                   | )  |  | 1.2   |   |  | 1.0   |  
|                                                                                                          |  |                            |         |                        |                            |   |                        |                         |  |                |                                   |   |                |                                                         |    |  |       |   |  |       |  
|Net income                                                                                                |  | $                          | 5,297   |                        |                            | $ | 6,517                  |                         |  | $              | (1,220                            | ) |                | (18.7                                                   | )% |  | 1.0   | % |  | 1.3   | %
|                                                                                                          |  |                            |         |                        |                            |   |                        |                         |  |                |                                   |   |                |                                                         |    |  |       |   |  |       |  

Net Sales

Sales increased $47.5 million in third quarter 2009 primarily driven by our acquisition of Am-Pac Tire in late 2008, which contributed $63.4 million to the quarter-over-quarter increase. Excluding Am-Pac
Tire, softer tire unit sales of $2.3 million, combined with a decline in wheel and equipment and supply sales, collectively $8.8 million, partially offset the increase noted above.

Gross Profit

Gross profit in third quarter 2009 increased $4.4 million
primarily due to the contribution from the Am-Pac Tire acquisition and, to a lesser extent, higher net tire pricing resulting from the pass through of manufacturer price increases that occurred throughout 2008. Partially offsetting these increases
were the benefit of favorable inventory cost layers generated during the third quarter of 2008, which resulted from passing through the tire manufacturers multiple price increases, that did not repeat in 2009.

Selling, General and Administrative Expenses

The increase in selling, general and administrative expenses of $4.7 million is due predominantly to our acquisition of Am-Pac Tire in late 2008, which accounted for an increase of approximately $6.7
million, (down from $17.3 million in first quarter 2009 and $12.7 million in second quarter 2009). In addition, higher rents for larger facilities occupied during late 2008 or early 2009 contributed $1.2 million to the quarter-over-quarter increase.
Lower employee-related expenses of $1.0 million, including lower overall employee headcount, and lower fuel cost of $1.7 million partially offset the increases noted above.



28



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Interest Expense

The decrease in interest expense for third quarter 2009 is primarily due to lower average borrowings from our revolving credit facility during third quarter 2009 combined with lower interest rates on our
variable rate debt, partially offset by a $0.4 million increase in interest expense related to the change in fair value of the interest rate swap agreement entered into in second quarter 2009.

Provision for Income Taxes

We recognized an income tax provision of $6.8 million in third quarter 2009 based on a pre-tax income of $12.1 million, compared to an income tax provision of $5.0 million in third quarter 2008 based on a pre-tax income of $11.5 million.
The effective tax rate in third quarter 2009 was 56.3% compared with 43.2% in third quarter 2008. The increase in the effective tax rate is due primarily to a lower projected pre-tax income level for 2009 as compared to 2008 with a consistent
anticipated amount from permanent differences (primarily the impact of preferred stock dividends that are not deductible for income tax purposes), and, to a lesser extent, a slightly higher state income tax effective rate. The income tax provision
recorded for third quarter 2009 has been computed based on year-to-date income and projected results for the full year. The final effective tax rate to be applied to fiscal 2009 will depend on the actual amount of pre-tax income (loss) generated by
us for the full year.

Net Income

The decrease in net income of $1.2 million is due, in part, to higher selling, general and administrative expenses, as discussed above, and the fluctuation in the income tax provision between periods,
partially offset by improvement in contributed gross profit dollars and lower interest expense.

Nine Months Ended October 3, 2009
Compared to the Nine Months Ended October 4, 2008

The following table sets forth the period change for each
category of the statements of operations, as well as each category as a percentage of net sales (in thousands):



|                                                                                                          |  |                                |           |                        |                                |   |                        |                         |  |                |                                   |   |                |                                                             |    |  |       |   |  |       |  
|--------------------------------------------------------------------------------------------------------- |  | ------------------------------ | --------- | ---------------------- | ------------------------------ | - | ---------------------- | ----------------------- |  | -------------- | --------------------------------- | - | -------------- | ----------------------------------------------------------- | -- |  | ----- | - |  | ----- | -
|                                                                                                          |  | Nine MonthsEndedOctober 3,2009 |           |                        | Nine MonthsEndedOctober
4,2008 |   |                        | Period OverPeriodChange |  |                | Period OverPeriodPercentageChange |   |                | Results as aPercentage of NetSales for theNine Months Ended |   
|                                                                                                          |  |                                |           | Favorable(unfavorable) |                                |   | Favorable(unfavorable) |                         |  | October 3,2009 |                                   |   | October 4,2008 |                                                            
|                                                                                                          |  | (Unaudited)                    |           |                        | (Unaudited)                    |   |                        |                         |  |                |                                   |   |                |                                                             |    |  |       |  
|Net sales                                                                                                 |  | $                              | 1,645,046 |                        |                                | $ | 1,517,300              |                         |  | $              | 127,746                           |   |                | 8.4                                                         | %  |  | 100.0 | % |  | 100.0 | %
|Cost of goods sold, excluding depreciation included in selling, general and administrative expenses below |  |                                | 1,364,554 |                        |                                |   | 1,249,110              |                         |  |                | (115,444                          | ) |                | (9.2                                                        | )  |  | 82.9  |   |  | 82.3  |  
|                                                                                                          |  |                                |           |                        |                                |   |                        |                         |  |                |                                   |   |                |                                                             |    |  |       |   |  |       |  
|Gross profit                                                                                              |  |                                | 280,492   |                        |                                |   | 268,190                |                         |  |                | 12,302                            |   |                | 4.6                                                         |    |  | 17.1  |   |  | 17.7  |  
|Selling, general and administrative expenses                                                              |  |                                | 233,602   |                        |                                |   | 204,084                |                         |  |                | (29,518                           | ) |                | (14.5                                                       | )  |  | 14.2  |   |  | 13.5  |  
|                                                                                                          |  |                                |           |                        |                                |   |                        |                         |  |                |                                   |   |                |                                                             |    |  |       |   |  |       |  
|Operating income                                                                                          |  |                                | 46,890    |                        |                                |   | 64,106                 |                         |  |                | (17,216                           | ) |                | (26.9                                                       | )  |  | 2.9   |   |  | 4.2   |  
|Other expense:                                                                                            |  |                                |           |                        |                                |   |                        |                         |  |                |                                   |   |                |                                                             |    |  |       |   |  |       |  
|Interest expense                                                                                          |  |                                | (41,345   | )                      |                                |   | (44,402                | )                       |  |                | 3,057                             |   |                | 6.9                                                         |    |  | (2.5  | ) |  | (2.9  | )
|Other, net                                                                                                |  |                                | (845      | )                      |                                |   | (953                   | )                       |  |                | 108                               |   |                | 11.3                                                        |    |  | (0.1  | ) |  | (0.1  | )
|                                                                                                          |  |                                |           |                        |                                |   |                        |                         |  |                |                                   |   |                |                                                             |    |  |       |   |  |       |  
|Income from operations before income taxes                                                                |  |                                | 4,700     |                        |                                |   | 18,751                 |                         |  |                | (14,051                           | ) |                | (74.9                                                       | )  |  | 0.3   |   |  | 1.2   |  
|Income tax provision                                                                                      |  |                                | 2,356     |                        |                                |   | 8,200                  |                         |  |                | 5,844                             |   |                | 71.3                                                        |    |  | 0.1   |   |  | 0.5   |  
|                                                                                                          |  |                                |           |                        |                                |   |                        |                         |  |                |                                   |   |                |                                                             |    |  |       |   |  |       |  
|Net income                                                                                                |  | $                              | 2,344     |                        |                                | $ | 10,551                 |                         |  | $              | (8,207                            | ) |                | (77.8                                                       | )% |  | 0.1   | % |  | 0.7   | %
|                                                                                                          |  |                                |           |                        |                                |   |                        |                         |  |                |                                   |   |                |                                                             |    |  |       |   |  |       |  



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Net Sales

Sales increased $127.7 million in the nine-month period of 2009 primarily driven by our acquisition of Am-Pac Tire in late 2008, which contributed $215.6 million to the year-over-year increase.
Additionally, our passing through the tire manufacturers multiple price increases of 2008 contributed an additional $41.0 million to the year-over-year increase. Excluding Am-Pac Tire and the three additional business days in the nine-month period
of 2008, our sales of passenger and light truck tire units continued to outperform the overall passenger and light truck tire market (down 7.4% as measured by the RMA), but still declined 6.5% during the nine-month period of 2009 as compared to the
nine-month period of 2008. As such, softer tire unit sales of $87.3 million (approximately $20.9 million of which resulted from an additional three business days in the nine-month period of 2008 compared to the same period in 2009), combined with a
decline in wheel and equipment and supply sales, collectively off $42.2 million, partially offset the increases noted above.

Gross
Profit

Gross profit in the nine-month period of 2009 increased $12.3 million primarily due to the contribution from the
Am-Pac Tire acquisition and, to a lesser extent, higher net tire pricing resulting from the pass through of manufacturer price increases that occurred throughout 2008. Partially offsetting these increases was the benefit of favorable inventory cost
layers generated during the first nine months of 2008, which resulted from passing through the tire manufacturers multiple price increases, that did not repeat in 2009, as well as lower tire, wheel and equipment and supply sales volumes, due, in
part, to the three fewer business days in the nine-month period of 2009.

Selling, General and Administrative Expenses

The increase in selling, general and administrative expenses of $29.5 million is due predominantly to our acquisition of Am-Pac Tire in late
2008, which accounted for an increase of approximately $36.7 million. Other increases included higher restructuring expense related to lease tails for facilities that were relocated ($1.0 million), higher rents for larger facilities occupied during
late 2008 or early 2009 ($3.6 million) and higher amortization expense related to the change in accounting estimate for certain customer list intangible assets (See Note 7 in the Notes to the Condensed Consolidated Financial Statements). Lower
employee-related expenses of $9.4 million, including lower incentive-based compensation, lower overall employee headcount and three fewer business days in 2009 as compared to 2008, as well as lower fuel cost partially offset the increases noted
above.

Interest Expense

The $3.1 million decrease in interest expense for the nine-month period of 2009 was due to lower interest rates on our variable rate debt, partially offset by higher average borrowings from our revolving
credit facility during the nine-month period of 2009 as well as a $0.9 million increase in interest expense related to the change in fair value of the interest rate swap agreement entered into in the second quarter of 2009.

Provision for Income Taxes

We recognized an income tax provision of $2.4 million in the nine-month period of 2009 based on a pre-tax income of $4.7 million, compared to an income tax provision of $8.2 million in the nine-month period of 2008 based on a pre-tax income
of $18.8 million. The effective tax rate for the first nine months of 2009 was 50.1% compared with 43.7% for the corresponding period in 2008. The increase in the effective tax rate is due primarily to a lower projected pre-tax income level for 2009
as compared to 2008 with a consistent anticipated amount from permanent differences (primarily the impact of preferred stock dividends that are not deductible for income tax purposes). The income tax provision recorded for the first nine months of
2009 has been computed based on year-to-date income and projected results for the full year. The final effective tax rate to be applied to fiscal 2009 will depend on the actual amount of pre-tax income (loss) generated by us for the full year.



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Net Income

Net income for the nine-month period of 2009 decreased $8.2 million due, in part, to higher selling, general and administrative expenses, as discussed above, partially offset by improvement in contributed
gross profit dollars, lower interest expense and the fluctuation in the income tax provision between periods.

Critical
Accounting Polices and Estimates

The preparation of financial statements and related disclosures in conformity with
accounting principles generally accepted in the United States requires management to make judgments, assumptions and estimates that affect the amounts reported. Please see the discussion of critical accounting policies and estimates in our Annual
Report on Form 10-K for the period ended January 3, 2009. During the nine months ended October 3, 2009, there have been no material changes to our critical accounting policies.

Liquidity and Capital Resources

At October 3,
2009 our total debt, including capital leases, was $589.4 million compared to $642.4 million at January 3, 2009, a decrease of $53.0 million. Higher repayments of ATDs amended revolving credit facility accounted for the majority of the
decrease in total debt. Total commitments by the lenders under our revolving credit facility were $400.0 million at October 3, 2009, of which $123.8 million was available for additional borrowings. The amount available to borrow under our
revolving credit facility is limited by the borrowing base computation, as defined in the Amended Revolver.

The following
table summarizes the cash flows for the nine months ended October 3, 2009 and October 4, 2008 (in thousands):



|                                                     |  |                                |          |   |                                |   |         |  
|---------------------------------------------------- |  | ------------------------------ | -------- | - | ------------------------------ | - | ------- | -
|                                                     |  | Nine MonthsEndedOctober 3,2009 |          |   | Nine MonthsEndedOctober 4,2008 |  
|Cash provided by (used in) operating activities      |  | $                              | 100,007  |   |                                | $ | (77,148 | )
|Cash provided by (used in) investing activities      |  |                                | 2,052    |   |                                |   | (11,113 | )
|Cash (used in) provided by financing activities      |  |                                | (104,108 | ) |                                |   | 92,593  |  
|                                                     |  |                                |          |   |                                |   |         |  
|Net (decrease) increase in cash and cash equivalents |  |                                | (2,049   | ) |                                |   | 4,332   |  
|Cash and cash equivalents, beginning of period       |  |                                | 8,495    |   |                                |   | 4,749   |  
|                                                     |  |                                |          |   |                                |   |         |  
|Cash and cash equivalents, end of period             |  | $                              | 6,446    |   |                                | $ | 9,081   |  
|                                                     |  |                                |          |   |                                |   |         |  
|Cash payments for interest                           |  | $                              | 40,818   |   |                                | $ | 50,190  |  
|Cash payments for taxes, net                         |  | $                              | 5,294    |   |                                | $ | 11,386  |  
|Capital expenditures financed by debt                |  | $                              | 1,369    |   |                                | $ | 2,258   |  

Operating Activities

Cash provided by operating activities increased $177.1 million to $100.0 million in the nine months ended October 3, 2009 compared to
cash used in operating activities of $77.1 million in the nine months ended October 4, 2008. The increase in cash provided by operating activities was primarily due to a decrease in our net working capital requirements. For the nine months
ended October 3, 2009, our change in operating assets and liabilities generated a cash inflow of approximately $69.9 million, primarily driven by a decrease in inventories and, to a lesser extent, an increase in accounts payable, partially
offset by an increase in accounts receivable and a decrease in accrued expenses. The decrease in inventories resulted from the combination of the consolidations of the acquired Am-Pac Tire distribution centers (finalized in early July 2009) and
rationalization of their inventories, as well as, reduction in elevated year-end inventory levels. The increase in accounts receivable resulted from seasonal volume increases during the third quarter of 2009 and the decrease in accrued expenses



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resulted from income tax payments and incentive compensation payments made during the nine months ended October 3, 2009, both of which related to fiscal 2008 performance. Comparatively,
during the same period of 2008, our change in operating assets and liabilities generated a cash outflow of approximately $109.6 million, primarily driven by increases in accounts receivables and inventories combined with a decrease in accrued
expenses partially offset by an increase in accounts payable. The decrease in accrued expenses is primarily due to interest payments on our senior notes, income tax payments and incentive compensation payments that were made during the nine months
ended October 4, 2008.

Investing Activities

Net cash provided by investing activities increased $13.2 million to $2.1 million in the nine months ended October 3, 2009 compared to net cash used in investing activities of $11.1 million in the
nine months ended October 4, 2008. The increase in net cash provided by investing activities was due primarily to the proceeds from the sale of assets held for sale, including $7.3 million for the sale of certain retail operations acquired in
the Am-Pac Tire acquisition (see Note 6 in the Notes to the Condensed Consolidated Financial Statements), and a lower level of purchases of property and equipment in the first nine months of 2009 as compared to the first nine months of 2008
primarily resulting from the expansion of one of our distribution centers in 2008, which did not repeat. Capital expenditures during the nine months ended October 3, 2009 included information technology upgrades and warehouse racking. During
the nine months ended October 3, 2009, we also had capital expenditures financed by debt of $1.4 million relating to information technology.

Financing Activities

Net cash used in financing activities increased $196.7 million to $104.1 million
in the nine months ended October 3, 2009 compared to net cash provided by financing activities of $92.6 million in the nine months ended October 4, 2008. The increase in cash used in financing activities was primarily due to lower net
borrowings from our Amended Revolver, primarily due to the reduction in working capital requirements discussed above, as well as the timing of outstanding checks from year-end that cleared in first quarter 2009.

Revolving Credit Facility

On May 9, 2007, ATD entered into the Fifth Amendment to the Fourth Amended and Restated Loan and Security Agreement (the Amended Revolver). The Borrowers to the Amended Revolver are ATD and its subsidiaries. The Amended
Revolver provides for a senior secured revolving credit facility of up to $400.0 million (of which up to $25.0 million may be utilized in the form of commercial and standby letters of credit), subject to a borrowing base formula. The Amended
Revolver is collateralized primarily by ATDs inventories and accounts receivable. As of October 3, 2009, the outstanding Amended Revolver balance was $225.2 million. In addition, ATD has certain letters of credit outstanding at
October 3, 2009 in the aggregate amount of $7.9 million and at that same date, $123.8 million was available for additional borrowings.

Borrowings under the Amended Revolver bear interest, at ATDs option, at either (i) the Base Rate, as defined, plus the applicable margin (0.0% as of October 3, 2009) or (ii) the
Eurodollar Rate, as defined, plus the applicable margin (1.50% as of October 3, 2009). At October 3, 2009 and January 3, 2009, borrowings under the Amended Revolver were at a weighted average interest rate of 1.9% and 3.6%,
respectively. The applicable margin for the loans varies based upon a performance-based grid, as defined in the Amended Revolver.

All obligations under the Amended Revolver are guaranteed by Holdings and each of ATDs existing and future direct and indirect domestic subsidiaries that are not direct obligors thereunder. Obligations under the Amended Revolver are
collateralized by a pledge of substantially all assets of the obligors, including all shares of ATDs capital stock and that of ATDs subsidiaries, subject to certain limitations.

In the event that ATD does not have at least $35.0 million available to be drawn under the Amended Revolver (subject to a cure) it would be
required to meet a fixed charge coverage ratio of 1.0:1.0. Additionally, the Amended Revolver restricts ATDs ability to incur additional debt; enter into guarantees; make loans and



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investments; declare dividends; modify certain material agreements or organizational documents relating to preferred stock; and change the business it conducts, as well as other customary
covenants. As of October 3, 2009 and January 3, 2009, ATD had more than $35.0 million available to draw under the Amended Revolver and was therefore not subject to the covenant. The Amended Revolver is set to expire on
December 31, 2011.

Supplemental Disclosures of Cash Flow Information

Cash payments for interest decreased $9.4 million to $40.8 million in the nine-month period ended October 3, 2009 compared to $50.2
million in the nine-month period ended October 4, 2008 primarily due to the timing of our 2008 calendar period, which included four quarterly interest payments on our Senior Floating Rate Notes ($14.2 million) compared to only three quarterly
interest payments in the nine-month period ended October 3, 2009 ($7.7 million). In addition, lower interest rates during the nine-month period ended October 3, 2009 as compared to the nine-month period ended October 4, 2008 also
contributed to the year-over-year decline in cash payments for interest.

Cash payments for taxes decreased $6.1 million to
$5.3 million in the nine-month period ended October 3, 2009 compared to $11.4 million in the nine-month period ended October 4, 2008 primarily due to the balance and timing of income tax extension payments for fiscal 2007 made in the first
part of 2008, as compared to payments for fiscal 2008 made in the first part of 2009.

Indenture EBITDA

We evaluate liquidity based on several factors, of which the primary financial measure is Indenture EBITDA. The presentation of Indenture
EBITDA, a non-GAAP financial measure, and ratios based thereon, do not comply with accounting principles generally accepted in the United States because they are adjusted to exclude certain cash expenses, as defined in the indentures. We present
Indenture EBITDA as it is used to determine our compliance with covenants contained in the related indentures governing our notes. The covenants are tied to ratios based on Indenture EBITDA, referred to as Consolidated Cash Flows in the indenture
agreement, and restrict our ability to incur additional indebtedness and to issue preferred stock. Indenture EBITDA as used herein represents earnings before interest, taxes, depreciation and amortization, and other adjustments permitted in
calculating covenant compliance under the indentures. We believe that the inclusion of this supplementary information is necessary for investors to understand our ability to comply with the financial covenants and debt service of the notes.
Indenture EBITDA should not be considered an alternative to, or more meaningful than, cash flows as determined in accordance with accounting principles generally accepted in the United States. The following table is a reconciliation of the most
directly comparable GAAP measure, net cash provided by (used in) operating activities, to Indenture EBITDA (in thousands):



|                                                    |  |                                |         |   |                                |   |         |  
|--------------------------------------------------- |  | ------------------------------ | ------- | - | ------------------------------ | - | ------- | -
|                                                    |  | Nine MonthsEndedOctober 3,2009 |         |   | Nine MonthsEndedOctober 4,2008 |  
|Net cash provided by (used in) operating activities |  | $                              | 100,007 |   |                                | $ | (77,148 | )
|Changes in operating assets and liabilities         |  |                                | (69,915 | ) |                                |   | 109,575 |  
|Benefit for deferred income taxes                   |  |                                | 4,721   |   |                                |   | 3,417   |  
|Interest expense                                    |  |                                | 41,345  |   |                                |   | 44,402  |  
|Current provision for income taxes                  |  |                                | 2,356   |   |                                |   | 8,200   |  
|Provision for doubtful accounts                     |  |                                | (1,368  | ) |                                |   | (1,113  | )
|Amortization of other assets                        |  |                                | (3,627  | ) |                                |   | (3,626  | )
|Accretion of 8% cumulative preferred stock          |  |                                | (331    | ) |                                |   | (331    | )
|Accrued dividends on 8% cumulative preferred stock  |  |                                | (1,648  | ) |                                |   | (1,522  | )
|Other                                               |  |                                | (266    | ) |                                |   | 841     |  
|                                                    |  |                                |         |   |                                |   |         |  
|Indenture EBITDA                                    |  | $                              | 71,274  |   |                                | $ | 82,695  |  
|                                                    |  |                                |         |   |                                |   |         |  



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Total Indenture EBITDA for the nine months ended October 3, 2009 decreased $11.4
million to $71.3 million compared to $82.7 million in the nine months ended October 4, 2008 due primarily to a reduction in passenger and light truck tire sales units and, to a lesser extent, lower sales contributions from wheels, equipment and
supplies during the nine-month period ended October 3, 2009, partially offset by the contributions from our acquisition of Am-Pac Tire, favorable net tire pricing and related contributed gross profit dollars, and lower selling, general and
administrative expenses, excluding Am-Pac Tire, resulting from three fewer business days in 2009 versus 2008, as well as lower headcount and fuel costs.

We anticipate that our principal use of cash going forward will be to meet working capital and debt service requirements, to make capital expenditures, and to fund acquisitions. Based upon current and
anticipated levels of operations, we believe that our cash flow from operations, together with amounts available under ATDs Amended Revolver, will be adequate to meet our anticipated requirements for at least the next twelve months. In
addition, we have total commitments by our lenders under our Amended Revolver of $400.0 million and we do not currently anticipate that any of our lenders will have a problem meeting their commitments under that facility.

Off-Balance Sheet Arrangements

The only significant known remaining liability related to our retail business that was sold in 2001 is the exposure related to leases that we have guaranteed. As of October 3, 2009, our total
obligations as guarantor on these leases are approximately $6.0 million extending over 10 years. However, we have secured assignments or sublease agreements for the vast majority of these commitments with contractually assigned or subleased rentals
of approximately $5.5 million. A provision has been made for the net present value of the estimated shortfall.

Recently
Issued Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (FASB) issued the
FASB Accounting Standards Codification (Codification). The Codification will become the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under
authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The Codification is not intended to change or alter existing GAAP. The Codification is effective for financial statements issued for interim and annual
periods ending after September 15, 2009. The adoption of the Codification did not have a material impact on our consolidated financial statements.

In May 2009, the FASB issued authoritative guidance for events that occur subsequent to the end of a reporting period. This authoritative guidance establishes general standards of accounting for and
disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. This authoritative guidance is effective for interim and annual reporting periods ended after June 15,
2009. We adopted this guidance on July 4, 2009 and have included the required disclosures in Note 2 in the Notes to the Condensed Consolidated Financial Statements.

In April 2009, the FASB issued authoritative guidance for fair value disclosures of financial instruments during interim periods. This guidance extends the disclosure requirements for fair value of
financial instruments to interim period financial statements, in addition to the existing requirements for annual periods and reiterates the requirement to disclose the methods and significant assumptions used to estimate fair value. This guidance
is effective for interim and annual periods ending after June 15, 2009. We adopted this guidance on July 4, 2009 and have included the required disclosures in Note 9 in the Notes to the Condensed Consolidated Financial Statements.

In April 2009, the FASB issued authoritative guidance for the recognition and presentation of impairments that are
other-than-temporary. This guidance amends the other-than-temporary impairment guidance for debt



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securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities. This accounting standard is
effective for interim and annual periods ending after June 15, 2009. We adopted this accounting standard on July 4, 2009 with no material impact on our consolidated financial statements.

In April 2008, the FASB issued authoritative guidance for the determination of useful lives of intangible assets. This guidance amends the
factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. The intent of this guidance is to improve the consistency between the useful life of a recognized
intangible asset under the authoritative guidance for goodwill and other intangible assets and the period of expected cash flows used to measure the fair value of the asset under the authoritative guidance for business combinations and other U.S.
generally accepted accounting principles. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. We adopted this guidance on January 4,
2009 (the first day of our 2009 fiscal year). The adoption of this guidance did not have a material impact on our results of operations and financial position.

In March 2008, the FASB issued authoritative guidance for disclosures of derivative instruments and hedging activities. This guidance is intended to improve financial reporting about derivative
instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entitys financial position, financial performance, and cash flows. This guidance is effective for financial
statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. We adopted the provisions of this accounting standard on January 4, 2009 (the first day of our 2009 fiscal year).
As a result of the adoption, we expanded our disclosures regarding derivative instruments and hedging activities which are included in Note 8 in the Notes to Condensed Consolidated Financial Statements.

In December 2007, the FASB issued revisions to an accounting standard for business combinations. The revised accounting standard requires an
acquiring entity to recognize, with limited exceptions, all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value. In addition, the revised accounting standard will require acquisition costs to be expensed
as incurred, acquired contingent liabilities to be recorded at fair value at the acquisition date and subsequently measured at either the higher of such amount or the amount determined under existing guidance for non-acquired contingencies,
restructuring costs associated with a business combination to be generally expensed subsequent to the acquisition date and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date to generally affect
income tax expense. The revised accounting standard also includes a substantial number of new disclosure requirements. The revised accounting standard is effective for fiscal years beginning after December 15, 2008 and is to be applied
prospectively. We adopted this revised standard on January 4, 2009 (the first day of our 2009 fiscal year). The adoption of this revised accounting standard did not have a material impact on our results of operations or financial position;
however, the impact in future periods will depend on the nature and size of business combinations completed in future periods.



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|Item 3. | Quantitative and Qualitative Disclosures about Market Risk.
|------- | -----------------------------------------------------------

Our results of operations are exposed to changes in interest rates primarily with respect to ATDs amended credit facility and our
Senior Floating Rate Notes. Interest on the amended credit facility is tied to the Base Rate, as defined in the Amended Revolver, or LIBOR. Interest on the Senior Floating Rate Notes is tied to the three-month LIBOR. At October 3, 2009, ATD had
$365.2 million outstanding under its amended credit facility and our Senior Floating Rate Notes, of which $180.2 million was not hedged by an interest rate swap agreement and was thus subject to interest rate changes. An increase of 1% in such
interest rate percentages would increase our annual interest expense by $1.8 million, based on the outstanding balance of the amended credit facility and Senior Floating Rate Notes that have not been hedged at October 3, 2009.

On June 4, 2009, we entered into an interest rate swap agreement, effective as of June 8, 2009 (the 2009 Swap), to
manage exposure to fluctuations in interest rates. The 2009 Swap represents a contract to exchange floating rate for fixed interest payments periodically over the life of the agreement without exchange of the underlying notional amount. The notional
amount of the 2009 Swap is used to measure interest to be paid or received and does not represent the amount of exposure to credit loss. At October 3, 2009, the 2009 Swap in place covers a notional amount of $100.0 million of variable rate
indebtedness at a fixed interest rate of 1.45% and expires on June 8, 2011. The 2009 Swap has not been designated for hedge accounting treatment. Accordingly, we recognize the fair value of the 2009 Swap in the accompanying condensed
consolidated balance sheets and any changes in the fair value are recorded as adjustments to interest expense in the accompanying condensed consolidated statements of operations. The fair value of the 2009 Swap is the estimated amount that we would
pay or receive to terminate the agreement at the reporting date. The fair value of the 2009 Swap was a liability of $0.9 million at October 3, 2009 and is included in other liabilities in the accompanying condensed consolidated balance sheet
with the offset included in interest expense in the accompanying condensed consolidated statement of operations. See Note 8 in the Notes to Condensed Consolidated Financial Statements for more information.

On October 11, 2005, we entered into an interest rate swap agreement (the 2005 Swap) to manage exposure to fluctuations in
interest rates. The 2005 Swap represents a contract to exchange floating rate for fixed interest payments periodically over the life of the agreement without exchange of the underlying notional amount. The notional amount of the 2005 Swap is used to
measure interest to be paid or received and does not represent the amount of exposure to credit loss. At October 3, 2009, the 2005 Swap in place covers a notional amount of $85.0 million of the $140.0 million of Senior Floating Rate Notes at a
fixed interest rate of 4.79% and expires on September 30, 2010. The 2005 Swap has been designated for hedge accounting treatment. Accordingly, we recognize the fair value of the 2005 Swap in the accompanying condensed consolidated balance
sheets and any changes in the fair value are recorded as adjustments to other comprehensive income (loss). The fair value of the 2005 Swap is the estimated amount that we would pay or receive to terminate the agreement at the reporting date. The
fair value of the 2005 Swap was a liability of $3.5 million at October 3, 2009 and $4.3 million at January 3, 2009 and is included in other liabilities in the accompanying condensed consolidated balance sheets with the offset included in
other comprehensive income (loss), net of tax. See Note 8 in the Notes to Condensed Consolidated Financial Statements for more information.



|Item 4. | Controls and Procedures.
|------- | ------------------------

Evaluation of Disclosure Controls and Procedures



| | (a) | We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our filings under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to our management,
including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, including the Chief Executive Officer and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | the Chief Financial Officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control
objectives.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures are effective at a reasonable assurance level.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Changes in Internal Control Over Financial Reporting

During the quarter ended October 3, 2009, there was
no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting with the exception of our ongoing system conversion. We are
currently implementing a conversion of our legacy computer system to Oracle. We have already implemented the general ledger as well as the accounts payable, inventory and accounts receivable functions on Oracle but still must transition other key
functions. We cannot be sure that the transition will be fully implemented on a timely basis, if at all. If we do not successfully implement this project, our controls over financial reporting may be disrupted and our operations adversely affected.



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PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings.
|------- | ------------------

We are involved from time to time in various lawsuits, including alleged class action lawsuits arising out of the ordinary conduct of our business. We do not expect that any of these matters will have a
material adverse effect on our business or financial condition.



|Item 1A. | Risk Factors.
|-------- | -------------

There have been no material changes to any of the risk factors disclosed in our most recently filed Annual Report on Form 10-K.



|Item 6. | Exhibits.
|------- | ---------



| |  |      |  |                                                                                                                                                                                                        
| |  | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 31.1 |  | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
| |  |     
| |  | 31.2 |  | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
| |  |     
| |  | 32.1 |  | Certifications of Principal Executive Officer and Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.      



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SIGNATURES

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

Date: November 17, 2009



AMERICAN TIRE DISTRIBUTORS HOLDINGS, INC.By:

/s/    DAVID L.
DYCKMANDavid L. DyckmanExecutive Vice President and Chief Financial Officer(On behalf of the registrant and as Principal Financial Officer)




39