**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

## **Washington, D.C. 20549**

 

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**FORM 10-Q**

 

**ý**** QUARTERLY REPORT PURSUANT TO SECTION 13OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934**

 

**For theQuarterly Period Ended October 2, 2005**

 

**or**

 

**o**** TRANSITION REPORT PURSUANT TO SECTION 13OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934**

 

**Commissionfile number 333-72343**

 

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**TRUE TEMPER SPORTS, INC.**

(Exact name ofregistrant as specified in its charter)

 
| **Delaware**                                                     | ** ** | **3949**                                                   | ** ** | **52-2112620**                           |
|------------------------------------------------------------------|------------|------------------------------------------------------------|------------|------------------------------------------|
| (State or other  jurisdiction of  incorporation or organization) |       | (Primary  Standard Industrial  Classification Code Number) |       | (I.R.S. Employer  Identification Number) |

 

**8275Tournament Drive**

**Suite 200**

**Memphis,Tennessee 38125**

**Telephone:(901) 746-2000**

(Address,including zip code, and telephone number, including area code, of registrant’sprincipal executive offices)

 

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Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required tofile such reports), and (2) has been subject to such filing requirementsfor the past 90 days. Yes ýNo o.

 

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

 

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

 

As of November 16,2005 the Registrant had 100 shares of Common Stock, $0.01 par value pershare, outstanding.

 

 

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**TRUETEMPER SPORTS, INC.**

 

**INDEX**

 
|          |                  |                                                                                        |   | **Page** |
|---------------|-----------------------|---------------------------------------------------------------------------------------------|--------|----------|
| PART I.  | FINANCIAL INFORMATION |                                                                                        |   |     |
|          |                  |                                                                                        |   |     |   |
|          | Item 1.          | Financial Statements                                                                        |   |     |   |
|          |                  |                                                                                        |   |     |   |
|          |                  | Condensed Consolidated  Statements of Operations (Unaudited)                                |   | 1        |   |
|          |                  |                                                                                        |   |     |   |
|          |                  | Condensed  Consolidated Balance Sheets (Unaudited)                                          |   | 2        |   |
|          |                  |                                                                                        |   |     |   |
|          |                  | Condensed Consolidated  Statements of Cash Flows (Unaudited)                                |   | 3        |   |
|          |                  |                                                                                        |   |     |   |
|          |                  | Notes to Condensed Consolidated  Financial Statements (Unaudited)                           |   | 4        |   |
|          |                  |                                                                                        |   |     |   |
|          | Item 2.          | Management’s Discussion and  Analysis of Financial Condition and Results of Operations |   | 9        |   |
|          |                  |                                                                                        |   |     |   |
|          | Item 3.          | Quantitative and Qualitative  Disclosures About Market Risk                                 |   | 16       |   |
|          |                  |                                                                                        |   |     |   |
|          | Item 4.               | Controls and Procedures                                                                     |   | 17       |   |
|          |                  |                                                                                        |   |     |   |
| PART II. | OTHER INFORMATION     |                                                                                        |   |     |
|          |                  |                                                                                        |   |     |   |
|          | Item 1.          | Legal Proceedings                                                                           |   | 18       |   |
|          |                  |                                                                                        |   |     |   |
|          | Item 2.          | Changes in Securities and  Use of Proceeds                                                  |   | 18       |   |
|          |                  |                                                                                        |   |     |   |
|          | Item 3.          | Defaults Upon Senior  Securities                                                            |   | 18       |   |
|          |                  |                                                                                        |   |     |   |
|          | Item 4.          | Submission of Matters to a  Vote of Security Holders                                        |   | 18       |   |
|          |                  |                                                                                        |   |     |   |
|          | Item 5.          | Other Information                                                                           |   | 18       |   |
|          |                  |                                                                                        |   |     |   |
|          | Item 6.          | Exhibits                                                                                    |   | 18       |   |
|          |                  |                                                                                        |   |     |   |
| Signatures    |                  |                                                                                        |   | 20       |   |
|               |                       |                                                                                             |        |          |  |  |

 

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### **PART I**  FINANCIALINFORMATION

 

**Item 1.****    *Financial Statements***

 

**TRUETEMPER SPORTS, INC.**

**(A wholly-ownedsubsidiary of True Temper Corporation)**

 

**CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS**

**(Unaudited)**

**(Dollarsin thousands)**

 
| ** **                                           | ** ** | **Quarterly**                                         | ** ** | **Year – To – Date**                            | ** ** |
|------------------------------------------------------|------------|-------------------------------------------------------|------------|-----------------------------------------------------------|------------|
| ** **                                           | ** ** | **Successor Company**                                 | ** ** | **Successor Company**                                     | ** ** | **Predecessor  Company** | ** ** |
| ** **                                           | ** ** | **Period from July 4 to  October 2,  2005** | ** ** | **Period from June 28 to  September 26,  2004** | ** ** | **Period from January 1 to October 2,  2005** | ** ** | **Period from March 15 to September 26,  2004** | ** ** | **Period from January 1 to March 14,  2004** | ** ** |
| ** **                                           | ** ** | ** **                                            | ** ** | ** **                                                | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **NET SALES**                                        | ** ** | **$**                                                 | **25,520** | ** **                                                | **$**      | **21,308** | ** ** | **$** | **90,188** | ** ** | **$** | **56,605** | ** ** | **$** | **20,247** | ** ** |
| Cost of sales                                        |       | 15,077                                                |       | 12,929                                                    |       | 53,625 |   | 34,040 |   | 11,871 |   |
| **GROSS  PROFIT**                                    | ** ** | **10,443**                                            | ** ** | **8,379**                                                 | ** ** | **36,563** | ** ** | **22,565** | ** ** | **8,376** | ** ** |
|                                                 |       |                                                  |       |                                                      |       |   |   |   |   |   |   |
| Selling, general and administrative expenses         |       | 3,598                                                 |       | 2,610                                                     |       | 11,733 |   | 6,513 |   | 3,635 |   |
| Amortization of intangible assets                    |       | 3,456                                                 |       | —                                                    |       | 10,368 |   | — |   | — |   |
| Business  development, start-up and transition costs |       | 37                                                    |       | 313                                                       |       | 172 |   | 495 |   | 100 |   |
| Transaction and reorganization expenses              |       | —                                                |       | 25                                                        |       | — |   | 25 |   | 5,381 |   |
| Loss on early  extinguishment of long- term debt     |       | —                                                |       | —                                                    |       | — |   | — |   | 9,217 |   |
| **OPERATING  INCOME (LOSS)**                         | ** ** | **3,352**                                             | ** ** | **5,431**                                                 | ** ** | **14,290** | ** ** | **15,532** | ** ** | **(9,957** | **)** |
|                                                 |       |                                                  |       |                                                      |       |   |   |   |   |   |   |
| Interest expense, net of interest income             |       | 4,408                                                 |       | 4,111                                                     |       | 13,934 |   | 8,790 |   | 2,498 |   |
| Other expenses (income), net                         |       | (66                                                   | )          | 44                                                        |       | (33 | ) | 58 |   | (2 | ) |
| **INCOME  (LOSS) BEFORE INCOME TAXES**               | ** ** | **(990**                                              | **)**      | **1,276**                                                 | ** ** | **389** | ** ** | **6,684** | ** ** | **(12,453** | **)** |
|                                                 |       |                                                  |       |                                                      |       |   |   |   |   |   |   |
| Income tax expense (benefit)                         |       | (329                                                  | )          | 528                                                       |       | 296 |   | 2,626 |   | (2,845 | ) |
| **NET  INCOME (LOSS)**                               | ** ** | **$**                                                 | **(661**   | **)**                                                     | **$**      | **748** | ** ** | **$** | **93** | ** ** | **$** | **4,058** | ** ** | **$** | **(9,608** | **)** |

 

See accompanyingnotes to condensed consolidated financial statements

 

1

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**TRUETEMPER SPORTS, INC.**

**(A wholly-ownedsubsidiary of True Temper Corporation)**

 

**CONDENSEDCONSOLIDATED BALANCE SHEETS**

**(Unaudited)**

**(Dollarsin thousands)**

 
| ** **                                                                                                  | ** ** | **October 2,  2005** | ** **  | **December 31,  2004** | ** ** |
|-------------------------------------------------------------------------------------------------------------|------------|---------------------------|-------------|-----------------------------|------------|
| ** **                                                                                                  |       |                      |        |                        |       |
| **ASSETS**                                                                                                  |       |                      |        |                        |       |
| **CURRENT ASSETS**                                                                                          |       |                      |        |                        |       |
| Cash and cash  equivalents                                                                                  |       | $                         | 2,545       |                        | $          | 3,337 |   |
| Receivables, net                                                                                            |       | 18,161                    |        | 14,578                      |       |
| Inventories                                                                                                 |       | 20,863                    |        | 21,910                      |       |
| Prepaid expenses  and other current assets                                                                  |       | 3,579                     |        | 3,533                       |       |
| **Total  current assets**                                                                                   | ** ** | **45,148**                | ** **  | **43,358**                  | ** ** |
|                                                                                                        |       |                      |        |                        |       |
| Property, plant  and equipment, net                                                                         |       | 12,553                    |        | 13,407                      |       |
| Goodwill, net                                                                                               |       | 150,883                   |        | 150,883                     |       |
| Intangible  assets, net                                                                                     |       | 135,898                   |        | 146,266                     |       |
| Other assets                                                                                                |       | 6,164                     |        | 6,911                       |       |
| **Total  assets**                                                                                           | ** ** | **$**                     | **350,646** | ** **                  | **$**      | **360,825** | ** ** |
|                                                                                                        |       |                      |        |                        |       |
| **LIABILITIES &  STOCKHOLDER’S EQUITY**                                                       |       |                      |        |                        |       |
| **CURRENT LIABILITIES**                                                                                     |       |                      |        |                        |       |
| Current portion  of long-term debt                                                                          |       | $                         | 258         |                        | $          | 545 |   |
| Accounts payable                                                                                            |       | 5,207                     |        | 4,356                       |       |
| Accrued expenses  and other current liabilities                                                             |       | 8,660                     |        | 9,796                       |       |
| **Total  current liabilities**                                                                              | ** ** | **14,125**                | ** **  | **14,697**                  | ** ** |
|                                                                                                        |       |                      |        |                        |       |
| Deferred tax liability, net                                                                                 |       | 5,502                     |        | 5,403                       |       |
| Long-term debt, net of current portion                                                                      |       | 222,467                   |        | 232,180                     |       |
| Other liabilities                                                                                           |       | 7,165                     |        | 7,215                       |       |
| **Total  liabilities**                                                                                      | ** ** | **249,259**               | ** **  | **259,495**                 | ** ** |
|                                                                                                        |       |                      |        |                        |       |
| **STOCKHOLDER’S EQUITY**                                                                               |       |                      |        |                        |       |
| Common stock —  par value $0.01 per share; authorized 1,000 shares; issued and outstanding  100 shares |       | —                    |        | —                      |       |
| Additional paid-in capital                                                                                  |       | 111,943                   |        | 111,943                     |       |
| Accumulated deficit                                                                                         |       | (10,371                   | )           | (10,464                     | )          |
| Accumulated other comprehensive loss, net of taxes                                                          |       | (185                      | )           | (149                        | )          |
| **Total  stockholder’s equity**                                                                        | ** ** | **101,387**               | ** **  | **101,330**                 | ** ** |
| **Total  liabilities and stockholder’s equity**                                                        | ** ** | **$**                     | **350,646** | ** **                  | **$**      | **360,825** | ** ** |

 

See accompanyingnotes to condensed consolidated financial statements

 

2

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**TRUETEMPER SPORTS, INC.**

**(A wholly-ownedsubsidiary of True Temper Corporation)**

 

**CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

**(Dollarsin thousands)**

 
| ** **                                                                                     | ** ** | **Successor Company**                                     | ** ** | **Predecessor  Company**                                    | ** ** |
|------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------|------------|-------------------------------------------------------------|------------|
| ** **                                                                                     | ** ** | **Period from  January 1 to  October 2,  2005** | ** ** | **Period from  March 15 to  September 26,  2004** | ** ** | **Period from  January 1 to  March 14,  2004** | ** ** |
| **OPERATING ACTIVITIES**                                                                       |       |                                                      |       |                                                        |       |   |   |
| Net income  (loss)                                                                             |       | $                                                         | 93         |                                                        | $          | 4,058 |   | $ | (9,608 | ) |
| Adjustments to  reconcile net income (loss) to net cash provided by operating activities:      |       |                                                      |       |                                                        |       |   |   |
| Depreciation and  amortization                                                                 |       | 2,025                                                     |       | 1,671                                                       |       | 671 |   |
| Amortization of  deferred financing costs                                                      |       | 1,088                                                     |       | 678                                                         |       | 109 |   |
| Amortization of  intangible assets                                                             |       | 10,368                                                    |       | —                                                      |       | — |   |
| Loss (gain) on  disposal of property, plant and equipment                                      |       | (57                                                       | )          | 40                                                          |       | — |   |
| Transaction and  reorganization expenses                                                       |       | —                                                    |       | 25                                                          |       | 5,381 |   |
| Loss on early  extinguishment of long-term debt                                                |       | —                                                    |       | —                                                      |       | 9,217 |   |
| Deferred taxes                                                                                 |       | 99                                                        |       | 2,527                                                       |       | (3,015 | ) |
| Changes in  operating assets and liabilities, net                                              |       | (3,107                                                    | )          | (1,702                                                      | )          | 227 |   |
| **Net  cash provided by operating activities**                                                 | ** ** | **10,509**                                                | ** ** | **7,297**                                                   | ** ** | **2,982** | ** ** |
|                                                                                           |       |                                                      |       |                                                        |       |   |   |
| **INVESTING ACTIVITIES**                                                                       |       |                                                      |       |                                                        |       |   |   |
| Purchase of  property, plant and equipment                                                     |       | (1,898                                                    | )          | (1,048                                                      | )          | (330 | ) |
| Proceeds from  sale of property, plant and equipment                                           |       | 784                                                       |       | —                                                      |       | — |   |
| **Net  cash used in investing activities**                                                     | ** ** | **(1,114**                                                | **)**      | **(1,048**                                                  | **)**      | **(330** | **)** |
|                                                                                           |       |                                                      |       |                                                        |       |   |   |
| **FINANCING ACTIVITIES**                                                                       |       |                                                      |       |                                                        |       |   |   |
| Proceeds from  issuance of bank debt                                                           |       | —                                                    |       | 110,000                                                     |       | — |   |
| Proceeds from  issuance of Senior Subordinated Notes                                           |       | —                                                    |       | 125,000                                                     |       | — |   |
| Principal  payments on bank debt                                                               |       | (10,000                                                   | )          | (2,275                                                      | )          | (7,700 | ) |
| Repayment of  bank debt, including accrued interest                                            |       | —                                                    |       | (6,335                                                      | )          | — |   |
| Call Senior  Subordinated Notes, including accrued interest and call premium                   |       | —                                                    |       | (109,160                                                    | )          | — |   |
| Payment of debt  issuance costs                                                                |       | —                                                    |       | (8,678                                                      | )          | — |   |
| Distribution of  net equity to selling shareholders                                            |       | —                                                    |       | (102,518                                                    | )          | — |   |
| Transaction and  reorganization expenses, including cash payments for direct acquisition costs |       | —                                                    |       | (10,805                                                     | )          | (463 | ) |
| Other financing  activity                                                                      |       | (187                                                      | )          | —                                                      |       | (42 | ) |
| **Net  cash used in financing activities**                                                     | ** ** | **(10,187**                                               | **)**      | **(4,771**                                                  | **)**      | **(8,205** | **)** |
| ** **                                                                                     | ** ** | ** **                                                | ** ** | ** **                                                  | ** ** | ** ** | ** ** |
| Net increase (decrease) in cash                                                                |       | (792                                                      | )          | 1,478                                                       |       | (5,553 | ) |
| Cash at beginning of period                                                                    |       | 3,337                                                     |       | 2,836                                                       |       | 8,389 |   |
| **Cash at end of period**                                                                      | ** ** | **$**                                                     | **2,545**  | ** **                                                  | **$**      | **4,314** | ** ** | **$** | **2,836** | ** ** |

 

See accompanyingnotes to condensed consolidated financial statements

 

3

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**TRUE TEMPER SPORTS, INC.**

**(A wholly-owned subsidiary ofTrue Temper Corporation)**

 

**NOTES TO CONDENSED CONSOLIDATEDFINANCIAL STATEMENTS**

**(Unaudited)**

**(Dollars in thousands unlessotherwise indicated)**

 

**1)  Basis of Presentation**

 

The accompanyingunaudited financial statements of True Temper Sports, Inc. (“True Temper”or the “Company”) have been prepared in accordance with the rules andregulations of the Securities and Exchange Commission (“SEC”) for quarterlyreports on Form 10-Q and consequently do not include all the disclosuresrequired by accounting principles generally accepted in the United States ofAmerica. It is suggested that these financial statements be read in conjunctionwith the audited financial statements and the notes thereto for the year ended December 31,2004. In the opinion of management, the financial statements as of and for theperiods ended October 2, 2005 and September 26, 2004 include alladjustments, consisting of only normal recurring adjustments, which arenecessary for the fair presentation of results for interim periods.

 

The Company’s fiscal yearbegins on January 1 and ends on December 31 of each year. During thecourse of the year the Company closes its books on a monthly and quarterlybasis following a 4,4,5 week closing calendar. Since the Company usesSunday as the last day of each period (with the exception of December) thenumber of days in the first and fourth quarters of any given year can varydepending on which day of the week January 1st falls on.

 

On January 30, 2004,TTS Holdings LLC, a company formed by Gilbert Global Equity Partners, L.P. andits affiliated funds (“Gilbert Global”), entered into a stock purchaseagreement with the Company’s direct parent company, True Temper Corporation,pursuant to which TTS Holdings LLC and certain of the Company’s seniormanagement purchased all of the outstanding shares of True TemperCorporation.  In connection with thisacquisition, and effective on March 15, 2004, the Company repaid all ofits outstanding 2002 senior credit facility, redeemed all of its 10 7/8%senior subordinated notes due 2008, and made certain payments of the netremaining equity of the predecessor company to the selling shareholders.  These payments were financed with the netproceeds of a new senior credit facility and new 8 3/8%senior subordinated notes due 2011.

 

This transaction wasaccounted for by the Company’s parent company using the purchase method ofaccounting.  As the Company is a whollyowned subsidiary of True Temper Corporation, the Company has “pushed down” theeffect of the purchase method of accounting to these financial statements.  These financial statements and accompanyingnotes present the historical cost basis results of the Company as “predecessorcompany” through March 14, 2004, and the results of the Company as “successorcompany” from March 15, 2004 through October 2, 2005, accordingly,the successor company presentation is not comparable to the predecessor companypresentation due to the different basis of accounting.  The financial statements have also beenseparated by a vertical dashed line into predecessor company and successorcompany results where necessary.

 

**2)  Stock Based Compensation**

 

On August 10, 2005the Company’s parent company, True Temper Corporation (“TTC”), issued, tocertain employees in return for service, a total of 525,400 stock options andstock appreciation rights (“Equity Incentive Awards”) to purchase common stockof TTC for $13.56 per share.  The EquityIncentive Awards vest and become exercisable at various times and under variousconditions through August 10, 2012; based on service with certainacceleration features based on performance criteria.

 

The Company applies theintrinsic-value-based method of accounting prescribed by Accounting PrinciplesBoard (APB) Opinion No. 25, *Accounting for StockIssued to Employees*, and related interpretations including FASBInterpretation No. 44, *Accounting for CertainTransactions involving Stock Compensation, an interpretation of APB Opinion No. 25*,issued in March 2000, to account for its fixed-plan Equity IncentiveAwards. Under this method, compensation expense is recorded on the date ofgrant only if the current market price of the underlying stock exceeded theexercise price of the Equity Incentive Award. SFAS No. 123, *Accounting for*

 

4

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*Stock Based Compensation*,established accounting and disclosure requirements using a fair-value-basedmethod of accounting for stock-based employee compensation plans. As allowed bySFAS No. 123, the Company has elected to continue to apply the intrinsic-value-basedmethod of accounting described above, and has adopted only the disclosurerequirements of SFAS No. 123. The following table illustrates the effecton net income (loss) if the fair-value-based method had been applied to alloutstanding and unvested Equity Incentive Awards in each period, and sucheffect on the net income of TTC were to be pushed down to its wholly ownedsubsidiary, True Temper Sports, Inc.

 

| ** **                                                                                                                   | ** ** | **Period from July 4 to  October 2,  2005** | ** ** | **Period from January 1 to October 2,  2005** | ** ** |
|------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------|------------|---------------------------------------------------------|------------|
| Net income (loss), as reported                                                                                               |       | $                                                     | (661       | )                                                       | $          | 93 |   |
| Add stock-based  employee compensation expense in reported net income (loss), net of tax                                     |       | —                                                |       | —                                                  |       |
| Deduct total  stock-based employee compensation expense determined under fair value based  method for all awards, net of tax |       | (24                                                   | )          | (24                                                     | )          |
| Net income (loss), adjusted                                                                                                  |       | $                                                     | (685       | )                                                       | $          | 69 |   |

 

**3)  Inventories**

 

| ** **      | ** ** | **October 2,  2005** | ** ** | **December 31,  2004** | ** ** |
|-----------------|------------|---------------------------|------------|-----------------------------|------------|
| Raw materials   |       | $                         | 4,804      |                        | $          | 4,601 |   |
| Work in process |       | 2,146                     |       | 2,182                       |       |
| Finished goods  |       | 13,913                    |       | 15,127                      |       |
| Total           |       | $                         | 20,863     |                        | $          | 21,910 |   |

 

**4)  Segment Reporting**

 

The Company operates intwo reportable business segments: golf shafts and performance sports. TheCompany’s reportable segments are based on the type of product manufactured andthe application of that product in the marketplace. The golf shaft segmentmanufactures and sells steel, composite, and multi-material golf club shaftsfor use exclusively in the golf industry. The performance sports segmentmanufactures and sells high strength, tight tolerance tubular components forbicycle, hockey and other recreational sport markets. The Company evaluates theperformance of these segments based on segment sales and gross profit. TheCompany has no inter-segment sales.

 
| ** **          | ** ** | **Quarterly**                                          | ** ** | **Year – To – Date**                             | ** ** |
|---------------------|------------|--------------------------------------------------------|------------|------------------------------------------------------------|------------|
| ** **          | ** ** | **Successor Company**                                  | ** ** | **Successor Company**                                      | ** ** | **Predecessor  Company** | ** ** |
| ** **          | ** ** | **Period from  July 4 to  October 2,  2005** | ** ** | **Period from  June 28 to  September 26,  2004** | ** ** | **Period from  January 1 to  October 2,  2005** | ** ** | **Period from  March 15 to  September 26,  2004** | ** ** | **Period from  January 1 to  March 14,  2004** | ** ** |
| Net sales:          |       |                                                   |       |                                                       |       |   |   |   |   |   |   |
| Golf shafts         |       | $                                                      | 23,837     |                                                       | $          | 20,042 |   | $ | 85,269 |   | $ | 53,402 |   | $ | 19,067 |   |
| Performance  sports |       | 1,683                                                  |       | 1,266                                                      |       | 4,919 |   | 3,203 |   | 1,180 |   |
| Total               |       | $                                                      | 25,520     |                                                       | $          | 21,308 |   | $ | 90,188 |   | $ | 56,605 |   | $ | 20,247 |   |
|                |       |                                                   |       |                                                       |       |   |   |   |   |   |   |
| Gross profit:       |       |                                                   |       |                                                       |       |   |   |   |   |   |   |
| Golf shafts         |       | $                                                      | 10,091     |                                                       | $          | 8,037 |   | $ | 35,476 |   | $ | 21,773 |   | $ | 8,080 |   |
| Performance  sports |       | 352                                                    |       | 342                                                        |       | 1,087 |   | 792 |   | 296 |   |
| Total               |       | $                                                      | 10,443     |                                                       | $          | 8,379 |   | $ | 36,563 |   | $ | 22,565 |   | $ | 8,376 |   |

 

5

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Following is areconciliation of total reportable segment gross profit to total Companyincome (loss) before income taxes:

 
| ** **                                           | ** ** | **Quarterly**                                          | ** ** | **Year – To – Date**                             | ** ** |
|------------------------------------------------------|------------|--------------------------------------------------------|------------|------------------------------------------------------------|------------|
| ** **                                           | ** ** | **Successor Company**                                  | ** ** | **Successor Company**                                      | ** ** | **Predecessor  Company** | ** ** |
| ** **                                           | ** ** | **Period from  July 4 to  October 2,  2005** | ** ** | **Period from  June 28 to  September 26,  2004** | ** ** | **Period from  January 1 to  October 2,  2005** | ** ** | **Period from  March 15 to  September 26,  2004** | ** ** | **Period from  January 1 to  March 14,  2004** | ** ** |
| Total reportable  segment gross profit               |       | $                                                      | 10,443     |                                                       | $          | 8,379 |   | $ | 36,563 |   | $ | 22,565 |   | $ | 8,376 |   |
| Less:                                                |       |                                                   |       |                                                       |       |   |   |   |   |   |   |
| Selling, general  and administrative expenses        |       | 3,598                                                  |       | 2,610                                                      |       | 11,733 |   | 6,513 |   | 3,635 |   |
| Amortization of  intangible assets                   |       | 3,456                                                  |       | —                                                     |       | 10,368 |   | — |   | — |   |
| Business  development, start-up and transition costs |       | 37                                                     |       | 313                                                        |       | 172 |   | 495 |   | 100 |   |
| Transaction and  reorganization expenses             |       | —                                                 |       | 25                                                         |       | — |   | 25 |   | 5,381 |   |
| Loss on early  extinguishment of long-term debt      |       | —                                                 |       | —                                                     |       | — |   | — |   | 9,217 |   |
| Interest  expense, net of interest income            |       | 4,408                                                  |       | 4,111                                                      |       | 13,934 |   | 8,790 |   | 2,498 |   |
| Other expense  (income), net                         |       | (66                                                    | )          | 44                                                         |       | (33 | ) | 58 |   | (2 | ) |
| Total Company  income (loss) before income taxes     |       | $                                                      | (990       | )                                                          | $          | 1,276 |   | $ | 389 |   | $ | 6,684 |   | $ | (12,453 | ) |

 

**5)  Comprehensive Income**

 

Totalcomprehensive income and its components for the periods covered by this reportare as follows:

 
| ** **                                                                          | ** ** | **Quarterly**                                          | ** ** | **Year – To – Date**                             | ** ** |
|-------------------------------------------------------------------------------------|------------|--------------------------------------------------------|------------|------------------------------------------------------------|------------|
| ** **                                                                          | ** ** | **Successor Company**                                  | ** ** | **Successor Company**                                      | ** ** | **Predecessor  Company** | ** ** |
| ** **                                                                          | ** ** | **Period from  July 4 to  October 2,  2005** | ** ** | **Period from  June 28 to  September 26,  2004** | ** ** | **Period from  January 1 to  October 2,  2005** | ** ** | **Period from  March 15 to  September 26,  2004** | ** ** | **Period from  January 1 to  March 14,  2004** | ** ** |
| Net income (loss)                                                                   |       | $                                                      | (661       | )                                                          | $          | 748 |   | $ | 93 |   | $ | 4,058 |   | $ | (9,608 | ) |
| Mark to market  adjustment on foreign currency derivative instruments, net of taxes |       | (21                                                    | )          | (33                                                        | )          | (36 | ) | 22 |   | (121 | ) |
| Total comprehensive income (loss)                                                   |       | $                                                      | (682       | )                                                          | $          | 715 |   | $ | 57 |   | $ | 4,080 |   | $ | (9,729 | ) |

 

**6)  Transaction and Reorganization**

 

On January 30, 2004,TTS Holdings LLC, a company formed by Gilbert Global, entered into a stockpurchase agreement with the Company’s direct parent company, True TemperCorporation, pursuant to which TTS Holdings LLC and certain of the Company’ssenior management purchased all of the outstanding shares of True TemperCorporation.  In connection with thisacquisition, and effective on March 15, 2004, the Company repaid all ofits outstanding 2002 senior credit facility, redeemed all of its 10 7/8%senior subordinated notes due 2008, and made certain payments of the netremaining equity of the predecessor company to the selling shareholders.  These payments were financed with the netproceeds of a new senior credit facility and new 8 3/8%senior

 

6

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subordinated notes due2011.

 

The purchase price asstipulated in the January 30, 2004 stock purchase agreement totaled $342.0million, plus direct acquisition costs and certain working capital adjustmentsof $18.4 million, less a purchase price adjustment for final working capital of$0.8 million.  Following is theallocation of the total consideration paid:

 
| Current assets, excluding inventory                        |   |    |   | $       | 20,086  |   |
|------------------------------------------------------------|--------|---------|--------|---------|---------|--------|
| Inventory                                                  |   |    |   | 30,119  |    |
| Identifiable intangible assets:                            |   |    |   |    |    |
| Trade name                                                 |   | $       | 19,455 |    |    |   |
| Patented  technology                                       |   | 11,686  |   |    |    |
| Purchased  customer relationships                          |   | 121,524 |   |    |    |
| Lease contract                                             |   | 4,323   |   |    |    |
| Other                                                      |   | 262     |   |    |    |
| Total  identifiable intangible assets                      |   |    |   | 157,250 |    |
| Property, plant and equipment                              |   |    |   | 14,684  |    |
| Deferred tax assets, net, existing at acquisition  date    |   |    |   | 51,866  |    |
| Deferred tax assets related to acquisition                 |   |    |   | 10,552  |    |
| Deferred financing costs                                   |   |    |   | 7,366   |    |
| Goodwill                                                   |   |    |   | 150,883 |    |
| Other assets                                               |   |    |   | 95      |    |
| Current liabilities                                        |   |    |   | (12,475 | )       |
| Deferred tax liability related to intangible assets        |   |    |   | (59,680 | )       |
| Deferred tax liability related to fair value of  inventory |   |    |   | (4,432  | )       |
| Other liabilities                                          |   |    |   | (6,656  | )       |
| Total                                                      |   |    |   | $       | 359,658 |   |
|                                                            |        |         |        |         |         |        |  |

 

This transaction wasaccounted for by the Company’s parent company using the purchase method ofaccounting.  As the Company is a whollyowned subsidiary of True Temper Corporation, the Company has “pushed down” theeffect of the purchase method of accounting to these financial statements.

 

In connection with theacquisition, the Company conducted an assessment and valuation of all tangibleand intangible assets acquired.  Theresults of this exercise are reflected in the allocation table above.  Of particular note was (i) theestablishment of intangible assets in an aggregate amount of approximately$157.3 million based on both internal Company assessments and a study conductedby an independent firm specializing in intangible asset valuation; and (ii) thewrite-up of inventory by approximately $11.7 million to reflect the estimatedfair value of inventory at the date of acquisition.  Both of these adjustments were completed incompliance with the purchase accounting prescribed by Statement of FinancialAccounting Standards No. 141, *Business Combinations*,which the Company adopted on January 1, 2002.

 

The establishment of theintangible assets results in certain non-cash amortization expense beginning in2004, as these intangible assets are amortized over their expected economiclives.

 

At the time of thetransaction the predecessor company recorded certain transaction relatedexpenses totaling $5.4 million.  Theseexpenses consist primarily of investment banking merger and acquisition fees,legal fees and other incidental costs and expenses typically incurred in anacquisition of this nature.  Also, as adirect result of the early extinguishment of the predecessor company’slong-term debt, expenses totaling $9.2 million were incurred consistingprimarily of the write-off of the remaining deferred financing costs related tothe 10 7/8% senior subordinated notes due 2008 and the2002 senior credit facility, and the early extinguishment call premium andrelated interest incurred when the Company redeemed the 10 7/8%senior subordinated notes on March 15, 2004.

 

7

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The following unauditedpro forma financial information is presented as if the aforementionedtransaction, and all related purchase accounting adjustments, had occurred asof January 1, 2004.  The pro formaamounts contain certain adjustments, including, (i) an adjustment tointerest expense to reflect the extinguishment of the 10 7/8%Senior Subordinated Notes due 2008 and the 2002 senior credit facility, and theissuance of the 8 3/8% Senior Subordinated Notes due 2011and 2004 senior credit facility, (ii) the elimination of transaction andreorganization expenses and the loss on early extinguishment of long-term debt,which are both non-recurring, (iii) the additional charge to operatingincome for the amortization of intangible assets and (iv) the related taxeffect of the adjustments described above.

 
| ** **               | ** ** | **Period from  January 1 to  September 26,  2004** | ** ** |
|--------------------------|------------|--------------------------------------------------------------|------------|
| Net sales                |       | $                                                            | 76,852     |   |
| Loss before income taxes |       | $                                                            | (2,333     | ) |
| Net loss                 |       | $                                                            | (1,584     | ) |

 

**7)  Pension and Other Postretirement Benefits**

 

The following tablereflects the Company’s net periodic pension benefit expense and cashcontributions to its pension plan for the periods covered by this report:

 
| ** **                            | ** ** | **Quarterly**                                          | ** ** | **Year – To – Date**                             | ** ** |
|---------------------------------------|------------|--------------------------------------------------------|------------|------------------------------------------------------------|------------|
| ** **                            | ** ** | **Successor Company**                                  | ** ** | **Successor Company**                                      | ** ** | **Predecessor  Company** | ** ** |
| ** **                            | ** ** | **Period from  July 4 to  October 2,  2005** | ** ** | **Period from  June 28 to  September 26,  2004** | ** ** | **Period from  January 1 to  October 2,  2005** | ** ** | **Period from  March 15 to  September 26,  2004** | ** ** | **Period from  January 1 to  March 14,  2004** | ** ** |
| Service cost                          |       | $                                                      | 157        |                                                       | $          | 142 |   | $ | 413 |   | $ | 273 |   | $ | 180 |   |
| Interest cost                         |       | 293                                                    |       | 268                                                        |       | 768 |   | 513 |   | 203 |   |
| Expected return on plan assets        |       | (320                                                   | )          | (302                                                       | )          | (840 | ) | (579 | ) | (227 | ) |
| Net amortization                      |       | 53                                                     |       | —                                                     |       | 139 |   | — |   | 30 |   |
| Net periodic pension benefit expense  |       | $                                                      | 183        |                                                       | $          | 108 |   | $ | 480 |   | $ | 207 |   | $ | 186 |   |
|                                  |       |                                                   |       |                                                       |       |   |   |   |   |   |   |
| Cash contribution to the pension plan |       | $                                                      | 193        |                                                       | $          | — |   | $ | 239 |   | $ | — |   | $ | — |   |

 

The Company expects tomake additional cash contributions to the pension plan of $46 during the fourthquarter of 2005, for a total 2005 contribution of $285.

 

The following tablereflects the Company’s net periodic postretirement benefit expense for theperiods covered by this report:

 
| ** **                                   | ** ** | **Quarterly**                                          | ** ** | **Year – To – Date**                             | ** ** |
|----------------------------------------------|------------|--------------------------------------------------------|------------|------------------------------------------------------------|------------|
| ** **                                   | ** ** | **Successor Company**                                  | ** ** | **Successor Company**                                      | ** ** | **Predecessor  Company** | ** ** |
| ** **                                   | ** ** | **Period from  July 4 to  October 2,  2005** | ** ** | **Period from  June 28 to  September 26,  2004** | ** ** | **Period from  January 1 to  October 2,  2005** | ** ** | **Period from  March 15 to  September 26,  2004** | ** ** | **Period from  January 1 to  March 14,  2004** | ** ** |
| Service cost                                 |       | $                                                      | 16         |                                                       | $          | 24 |   | $ | 68 |   | $ | 38 |   | $ | 20 |   |
| Interest cost                                |       | 38                                                     |       | 49                                                         |       | 166 |   | 78 |   | 44 |   |
| Net amortization                             |       | —                                                 |       | —                                                     |       | — |   | — |   | 6 |   |
| Net periodic  postretirement benefit expense |       | $                                                      | 54         |                                                       | $          | 73 |   | $ | 234 |   | $ | 116 |   | $ | 70 |   |

 

8

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

 

The following discussionshould be read in conjunction with the more detailed information in the Company’s2004****Annual Financial Statements, includingthe notes thereto, appearing most recently in our 2004 Annual Report on Form 10-K,filed with the SEC on March 30, 2005.

 

**Company Overview**

 

True Temper Sports, Inc.(“True Temper” or the “Company”), a wholly owned subsidiary of True TemperCorporation (“TTC”), is a leading designer, manufacturer and marketer of steel,composite, and multi-material golf club shafts for original equipmentmanufacturers (“OEM’s”) and distributors in the golf equipment industry. Inaddition, True Temper produces and sells a variety of performance sportsproducts that offer high strength and tight tolerance tubular components to thebicycle, hockey and other recreational sports markets. In calendar 2004, golfshaft sales represented 94% of total revenues, and performance sports salesrepresented 6%. This sales split has remained relatively consistent during thefirst nine months of 2005.

 

**Purchase Agreement for TrueTemper Corporation**

 

On January 30, 2004,TTS Holdings LLC, a company formed by Gilbert Global Equity Partners, L.P. andits affiliated funds (“Gilbert Global”), entered into a stock purchaseagreement with the Company’s direct parent company, True Temper Corporation,pursuant to which TTS Holdings LLC and certain of the Company’s seniormanagement purchased all of the outstanding shares of TTC (“Gilbert GlobalAcquisition”).  In connection with thisacquisition, and effective on March 15, 2004, the Company repaid all ofits outstanding 2002 senior credit facility, redeemed all of its 10 7/8%senior subordinated notes due 2008, and made certain payments of the netremaining equity of the predecessor company to the selling shareholders.  These payments were financed with the netproceeds of a new senior credit facility and new 8 3/8%senior subordinated notes due 2011.

 

The Gilbert GlobalAcquisition was accounted for by the Company’s parent company using thepurchase method of accounting.  As theCompany is a wholly owned subsidiary of TTC, the Company has “pushed down” theeffect of the purchase method of accounting to its financial statements.  The Company’s financial statements andaccompanying notes present the historical cost basis results of the Company as “predecessor”through March 14, 2004, and the results of the Company as “successor” fromMarch 15, 2004 through October 2, 2005, accordingly, certain elementsof the successor company presentation are not comparable to the predecessorcompany presentation due to the different basis of accounting.

 

For purposes of thefollowing discussion regarding the Company’s results of operations and cashflow, the Company has combined the results of the predecessor and successorcompanies in 2004 in order to compare the results to the results in 2005.  Material variances caused by the different basisof accounting have been disclosed where applicable.

 

9

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**Results of Operations**

 

The following tables set forth thecomponents of net income as a percentage of net sales for the periodsindicated:

 
| ** **                                          | ** ** | **Quarterly**                                          | ** ** |
|-----------------------------------------------------|------------|--------------------------------------------------------|------------|
| ** **                                          | ** ** | **Period from  July 4 to  October 2,  2005** | ** ** | **Period from  June 28 to  September 26,  2004** | ** ** |
| Net sales                                           |       | 100.0                                                  | %          | 100.0 | % |
| Cost of sales                                       |       | 59.1                                                   |       | 60.7 |   |
| Gross profit                                        |       | 40.9                                                   |       | 39.3 |   |
| Selling, general and administrative expenses        |       | 14.1                                                   |       | 12.2 |   |
| Amortization of intangible assets                   |       | 13.5                                                   |       | — |   |
| Business development, start-up and transition costs |       | 0.1                                                    |       | 1.5 |   |
| Transaction and reorganization expenses             |       | —                                                 |       | 0.1 |   |
| Operating income                                    |       | 13.1                                                   |       | 25.5 |   |
| Interest expenses, net of interest income           |       | 17.3                                                   |       | 19.3 |   |
| Other expenses (income), net                        |       | (0.3                                                   | )          | 0.2 |   |
| Income (loss)  before income taxes                  |       | (3.9                                                   | )          | 6.0 |   |
| Income tax expense (benefit)                        |       | (1.3                                                   | )          | 2.5 |   |
| Net income  (loss)                                  |       | (2.6                                                   | )%         | 3.5 | % |

 
| ** **                                           | ** ** | **Year – To – Date**                            | ** ** |
|------------------------------------------------------|------------|-----------------------------------------------------------|------------|
| ** **                                           | ** ** | **Successor  Company**                                    | ** ** | **Combined  Company** | ** ** | **Successor  Company** | ** ** | **Predecessor  Company** | ** ** |
| ** **                                           | ** ** | **Period from  January 1 to  October 2,  2005** | ** ** | **Period from  January 1 to  September 26,  2004** | ** ** | **Period from  March 15 to  September 26,  2004** | ** ** | **Period from  January 1 to  March 14,  2004** | ** ** |
| Net sales                                            |       | 100.0                                                     | %          | 100.0 | % | 100.0 | % | 100.0 | % |
| Cost of sales                                        |       | 59.5                                                      |       | 59.7 |   | 60.1 |   | 58.6 |   |
| Gross profit                                         |       | 40.5                                                      |       | 40.3 |   | 39.9 |   | 41.4 |   |
| Selling, general and administrative expenses         |       | 13.0                                                      |       | 13.2 |   | 11.5 |   | 18.0 |   |
| Amortization of intangible assets                    |       | 11.5                                                      |       | — |   | — |   | — |   |
| Business  development, start-up and transition costs |       | 0.2                                                       |       | 0.8 |   | 0.9 |   | 0.5 |   |
| Transaction and reorganization expenses              |       | —                                                    |       | 7.0 |   | 0.0 |   | 26.6 |   |
| Loss on early extinguishment of debt                 |       | —                                                    |       | 12.0 |   | — |   | 45.5 |   |
| Operating income  (loss)                             |       | 15.8                                                      |       | 7.3 |   | 27.4 |   | (49.2 | ) |
| Interest expense, net of interest income             |       | 15.4                                                      |       | 14.7 |   | 15.5 |   | 12.3 |   |
| Other expenses (income), net                         |       | (0.0                                                      | )          | 0.1 |   | 0.1 |   | (0.0 | ) |
| Income (loss)  before income taxes                   |       | 0.4                                                       |       | (7.5 | ) | 11.8 |   | (61.5 | ) |
| Income tax expense (benefit)                         |       | 0.3                                                       |       | (0.3 | ) | 4.6 |   | (14.1 | ) |
| Net income  (loss)                                   |       | 0.1                                                       | %          | (7.2 | )% | 7.2 | % | (47.5 | )% |

 

***ThirdQuarter Ended October 2, 2005 Compared to the Third Quarter Ended September 26,2004***

 

***NetSales*** for the third quarter of 2005 increased approximately$4.2 million, or 19.8%, to $25.5 million from $21.3 million in the thirdquarter of 2004.

 

Golf shaft sales increased$3.8 million, or 18.9%, to $23.8 million compared to the $20.0 million in the thirdquarter of 2004.  This improvement inrevenue was driven by several factors, including a favorable shift in the mixof steel golf shafts sold towards more premium, branded products, and anincrease in unit sales volume for the Company’s branded and OEM proprietarygraphite golf shafts. This increased unit volume can be attributed to severalfactors, including (i) increased demand for True Temper’s new productofferings such as the Grafalloy ProLaunch graphite shaft, (ii) a greaternumber of successful new club introductions from several key OEM partners,specifically in the iron category, (iii) general reductions in the overallwholesale and retail channel inventory positions as compared to prior yearlevels, and (iv) increased acceptance and usage of the Company’s graphitegolf shaft products in certain OEM partners’ custom option programs, primarilyin the Grafalloy Blue and ProLaunch family of products.

 

10

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Performance sports sales increasedapproximately $0.4 million, or 32.9%, to $1.7 million in the third quarter of2005 from $1.3 million in the third quarter of 2004.  This increase in revenue was driven primarilyby unit volume improvements in both the hockey and bike categories, which is adirect result of the Company’s strategic initiative focused on diversificationinto non-golf recreation markets.

 

Net sales to internationalcustomers increased approximately $1.8 million, or 22.0%, to $10.0 million inthe third quarter of 2005 from $8.2 million in the third quarter of 2004.  This increase resulted primarily from thesame overall golf industry factors and True Temper specific issues describedabove, related to golf shaft sales activity. In addition, the Company has seen a marked increase in its penetrationinto the steel golf shaft market in Japan; due primarily to its new,light-weight steel shaft offerings that are being well received by the Japanesegolfers and overseas OEM club companies.

 

***GrossProfit*** for the third quarter of 2005 increased approximately$2.1 million, or 24.6%, to $10.4 million from $8.4 million in the third quarterof 2004. Gross profit as a percentage of net sales increased to 40.9% in the thirdquarter of 2005 from 39.3% in the third quarter of 2004.  The increase in gross profit as a percentageof net sales was driven primarily by (i) increased selling prices for golfshaft products, (ii) the favorable impact of certain fixed costs in thecompany’s manufacturing facilities spread over an increased unit volume, and (iii) favorableoperating improvements from productivity and cost control programs at theCompany’s manufacturing facilities, including the labor cost savings realizedfrom the transition of graphite product manufacturing to Guangzhou, China.  These favorable factors were partially offsetby (i) an increase in the cost of raw materials and natural gas and (ii) theimpact of general inflation on the Company’s other labor and overhead costs.

 

***Selling,General and Administrative Expenses*** (“SG&A”) for the thirdquarter of 2005 increased approximately $1.0 million, or 37.9%, to $3.6 millionfrom $2.6 million in the third quarter of 2004. SG&A as a percentage of net sales increased to 14.1% in the thirdquarter of 2005 from 12.2% in the third quarter of 2004.  The increase in SG&A spending betweenperiods was due in part to (i) incremental advertising and promotion ofnew products, (ii) performance based management expense, and (iii) moderateincreases in travel costs in support of the revenue gains.

 

***Amortization of Intangible Assets*** for the thirdquarter of 2005 was $3.5 million. Intangible assets were acquired in connection with the Gilbert GlobalAcquisition.  Intangible assets withdefinitive lives are being amortized using a straight-line method over periodsfrom 2 to 59 years.  There was noamortization of intangible assets in the third quarter of 2004.

 

***BusinessDevelopment, Start-Up and Transition Costs*** for the thirdquarter of 2005 decreased approximately $0.3 million, to less than $0.1 from$0.3 million in the third quarter of 2004. These costs represent various start-up business expenses related to theopening of the Company’s composite manufacturing operation in Southern China,and the related down-sizing costs incurred at the Company’s El Cajon,California facility.  The decrease incost reflects the fact that this project is substantially complete.

 

***OperatingIncome***for the third quarter of 2005 decreased approximately$2.1 million, or 38.3%, to $3.4 million from $5.4 million in the third quarterof 2004.  Operating income as apercentage of net sales decreased to 13.1% in the third quarter of 2005 from 25.5%in the third quarter of 2004.  Thisdecrease reflects the profit impact of the items described above, primarily theamortization of intangible assets.

 

***InterestExpense, net of Interest Income*** for the third quarter of2005 increased to $4.4 million from $4.1 million in the third quarter of 2004.  This increase was driven primarily by theincrease in interest rates on the variable rate bank debt, offset somewhat by adecrease in outstanding principal amounts of variable rate bank debt betweenperiods.

 

***IncomeTax Expense***in the third quarter of 2005 decreased to anet benefit of $0.3 million from a net expense of $0.5 million in the thirdquarter of 2004. The effective tax rate during these periods differs from afederal statutory rate of 34% due primarily to the incremental tax rate forstate and foreign income tax purposes.

 

***NetIncome***for the third quarter of 2005 decreased approximately$1.4 million to a net loss of $0.7 million from net income of $0.7 million inthe third quarter of 2004.  This decreasereflects the profit impact of the items described above.

 

11

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***NineMonth Period Ended October 2, 2005 Compared to the Nine Month Period EndedSeptember 26, 2004***

 

***NetSales*** for the first nine months of 2005 increased approximately$13.3 million, or 17.4%, to $90.2 million from $76.9 million in the first ninemonths of 2004.

 

Golf shaft sales increasedapproximately $12.8 million, or 17.7%, to $85.3 million in the first ninemonths of 2005 from $72.5 million in the first nine months of 2004.  This improvement in revenue was driven byseveral factors, including a favorable shift in the mix of steel golf shaftssold towards more premium, branded products. In addition, the Company generated greater unit sales of graphite golfshafts.  The increased unit volume can beattributed to several factors, including (i) increased demand for TrueTemper’s new product offerings such as the Grafalloy ProLaunch graphite shaft, (ii) agreater number of successful new club introductions from several key OEMpartners, specifically in the iron category, (iii) general reductions inthe overall wholesale and retail channel inventory positions as compared toprior year levels, and (iv) increased acceptance and usage of the Company’sgraphite golf shaft products in certain OEM partners’ custom option programs,primarily in the Grafalloy Blue and ProLaunch family of products.

 

Performance sports sales increasedapproximately $0.5 million, or 12.2%, to $4.9 million in the first nine monthsof 2005 from $4.4 million in the first nine months of 2004.

 

Net sales to international customersincreased approximately $3.5 million, or 12.6%, to $31.0 million in the first ninemonths of 2005 from $27.5 million in the first nine months of 2004.  This increase resulted primarily from thesame overall golf industry factors and True Temper specific issues describedabove, related to golf shaft sales activity. In addition, the Company has seen a marked increase in its penetrationinto the steel golf shaft market in Japan; due primarily to its new,light-weight steel shaft offerings that are being well received by the Japanesegolfers and overseas OEM club companies.

 

***GrossProfit*** for the first nine months of 2005 increased approximately$5.6 million, or 18.2%, to $36.6 million from $30.9 million in the first ninemonths of 2004. Gross profit as a percentage of net sales increased to 40.5% inthe first nine months of 2005 from 40.3% in the first nine months of 2004.  The increase in gross profit as a percentageof net sales was driven primarily by (i) increased selling prices for golfshaft products, (ii) favorable product mix in the premium steel golf shaftsegment, (iii) improved foreign currency exchange rates, and (iv) favorableoperating improvements from productivity and cost control programs at theCompany’s manufacturing facilities, including the labor cost savings realizedfrom the transition of graphite product manufacturing to Guangzhou, China.  These favorable factors were partially offsetby (i) an increase in the cost of raw materials and natural gas and (ii) theimpact of general inflation on the Company’s other labor and overhead costs

 

***Selling,General and Administrative Expenses*** for the first ninemonths of 2005 increased approximately $1.6 million, or 15.6%, to $11.7 millionfrom $10.2 million in the first nine months of 2004.  SG&A as a percentage of net salesdecreased to 13.0% in the first nine months of 2005 from 13.2% in the first ninemonths of 2004.  This decrease inSG&A as a percentage of net sales was due primarily to the increase insales between periods.  The increase in SG&Aspending between periods was due in part to (i) incremental advertisingand promotion of new products, (ii) performance based management expense,and (iii) moderate increases in travel costs in support of the revenuegains.

 

During the first ninemonths of 2005 the Company spent approximately $0.2 million on its initialcompliance project related to Section 404 of the Sarbanes-Oxley Act of2002 (“SOX”).  In 2004 the Company spentapproximately $0.1 million on SOX initial compliance, all in the fourth quarter.

 

***Amortization of Intangible Assets*** for the firstnine months of2005 was $10.4 million.  Intangibleassets were acquired in connection with the Gilbert Global Acquisition.  Intangible assets with definitive lives arebeing amortized using a straight-line method over periods from 2 to 59years.  There was no amortization ofintangible assets in the first nine months of 2004.

 

***BusinessDevelopment, Start-Up and Transition Costs*** for the first ninemonths of 2005 decreased approximately $0.4 million, or 71.1%, to $0.2 millionfrom $0.6 million in the first nine months of 2004.   These costs represent various start-upbusiness expenses related to the opening of the Company’s composite

 

12

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manufacturing operationin Southern China, and the related down-sizing costs incurred at the Company’sEl Cajon, California facility.  Thedecrease in cost reflects the fact that this project is substantially complete.

 

***Transactionand Reorganization Expenses*** for the first nine months of2004 were $5.4 million and were incurred in conjunction with the sale andpurchase agreement for TTC which closed on March 15, 2004.  These transaction related expenses include (i) investmentbanking merger and acquisition fees; (ii) legal fees; and (iii) otherincidental costs and expenses related to the sale of TTC.  No such transaction and reorganizationexpenses were incurred during the first nine months of 2005.

 

***Losson the Early Extinguishment of Long-Term Debt*** for thefirst nine months of 2004 was $9.2 million. The costs recorded as loss on the early extinguishment of long-term debtinclude (i) the write-off of the remaining deferred financing costsrelated to our 10 7/8% senior subordinated notes and our 2002 senior creditfacility, and (ii) the early extinguishment call premium and relatedinterest we incurred when we redeemed the 10 7/8% senior subordinated notes on March 15,2004.  No long-term debt was extinguishedduring the first nine months of 2005.

 

***OperatingIncome*** for the first nine months of 2005 increased approximately$8.7 million to $14.3 million from $5.6 million in the first nine months of 2004.Operating income as a percentage of net sales increased to 15.8% in the first ninemonths of 2005 from 7.3% in the first nine months of 2004. This increasereflects the profit impact of the items described above, offset primarily by theamortization of intangible assets.

 

***InterestExpense, net of Interest Income*** for the first nine monthsof 2005 increased approximately $2.6 million to $13.9 million from $11.3million in the first nine months of 2004. This increase was driven primarily by the increase in outstandingprincipal amounts of variable rate bank debt and fixed rate bonds associatedwith the Gilbert Global Acquisition, offset somewhat by a decrease in theinterest rate on the Company’s fixed rate debt between periods.

 

***IncomeTax Expense / (Benefit)*** for the first nine months of 2005increased to an income tax expense of $0.3 million compared to an income tax benefitof $0.2 million in the first nine months of 2004. The effective tax rate duringthese periods differs from a federal statutory rate of 34% due primarily to theincremental tax rate for state and foreign income tax purposes.  For the period from January 1, 2004 throughMarch 14, 2004 the effective tax rate also differs due to thenondeductible nature of a portion of transaction and reorganization expenses.

 

***Netincome*** for the first nine months of 2005 increasedapproximately $5.6 million to $0.1 million from a $5.6 million loss in thefirst nine months of 2004.  This increasereflects the profit impact from the items described above.

 

**Liquidity and Capital Resources**

 

  ***General***

 

As part of the GilbertGlobal Acquisition the Company entered into a new senior credit facility (the “2004Senior Credit Facility”) which includes a $20.0 million non-amortizingrevolving credit facility and a $110.0 million Term B loan (as amended fromtime to time).  The term loan requirescash interest payments and quarterly principal payments beginning June 30,2004 and continuing through March 15, 2011.

 

Also in conjunction withthe Gilbert Global Acquisition the Company issued new 8 3/8%Senior Subordinated Notes due 2011 (the “8 3/8% Notes”).  The 8 3/8% Notesrequire cash interest payments each March 15th and September 15thcommencing on September 15, 2004. The 8 3/8% Notes are redeemable at the Company’soption, under certain circumstances and at certain redemption prices, beginningMarch 15, 2008.

 

The Company used theproceeds from the 2004 Senior Credit Facility and the 8 3/8%Notes to pay off the existing debt that was outstanding at closing on March 15,2004, and to make a distribution of the net remaining equity to the sellingshareholders.

 

Both the 2004 SeniorCredit Facility and the 8 3/8% Notes contain covenantsand events of default, including substantial restrictions and provisions which,among other things, limit the Company’s ability to incur additionalindebtedness, make acquisitions and capital expenditures, sell assets, createliens or other

 

13

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encumbrances, makecertain payments and dividends, or merge or consolidate. The 2004 Senior CreditFacility also requires the Company to maintain certain specified financialratios and tests including minimum interest coverage and fixed charge coverageratios, and maximum leverage ratios. Furthermore, the 2004 Senior CreditFacility requires certain mandatory prepayments including payments from the netproceeds of certain asset sales and a portion of the Company’s excess cash flowas defined within the credit agreement.

 

On September 24,2004 the Company executed an amendment to its 2004 Senior Credit Facility (the “Amendment”).  The Amendment provided adjustments to certainspecified financial ratios and tests included in the 2004 Senior CreditFacility.  As part of the Amendment, themargin adder on LIBOR based loans was increased from 2.50% to between 2.75% and3.00%, depending on financial ratios, beginning September 24, 2004 and continuingthrough December 31, 2005.  At October 2,2005 the Company was in compliance with all of the covenants in both the 2004Senior Credit Facility and the 8 3/8% Notes.

 

***NineMonths Ended October 2, 2005 Compared to the Nine Months Ended September 26,2004***

 

Net cash provided byoperating activities increased approximately $0.2 million between periods, as netincome increased during 2005.  Inaddition, the Company decreased total inventory by approximately $1.0 millionduring the first nine months of 2005. Offsetting the cash from operations generated by the aforementioneditems, trade accounts receivable increased approximately $3.6 million duringthe first nine months of 2005, due primarily to the increase in revenue betweenperiods.

 

The Company used $1.9million of cash to invest in property, plant and equipment in the first ninemonths of 2005, compared to the $1.4 million spent in the first nine months of2004.  The increase in investments inproperty, plant and equipment is the result of additional automation effortsaimed at improving quality and productivity in the Company’s manufacturingfacilities.  In addition, the unutilizedproduction facility located in Olive Branch, Mississippi was sold during thethird quarter of 2005, generating net proceeds of approximately $0.8 million.

 

The Company used $10.2million of net cash for financing activities in the first nine months of 2005as compared to $13.0 million in the first nine months of 2004.  The 2005 activity includes voluntaryprepayments of principal on the 2004 Senior Credit Facility totaling $10.0million.

 

The 2004 activity includesthe result of the Gilbert Global Acquisition as noted above.  On March 15, 2004, the proceeds fromissuing the 2004 Senior Credit Facility and the proceeds from issuing the 8 3/8%Notes, plus cash generated from operations during the first quarter, and cashon hand at the beginning of that quarter were used to (i) repay theoutstanding principal and interest on the Company’s 2002 senior creditfacility, (ii) redeem and repay the 10 7/8% Notesincluding accrued and unpaid interest and early redemption call premium, (iii) payfor debt issuance costs on the 2004 senior credit facility and the 8 3/8%Notes, (iv) pay for transaction and reorganization expenses, and (v) makea distribution of the net remaining equity to the selling shareholders.

 

***ExistingContractual Cash Obligations***

 

The following tablereflects the Company’s contractual cash obligations for long-term debt andoperating leases as of October 2, 2005 (dollars in millions):

 
| ** **               | ** ** | **Total** | ** ** | **2005** | ** ** | **2006  through  2007** | ** ** | **2008  through  2009** | ** ** | **Thereafter** | ** ** |
|--------------------------|------------|-----------|------------|----------|------------|-------------------------|------------|-------------------------|------------|----------------|------------|
| Long-Term Debt(1)        |       | $         | 222.7      |     | $          | —                  |       | $                       | 1.5        |           | $          | 2.0 |   | $ | 219.2 |   |
| Operating Leases         |       | 2.2       |       | 0.3      |       | 1.4                     |       | 0.5                     |       | —         |       |
| Purchase Commitments (2) |       | 1.0       |       | 0.2      |       | 0.8                     |       | —                  |       | —         |       |
| Total(3)                 |       | $         | 225.9      |     | $          | 0.5                     |       | $                       | 3.7        |           | $          | 2.5 |   | $ | 219.2 |   |

 

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(1)          The Company’s long-term debt agreementscontain customary change of control provisions that could, under certaincircumstances, cause accelerated debt repayment.

 

(2)          Amount represents the purchase commitments fornatural gas and nickel used in the manufacture of steel golf shafts at ourAmory, Mississippi facility.

 

(3)          This table does not include future obligationsrelated to funding pension benefits.

 

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***FutureCash Generation and Use***

 

Currently the Company’sintention is to use existing cash and cash provided from future operations, ifany, as allowed within the covenants of the 2004 Senior Credit Facility and the8 3/8% Notes, to:

 

•                  Repaythe principal on the 2004 Senior Credit Facility; and / or

 

•                  Tomake additional investments in the business, which may include, among otherthings, capital expenditures, business acquisitions, and/or expenditures forbusiness development and expansion in China.

 

In addition to the debtservice obligations for principal and interest payments, the Company’sliquidity needs largely relate to working capital requirements and capitalexpenditures for machinery and equipment. The Company intends to fund its current and long term working capital,capital expenditure and debt service requirements through cash flow generatedfrom operations.  However, since therecan be no assurance of future performance, as of October 2, 2005 theCompany has the $20.0 million revolving credit facility available for futurecash requirements.  The maximum amountthe Company may use of the $20.0 million revolving credit facility is limitedby the financial covenants contained within the 2004 Senior Credit Facility.  As of October 2, 2005, the Companybelieves that cash flow generated from operations, in addition to otherfinancing sources, will be sufficient to meet its cash obligations for theensuing twelve month period.

 

In addition to theCompany’s cash obligations for interest and principal payments related to itsdebt obligations, the Company also has a management services agreement with anaffiliate of the principle common stock holder in its parent company, whichrequires the payment of an annual advisory fee of $0.5 million.

 

Depending on the size,any future acquisitions, joint ventures, capital expenditures or similartransactions may require significant capital resources in excess of cashprovided from operations, and potentially in excess of cash available under therevolving credit facility.  There can beno assurance that the Company will be able to obtain the necessary capital,under acceptable terms, from creditors or other sources that will be sufficientto execute any such business investment or capital expenditure.

 

**Impact of Recently IssuedAccounting Standards**

 

In December 2004,the FASB issued Statement No. 123 (revised December 2004), *Share-Based Payment*(“Statement 123(R)”).  Statement 123(R) replaces FASB Statement 123,*Accounting for Stock-Based Compensation*,and supersedes APB Opinion No. 25, *Accounting for StockIssued to Employees*. Statement 123(R) will require compensation costs related to share-basedpayment transactions to be recognized in the financial statements.  With limited exceptions, the amount ofcompensation cost will be measured based on the grant-date fair value of theequity or the liability instruments issued. In addition, liability awards will be remeasured each reportingperiod.  Compensation cost will berecognized over the period that an employee provides service in exchange forthe award.  Statement 123(R) is effectiveas of the beginning of the first annual reporting period that begins after June 15,2005.  The Company does not believe theadoption of Statement 123(R) will have a material impact on its consolidatedfinancial condition or results of operations taken as a whole.

 

In November 2004,the FASB issued SFAS No. 151, “Inventory Costs.”  SFAS No. 151 indicates that “abnormal”amounts of idle facility expense, freight, handling costs, and wasted materialsshould be recognized as current-period charges (when actual production defectrates vary significantly from expected rates) and requires the allocation offixed production overheads to inventory based on the “normal capacity”, asdefined, of the production facilities. SFAS No. 151 is effective for inventory costs incurred duringfiscal years beginning after June 15, 2005.  The Company has not yet determined theimpact, if any, of adopting SFAS No. 151.

 

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**Forward-Looking Statements**

 

The Private SecuritiesLitigation Reform Act of 1995 (the “Act”) provides a safe harbor forforward-looking statements made by the Company. This document containsforward-looking statements, including but not limited to Item 2 “Management’sDiscussion and Analysis of Financial Condition and Results of Operations”. Allstatements which address future operating or financial performance, events ordevelopments that the Company expects, plans, believes, hopes, wishes, forecasts,predicts, intends, or anticipates will occur in the future, and other similarmeanings or phrases, are forward-looking statements within the meaning of theAct.

 

The forward-lookingstatements are based on management’s current views and assumptions regardingfuture events and operating performance. However, there are many risk factors,including but not limited to, the Company’s substantial leverage, the Company’sability to service its debt, the general state of the economy, the Company’sability to execute its plans, fluctuations in the price and availability ofenergy, fluctuations in the price and availability of raw materials,potentially significant increases to employee health and welfare costs,competitive factors, and other risks that could cause the actual results todiffer materially from the estimates or predictions contained in the Company’sforward-looking statements. Additional information concerning the Company’srisk factors is contained from time to time in the Company’s public filingswith the SEC; and most recently in the Business Risks section ofItem 1 to Part 1 of the Company’s 2004 Annual Report on Form 10-Kfiled with the SEC on March 30, 2005.

 

The Company’s views,estimates, plans and outlook as described within this document may changesubsequent to the release of this statement. The Company is under no obligation to modify or update any or all of thestatements it has made herein despite any subsequent changes the Company maymake in its views, estimates, plans or outlook for the future.

 

**Item 3.****    *Quantitative and Qualitative Disclosures About Market Risk***

 

**Interest Rate Sensitivity**

 

The table below providesinformation about the Company’s debt obligations as of October 2, 2005that may be sensitive to changes in interest rates. The table presents cashflows and related weighted average interest rates by expected maturity dates(dollars in millions).

 
| ** **                                   | ** ** | **Expected Maturity Date** | ** ** | ** ** | ** ** |
|----------------------------------------------|------------|----------------------------|------------|------------|------------|
| ** **                                   | ** ** | **2005**                   | ** ** | **2006**   | ** ** | **2007** | ** ** | **2008** | ** ** | **2009** | ** ** | **There-  after** | ** ** | **Total** | ** ** |
| LONG TERM DEBT                               |       |                       |       |       |       |   |   |   |   |   |   |   |   |   |   |
| Fixed Rate 8 3/8%  Senior Subordinated Notes |       | $                          | —     |       | $          | — |   | $ | — |   | $ | — |   | $ | — |   | $ | 125.0 |   | $ | 125.0 |   |
| Average Interest  Rate                       |       |                       |       |       |       |   |   |   |   |   |   | 8.375 | % | 8.375 | % |
| Variable Rate  Senior Credit Facility        |       | $                          | —     |       | $          | 0.5 |   | $ | 1.0 |   | $ | 1.0 |   | $ | 1.0 |   | $ | 94.2 |   | $ | 97.7 |   |
| Average Interest  Rate (a)                   |       |                       |       |       |       |   |   |   |   |   |   |   |   | 6.638 | % |

 

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(a)            Variable rate long-term debt is comprised ofterm loans under the 2004 Senior Credit Facility, which provides for interestat the Company’s option, at (1) the base rate of the bank acting asadministrative agent plus a margin adder of 2.00%, or (2) under a LIBORoption with a borrowing spread of LIBOR plus 2.50% to 3.00%, depending oncertain financial ratios.

 

The Company’s operatingresults are affected by changes in interest rates primarily as a result ofborrowings under the 2004 Senior Credit Facility. If interest rates increasedby 25 basis points, interest expense would have increased by approximately $0.1million for the quarterly period ended October 2, 2005, based on balancesoutstanding during the quarterly period then ended.

 

Information concerningthe Company’s market risks related to foreign exchange rates and commodities iscontained in the “Management’s Discussion and Analysis of Financial Conditionand Results of Operations” section of the Company’s 2004 Annual Report on Form 10-K,as filed with the SEC on March 30, 2005. This information has been omittedfrom this report as there have been no material changes to the Company’s risksrelated to foreign exchange rates and commodities as of October 2, 2005.

 

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**Item 4.****    *Controls and Procedures***

 

**Evaluation of Disclosure Controlsand Procedures**

 

Evaluations required by Rule 13a-15of the Securities Exchange Act of 1934 of the effectiveness of the Company’sdisclosure controls and procedures (as defined in Rule 13a-15(e) underthe Securities Exchange Act of 1934) as of the end of the period covered bythis Report have been carried out under the supervision and with theparticipation of the Company’s management, including its Chief ExecutiveOfficer and Chief Financial Officer. Based upon such evaluations, the ChiefExecutive Officer and Chief Financial Officer concluded that the Company’sdisclosure controls and procedures were effective. There have been no changesin the Company’s internal controls over financial reporting during the periodcovered by this Report that were identified in connection with the evaluationreferred to above that have materially affected, or are reasonably likely tomaterially affect, the Company’s internal controls over financial reporting.

 

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**PART II. OTHER INFORMATION**

 

**Item 1.****    *Legal Proceedings***

 

Variousclaims and legal proceedings generally incidental to the normal course ofbusiness are pending or threatened against us. While we cannot predict theoutcome of these matters, in the opinion of management, any liability arisingfrom these matters will not have a material adverse effect on our business,financial condition or results of operations.

 

**Item 2.****    *Changes in Securities and Use of Proceeds***

 

On August 10,2005 the Company’s parent company, True Temper Corporation (“TTC”), issued, tocertain employees in return for service, a total of 525,400 stock options andstock appreciation rights (“Equity Incentive Awards”) to purchase common stockof TTC for $13.56 per share.  The EquityIncentive Awards vest and become exercisable at various times and under variousconditions through August 10, 2012; based on service and performancecriteria.  These Equity Incentive Awardswere issued concurrent with the rescission of certain awards issued during2004, and are of substantially the same nature and value as the originalawards.

 

TheEquity Incentive Awards were issued in a transaction not requiring registrationunder the Securities Act of 1933, in reliance upon section 4(2) ofthat Act.  There were no underwritersinvolved in the transaction.

 

**Item 3.****    *Defaults Upon Senior Securities***

 

—None—

 

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

 

There were no matters submitted toa vote of security holders during the quarter ended October 2, 2005.

 

**Item 5.****    *Other Information***

 

—Not Applicable—

 

**Item 6.****    *Exhibits***

 
| 1.1    |   | Purchase  Agreement, dated as of March 3, 2004, among True Temper  Sports, Inc., Credit Suisse First Boston LLC and Goldman,  Sachs & Co. (filed as Exhibit 1.1 to True Temper  Sports, Inc.’s Registration Statement on Form S-4, as filed with  the Securities and Exchange Commission on April 13, 2004).*                                                                                              |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.1    |   | Indenture,  dated as of March 15, 2004, among True Temper Sports, Inc., the  Guarantors identified therein, and The Bank of New York (filed as  Exhibit 4.1 to True Temper Sports, Inc.’s Registration Statement on  Form S-4, as filed with the Securities and Exchange Commission on  April 13, 2004).*                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.2    |   | Form of  Senior Subordinated Note due 2011 (filed as Exhibit 4.2 to True Temper  Sports, Inc.’s Registration Statement on Form S-4, as filed with  the Securities and Exchange Commission on April 13, 2004).*                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.3    |   | Registration  Rights Agreement, dated as of March 15, 2004, among True Temper  Sports, Inc., El Cajon Equipment Corporation, True Temper Sports-PRC  Holdings, Inc., Credit Suisse First Boston LLC and Goldman,  Sachs & Co (filed as Exhibit 4.3 to True Temper  Sports, Inc.’s Registration Statement on Form S-4, as filed with  the Securities and Exchange Commission on April 13, 2004).* |

 

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| 10.1   |   | Management  Services Agreement, dated as of March 15, 2004, between GGEP  Management, L.L.C., GGEP Management (Bermuda) Ltd., and True Temper  Sports, Inc. (filed as Exhibit 10.1 to True Temper  Sports, Inc.’s Registration Statement on Form S-4, as filed with  the Securities and Exchange Commission on April 13, 2004).*                                                                                                                                                              |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2   |   | Shareholders  Agreement, dated as of March 15, 2004, by and among True Temper  Corporation, TTS Holdings LLC and the Other Investors identified therein  (filed as Exhibit 10.2 to True Temper Sports, Inc.’s Registration  Statement on Form S-4, as filed with the Securities and Exchange  Commission on April 13, 2004).*                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.3   |   | True  Temper Corporation 2004 Equity Incentive Plan, dated as of March 15,  2004 (filed as Exhibit 10.3 to True Temper Sports, Inc.’s  Registration Statement on Form S-4, as filed with the Securities and  Exchange Commission on April 13, 2004).*                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.4   |   | Credit  Agreement, dated as of March 15, 2004, by and among True Temper  Corporation, True Temper Sports, Inc, the Lenders identified therein,  Credit Suisse First Boston, Antares Capital Corporation, Goldman Sachs Credit  Partners L.P. and Merrill Lynch Capital (filed as Exhibit 10.4 to  True Temper Sports, Inc.’s Registration Statement on Form S-4, as  filed with the Securities and Exchange Commission on April 13, 2004).*                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.5   |   | Tax  Sharing and Administrative Services Agreement, dated as of March 15,  2004, by and among True Temper Corporation, True Temper Sports, Inc., El  Cajon Equipment Corporation and True Temper Sports-PRC Holdings, Inc.  (filed as Exhibit 10.5 to True Temper Sports, Inc.’s Registration  Statement on Form S-4, as filed with the Securities and Exchange  Commission on April 13, 2004).*                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.6   |   | Employment  Agreement, dated as of January 30, 2004, by and between True Temper  Sports, Inc. and Scott C. Hennessy (filed as Exhibit 10.6 to  True Temper Sports, Inc.’s Registration Statement on Form S-4, as  filed with the Securities and Exchange Commission on April 13, 2004).*                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.7   |   | First  Amendment, dated as of September 24, 2004, to the Credit Agreement,  dated as of March 15, 2004, by and among True Temper Corporation, True  Temper Sports, Inc, the Lenders identified therein, Credit Suisse First  Boston, Antares Capital Corporation, Goldman Sachs Credit Partners L.P.  and Merrill Lynch Capital (filed as Exhibit 10.1 to True Temper  Sports, Inc.’s report on Form 8-K, as filed with the Securities and  Exchange Commission on September 30, 2004).* |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 31.1   |   | Certification  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 31.2   |   | Certification  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 32.1   |   | Certification  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 32.2   |   | Certification  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

 

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*     Incorporatedby reference

**   Filedherewith

 

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**SIGNATURES**

 

Pursuant to therequirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned, thereuntoduly authorized, in the City of Memphis, State of Tennessee, on November 16,2005.

 
|   | True Temper  Sports, Inc. |
|--------|--------------------------------|
|   |                           |   |
|   |                           |   |
|   | By:                            | /s/    SCOTT  C. HENNESSY |   |
|   |                           |   |
|   | Name:                          | Scott C. Hennessy |
|   | Title:                         | President and Chief  Executive Officer |
|   |                           |   |
|   | By:                            | /s/    JASON  A. JENNE |   |
|   |                           |   |
|   | Name:                          | Jason A. Jenne |
|   | Title:                         | Vice President, Chief Financial  Officer |
|   |                           | and Treasurer |
|        |                                |  |  |  |

 

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