UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q

ý

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Quarterly Period Ended September 28, 2008oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
from                             to


Commission file number 333-72343



TRUE TEMPER SPORTS, INC.(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

52-2112620(I.R.S. Employer
Identification Number)8275 Tournament Drive
Suite 200
Memphis, Tennessee(Address of principal executive offices)

38125(Zip Code)Telephone: (901) 746-2000(Registrant's telephone number,
including area code)




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

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

Large accelerated filer o

Accelerated filer o

Non-accelerated filer ý

Smaller reporting company o(Do not check if a
smaller reporting
company)


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

As of November 12, 2008, the Registrant had 100 shares of Common Stock, $0.01 par value per share, outstanding.



---





TRUE TEMPER SPORTS, INC.    INDEX



PagePART I

FINANCIAL INFORMATIONItem 1.

Financial Statements

1Condensed Consolidated Statements of Operations (Unaudited)

1Condensed Consolidated Balance Sheets (Unaudited)

2Condensed Consolidated Statements of Cash Flows (Unaudited)

3Notes to Condensed Consolidated Financial Statements (Unaudited)

4Item 2.

Management's Discussion and Analysis of Financial Condition and Results of
Operations

11Item 3.

Quantitative and Qualitative Disclosures About Market Risk

20Item 4T.

Controls and Procedures

20PART II

OTHER INFORMATIONItem 1.

Legal Proceedings

21Item 1A.

Risk Factors

21Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

21Item 3.

Defaults Upon Senior Securities

21Item 4.

Submission of Matters to a Vote of Security Holders

21Item 5.

Other Information

21Item 6.

Exhibits

21Signatures

22


i

---





PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

TRUE TEMPER SPORTS, INC. AND SUBSIDIARIES  (A wholly-owned subsidiary of True Temper Corporation)    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  (Unaudited)
(Dollars in thousands)

Quarter Ended

Year-To-DateSeptember 28,
2008

September 30,
2007

September 28,
2008

September 30,
2007NET SALES

$
24,203

$
24,140

$
97,764

$
86,756Cost of sales


17,535


20,073


64,627


62,244GROSS PROFIT


6,668


4,067


33,137


24,512Selling, general and administrative expenses


3,598


3,443


11,940


10,807Amortization of intangible assets


3,734


3,731


11,203


11,205Business development, start-up and transition costs


234


369


717


1,405Loss on early extinguishment of long-term debt











755OPERATING INCOME (LOSS)


(898
)

(3,476
)

9,277


340Interest expense, net


5,553


6,306


17,378


18,585Other expenses


81


5


148


27LOSS BEFORE INCOME TAXES


(6,532
)

(9,787
)

(8,249
)

(18,272
)Income tax expense


63


12,990


39


9,867NET LOSS

$
(6,595
)
$
(22,777
)
$
(8,288
)
$
(28,139
)


See
accompanying notes to condensed consolidated financial statements

1

---





TRUE TEMPER SPORTS, INC. AND SUBSIDIARIES
(A wholly-owned subsidiary of True Temper Corporation)

CONDENSED CONSOLIDATED BALANCE SHEETS  (Unaudited)  (Dollars in thousands)

September 28,
2008

December 31,
2007ASSETSCURRENT ASSETSCash and cash equivalents

$
3,302

$
4,722Receivables, net


18,325


21,185Inventories


34,402


28,418Deferred tax assets


1,163


1,242Prepaid expenses and other current assets


2,053


1,803Total current assets


59,245


57,370Property, plant and equipment, net


18,677


18,902Goodwill


156,023


156,070Intangible assets, net


108,201


119,396Other assets


6,944


8,112Total assets

$
349,090

$
359,850LIABILITIES AND STOCKHOLDER'S EQUITYCURRENT LIABILITIESCurrent portion of long-term debt

$
5,987

$
987Accounts payable


6,969


7,979Accrued expenses and other current liabilities


9,001


12,052Total current liabilities


21,957


21,018Deferred tax liabilities


10,060


10,139Long-term debt, net of current portion


254,239


259,733Other liabilities


8,908


10,959Total liabilities


295,164


301,849STOCKHOLDER'S EQUITYCommon stockpar value $0.01 per share; authorized 1,000 shares; issued and outstanding 100 shares





Additional paid-in capital


122,673


118,648Accumulated deficit


(63,456
)

(55,168
)Accumulated other comprehensive loss, net of taxes


(5,291
)

(5,479
)Total stockholder's equity


53,926


58,001Commitments and contingent liabilities





Total liabilities and stockholder's equity

$
349,090

$
359,850


See
accompanying notes to condensed consolidated financial statements

2

---





TRUE TEMPER SPORTS, INC. AND SUBSIDIARIES  (A wholly-owned subsidiary of True Temper Corporation)        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS    
 (Unaudited)  (Dollars in thousands)

Year-To-DateSeptember 28,
2008

September 30,
2007OPERATING ACTIVITIESNet loss

$
(8,288
)
$
(28,139
)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation


2,438


2,210Amortization of deferred financing costs


1,389


1,198Amortization of intangible assets


11,203


11,205Loss on disposal of property, plant and equipment


28


15Loss on early extinguishment of long-term debt





755Deferred income taxes





9,689Changes in operating assets and liabilities, net


(9,310
)

(7,580
)Net cash used in operating activities


(2,540
)

(10,647
)INVESTING ACTIVITIESPurchases of property, plant, equipment


(2,209
)

(2,592
)Acquisition of business





(10,076
)Other investing activity





(76
)Net cash used in investing activities


(2,209
)

(12,744
)FINANCING ACTIVITIESProceeds from issuance of bank debt





45,000Capital contribution from True Temper Corporation


4,500


6,700Principal payments on bank debt


(494
)

(24,686
)Payment of debt issuance costs





(2,263
)Distribution to True Temper Corporation


(475
)

Other financing activity


(202
)

(177
)Net cash provided by financing activities


3,329


24,574Net increase (decrease) in cash and cash equivalents


(1,420
)

1,183Cash and cash equivalents at beginning of period


4,722


3,055Cash and cash equivalents at end of period

$
3,302

$
4,238


See
accompanying notes to condensed consolidated financial statements

3

---





TRUE TEMPER SPORTS, INC. AND SUBSIDIARIES  (A wholly-owned subsidiary of True Temper Corporation)        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS        (Unaudited)  (Dollars in thousands unless otherwise indicated)

1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of True Temper Sports, Inc. and subsidiaries ("True
Temper" or the "Company") have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q and
consequently do not include all the disclosures required by U.S. generally accepted accounting principles. It is suggested that these financial statements be read in conjunction with the audited
consolidated financial statements and the notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2007. In the opinion of
management, the unaudited condensed consolidated financial statements as of and for the periods ended September 28, 2008 and September 30, 2007 include all adjustments, consisting of
only normal recurring adjustments, which are necessary for the fair presentation of results for interim periods.

The
Company's fiscal year begins on January 1 and ends on December 31 of each year. During the course of the year the Company closes its books on a monthly and quarterly
basis following a 4,4,5 week closing calendar. Since the Company uses Sunday as the last day of each period (with the exception of December) the number of days in the first and fourth quarters
of any given year can vary depending 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. and its affiliated funds ("Gilbert Global"), entered into a stock
purchase agreement with the Company's direct parent company, True Temper Corporation ("TTC"), pursuant to which TTS Holdings LLC and certain of the Company's senior management purchased all of
the outstanding shares of TTC. In connection with this acquisition, and effective on March 15, 2004, the Company repaid all of its outstanding 2002 senior credit facility, redeemed all of its
107/8% senior subordinated notes due 2008, and made certain payments of the net remaining equity of the predecessor company to the selling shareholders. These payments were financed
with the net proceeds of a new senior credit facility and new 83/8% senior subordinated notes due 2011.

This
transaction was accounted for by TTC using the purchase method of accounting. As the Company is a wholly owned subsidiary of True Temper Corporation, the Company has "pushed down"
the effect of the purchase method of accounting to the consolidated financial statements of True Temper Sports, Inc.

2) Stock-Based Compensation

On August 10, 2005 TTC issued, to certain employees in return for service, a total of 525,400 stock options and stock
appreciation rights ("Equity Incentive Awards") to purchase common stock of TTC for $13.56 per share. These Equity Incentive Awards have a term of ten years, and vest and become exercisable at various
times and under various conditions through August 10, 2012; with certain acceleration features based on performance criteria and change of control provisions. There were no Equity Incentive
Awards granted or exercised during calendar 2007, and a total of 122,400 were forfeited. The weighted average remaining contractual life of these outstanding Equity Incentive Awards is between seven
and eight years.

There
were no Equity Incentive Awards exercised or forfeited during the first nine months of 2008. On April 1, 2008 TTC issued, to certain employees of the Company in return for
service, a total of

4

---



TRUE TEMPER SPORTS, INC. AND SUBSIDIARIES
(A wholly-owned subsidiary of True Temper Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)
(Dollars in thousands unless otherwise indicated)

60,000
Equity Incentive Awards in the form of stock options to purchase common stock of TTC for $13.56 per share. These options have a term of ten years, and vest and become exercisable at
various times and under various conditions through March 15, 2012; with certain acceleration features based on change of control provisions. The Company assessed the fair value of the Equity
Incentive Awards granted by TTC on April 1, 2008 and determined that the compensation expense related to these awards was immaterial to its consolidated financial statements for any period
presented.

In
addition, TTC has 354,000 equity awards which vest only upon a sale of TTC and achievement of certain other terms as described in the awards. As of September 28, 2008, the
events required for vesting of these awards are not expected to occur in the near term.

3) Inventories

September 28,
2008

December 31,
2007Raw materials

$
7,021

$
5,017Work in process


3,731


4,156Finished goods


23,650


19,245Total

$
34,402

$
28,418


4) Segment Reporting And Other Related Disclosures

(a)   Segment Reporting

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

Quarter Ended

Year-To-DateSeptember 28,
2008

September 30,
2007

September 28,
2008

September 30,
2007Net sales:Golf shafts

$
21,166

$
20,557

$
84,372

$
77,407Performance sports


3,037


3,583


13,392


9,349Total

$
24,203

$
24,140

$
97,764

$
86,756Gross profit:Golf shafts

$
6,092

$
3,323

$
30,466

$
22,694Performance sports


576


744


2,671


1,818Total

$
6,668

$
4,067

$
33,137

$
24,512


5

---



TRUE TEMPER SPORTS, INC. AND SUBSIDIARIES
(A wholly-owned subsidiary of True Temper Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)
(Dollars in thousands unless otherwise indicated)

Following
is a reconciliation of total reportable segment gross profit to total Company loss before income taxes:

Quarter Ended

Year-To-DateSeptember 28,
2008

September 30,
2007

September 28,
2008

September 30,
2007Total reportable segment gross profit

$
6,668

$
4,067

$
33,137

$
24,512Less:Selling, general and administrative expenses


3,598


3,443


11,940


10,807Amortization of intangible assets


3,734


3,731


11,203


11,205Business development, start-up and transition costs


234


369


717


1,405Loss on early extinguishment of long-term debt











755Interest expense, net


5,553


6,306


17,378


18,585Other expense


81


5


148


27Total Company loss before income taxes

$
(6,532
)
$
(9,787
)
$
(8,249
)
$
(18,272
)


(b)   Sales by Geographic Region

The geographic distribution of the Company's net sales, by location of customer, is summarized as follows:

Quarter Ended

Year-To-DateSeptember 28,
2008

September 30,
2007

September 28,
2008

September 30,
2007U.S.

$
13,614

$
14,270

$
61,184

$
57,328International

$
10,589

$
9,870

$
36,580

$
29,428Total

$
24,203

$
24,140

$
97,764

$
86,756


6

---



TRUE TEMPER SPORTS, INC. AND SUBSIDIARIES
(A wholly-owned subsidiary of True Temper Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)
(Dollars in thousands unless otherwise indicated)

5) Comprehensive Loss

Total comprehensive loss and its components for the periods covered by this report are as follows:

Quarter Ended

Year-To-DateSeptember 28,
2008

September 30,
2007

September 28,
2008

September 30,
2007Net loss

$
(6,595
)
$
(22,777
)
$
(8,288
)
$
(28,139
)Mark to market adjustment on derivative instruments, net of taxes


(321
)

(2
)

188


(44
)Total comprehensive loss

$
(6,916
)
$
(22,779
)
$
(8,100
)
$
(28,183
)


6) Pension and Other Postretirement Benefits

The following table reflects the Company's net periodic pension benefit expense and cash contributions to its pension plan, as well as
the net periodic postretirement benefit expense related to its unfunded health care plan for retirees, for the periods covered by this report:

Quarter Ended

Year-To-DateSeptember 28,
2008

September 30,
2007

September 28,
2008

September 30,
2007Pension Plan:Net periodic pension benefit expense

$
203

$
120

$
529

$
360Cash contributions to the pension plan

$
2,013

$
107

$
2,607

$
212Postretirement Health Plan:Net periodic postretirement benefit expense

$
186

$
123

$
482

$
366


7) Acquisition of Business

On
February 25, 2007, the Company acquired 100% of the shares of Supertop Enterprises Limited, the sole shareholder of CN Precision Co., Ltd ("CN Precision"), a
wholly foreign-owned enterprise in Suzhou, China for approximately $9.5 million, plus direct acquisition costs and certain working capital adjustments of $0.2 million. Approximately
$0.7 million of the purchase price was contingent upon the successful completion of certain contractual obligations by the seller. By September 30, 2007, all of the contractual
obligations had been fulfilled by the seller, and the entire $0.7 million contingent purchase price had been paid.

CN
Precision is a startup steel golf shaft manufacturing facility. The Company is continuing the process of commissioning all of the machinery and equipment necessary to produce steel
golf shafts at CN Precision, and expects to continue to ramp up production of steel golf shaft manufacturing in this facility during 2008 and 2009.

7

---



TRUE TEMPER SPORTS, INC. AND SUBSIDIARIES
(A wholly-owned subsidiary of True Temper Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)
(Dollars in thousands unless otherwise indicated)

This
transaction was accounted for using the purchase method of accounting. In connection with the acquisition, the Company conducted an assessment and valuation of all tangible and
intangible assets acquired. The results of this exercise are reflected in the financial statements for the periods ended December 31, 2007 and September 28, 2008.

The
establishment of the intangible assets resulted in certain non-cash amortization expense beginning in 2007, as these intangible assets are amortized over their expected
economic life of 50 years.

8) Debt Refinancing and Interest Rate Swaps

On
January 22, 2007, the Company executed an amendment to its 2006 Restated Credit Facility (the "Second Amendment"). The Second Amendment was made effective as of
December 20, 2006. The Second Amendment was executed in conjunction with a second lien financing effort, described more fully below, and related acquisition, described more fully in
Note 7. In addition to allowing the flexibility for such second lien financing, the Second Amendment also provided adjustments to certain specified financial ratios and tests included in the
2006 Restated Credit Facility. As part of the Second Amendment, the margin adder on LIBOR based loans was increased to between 3.00% and 3.25%, depending on financial ratios, beginning
January 22, 2007.

On
January 22, 2007, the Company executed a Second Lien Credit Agreement (the "Second Lien"). The Second Lien included additional term loans of approximately $45.0 million,
with $24.7 million of the proceeds being used to pay down the debt under the 2006 Restated Credit Facility. The margin adder under the Second Lien is 4.5% or 5.5%, depending on the type of
borrowing. The maturity date of the Second Lien is June 30, 2011. The Second Lien does not amortize.

As
a result of paying down $24.7 million of the borrowings under the 2006 Restated Credit Facility, the Company recognized a loss on early extinguishment of long-term debt of
$0.8 million. This loss is comprised of the write off of certain deferred financing costs related to the 2006 Restated Credit Facility and third party costs incurred in conjunction with the
Second Amendment.

During
the second quarter of 2008, the Company entered into interest rate swap agreements to fix the underlying LIBOR borrowing base rate on $100.0 million of its variable rate
debt at approximately 3.20% for a period of approximately 24 months. The Company has designated the interest rate swaps as cash flow hedges for accounting purposes.

9) Commitments and Contingencies

Product Warranties

The Company generally warrants its products against certain manufacturing and other defects. These product warranties are provided for
specific periods of time and/or usage of the product depending on the nature of the product, the geographic location of its sale and other factors. The accrued product warranty costs are based
primarily on historical experience of actual warranty claims as well as current information on product costs.

8

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TRUE TEMPER SPORTS, INC. AND SUBSIDIARIES
(A wholly-owned subsidiary of True Temper Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)
(Dollars in thousands unless otherwise indicated)

The
following table provides the changes in the Company's product warranties:

Quarter Ended

Year-To-DateSeptember 28,
2008

September 30,
2007

September 28,
2008

September 30,
2007Balance at beginning of period

$
527

$
435

$
447

$
326Accruals for warranties issued


475


520


995


1,243Warranty claims paid


(580
)

(551
)

(1,020
)

(1,165
)Balance at end of period

$
422

$
404

$
422

$
404


10) Fair Value Measurements

In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS No. 157,Fair
Value Measurements.SFAS No. 157 defines fair value, establishes a framework for measuring fair value in U.S. generally accepted accounting principles and expands
disclosures about fair value measurements. The provisions of SFAS No. 157 related to certain nonfinancial assets and liabilities are effective for financial statements issued for fiscal years
beginning after November 15, 2008. The remaining provisions of SFAS No. 157 are effective for financial statements issued for fiscal years beginning after November 15, 2007, and
the Company adopted such provisions effective January 1, 2008.

SFAS
No. 157 defines the inputs used to measure fair value into the following fair value hierarchy:



As
of September 28, 2008, cash flow hedging derivative assets and liabilities were principally related to the fair value of foreign exchange forward contracts and interest rate
swaps. The Company defines the fair value of foreign exchange forward contracts as the amount of the difference between the contracted and current market foreign currency exchange rates at the end of
the period. Management estimates the fair value of foreign exchange forward contracts on a quarterly basis by obtaining market quotes for future contracts with similar terms, adjusted where necessary
for maturity differences. To estimate the fair value of the interest rate swaps, the Company uses estimates of future cash flows, which are discounted to a net present value, based on the forward
LIBOR curve at the reporting date.

The
following table sets forth, by level within the fair value hierarchy, the financial assets and liabilities recorded at fair value on a recurring basis as of September 28,
2008:

True Temper Fair Value Measurements at Reporting Date

Description

September 28,
2008

Level 1

Level 2

Level 3Derivatives (foreign exchange forward contracts)

$
0.4

$


$
0.4

$
Derivatives (interest rate swaps)

$
0.0

$


$
0.0

$



9

---



TRUE TEMPER SPORTS, INC. AND SUBSIDIARIES
(A wholly-owned subsidiary of True Temper Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)
(Dollars in thousands unless otherwise indicated)

The
provisions of SFAS No. 157 for all non-financial assets and liabilities apply to fiscal years beginning after November 15, 2008. The Company is currently
assessing the impact of SFAS No. 157 for non-financial assets and liabilities on its consolidated statements of financial position and results of operations.

In
February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial Assets and Liabilitiesan amendment of FASB
Statement No. 115.SFAS No. 159 gives companies the option to choose to measure many financial instruments and certain other items at fair value. SFAS
No. 159 is effective for financial statements for fiscal years beginning after November 15, 2007. The Company has not elected the fair value option for any assets or liabilities under
SFAS No. 159.

11) Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141 (Revised),Business
Combinations.SFAS No. 141R replaces SFAS No. 141 while retaining the fundamental requirements in SFAS No. 141 that the acquisition (purchase) method of
accounting be used for all business combinations. SFAS No. 141R retains SFAS No. 141 guidance for identifying and recognizing intangible assets separately from goodwill and makes certain
changes to how the acquisition (purchase) method is applied. SFAS No. 141R is effective on a prospective basis for business combinations for which the acquisition date is on or after
January 1, 2009. Generally, the effects of SFAS No. 141R will depend on future acquisitions.

In
December 2007, the FASB issued SFAS No. 160,Noncontrolling Interest in Consolidated Financial Statementsan amendment of ARB
No. 51.SFAS No. 160 amends ARB No. 51 to establish accounting and reporting standards for the noncontrolling interest (sometimes called a minority
interest) in a subsidiary and for the deconsolidation of a subsidiary and to provide consistency with SFAS No. 141. SFAS No. 160 is effective for financial statements for fiscal years
beginning on or after December 15, 2008. The Company has not yet evaluated the impact, if any, of this requirement.

In
March 2008, the FASB issued SFAS No. 161,Disclosures about Derivative Instruments and Hedging Activities. SFAS
No. 161 is effective for financial statements issued for periods beginning after November 15, 2008, with early application encouraged. This statement amends and expands the disclosure
requirements in SFAS No. 133,Accounting for Derivative Instruments and Hedging Activities, and other related literature. The Company has not yet
evaluated the impact, if any, of this requirement.

12) Capital Contributions

During the third quarter of 2008 and the third quarter of 2007, TTS Holdings LLC made capital investments in the Company's
parent, True Temper Corporation, totaling $4.5 million and $6.7 million, respectively. These funds were then contributed by True Temper Corporation to the Company in order to maintain
full compliance with the third quarter 2008 and the second and third quarter 2007 financial covenants in the Company's 2006 Restated Credit Facility and the Second Lien Credit Agreement.

The
equity investments were from the proceeds of Series A Senior Preferred Shares issued by the Company's parent. While the Senior Preferred shares contain customary mandatory
redemption features that are binding on the Company's parent, the Company has no legal obligation to redeem the Senior Preferred Shares in the future, nor has the Company guaranteed or pledged its
assets in regard
to them. True Temper Corporation is a holding company whose primary operations are through its investment in the Company.

10

---





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

The following discussion should be read in conjunction with the more detailed information in the True Temper Sports, Inc. 2007
annual audited consolidated financial statements, including the notes thereto, appearing in the 2007 annual report on Form 10-K, filed with the SEC on March 21, 2008.

Company Overview

True Temper Sports, Inc. ("True Temper" or the "Company"), a wholly owned subsidiary of True Temper Corporation ("TTC"), is a
leading designer, manufacturer and marketer of steel, composite, and multi-material golf club shafts for original equipment manufacturers ("OEMs") and distributors in the golf equipment industry. In
addition, True Temper produces and sells a variety of performance sports products that offer high strength and tight tolerance tubular components to the bicycle, hockey and other recreational sports
markets. In 2007, golf shaft sales represented 88% of total net sales, and performance sports sales represented 12%. During the first nine months of 2008, net sales of performance sports products
represented 14% of total net sales.

Purchase Agreement for True Temper Corporation

On January 30, 2004, TTS Holdings LLC, a company formed by Gilbert Global Equity Partners, L.P. and its affiliated
funds ("Gilbert Global"), entered into a stock purchase agreement with the Company's direct parent company, True Temper Corporation, pursuant to which TTS Holdings LLC and certain of the
Company's senior management purchased all of the outstanding shares of TTC ("Gilbert Global Acquisition"). In connection with this acquisition, and effective on March 15, 2004, the Company
repaid all of its outstanding 2002 senior credit facility, redeemed all of its 107/8% senior subordinated notes due 2008, and made certain payments of the net remaining equity of the
predecessor company to the selling shareholders. These payments were financed with the net proceeds of a new senior credit facility and new 83/8% senior subordinated notes due 2011.

The
Gilbert Global Acquisition was accounted for by TTC using the purchase method of accounting. As the Company is a wholly owned subsidiary of TTC, the Company has "pushed down" the
effect of the purchase method of accounting to the consolidated financial statements of True Temper Sports, Inc.

Results of Operations

The following table sets forth the components of net loss as a percentage of net sales for the periods indicated:

Quarter Ended

Year-To-DateSeptember 28,
2008

September 30,
2007

September 28,
2008

September 30,
2007Net sales


100.0
%

100.0
%

100.0
%

100.0
%Cost of sales


72.4


83.2


66.1


71.7Gross profit


27.6


16.8


33.9


28.3Selling, general and administrative expenses


14.9


14.3


12.2


12.5Amortization of intangible assets


15.4


15.5


11.5


12.9Business development, start-up and transition costs


1.0


1.5


0.7


1.6Loss on early extinguishment of long-term debt


0.0


0.0


0.0


0.9Operating income (loss)


(3.7
)

(14.4
)

9.5


0.4Interest expense, net


22.9


26.1


17.8


21.4Other expenses


0.3


0.0


0.2


0.0Loss before income taxes


(27.0
)

(40.5
)

(8.4
)

(21.1
)Income tax expense


0.3


53.8


0.0


11.4Net loss


(27.2
)%

(94.4
)%

(8.5
)%

(32.4
)%


The
amounts in above table may not foot due to rounding.

11

---



Third Quarter Ended September 28, 2008 Compared to the Third Quarter Ended September 30, 2007

Net Salesfor the third quarter of 2008 increased approximately $0.1 million, or
0.3%, to $24.2 million from $24.1 million in the third quarter of 2007. Golf shaft sales increased approximately $0.6 million, or 3.0%, to $21.2 million compared to the
$20.6 million realized in the third quarter of 2007. This improvement related primarily to an increase in the unit volume of premium steel golf shaft sales coinciding with the late 2007 and
2008 new product launches in irons and putters from a number of the Company's key OEM partners. In addition, the Company's golf shaft price increase implemented in the fourth quarter of 2007 also
served to increase sales in the third quarter of 2008.

Performance
sports sales decreased approximately $0.5 million, or 15.3%, to $3.0 million from $3.6 million in the third quarter of 2007. This decrease related
primarily to the timing of new product shipments to key OEM partners in the hockey industry. During the second quarter of 2008, the Company experienced dramatic growth in its hockey business, which
impacted the timing of overall expected 2008 quarterly unit volume.

Net
sales to international customers increased approximately $0.7 million, or 7.3%, to $10.6 million in the third quarter of 2008 from $9.9 million in the third
quarter of 2007. This increase related primarily to revenue growth in the Japanese golf market, which is a targeted international growth region for the Company, as well as favorable foreign currency
translation gains between the US Dollar, Japanese Yen and British Pound.

Gross Profitfor the third quarter of 2008 increased $2.6 million, or 64.0%, to $6.7 million from $4.1 million in the
third quarter of 2007. Gross profit as a percentage of net sales increased to 27.6% in the third quarter of 2008 from 16.8% in the third quarter of 2007. The increase in gross profit as a percentage
of net sales was driven by several factors, including (i) the mix of golf products sold being more heavily weighted toward premium steel golf shafts which have higher margins, (ii) a
global price increase effective October 1, 2007, (iii) programs designed to improve the operational efficiency of the Company's production facilities, (iv) a significant
modification to the Company's medical plan to reduce costs, and (v) lower costs for nickel offset somewhat by increased utility and natural gas costs.

Selling, General and Administrative Expenses ("SG&A")for the third quarter of 2008 increased approximately $0.2 million, or 4.5%,
to $3.6 million from $3.4 million in the third quarter of 2007. SG&A as a percentage of net sales increased to 14.9% from 14.3% in the third quarter of 2007. The increase in SG&A
spending was associated primarily with an increase in legal expenses related to the successful termination of certain consent decrees that had been in place for approximately 50 years, and
costs associated with the organizational realignment of certain key operations roles within the Company.

Amortization of Intangible Assetswas relatively stable at $3.7 million during the third quarter of both 2008 and 2007. Intangible
assets were acquired in connection with (i) the Gilbert Global Acquisition in 2004, (ii) the acquisition of certain assets from Royal Precision in 2006, and (iii) the acquisition
of CN Precision in 2007. Intangible assets with definitive lives are being amortized using a straight-line method over periods from 2 to 59 years.

Business Development, Start-Up and Transition Costsfor the third quarter of 2008 decreased to $0.2 million from
$0.4 million in the third quarter of 2007. The costs incurred during these periods relate primarily to expenses associated with the acquisition of CN Precision, a steel golf shaft manufacturing
facility located in Suzhou, China. These costs include certain start-up related costs to commission this new facility and the related production equipment. The Company expects to continue
to ramp-up production of steel golf shafts in this new facility during the later half of 2008 and 2009. See Note 7 to the condensed consolidated financial statements included
elsewhere in this quarterly report for a further discussion of this acquisition.

12

---



Operating Income (Loss)for the third quarter of 2008 improved approximately $2.6 million, to a loss of $0.9 million from a
loss of $3.5 million in the third quarter of 2007. This increase reflects the impact from gross profit, SG&A, and business development, start-up and transition costs described
above.

Interest Expense, Netfor the third quarter of 2008 decreased approximately $0.8 million, or 11.9%, to $5.6 million from
$6.3 million in the third quarter of 2007. This decrease was due primarily to a decrease in interest rates on the Company's variable rate debt, as the overall interest rate market in the U.S.
and Western Europe experienced a decline during 2008. As a result of the interest rate swaps executed in the second quarter of 2008, the Company has fixed the LIBOR borrowing base rate on
$100.0 million of its variable rate debt at approximately 3.20% for a period of approximately 24 months.

Income Tax Expensedecreased in the third quarter of 2008 to income tax expense of $0.1 million, compared to income tax expense of
$13.0 million in the third quarter of 2007. This decrease was due primarily to an increase in the Company's deferred tax asset valuation allowance during the third quarter of 2008, which was
first established in the third quarter of 2007. The effective tax rate during these periods differs from a federal statutory rate of 34% due primarily to the incremental tax rate for state and foreign
income tax purposes and the provision of the valuation allowance referred to above.

Net Lossfor the third quarter of 2008 improved to a loss of $6.6 million as compared to a net loss of $22.8 million in the
third quarter of 2007. This improvement reflects the impact from gross profit,
SG&A, business development, start-up and transition costs, interest expense, and income tax expense described above.

First Nine Months Ended September 28, 2008 Compared to the First Nine Months Ended September 30, 2007

Net Salesfor the first nine months of 2008 increased approximately
$11.0 million, or 12.7%, to $97.8 million from $86.8 million in the first nine months of 2007. Golf shaft sales increased approximately $7.0 million, or 9.0%, to
$84.4 million compared to the $77.4 million realized in the first nine months of 2007. This improvement related primarily to an increase in the unit volume of premium steel golf shaft
sales coinciding with the late 2007 and 2008 new product launches in irons and putters from a number of the Company's key OEM partners. In addition, the Company's golf shaft price increase implemented
in the fourth quarter of 2007 also served to increase sales in the first nine months of 2008.

Performance
sports sales increased approximately $4.0 million, or 43.2%, to $13.4 million from $9.4 million in the first nine months of 2007. This increase was the
direct result of the Company's continued diversification strategy in this segment of its business. During the first nine months of 2008, the primary driver of the sales improvement related to
increased unit volume of hockey sticks associated with new products launched in late 2007 and 2008, as well as new customer relationships developed in these same areas, as the Company continues to
gain market share and execute on its performance sports growth strategy.

Net
sales to international customers increased approximately $7.2 million, or 24.6%, to $36.6 million in the first nine months of 2008 from $29.4 million in the
first nine months of 2007. This increase related to revenue growth in the Japanese golf market, which is a targeted international growth region for the Company, the routine shifting of product
assembly into China by the major golf OEMs, and favorable foreign currency translation gains between the US Dollar, Japanese Yen and British Pound.

Gross Profitfor the first nine months of 2008 increased $8.6 million, or 35.2%, to $33.1 million from $24.5 million
in the first nine months of 2007. Gross profit as a percentage of net sales increased to 33.9% in the first nine months of 2008 from 28.3% in the first nine months of 2007. The increase in gross
profit as a percentage of net sales was driven by several factors, including (i) the mix of golf products sold being more heavily weighted toward premium steel golf shafts which have higher
margins, (ii) a global price increase effective October 1, 2007, (iii) programs designed to improve the operational

13

---



efficiency
of the Company's production facilities, (iv) a significant modification to the Company's medical plan to reduce costs, (v) lower costs for nickel offset somewhat by increased
utility and natural gas costs, and (vi) fixed costs being spread over increased unit volumes in both the golf and performance sports segments.

Selling, General and Administrative Expenses ("SG&A")for the first nine months of 2008 increased approximately $1.1 million, or
10.5%, to $11.9 million from $10.8 million in the first nine months of 2007. SG&A as a percentage of net sales decreased to 12.2% from 12.5% in the first nine months of 2007. The
increase in SG&A spending was associated primarily with (i) an increase in the Company's provision for bad debts during the second quarter of 2008, (ii) an increase in legal expenses
related to the successful termination of certain consent decrees that had been in place for approximately 50 years, and (iii) costs associated with the organizational realignment of
certain key operations roles within the Company.

Amortization of Intangible Assetswas relatively stable at $11.2 million during the first nine months of both 2008 and 2007.
Intangible assets were acquired in connection with (i) the Gilbert Global Acquisition in 2004, (ii) the acquisition of certain assets from Royal Precision in 2006, and (iii) the
acquisition of CN Precision in 2007. Intangible assets with definitive lives are being amortized using a straight-line method over periods from 2 to 59 years.

Business Development, Start-Up and Transition Costsfor the first nine months of 2008 decreased to $0.7 million from
$1.4 million in the first nine months of 2007. The costs incurred during these periods relate primarily to expenses associated with the acquisition of CN Precision, a steel golf shaft
manufacturing facility located in Suzhou, China. These costs include certain start-up related costs to commission this new facility and the related production equipment. The Company
expects to continue to ramp-up production of steel golf shafts in this new facility during the later half of 2008 and 2009. See Note 7 to the condensed consolidated financial
statements included elsewhere in this quarterly report for a further discussion of this acquisition.

Loss On Early Extinguishment of Long-Term Debtfor the first nine months of 2007 totaled $0.8 million. As a result of
paying down $24.7 million of the borrowings under the 2006 Restated Credit Facility, the Company recognized a loss on early extinguishment of long-term debt, comprised of the
write-off of certain deferred financing costs related to the 2006
Restated Credit Facility and third party costs incurred in conjunction with the Second Amendment to the same facility. No such loss on early extinguishment of long-term debt was recognized
in the first nine months of 2008.

Operating Incomefor the first nine months of 2008 increased approximately $8.9 million, to $9.3 million from
$0.3 million in the first nine months of 2007. This increase reflects the impact from gross profit, SG&A, business development, start-up and transition costs, and loss on early
extinguishment of long-term debt described above.

Interest Expense, Netfor the first nine months of 2008 decreased approximately $1.2 million, or 6.5%, to $17.4 million from
$18.6 million in the first nine months of 2007. This decrease was due primarily to a decrease in interest rates on the Company's variable rate debt, as the overall interest rate market in the
U.S. and Western Europe experienced a decline during 2008. As a result of the interest rate swaps executed in the second quarter of 2008, the Company has fixed the LIBOR borrowing base rate on
$100.0 million of its variable rate debt at approximately 3.20% for a period of approximately 24 months. This decline in the Company's variable interest rate was partially offset by an
increase in the outstanding principal balance of variable rate debt due to the issuance of the $45.0 million Second Lien credit facility, during the first quarter of 2007, and an increase in
the weighted average interest rate for the Company's variable rate debt resulting from the higher LIBOR margin adder on the Second Lien credit facility.

Income Tax Expensedecreased in the first nine months of 2008 to income tax expense of slightly less than $0.1 million, compared to
income tax expense of $9.9 million in the first nine months of 2007.

14

---



This
decrease in income tax expense was due primarily to an increase in the Company's deferred tax asset valuation allowance, which was first established in the third quarter of 2007. The effective
tax rate during these periods differs from a federal statutory rate of 34% due primarily to the incremental tax rate for state and foreign income tax purposes and the provision of the valuation
allowance referred to above.

Net Lossfor the first nine months of 2008 improved to a net loss of $8.3 million as compared to a net loss of $28.1 million
in the first nine months of 2007. This decrease reflects the impact from gross profit, SG&A, business development, start-up and transition costs, loss on early extinguishment of
long-term debt, interest expense, and income tax benefit described above.

Liquidity and Capital Resources

General

On March 15, 2004, as part of the Gilbert Global Acquisition, the Company entered into a new senior credit facility (the "2004
Senior Credit Facility") which includes a $20.0 million non-amortizing revolving credit facility and a $110.0 million Term B loan (as amended from time to time). The term
loan requires cash interest payments and quarterly principal payments beginning June 30, 2004 and continuing through March 15, 2011.

Also
in conjunction with the Gilbert Global Acquisition, the Company issued new 83/8% Senior Subordinated Notes due 2011 (the "83/8% Notes"). The
83/8% Notes require cash interest payments each March 15th and September 15th commencing on September 15, 2004. The 83/8% Notes are
redeemable at the Company's option, under certain circumstances and at certain redemption prices, beginning March 15, 2008.

The
Company used the proceeds from the 2004 Senior Credit Facility and the 83/8% 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 selling shareholders.

On
March 27, 2006, the Company amended and restated its 2004 Senior Credit Facility (the "2006 Restated Credit Facility"). The 2006 Restated Credit Facility included additional
term loans under the Company's existing senior secured credit facilities of approximately $18.0 million, amendments that enabled the Company to pursue future acquisitions, and the flexibility
to enable the Company to execute on its global strategic and operational initiatives.

On
January 22, 2007, the Company executed an amendment to its 2006 Restated Credit Facility (the "Second Amendment"). The Second Amendment was made effective as of
December 20, 2006. The Second Amendment was executed in conjunction with a second lien financing effort, described more fully below, and related acquisition, both described more fully in
Notes 7 and 8 to the condensed consolidated financial statements located elsewhere in this quarterly report. In addition to allowing the flexibility for such second lien financing, the Second
Amendment also provided adjustments to certain specified financial ratios and tests included in the 2006 Restated Credit Facility. As part of the Second Amendment, the margin adder on LIBOR based
loans was increased to between 3.00% and 3.25%, depending on financial ratios, beginning January 22, 2007.

On
January 22, 2007, the Company executed a Second Lien Credit Agreement (the "Second Lien"). The Second Lien included additional term loans of approximately $45.0 million,
with $24.7 million of the proceeds being used to pay down the debt under the 2006 Restated Credit Facility. The margin adder under the Second Lien is 4.5% or 5.5%, depending on the type of
borrowing. The maturity date of the Second Lien is June 30, 2011. The Second Lien does not amortize.

As
a result of paying down $24.7 million of the borrowings under the 2006 Restated Credit Facility, the Company recognized a loss on early extinguishment of long-term debt of
$0.8 million. This

15

---



loss
is comprised of the write off of certain deferred financing costs related to the 2006 Restated Credit Facility and third party costs incurred in conjunction with the Second Amendment.

During
the second quarter of 2008, the Company entered into interest rate swap agreements to fix the underlying LIBOR borrowing base rate on $100.0 million of its variable rate
debt at approximately 3.20% for a period of approximately 24 months. The Company has designated the interest rate swaps as cash flow hedges for accounting purposes.

The
2006 Restated Credit Facility, the Second Lien, and the 83/8% Notes contain covenants and events of default, including substantial restrictions and provisions which,
among other things, limit the Company's ability to incur additional indebtedness, make acquisitions and capital expenditures, sell assets, create liens or other encumbrances, make certain payments and
dividends, or merge or consolidate. The 2006 Restated Credit Facility and the Second Lien also require the Company to maintain specified financial ratios and tests including minimum interest coverage
and fixed charge coverage ratios, and maximum leverage ratios. In addition, the 2006 Restated Credit Facility and the Second Lien require certain mandatory prepayments including payments from the net
proceeds of certain asset sales and a portion of the Company's excess cash flows as defined within each credit agreement.

On
September 12, 2008, TTS Holdings LLC made a capital investment in the Company's parent, True Temper Corporation, of $4.5 million. These funds were then
contributed by True Temper Corporation to the Company in order to maintain full compliance with the third quarter 2008 financial covenants in the Company's 2006 Restated Credit Facility and the Second
Lien Credit Agreement.

As
of September 28, 2008, with the contributions noted above, the Company was in compliance with all of the covenants in the 2006 Restated Credit Facility, the Second Lien, and
the 83/8% Notes.

Cash Flows from Operating Activities

Net cash used in operations in the first nine months of 2008 improved by approximately $8.1 million, to a use of cash totaling
$2.5 million as compared to net cash used in operations of $10.6 million in the first nine months of 2007.

The
use of cash from operating activities of $2.5 million during the first nine months of 2008 was primarily the result of $6.8 million in cash generated from sales
activities, offset by a use of cash in working capital of $9.3 million. The use of cash for working capital purposes related primarily to (1) a decrease in accrued interest of
$3.1 million related to the timing of semi-annual cash interest payments on the 83/8 Notes, and (2) an increase in inventory of $6.0 million, which relates to
(i) the increase in net sales during the first nine months of 2008, and the corresponding increase in production requirements, (ii) an increase in the inventory build programs with our
key global golf OEMs, and (iii) an increase in raw materials due primarily to the timing of deliveries to our worldwide manufacturing locations, which we expect to be utilized during fourth
quarter 2008 production.

The
use of cash in operating activities of $10.6 million in the first nine months of 2007 was primarily the result of $3.0 million in cash used by normal operations as well
as a use of cash in working capital of $7.6 million. The use of cash by normal operations was driven primarily by cash interest expense of $18.9 million during the first nine months of
2007. The change in working capital consisted primarily of (1) an increase in accounts receivable of $2.6 million, which was an expected increase related to the higher net sales in the
third quarter of 2007 compared to the fourth quarter of 2006, and (2) an increase in inventory of $3.9 million, which relates to several factors, including (i) an increase in the
cost of nickel, a raw material used in the manufacture of steel golf shafts, (ii) an increase in the number of inventory build programs with key global golf OEMs, and (iii) an increase
in the Company's finished goods levels in anticipation of continued revenue gains in future periods.

16

---



Cash Flows from Investing Activities

Cash flows from investing activities were a use of cash totaling $2.2 million during the first nine months of 2008, and a use of
cash totaling $12.7 million during the first nine months of 2007. The use of cash in investing activities during the first nine months of 2008 related primarily to routine capital expenditures
for machinery and equipment. The cash used in investing
activities during the first nine months of 2007 related primarily to the acquisition of CN Precision, as described more fully in Note 7 to the condensed consolidated financial statements
located elsewhere in this quarterly report.

Cash Flows from Financing Activities

Cash flows from financing activities were a source of cash totaling $3.3 million during the first nine months of 2008, and a
source of cash totaling $24.6 million in the first nine months of 2007.

The
cash provided by financing activities during the first nine months of 2008 related primarily to the $4.5 million capital investment described below.

The
cash provided by financing activities in the first nine months of 2007 related primarily to the events surrounding the acquisition of CN Precision, as well as a general refinancing
of term debt, and included (i) new borrowings of second lien term debt totaling $45.0 million, (ii) the repayment of $24.7 million in first lien term debt, and
(iii) the payment of $2.3 million in debt issuance costs related to the additional borrowings. In addition, as described below, the Company received capital investments totaling
$6.7 million during the first nine months of 2007.

During
the third quarter of 2008 and the third quarter of 2007, True Temper Corporation, the Company's parent, made equity investments in True Temper Sports, Inc. totaling
$4.5 million and $6.7 million, respectively. The equity investments were from the proceeds of Series A Senior Preferred Shares issued by the Company's parent. While the Senior
Preferred Shares contain customary mandatory redemption features that are binding on the Company's parent, the Company has no legal obligation to redeem the Senior Preferred Shares in the future, nor
has the Company guaranteed or pledged its assets in regard to them. True Temper Corporation is a holding company whose primary operations are through its investment in the Company.

Existing Contractual Cash Obligations

The following table reflects the Company's contractual cash obligations for principal and anticipated interest payments on
long-term debt, current maturities of long-term debt, operating leases and other purchase commitments as of September 28, 2008 (dollars in millions):

Total

2008

2009
through
2010

2011
through
2012Long-Term Debt, Including Current Maturities (1 and 2)

$
314.2

$
3.1

$
115.9

$
195.2Operating Leases


2.2


0.2


1.4


0.6Purchase Commitments (3)


3.1


1.2


1.9


Total (4)

$
319.5

$
4.5

$
119.2

$
195.8


---

17

---



Future Cash Generation and Use

The Company currently intends to use existing cash and cash equivalents, and cash provided from future operations, if any, as allowed
within the covenants of the 2006 Restated Credit Facility, the Second Lien and the 83/8% Notes, to:



In
addition to the debt service obligations for principal and interest payments, the Company's liquidity needs largely relate to working capital requirements, capital expenditures for
machinery and equipment, and contributions to its defined benefit pension plan. The Company intends to fund its current and long-term working capital, capital expenditure and debt service
requirements through cash flow generated from operations. However, since there can be no assurance of future performance, as of September 28, 2008 the Company has the $20.0 million
revolving credit facility available for future cash requirements (as reduced by any outstanding draws, of which there were $5.0 million as of September 28, 2008). The maximum amount the
Company may use of the $20.0 million revolving credit facility is limited by the financial covenants contained within the 2006 Restated Credit Facility and is reduced by any outstanding letters
of credit (which totaled $4.1 million as of September 28, 2008). The current $20.0 million revolving credit facility is scheduled to expire on March 15, 2009. The Company
is evaluating all of its options to ensure that it has no negative impact to liquidity as a result of this expiration. These options may include modifications to existing Credit Agreements, the
issuance of new debt instruments, and / or additional equity infusions. As of September 28, 2008, the Company believes that cash flow generated from operations, in addition to the other
financing sources discussed above, will be sufficient to meet its cash obligations for at least the ensuing 12-month period.

In
addition to the Company's cash obligations for interest and principal payments related to its debt obligations, the Company also has a management services agreement with an affiliate
of Gilbert Global, which requires the payment of an annual management services fee of $0.5 million, as well as a transaction-based advisory fee associated with any significant merger,
acquisition or financing transaction entered into by the Company. A fee of $0.6 million was paid associated with the 2007 CN Precision acquisition.

Depending
on the size, any future acquisitions, joint ventures, capital expenditures or similar transactions may require significant capital resources in excess of cash provided from
operations, and potentially in excess of cash available under the revolving credit facility. There can be no assurance that the Company will be able to obtain the necessary capital, under commercially
acceptable terms, from creditors or other sources that will be sufficient to execute any such business investment or capital expenditure.

Like
many companies that access the private and public credit markets, the recent turmoil in those financial markets may further limit the Company's access to capital resources, and/or
result in terms and conditions that by historical standards are more restrictive and costly to the Company.

Defined Benefit Pension Plans

True Temper's unionized employees at its Amory, Mississippi manufacturing facility are covered by a non-contributory defined benefit
pension plan. The defined benefit pension plan is funded in conformity with funding requirements of applicable government regulations. Benefits are based on a negotiated, fixed amount multiplied by
the employee's length of service.

18

---



During
2008, and specifically within the quarterly period ended September 28, 2008, the Company experienced negative pension asset returns as a result of the recent decline in
valuation of overall equity and debt markets. Among other things, this decline could increase the Company's pension expense and/or cash funding requirements for 2009 and future years. Actual pension
expense for 2009 will depend on pension asset returns during the fourth quarter of 2008, as well as applicable discount rates as of December 31, 2008. At this time, we anticipate that 2009
pension expense could be higher than 2008 by approximately $0.5 million. Cash funding for the pension plan depends on a variety of factors, many of which are already established for calendar
year 2009. At this time, we anticipate cash funding of the pension plan for 2009 to be approximately $1.0 million less than in 2008.

Recent Accounting Pronouncements

Information regarding recent accounting pronouncements is contained in Notes 10 and 11 to the condensed consolidated financial
statements, which is incorporated herein by this reference.

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 (the "PSLRA") provides a safe harbor for forward-looking statements made by the
Company. This document contains forward-looking statements, including but not limited to the information contained in Item 2 "Management's Discussion and Analysis of Financial Condition and
Results of Operations". All statements which address future operating or financial performance, events or developments that the Company expects, plans, believes, hopes, wishes, forecasts, predicts,
intends, or anticipates will occur in the future, and other similar meanings or phrases, are forward-looking statements within the meaning of the PSLRA.

The
forward-looking statements are based on management's current views and assumptions regarding future events and operating performance. However, there are many risk factors, including
but not limited to, the Company's substantial leverage, the Company's ability to service its debt, the general state of the economy, the Company's ability to execute its plans, fluctuations in the
price and availability of energy, 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 to differ materially from the estimates or predictions contained in the Company's forward-looking statements. Additional information concerning the Company's
risk factors is contained from time to time in the Company's public filings with the SEC; and most recently in the Risk Factors section of Item 1A to Part 1 of the Company's 2007 Annual
Report on Form 10-K filed with the SEC on March 21, 2008, and in Part II, Item 1A of this quarterly report on Form 10-Q.

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

19

---



Item 3.Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Sensitivity

The table below provides information about the Company's debt obligations as of September 28, 2008. The table presents cash
flows from principal payments and related weighted average interest rates by expected maturity dates (dollars in millions).

Expected Maturity Date2008

2009

2010

2011

2012

Thereafter

TotalFixed-Rate 83/8% Senior Subordinated Notes

$


$


$


$
125.0

$


$


$
125.0Average Interest Rate




















8.38
%2006 Restated Credit Facility

$
0.5

$
6.0

$
71.1

$
12.6

$


$


$
90.2Average Interest Rate(a and c)




















6.35
%Second Lien

$


$


$


$
45.0

$


$


$
45.0Average Interest Rate(b and c)




















8.69
%


---

The
Company's operating results are affected by changes in interest rates primarily as a result of borrowings under the 2006 Restated Credit Facility and the Second Lien.
If interest rates increased by 25 basis points, interest expense would have increased by less than $0.1 million for the quarterly period ended September 28, 2008, based on balances
outstanding during the quarterly period then ended.

Information
concerning the Company's market risks related to foreign exchange rates and commodities is contained in the "Management's Discussion and Analysis of Financial Condition and
Results of Operations" section of the Company's 2007 Annual Report on Form 10-K, as filed with the SEC on March 21, 2008. This information has been omitted from this report
as there have been no material changes to the Company's risks related to foreign exchange rates and commodities as of September 28, 2008.

Item 4T.Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Evaluations required by Rule 13a-15 of the Securities Exchange Act of 1934 of the effectiveness of the Company's
disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this Report have been carried out
under the supervision and with the participation of the Company's management, including its Chief Executive Officer and Chief Financial Officer. Based upon
such evaluations, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective.

Changes in Internal Controls

There were no changes in the Company's internal control over financial reporting that occurred during its last fiscal quarter that have
materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.Legal Proceedings

Various claims and legal proceedings generally incidental to the normal course of business are pending or threatened against the
Company. While the Company cannot predict the outcome of these matters, in the opinion of management, any liability arising from these matters will not have a material adverse effect on the Company's
business, financial condition or results of operations.

Item 1A.Risk Factors

In addition to other information set forth in this quarterly report, you should carefully consider the risk factors outlined in
Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2007. The risk factors described in our 2007 Form 10-K,
along with those outlined below, could materially affect our business, financial condition or operating results.

The
information presented below updates, and should be read in conjunction with, the risk factor information disclosed in our Annual Report on Form 10-K for the year ended
December 31, 2007.

As
a result of the unprecedented volatility and uncertainty in the global credit and capital markets, as well as the apparent slowdown in the economies of the United States and other
golfing regions of the world, certain risks that we normally face may increase. These include:



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

Not applicable

Item 3.Defaults Upon Senior Securities

None

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

There were no matters submitted to a vote of security holders during the quarter ended September 28, 2008.

Item 5.Other Information

Not Applicable

Item 6.Exhibits

| |      |  |                                                                          
| | ---- |  | -------------------------------------------------------------------------
| | 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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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on November 12, 2008.

True Temper Sports, Inc.By:

/s/SCOTT C. HENNESSYName:

Scott C. HennessyTitle:

President and Chief Executive OfficerBy:

/s/JASON A. JENNEName:

Jason A. JenneTitle:

Vice President, Chief Financial Officer and Treasurer


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