UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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Form 10-Q

(Mark one)

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| | [X] | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 29, 2008

OR

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| | [ ] | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period fromto

Commission File Number 333-118086

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

Delaware
(State or other jurisdiction of
incorporation or organization)


22-2335400
(I.R.S. Employer Identification No.)465 Railroad Avenue,
Camp Hill, Pennsylvania
(Address of principal executive offices)


17011
(Zip Code)


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

Former name, former address and former fiscal year, if changed since last report:

NOT APPLICABLE

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 a period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes[X]No[ ]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of ‘‘accelerated filer and large accelerated filer’’ in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer[ ]Accelerated filer[ ]Non-accelerated filer[X]

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

As of May 13, 2008 the Registrant had 1,000 shares of its common stock, $1.00 par value, outstanding.

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ATT HOLDING CO.

TABLE OF CONTENTS

Page No.PART I.


FINANCIAL INFORMATIONItem 1.


Financial Statements (unaudited):Condensed Consolidated Balance Sheets as of March 29, 2008 and September 29, 2007




1Condensed Consolidated Statements of Operations for the thirteen week periods ended March 29, 2008 and March 31, 2007




2Condensed Consolidated Statements of Operations for the twenty-six week periods ended March 29, 2008 and March 31, 2007




3Condensed Consolidated Statements of Cash Flows for the twenty-six week periods ended March 29, 2008 and March 31, 2007




4Notes to Condensed Consolidated Financial Statements




5Item 2.


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




26Item 3.


Quantitative and Qualitative Disclosures About Market Risk




38Item 4.


Controls and Procedures




38PART II.


OTHER INFORMATIONItem 1.


Legal Proceedings




40Item 1A.


Risk Factors




40Item 2.


Unregistered Sales of Equity Securities and Use of Proceeds




40Item 3.


Defaults Upon Senior Securities




40Item 4.


Submission of Matters to a Vote of Security-Holders




40Item 5.


Other Information




40Item 6.


Exhibits




40Signatures




41


i

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PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

ATT Holding Co.
Condensed Consolidated Balance Sheets
(Dollars In Thousands)
(Unaudited)

March 29,
2008


September 29,
2007AssetsCurrent assets:Cash and cash equivalents



$
9,024




$
5,182Trade receivables, net




89,205





56,306Inventories




132,379





115,063Deferred income taxes




1,046





752Prepaid expenses and other current assets




5,673





5,509Total current assets




237,327





182,812Property, plant and equipment, net




60,683





66,055Intangibles, net




72,547





73,324Goodwill




58,666





59,320Other noncurrent assets




9,666





11,274Total assets



$
438,889




$
392,785Liabilities and stockholder’s deficitCurrent liabilities:Trade accounts payable



$
48,671




$
35,341Accrued interest payable




6,063





6,254Accrued expenses and other current liabilities




21,563





23,432Revolving loan




73,836





42,498Current portion of long-term debt and capital lease obligations




588





612Total current liabilities




150,721





108,137Deferred income taxes




20,749





20,477Long-term debt




300,356





300,578Accrued retirement benefits




12,070





10,943Other liabilities




11,623





6,638Total liabilities




495,519





446,773Commitments and contingenciesStockholder’s deficit:Preferred stock – Series A, $.0001 per share par value; 100,000 shares authorized; 62,495 shares issued and outstanding as of March 29, 2008 and September 29, 2007 (Liquidation preference of $62,495 at March 29, 2008)




—





—Common stock – Class A, $.0001 per share par value; 1,600,000 shares authorized; 726,556 shares issued and outstanding as of March 29, 2008 and September 29, 2007




—





—Common stock – Class B, $.0001 per share par value; 300,000 shares authorized; 267,448 shares issued and outstanding as of March 29, 2008 and September 29, 2007




—





—Additional paid-in capital




110,500





110,500Predecessor basis adjustment




(13,539
)




(13,539
)Accumulated deficit




(156,162
)




(155,707
)Accumulated other comprehensive income




2,571





4,758Total stockholder’s deficit




(56,630
)




(53,988
)Total liabilities and stockholder’s deficit



$
438,889




$
392,785


See accompanying notes.

1

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ATT Holding Co.
Condensed Consolidated Statements of Operations
(Dollars In Thousands)
(Unaudited)

Thirteen Week Period EndedMarch 29,
2008


March 31,
2007Net sales



$
147,143




$
174,035Cost of goods sold




107,222





131,447Gross profit




39,921





42,588Selling, general and administrative expenses




24,487





29,242Loss on disposal of fixed assets




213





94Amortization of intangible assets




341





372Impairment of fixed assets




34





—Operating income




14,846





12,880Interest expense, net




8,726





9,510Other expense




3,679





108Income before income taxes




2,441





3,262Income tax (benefit) expense




(892
)




4,204Net income (loss)



$
3,333




$
(942
)


See accompanying notes.

2

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ATT Holding Co.
Condensed Consolidated Statements of Operations
(Dollars In Thousands)
(Unaudited)

Twenty-Six Week Period EndedMarch 29,
2008


March 31,
2007Net sales



$
245,924




$
258,977Cost of goods sold




180,629





194,062Gross profit




65,295





64,915Selling, general and administrative expenses




45,955





49,944Loss on disposal of fixed assets




499





629Amortization of intangible assets




683





745Impairment of fixed assets




34





—Operating income




18,124





13,597Interest expense, net




17,232





18,132Other expense




1,389





237Loss before income taxes




(497
)




(4,772
)Income tax (benefit) expense




(42
)




5,346Net loss



$
(455
)



$
(10,118
)


See accompanying notes.

3

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

Twenty-Six Week Period EndedMarch 29,
2008


March 31,
2007Operating activitiesNet loss



$
(455
)



$
(10,118
)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation expense




7,861





7,947Amortization of intangible assets




683





745Amortization of loan fees included in interest expense




1,120





1,262Provision for deferred taxes




1,908





4,644Benefit from bad debts




(47
)




(76
)Noncash interest expense




24





135Amortization of bond discount




54





54Loss on disposal of fixed assets




499





629Unrealized foreign currency loss




1,405





66Changes in assets and liabilities:Accounts receivable




(32,917
)




(41,358
)Inventories




(17,236
)




(7,755
)Prepaid expenses and other assets




1,348





869Accounts payable




13,336





12,772Accrued expenses and other liabilities




(1,609
)




(3,141
)Net cash used in operating activities




(24,026
)




(33,325
)Investing activitiesCash paid for property, plant and equipment




(3,317
)




(7,338
)Proceeds from sale of property, plant and equipment




498





659Investment in joint venture




—





(300
)Net cash used in investing activities




(2,819
)




(6,979
)Financing activitiesRepayments of long-term debt




(371
)




(364
)Borrowings on revolver




87,938





95,291Repayments on revolver




(56,600
)




(59,000
)Net cash provided by financing activities




30,967





35,927Effect of exchange rate changes on cash




(280
)




(147
)Increase (decrease) in cash and cash equivalents




3,842





(4,524
)Cash and cash equivalents at beginning of period




5,182





5,638Cash and cash equivalents at end of period



$
9,024




$
1,114Supplemental Cash Flow InformationCash paid for interest



$
16,426




$
17,392Cash paid for income taxes



$
973




$
1,478Property, plant and equipment in trade accounts payable
at end of period



$
506




$
162


See accompanying notes.

4

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ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

1.    Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and the accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (‘‘US GAAP’’) and the rules of the Securities and Exchange Commission (‘‘SEC’’). In the opinion of management, all adjustments necessary for a fair presentation have been included. All adjustments were comprised of normal recurring adjustments, except as noted in the Notes to Condensed Consolidated Financial Statements. Due to the seasonal nature of our business, the results of operations for the thirteen and twenty-six week periods ended March 29, 2008 are not necessarily indicative of results to be expected for the entire fiscal year ending September 27, 2008. Certain information and notes normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. These interim financial statements and the related notes contain the accounts of ATT Holding Co. (the ‘‘Company’’) on a consolidated basis and should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 29, 2007.

The accompanying condensed consolidated financial statements include the accounts of ATT Holding Co. and its wholly-owned subsidiaries. All material intercompany transactions have been eliminated in consolidation.

All entities and assets owned by ATT Holding Co. subsequent to June 27, 2004 are referred to collectively as the ‘‘Company.’’ All entities and assets owned by ATT Holding Co. on June 27, 2004 or prior are referred to collectively as the ‘‘Predecessor.’’ ATT Holding Co. is a holding company which has no interest, operations or activities other than through its ownership of 100% of Ames True Temper Inc., (‘‘ATT’’) and ATT’s wholly-owned subsidiaries.

In the thirteen week period ended March 29, 2008, the Company amended certain of its annual customer contracts. As a result, customer allowances for these contracts are being treated as a reduction of revenue. In prior periods, these contracts provided for proof of performance for which the Company recorded these costs as an advertising expense within selling, general and administrative expenses.

Reclassifications

To maintain consistency with the presentation in the twenty-six week period ended March 29, 2008, the Company made the following reclassifications in the March 31, 2007 unaudited condensed consolidated statement of cash flows:

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| | • | $66 of unrealized foreign currency loss from accrued expenses and other liabilities to unrealized foreign currency loss within operating activities.

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| | • | the presentation of borrowings and repayments under its revolver from a net basis to a gross basis within financing activities.

2.    Recent Accounting Pronouncements

Adopted

The Company adopted Financial Accounting Standards Board (‘‘FASB’’) Interpretation No. 48, ‘‘Accounting for Uncertainty in IncomeTaxes – aninterpretation of FASB Statement No. 109’’ (‘‘FIN 48’’) effective September 30, 2007. See further information in Note 6.

To Be Adopted

In September 2006, the FASB issued Statement of Financial Accounting Standards (‘‘SFAS’’) No. 157, ‘‘Fair Value Measurements’’ (‘‘SFAS 157’’). SFAS 157 defines fair value, establishes a

5

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ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

framework for measuring fair value in US GAAP and expands disclosures about fair value measurements. The statement applies under other accounting pronouncements that require or permit fair value measurements. Accordingly, SFAS 157 does not require any new fair value measurements. However, for some entities, the application of SFAS 157 will change current practice. The FASB issued FASB Staff Position (‘‘FSP’’) No. 157-1 and 157-2. FSP 157-1 amends SFAS 157 to exclude SFAS No. 13, ‘‘Accounting for Leases’’, (‘‘SFAS 13’’) and its related interpretive accounting pronouncements that address leasing transactions, FSP 157-2 delays the effective date of the application of SFAS 157 to fiscal years beginning after November 15, 2008 for all non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The Company is required to adopt SFAS 157 in the first quarter of fiscal year 2009 except for the items delayed by FSP 157-2 which the Company is required to adopt in the first quarter of fiscal year 2010. The Company is currently evaluating what effect, if any, adoption of SFAS 157 will have on the Company’s consolidated financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – an amendment of FASB No. 87, 88, 106, and 132(R) (‘‘SFAS 158’’). SFAS 158 requires an entity to recognize in its statement of financial position an asset for a defined benefit postretirement plan’s overfunded status or a liability for a plan’s underfunded status, measure a defined benefit postretirement plan’s assets and obligation that determine its funded status as of the end of the employer’s fiscal year and recognize changes in the funded status of a defined benefit postretirement plan in comprehensive income in the year in which the change occurs. The Company adopted the requirement to recognize the funded status of a defined benefit postretirement plan in fiscal 2007. The requirement to measure plan assets and benefit obligations as of the date of the employer’s fiscal year end statement of financial position is effective for the fiscal years ending after December 15, 2008. The Company will adopt this requirement in fiscal 2009.

In February 2007, the FASB issued SFAS No. 159, ‘‘The Fair Value Option for Financial Assets and Financial Liabilities, Including an Amendment of FASB Statement No. 115’’ (‘‘SFAS 159’’). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS 159 does not affect any existing accounting literature that requires certain assets and liabilities to be carried at fair value. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company is required to adopt SFAS 159 in the first quarter of fiscal 2009. The Company is currently evaluating what effect, if any, adoption of SFAS 159 will have on the consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141(R), ‘‘Business Combinations’’ (‘‘SFAS 141(R)’’). SFAS 141(R) establishes principles and requirements for how an acquirer in a business combination:

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| | • | Recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree;

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| | • | Recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and

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| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | Determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.

SFAS 141(R) is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 and early

6

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ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

adoption is not permitted. The Company is required to adopt SFAS 141(R) in the first quarter of fiscal 2010. The Company has not yet assessed the impact of adoption, if any, on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, ‘‘Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51’’ (‘‘SFAS 160’’). SFAS 160 amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It also amends certain of ARB 51’s consolidation procedures for consistency with the requirements of SFAS 141(R). SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company is required to adopt SFAS 160 in the first quarter of fiscal 2010. The Company has not yet assessed the impact of adoption, if any, on its consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, ‘‘Disclosures about Derivative Instruments and Hedging Activities’’ (‘‘SFAS 161’’). SFAS 161 amends and expands the disclosure requirements of SFAS 133, ‘‘Accounting for Derivative Instruments and Hedging Activities’’ (‘‘SFAS 133’’). It requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS 161 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after November 15, 2008. The Company is required to adopt SFAS 161 in the first quarter of fiscal 2010. The Company has not yet assessed the impact of adoption, if any, on its consolidated financial statements.

3.    Restructuring

Restructuring Related to Acquisition of Predecessor

In connection with the acquisition of the Predecessor on June 28, 2004, the Company began to assess and formulate an exit and restructuring plan that includes reductions of workforce, facility closures and changes in business strategies. The Company’s plan met the conditions of EITF 95-3. This exit and restructuring plan is intended to increase operating efficiencies. At June 28, 2004, the Company recorded a liability of $4,782 related to the reductions of workforce and facility closures and $4,795 related to changes in business strategies for a product line. Adjustments have been made to these reserves as the cost estimates are refined and finalized. The Company expects to complete the implementation of these plans in fiscal year 2008. During the twenty-six week period ended March 29, 2008, the Company reduced the restructuring reserve based on payments that were related to materials under a purchase commitment associated with a change in business strategy for a product line.

At March 29, 2008, the remaining restructuring reserves of $548 were included in accrued expenses and other current liabilities and related to portions of the exit plans that are not yet complete. Changes to the restructuring reserves are as follows:

Balance as of September 29, 2007



$
1,612Accretion of Interest




48Purchase Accounting Adjustments




(279
)Payments




(833
)Balance as of March 29, 2008



$
548


7

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ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

4.    Inventories

Inventories are as follows:

March 29,
2008


September 29,
2007Finished goods



$
82,184




$
68,081Work in process




16,648





17,599Raw materials




33,547





29,383$
132,379




$
115,063


5.    Goodwill and Other Intangibles

The changes in carrying amount of goodwill for the twenty-six week period ended March 29, 2008 are as follows:

United States


Canada


TotalGoodwill at September 29, 2007



$
44,156




$
15,164




$
59,320Revision of purchase price allocation




(279
)




—





(279
)Currency translation adjustments




—





(245
)




(245
)Other




(130
)




—





(130
)Goodwill at March 29, 2008



$
43,747




$
14,919




$
58,666


There was a revision to goodwill during the twenty-six week period ended March 29, 2008, as a result of the refinement of the cost estimates relating to the restructuring reserve for the Predecessor acquisition and the impact of foreign currency exchange rates.

The following table reflects the components of intangible assets other than goodwill:

March 29,
2008


September 29,
2007Finite lived intangible assets:Technology (patents)



$
1,356




$
1,356Non-compete agreements




976





976Customer relationships




11,802





11,80014,134





14,132Accumulated amortization:Technology (patents)




(1,014
)




(932
)Non-compete agreements




(933
)




(923
)Customer relationships




(4,298
)




(3,707
)(6,245
)




(5,562
)Net finite lived intangible assets




7,889





8,570Indefinite lived intangible assets:Trade names




64,658





64,754Total Intangibles, net



$
72,547




$
73,324


The cost of intangible assets other than goodwill, including primarily customer and vendor relationships, covenants not to compete and employment agreements are amortized on a straight-line basis over the estimated lives of 3 to 19 years. Amortization of other intangibles amounted to $341

8

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ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

and $683 for the thirteen and twenty-six week periods ended March 29, 2008, respectively. The estimated aggregate amortization expense for each of the succeeding periods is as follows: $957 for the remainder of fiscal 2008; $1,221 in fiscal 2009; $1,211 in fiscal 2010; $1,200 in fiscal 2011; $1,180 in fiscal 2012 and $2,120 thereafter.

6.    Income Taxes

The Company determines its income tax provision for each jurisdiction in which it operates. This determination includes making an estimate of the Company’s current income tax payable, effects of temporary differences, net operating loss and credit carryforwards and the need for valuation allowances for deferred tax assets. In assessing whether or not deferred tax assets will be realized, the Company considers whether it is ‘‘more likely than not’’ that some portion or all of its deferred tax assets will not be realized. In making this assessment, historical operating losses, scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies are considered.

As a result of the history of losses that the Company has incurred in recent years in the U.S., substantially all of the U.S. domestic deferred tax assets, including tax loss carryforwards, net of certain deferred tax liabilities, have been offset with a valuation allowance. The Company expects to maintain a valuation allowance on these deferred tax assets until it can sustain a sufficient level of profits in the applicable tax jurisdictions that will demonstrate the ability to realize these net deferred tax assets at a more likely than not level.

Income tax benefit for the thirteen and twenty-six week periods ended March 29, 2008 primarily represents a net tax benefit for certain foreign jurisdictions, a reduction in deferred tax liabilities as a result of a change in Canadian tax rates and recognition of approximately $430 of tax benefits due to the lapse of a statute of limitations in the thirteen week period ended March 29, 2008. Income tax benefits were partially offset by the recognition of additional valuation allowances and the accrual of interest on tax contingencies.

On September 30, 2007, the Company adopted the provisions of FASB Interpretation No. 48,Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109(‘‘FIN 48’’). The provisions of FIN 48 provide recognition criteria and a related measurement model for tax positions taken or to be taken in income tax returns. In accordance with FIN 48, a tax position is a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in the measurement of current and deferred income taxes. Tax positions are recognized only when it is more likely than not (a likelihood of greater than 50%), based on the technical merits, that the position will be sustained upon examination. A probability approach is used in the measurement of the tax position which is the largest amount of the tax benefit that is considered to have a greater than 50% likelihood of being realized upon settlement.

As of September 30, 2007, the total amount of unrecognized tax benefits upon adoption of FIN 48 by the Company was approximately $1,400, of which substantially all had been previously accrued. As a result of the adoption of FIN 48, the Company did not recognize any change in its total liability for uncertain tax positions. If recognized, substantially all of the balance of the $1,400 in unrecognized tax benefits at the date of adoption would impact the effective tax rate, subject to the application of valuation allowance that may be required against the Company’s net deferred tax assets. The Company classifies interest and penalties related to unrecognized tax benefits in income tax expense. There was $287 of interest and $107 of penalties accrued at the date of adoption of FIN 48. For the thirteen and twenty-six week periods ended March 29, 2008, the Company recognized interest income of $66 and $38, respectively.

The Company is subject to income taxation in the United States, various states and certain foreign jurisdictions, primarily Canada, Ireland and Mexico. The Company is no longer subject to open tax years for any of these jurisdictions before 2004.

9

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ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

7.    Debt Arrangements

Senior Subordinated Notes

On June 28, 2004, ATT completed a private offering of $150,000 in aggregate principal amount at maturity of 10% Senior Subordinated Notes due July 15, 2012. The Senior Subordinated Notes are fully and unconditionally guaranteed by the Company and all of the Company’s domestic subsidiaries on a senior subordinated basis. On August 10, 2004, we filed a registration statement with respect to new notes having substantially identical terms as the original notes, as part of an offer to exchange registered notes for the privately issued original Senior Subordinated Notes. The new notes evidence the same debt as the original Senior Subordinated Notes, are entitled to the benefits of the indenture governing the original Senior Subordinated Notes and are treated under the indenture as a single class with the original notes. The exchange offer was completed on November 24, 2004. The Company pays interest on the new Senior Subordinated Notes semi-annually in cash, in arrears, on January 15 and July 15 at an annual rate of 10.0%.

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

The indenture governing new Senior Subordinated Notes contains various affirmative and negative covenants, subject to a number of important limitations and exceptions, including but not limited to those limiting the Company’s ability and the ability of the Company’s restricted subsidiaries to borrow money, guarantee debt or sell preferred stock, create liens, pay dividends on or redeem or repurchase stock, make certain investments, sell stock in the Company’s restricted subsidiaries, restrict dividends or other payments from restricted subsidiaries, enter into transactions with affiliates and sell assets or merge with other companies. The indenture governing the new Senior Subordinated Notes also contains various events of default, including but not limited to those related to non-payment of principal, interest or fees; violations of certain covenants; certain bankruptcy-related events; invalidity of liens; non-payment of certain legal judgments; and cross defaults with certain other indebtedness. We may redeem the Senior Subordinated Notes on or after July 15, 2008. We are required to redeem the new Senior Subordinated Notes under certain circumstances involving changes of control. At March 29, 2008, the Company was in compliance with all financial covenants.

Senior Floating Rate Notes

On January 14, 2005, ATT completed the offering of $150,000 Senior Floating Rate Notes due 2012. The Senior Floating Rate Notes, issued at a 0.5% discount, bear interest at a floating rate per annum, reset quarterly, equal to LIBOR (London Interbank Offered Rate) plus 4.00%. At March 29, 2008, the reset rate was 8.26%. On March 25, 2005, ATT filed a registration statement with respect to new notes having substantially identical terms as the original notes, as part of an offer to exchange registered notes for the privately issued original Senior Floating Rate Notes. The new notes evidence the same debt as the original Senior Floating Rate Notes, are entitled to the benefits of the

10

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ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

indenture governing the original Senior Floating Rate Notes and are treated under the indenture as a single class with the original notes. The exchange offer was completed on May 23, 2005. The Senior Floating Rate Notes pay interest quarterly in cash in arrears on January 15, April 15, July 15 and October 15 of each year. The Senior Floating Rate Notes mature on January 15, 2012, unless earlier redeemed or repurchased, and are subject to the terms and conditions set forth in the Indenture.

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

The indenture governing new Senior Floating Rate Notes contains various affirmative and negative covenants, subject to a number of important limitations and exceptions, including but not limited to those limiting the Company’s ability and the ability of the Company’s restricted subsidiaries to borrow money, guarantee debt or sell preferred stock, create liens, pay dividends on or redeem or repurchase stock, make certain investments, sell stock in the Company’s restricted subsidiaries, restrict dividends or other payments from restricted subsidiaries, enter into transactions with affiliates and sell assets or merge with other companies. The indenture governing the Senior Floating Rate Notes also contains various events of default, including but not limited to those related to non-payment of principal, interest or fees; failure to perform or observe certain covenants; inaccuracy of representations and warranties in any material respect, cross defaults with certain other indebtedness, certain bankruptcy related events, monetary judgment defaults and material non-monetary judgment defaults, ERISA (Employee Retirement Income Security Act) defaults and change of control. ATT can redeem the Senior Floating Rate Notes, in whole or in part, at any time on or after January 15, 2007. In addition, ATT is required to redeem the Senior Floating Rate Notes under certain circumstances involving changes of control. As of March 29, 2008, ATT has not redeemed any of the Notes. At March 29, 2008, the Company was in compliance with all financial covenants.

Interest Rate Swaps

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

On January 10, 2008, ATT entered into an interest rate swap with Wachovia Bank, N.A to hedge variable interest rate debt in connection with ATT’s Senior Floating Rate Notes. The swap was entered into to replace a notional amount of $50,000 that expired January 14, 2008. Pursuant to this swap with Wachovia Bank, N.A., which became effective on January 15, 2008, ATT swaps 3 month LIBOR rates for fixed interest rates of 3.63% on a notional amount of $50,000 for the period from

11

---



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

January 15, 2008 through January 14, 2009. This swap fixes the variable rate portion of the notional amount, while there is an additional margin of 4.00% that is fixed.

The Company has accounted for the interest rate swaps in accordance with Statement of Financial Accounting Standards (‘‘SFAS’’) No. 133,Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activitiesand SFAS No. 149,Amendment of Statement 133 on Derivative Instruments and Hedging Activities(collectively, ‘‘SFAS 133’’).  SFAS 133 establishes accounting and reporting standards for derivative instruments and hedging activities.  SFAS 133 requires that all derivatives be recognized as either assets or liabilities at fair value. The Company has accounted for the swaps as cash flow hedges. As of March 29, 2008, the interest rate swaps were recorded as a liability of $2,845. For the twenty-six week period ended March 29, 2008, the change in fair value was recognized as a reduction of other comprehensive income of $3,222.

Term Note

On July 19, 2005, ATT entered into a $2,700 Term Note, Loan and Security Agreement and Subordination Agreement with a Lender. This note is payable in monthly installments over five years. The interest rate per annum is equal to 2.5% and secured by certain collateral, which was agreed to by the Administrative Agent of the Amended and Restated Senior Secured Credit Facility. Under the terms of this note, ATT is required to create 108 jobs at the new manufacturing facility in Pennsylvania within three years of the completion of the facility. The Term Note contains customary events of default (subject to customary exceptions, thresholds and grace periods), including, without limitation: nonpayment of principal, interest, fees and failure to perform or observe certain covenants. As of March 29, 2008, ATT was in compliance with these covenants.

Amended and Restated Senior Secured Credit Agreement

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

The Credit Agreement contains various affirmative and negative covenants customary for similar credit facilities (subject to customary exceptions and certain existing obligations and liabilities), including, but not limited to, restrictions (with exceptions) on: liens; debt; loans, acquisitions, joint ventures and other investments; mergers and consolidations, sales, transfers and other dispositions of property or assets; dividends, distributions, redemptions and other restricted payments; changes in the nature of the Company’s business; transactions with affiliates; and prepayment, redemption or repurchase of certain debt. In addition, the Credit Agreement and term note require that the Company meet certain financial covenants. Capital expenditures are subject to fiscal year limitations of $15,000. In the event the Company triggers Cash Dominion as defined in the Credit Agreement, the Company is required to maintain a minimum consolidated earnings before interest, income taxes, depreciation and amortization modified by certain adjustments as defined in the Credit Agreement of $41,000 for any period of four quarters ending on the last day of any fiscal quarter. As of March 29, 2008, the Company was in compliance with all applicable debt covenants.

12

---



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

Borrowings outstanding under the revolving credit facility as of March 29, 2008 and September 29, 2007 were $73,836 and $42,498, respectively. The Company had letters of credit outstanding totaling $3,682 and $3,882 as of March 29, 2008 and September 29, 2007, respectively. The total amount available under the revolving credit facility at March 29, 2008 was $45,170. The interest rate for base rate loans under the revolving credit facility is calculated as the higher of 1) the prevailing Federal Funds rate plus 50 basis points or 2) the administrative agent’s prime interest rate plus an applicable rate determined by the Company’s consolidated leverage ratio as defined in the Credit Agreement. The interest rate for base rate loans under the revolving credit facility was 6.50% at March 29, 2008.

Total indebtedness is as follows:

March 29,
2008


September 29,
2007Revolving loan facility dated 4/7/06, expires 2011



$
73,836




$
42,498Term Note due 2010




1,306





1,575Capital lease obligations




40





71Senior Floating Rate Notes due 2012, net of unamortized discount of $402 and $456, respectively




149,598





149,54410% Senior Subordinated Notes due 2012




150,000





150,000Total debt




374,780





343,688Less short-term revolving loan facilities




(73,836
)




(42,498
)Less current portion of capital lease obligation




(40
)




(71
)Current portion of long-term debt




(548
)




(541
)Long-term debt



$
300,356




$
300,578


13

---



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

8.    Pension and Other Post-retirement Benefits

Pension Benefits


Other BenefitsThirteen Week
Period Ended


Thirteen Week
Period EndedMarch 29,
2008


March 31,
2007


March 29,
2008


March 31,
2007Service Cost



$
762




$
796




$
—




$
—Interest Cost




2,268





2,139





23





27Expected return on plan assets




(2,625
)




(2,895
)




—





—Amortization of prior service cost




6





—





—





—Amortization of unrecognized net loss




(5
)




(12
)




(29
)




(28
)Net periodic benefit cost



$
406




$
28




$
(6
)



$
(1
)


Pension Benefits


Other BenefitsTwenty-Six Week
Period Ended


Twenty-Six Week
Period EndedMarch 29,
2008


March 31,
2007


March 29,
2008


March 31,
2007Service Cost



$
1,524




$
1,592




$
1




$
1Interest Cost




4,536





4,278





47





52Expected return on plan assets




(5,250
)




(5,789
)




—





—Amortization of prior service cost




11





—





—





—Amortization of unrecognized net loss




(10
)




(25
)




(60
)




(56
)Net periodic benefit cost



$
811




$
56




$
(12
)



$
(3
)


On March 11, 2008, the Company determined to freeze benefit accruals under its domestic defined benefit plan (the ‘‘Pension Plan’’) and the Ames True Temper, Inc. Supplemental Executive Retirement Plan (‘‘SERP’’). On April 11, 2008, the Company notified salaried and certain non-bargaining unit hourly associates that the Company was freezing benefit accruals under the Pension Plan effective with the close of business on May 31, 2008. Participants under the Pension Plan will accrue benefits through May 31, 2008 based on applicable years of benefit service and eligible compensation through that date. Service after May 31, 2008 will count for vesting purposes and toward meeting the eligibility requirements for commencing a pension benefit under the Pension Plan, but will not count toward the calculation of the pension benefit amount. Compensation earned after May 31, 2008 will similarly not count toward the determination of the pension benefit amounts under the Pension Plan. In conjunction with the freezing of benefit accruals under the Pension Plan, the Company will freeze benefit accruals under the SERP effective with the close of business on May 31, 2008. Beginning on June 1, 2008, the Company will provide certain participants in the Pension Plan and SERP with enhanced matching contributions under an existing 401k defined contribution pension plan (the ‘‘401 (k) Plan’’). The eligibility for and amount of enhanced matching contributions under the 401 (k) Plan will depend on an employee’s combined years of benefit accrual service and age under the Pension Plan projected through December 31, 2008. The change in the Pension Plan will be accounted for as a curtailment under SFAS No. 88,Employer’s Accounting and Settlements and Curtailments of Defined Benefit Pension Plan and for Termination Benefits,in the third quarter of fiscal 2008, and is not expected to have a significant impact on the Company’s results of operations or financial position.

14

---



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

Employer Contributions

During the thirteen week periods ended March 29, 2008 and March 31, 2007, the Company contributed $63 and $142, respectively, to its defined benefit pension plans. During the twenty-six week periods ended March 29, 2008 and March 31, 2007 the Company contributed $123 and $417, respectively, to its defined benefit pension plans.

During the thirteen and twenty-six week periods ended March 29, 2008 and March 31, 2007, the Company made no contributions to its post-retirement benefit plans.

9.    Other Comprehensive Loss

Thirteen Week Period EndedMarch 29,
2008


March 31,
2007Net income (loss)



$
3,333




$
(942
)Other comprehensive gain (loss) income:Currency translation adjustment




2,104





297Fair value adjustments of swaps, net of tax




(2,456
)




(569
)Comprehensive gain (loss)



$
2,981




$
(1,214
)


Twenty-Six Week Period EndedMarch 29,
2008


March 31,
2007Net loss



$
(455
)



$
(10,118
)Other comprehensive gain (loss):Currency translation adjustment




1,035





(1,290
)Fair value adjustments of swaps, net of tax




(3,222
)




(633
)Comprehensive loss



$
(2,642
)



$
(12,041
)


15

---



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

10.    Segment Information

During the first quarter of fiscal 2008, the Company changed its organizational structure resulting in new chief operating decision makers. As a result, the Company has three operating segments, comprised of, the United States, Canada and Other. All of the Company’s revenues represent sales of similar products. All intercompany amounts are eliminated in the eliminations column. The Company has revised its segment disclosures for the thirteen and twenty-six week periods ended March 31, 2007 for this organizational change. Segment information for the thirteen and twenty-six week periods ended March 29, 2008 and March 31, 2007, representing the reportable segments currently utilized by the chief operating decision makers was as follows:

Thirteen Week Period EndedMarch 29, 2008United States


Canada


Other


Eliminations


ConsolidatedNet sales



$
124,157




$
26,738




$
2,588




$
(6,340
)



$
147,143Operating income (loss)




11,034





3,881





(69
)







14,846Interest expense, net
















8,726Other expense
















3,679Income before income taxes















$
2,441


Thirteen Week Period EndedMarch 31, 2007United States


Canada


Other


Eliminations


ConsolidatedNet sales



$
154,749




$
20,754




$
1,336




$
(2,804
)



$
174,035Operating income




10,952





1,946





(18
)







12,880Interest expense, net
















9,510Other expense
















108Income before income taxes















$
3,262


Twenty-Six Week Period EndedMarch 29, 2008United States


Canada


Other


Eliminations


ConsolidatedNet sales



$
200,269




$
49,738




$
5,036




$
(9,119
)



$
245,924Operating income




11,395





6,866





(137
)







18,124Interest expense, net
















17,232Other expense
















1,389Loss before income taxes















$
(497
)


16

---



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

Twenty-Six Week Period EndedMarch 31, 2007United States


Canada


Other


Eliminations


ConsolidatedNet sales



$
224,976




$
35,649




$
3,801




$
(5,449
)



$
258,977Operating income




10,607





3,129





(139
)







13,597Interest expense, net
















18,132Other expense
















237Loss before income taxes















$
(4,772
)


Segment assets as of March 29, 2008 and September 29, 2007 are as follows:

March 29,
2008


September 29,
2007United States



$
304,640




$
321,415Canada




124,092





64,250Other




10,157





7,120Total assets



$
438,889




$
392,785


11.    Other (Income) Expense

Other (income) expense consists of the following:

Thirteen Week Period EndedMarch 29,
2008


March 31,
2007Foreign exchange loss



$
3,733




$
32Other (income) expense




(54
)




76Total



$
3,679




$
108


Twenty-Six Week Period EndedMarch 29,
2008


March 31,
2007Foreign exchange loss



$
1,405




$
66Other (income) expense




(16
)




171Total



$
1,389




$
237


On September 1, 2007, the Company entered into an intercompany financing arrangement whereby one of the Company’s Canadian subsidiaries issued a U. S. dollar denominated intercompany note. The intercompany note is not long-term in nature. As a result, the impact of exchange rate changes on the principal and interest of the note was recorded as an unrealized loss in the condensed consolidated statements of operations. For the thirteen and twenty-six week period ended March 29, 2008 this unrealized loss was $3,752 and $1,407, respectively.

12.    Condensed Guarantor Data

On December 17, 2007, as a result of certain corporate restructuring activities, ATT entered into supplemental indenture agreements with respect to ATT’s $150,000 Senior Subordinated Notes and $150,000 Senior Floating Rate Notes (collectively, the ‘‘Notes’’) to include certain domestic

17

---



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

subsidiaries as guarantors. The Notes are fully and unconditionally and jointly and severally guaranteed by ATT Holding Co. and certain of its directly or indirectly wholly-owned subsidiaries, namely, Ames True Temper Properties, Inc., Ames Holdings, Inc. and Ames U.S. Holding Corp., (collectively the ‘‘Subsidiary Guarantors’’). ATT Holding Co. is a holding company which has no interest, operations or activities other than through its ownership of 100% of ATT and ATT’s wholly-owned subsidiaries. The Notes are not guaranteed by any of ATT Holding Co.’s other directly and indirectly wholly-owned subsidiaries.

The following condensed consolidating information presents, in separate columns, the condensed consolidating balance sheets as of March 29, 2008 and September 29, 2007, the related condensed consolidating statements of operations for the thirteen and twenty-six week periods ended March 29, 2008 and March 31, 2007 and the condensed consolidating statements of cash flows for the twenty-six week periods ended March 29, 2008 and March 31, 2007 for ATT Holding Co. on a parent-only basis, with its investment in subsidiary recorded under the equity method, the issuer (Ames True Temper Inc.) as a wholly-owned subsidiary, on a parent-only basis, with its investments in subsidiaries recorded under the equity method, the Subsidiary Guarantors on a combined basis, the subsidiary non-guarantors on a combined basis and the Company on a consolidated basis.

18

---



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

ATT Holding Co.
Condensed Consolidating Balance Sheet
As of March 29, 2008

ATT
Holding
Co.


Ames True
Temper
Inc.


Subsidiary
Guarantors


Subsidiary
Non-
Guarantors


Eliminations


ConsolidatedAssetsCurrent assets:Cash and cash equivalents



$
—




$
159




$
6




$
8,859




$
—




$
9,024Trade receivables, net




—





72,648





—





16,557





—





89,205Inventories




—





113,689





—





18,690





—





132,379Deferred income taxes




—





1,046





—





—





—





1,046Prepaid expenses and other current assets




—





4,328





—





1,345





—





5,673Total current assets




—





191,870





6





45,451





—





237,327Property, plant and equipment, net




—





47,244





—





13,439





—





60,683Intangibles, net




—





10,653





54,383





7,511





—





72,547Goodwill




—





43,747





—





14,919





—





58,666Intercompany receivable




—





36,993





205,719





1,689





(244,401
)




—Investment in subsidiaries




—





209,197





57,193





151,550





(417,940
)




—Other noncurrent assets




—





9,119





—





547





—





9,666Total assets



$
—




$
548,823




$
317,301




$
235,106




$
(662,341
)



$
438,889Liabilities and stockholder’s (deficit) equityCurrent liabilities:Trade accounts payable



$
—




$
40,268




$
73




$
8,330




$
—




$
48,671Accrued interest payable




—





6,063





—





—





—





6,063Accrued expenses and other current liabilities




—





17,706





—





3,857





—





21,563Revolving loan




—





73,836





—





—





—





73,836Current portion of long-term debt and capital lease obligations




—





588





—





—





—





588Total current liabilities




—





138,461





73





12,187





—





150,721Deferred income taxes




—





13,906





—





6,843





—





20,749Long-term debt




—





300,356





—





—





—





300,356Accrued retirement benefits




—





12,070





—





—





—





12,070Other liabilities




—





11,623





—





—





—





11,623Intercompany payable




—





129,037





—





115,364





(244,401
)




—Cumulative losses in subsidiaries




56,630





—





—





—





(56,630
)




—Total liabilities




56,630





605,453





73





134,394





(301,031
)




495,519Commitments and contingenciesStockholder’s (deficit) equity:Preferred stock – Series A




—





—





—





—





—





—Common stock – Class A




—





—





118,249





58,251





(176,500
)




—Common stock – Class B




—





—





—





—





—





—Additional paid-in capital




110,500





110,500





154,502





—





(265,002
)




110,500Predecessor basis adjustment




(13,539
)




(13,539
)




—





—





13,539





(13,539
)(Accumulated deficit) retained earnings




(156,162
)




(156,162
)




35,061





31,630





89,471





(156,162
)Accumulated other comprehensive income




2,571





2,571





9,416





10,831





(22,818
)




2,571Total stockholder’s (deficit) equity




(56,630
)




(56,630
)




317,228





100,712





(361,310
)




(56,630
)Total liabilities and stockholder’s (deficit) equity



$
—




$
548,823




$
317,301




$
235,106




$
(662,341
)



$
438,889


19

---



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

ATT Holding Co.
Condensed Consolidating Balance Sheet
As of September 29, 2007

ATT Holding
Co.


Ames True
Temper Inc.


Subsidiary
Guarantors


Subsidiary
Non-
Guarantors


Eliminations


ConsolidatedAssetsCurrent assets:Cash and cash equivalents



$
—




$
276




$
5




$
4,901




$
—




$
5,182Trade receivables, net




—





45,517





—





10,789





—





56,306Inventories




—





96,580





—





18,483





—





115,063Deferred income taxes




—





752





—





—





—





752Prepaid expenses and other current assets




—





4,388





—





1,121





—





5,509Total current assets




—





147,513





5





35,294





—





182,812Property, plant and equipment, net




—





51,641





—





14,414





—





66,055Intangibles, net




—





11,244





54,383





7,697





—





73,324Goodwill




—





44,156





—





15,164





—





59,320Intercompany receivable




—





35,102





200,974





1,730





(237,806
)




—Investment in subsidiaries




—





199,518





56,574





145,910





(402,002
)




—Other noncurrent assets




—





10,783





—





491





—





11,274Total assets



$
—




$
499,957




$
311,936




$
220,700




$
(639,808
)



$
392,785Liabilities and stockholder’s (deficit) equityCurrent liabilities:Trade accounts payable



$
—




$
29,466




$
157




$
5,718




$
—




$
35,341Accrued interest payable




—





6,254





—





—





—





6,254Accrued expenses and other current liabilities




—





18,154





—





5,278





—





23,432Revolving loan




—





42,498





—





—





—





42,498Current portion of long-term debt and capital lease obligations




—





612





—





—





—





612Total current liabilities




—





96,984





157





10,996





—





108,137Deferred income taxes




—





15,512





—





4,965





—





20,477Long-term debt




—





300,578





—





—





—





300,578Accrued retirement benefits




—





10,943





—





—





—





10,943Other liabilities




—





6,638





—





—





—





6,638Intercompany payable




—





123,290





3,800





110,716





(237,806
)




—Cumulative losses in subsidiaries




53,988





—





—





—





(53,988
)




—Total liabilities




53,988





553,945





3,957





126,677





(291,794
)




446,773Commitments and contingenciesStockholder’s (deficit) equity:Preferred stock — Series A




—





—





—





—





—





—Common stock — Class A




—





—





118,249





58,251





(176,500
)




—Common stock — Class B




—





—





—





—





—





—Additional paid-in capital




110,500





110,500





154,502





—





(265,002
)




110,500Predecessor basis adjustment




(13,539
)




(13,539
)




—





—





13,539





(13,539
)(Accumulated deficit) retained earnings




(155,707
)




(155,707
)




26,277





26,065





103,365





(155,707
)Accumulated other comprehensive income




4,758





4,758





8,951





9,707





(23,416
)




4,758Total stockholder’s (deficit)




(53,988
)




(53,988
)




307,979





94,023





(348,014
)




(53,988
)Total liabilities and stockholder’s (deficit) equity



$
—




$
499,957




$
311,936




$
220,700




$
(639,808
)



$
392,785


20

---



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

ATT Holding Co.
Condensed Consolidating Statement of Operations
For the Thirteen Week Period Ended March 29, 2008

ATT
Holding Co.


Ames True
Temper Inc.


Subsidiary
Guarantors


Subsidiary
Non-
Guarantors


Eliminations


ConsolidatedNet sales



$
—




$
123,769




$
—




$
29,202




$
(5,828
)



$
147,143Cost of goods sold




—





92,685





—





20,365





(5,828
)




107,222Gross profit




—





31,084





—





8,837





—





39,921Selling, general and administrative expenses




—





19,506





91





4,890





—





24,487Loss on disposal of fixed assets




—





213





—





—





—





213Amortization of intangible assets




—





296





—





45





—





341Impairment of fixed assets




—





34





—





—





—





34Operating income (loss)




—





11,035





(91
)




3,902





—





14,846Interest expense (income), net




—





10,848





(4,426
)




2,304





—





8,726Other expense (income)




—





2,612





(3,068
)




4,135





—





3,679(Loss) income before income taxes




—





(2,425
)




7,403





(2,537
)




—





2,441Income tax (benefit) expense




—





(2,675
)




2,591





(808
)




—





(892
)Equity in earnings (loss) of subsidiaries




3,333





3,083





(1,676
)




3,277





(8,017
)




—Net income



$
3,333




$
3,333




$
3,136




$
1,548




$
(8,017
)



$
3,333


ATT Holding Co.
Condensed Consolidating Statement of Operations
For the Thirteen Week Period Ended March 31, 2007

ATT
Holding Co.


Ames True
Temper Inc.


Subsidiary
Guarantors


Subsidiary
Non-
Guarantors


Eliminations


ConsolidatedNet sales



$
—




$
155,547




$
—




$
21,403




$
(2,915
)



$
174,035Cost of goods sold




—





119,720





—





14,642





(2,915
)




131,447Gross profit




—





35,827





—





6,761





—





42,588Selling, general and administrative expenses




—





24,448





—





4,794





—





29,242Loss on disposal of fixed assets




—





94





—





—





—





94Amortization of intangible assets




—





400





(67
)




39





—





372Operating income




—





10,885





67





1,928





—





12,880Interest expense (income), net




—





11,314





(1,820
)




16





—





9,510Other expense (income)




—





2,238





(2,550
)




420





—





108(Loss) income before income taxes




—





(2,667
)




4,437





1,492





—





3,262Income tax expense




—





2,161





1,553





490





—





4,204Equity in (loss) earnings of subsidiaries




(942
)




3,886





—





—





(2,944
)




—Net (loss) income



$
(942
)



$
(942
)



$
2,884




$
1,002




$
(2,944
)



$
(942
)


21

---



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

ATT Holding Co.
Condensed Consolidating Statement of Operations
For the Twenty-Six Week Period Ended March 29, 2008

ATT
Holding Co.


Ames True
Temper Inc.


Subsidiary
Guarantors


Subsidiary
Non-
Guarantors


Eliminations


ConsolidatedNet sales



$
—




$
199,881




$
—




$
53,696




$
(7,653
)



$
245,924Cost of goods sold




—





151,646





—





36,636





(7,653
)




180,629Gross profit




—





48,235





—





17,060





—





65,295Selling, general and administrative expenses




—





35,715





116





10,124





—





45,955Loss on disposal of fixed assets




—





499





—





—





—





499Amortization of intangible assets




—





591











92





—





683Impairment of fixed assets




—





34





—





—





—





34Operating income (loss)




—





11,396





(116
)




6,844





—





18,124Interest expense (income), net




—





21,390





(8,800
)




4,642





—





17,232Other expense (income)




—





3,841





(4,717
)




2,265





—





1,389(Loss) income before income taxes




—





(13,835
)




13,401





(63
)




—





(497
)Income tax (benefit) expense




—





(4,744
)




4,690





12





—





(42
)Equity in (loss) earnings of subsidiaries




(455
)




8,636





72





5,640





(13,893
)




—Net (loss) income



$
(455
)



$
(455
)



$
8,783




$
5,565




$
(13,893
)



$
(455
)


ATT Holding Co.
Condensed Consolidating Statement of Operations
For the Twenty-Six Week Period Ended March 31, 2007

ATT
Holding Co.


Ames True
Temper Inc.


Subsidiary
Guarantors


Subsidiary
Non-
Guarantors


Eliminations


ConsolidatedNet sales



$
—




$
225,608




$
—




$
37,733




$
(4,364
)



$
258,977Cost of goods sold




—





172,679





—





25,747





(4,364
)




194,062Gross profit




—





52,929





—





11,986





—





64,915Selling, general and administrative expenses




—





41,027





—





8,917





—





49,944Loss on disposal of fixed assets




—





629





—





—





—





629Amortization of intangible assets




—





666





—





79





—





745Operating income




—





10,607





—





2,990





—





13,597Interest expense (income), net




—





21,718





(3,595
)




9





—





18,132Other expense (income)




—





3,093





(3,677
)




821





—





237(Loss) income before income taxes




—





(14,204
)




7,272





2,160





—





(4,772
)Income tax expense




—





2,061





2,545





740





—





5,346Equity in (loss) earnings of subsidiaries




(10,118
)




6,147





—





—





3,971





—Net (loss) income



$
(10,118
)



$
(10,118
)



$
4,727




$
1,420




$
3,971




$
(10,118
)


22

---



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

ATT Holding Co.
Condensed Consolidating Statement of Cash Flows
For the Twenty-Six Week Period Ended March 29, 2008

ATT
Holding Co.


Ames True
Temper Inc.


Subsidiary
Guarantors


Subsidiary
Non-
Guarantors


Eliminations


ConsolidatedOperating activitiesNet (loss) income



$
(455
)



$
(455
)



$
8,783




$
5,565




$
(13,893
)



$
(455
)Adjustments to reconcile (net loss) income to net cash (used in) provided by operating activities:Depreciation expense




—





6,486





—





1,375





—





7,861Equity in loss (earnings) of subsidiaries




455





(8,636
)




(72
)




(5,640
)




13,893





—Provision for deferred taxes




—





(231
)




—





2,139





—





1,908Other, net




—





2,150





—





183





—





2,333Unrealized foreign currency loss




—





—





—





1,405





—





1,405Changes in assets and liabilities:Accounts receivable




—





(26,993
)




—





(5,924
)




—





(32,917
)Inventories




—





(17,109
)




—





(127
)




—





(17,236
)Prepaid expenses and other current assets




—





1,536





—





(188
)




—





1,348Accounts payable




—





10,801





(84
)




2,619





—





13,336Intercompany accounts




—





3,816





(8,652
)




4,836





—





—Accrued expenses and other liabilities




—





141





26





(1,776
)




—





(1,609
)Net cash (used in) provided by operating activities




—





(28,494
)




1





4,467





—





(24,026
)Investing activitiesCash paid for property, plant and equipment




—





(3,088
)




—





(229
)




—





(3,317
)Proceeds from sale of property, plant and equipment




—





498





—





—





—





498Net cash used in investing activities




—





(2,590
)




—





(229
)




—





(2,819
)Financing activitiesRepayments of long-term debt




—





(371
)




—





—





—





(371
)Borrowings on revolver




—





87,938





—





—





—





87,938Repayments on revolver




—





(56,600
)




—





—





—





(56,600
)Net cash provided by financing activities




—





30,967





—





—





—





30,967Effect of exchange rate changes on cash




—





—





—





(280
)




—





(280
)(Decrease) increase in cash and cash equivalents




—





(117
)




1





3,958





—





3,842Cash and cash equivalents at beginning of period




—





276





5





4,901





—





5,182Cash and cash equivalents at end of period



$
—




$
159




$
6




$
8,859




$
—




$
9,024


23

---



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

ATT Holding Co.
Condensed Consolidating Statement of Cash Flows
For the Twenty-Six Week Period Ended March 31, 2007

ATT
Holding Co.


Ames True
Temper Inc.


Subsidiary
Guarantors


Subsidiary
Non-
Guarantors


Eliminations


ConsolidatedOperating activitiesNet (loss) income



$
(10,118
)



$
(10,118
)



$
4,727




$
1,420




$
3,971




$
(10,118
)Adjustments to reconcile (net loss) income to net cash used in operating activities:Depreciation expense




—





6,757





—





1,190





—





7,947Equity in loss (earnings) of subsidiaries




10,118





(6,147
)




—





—





(3,971
)




—(Benefit from) provision for deferred taxes




—





3,774





—





870





—





4,644Other, net




—





2,356





382





11





—





2,749Unrealized foreign currency loss




—





—





—





66





—





66Changes in assets and liabilities:Accounts receivable




—





(35,722
)




—





(5,636
)




—





(41,358
)Inventories




—





(4,620
)




—





(3,135
)




—





(7,755
)Prepaid expenses and other current assets




—





2,004





—





(1,135
)




—





869Accounts payable




—





10,466





(9
)




2,315





—





12,772Intercompany accounts




—





809





(5,102
)




4,293





—





—Accrued expenses and other liabilities




—





(2,001
)




—





(1,140
)




—





(3,141
)Net cash used in operating activities




—





(32,442
)




(2
)




(881
)




—





(33,325
)Investing activitiesCash paid for property, plant and equipment




—





(4,420
)




—





(2,918
)




—





(7,338
)Proceeds from sale of property, plant and equipment




—





1,042





—





(383
)




—





659Investment in joint venture










(300
)










—











(300
)Net cash used in investing activities




—





(3,678
)




—





(3,301
)




—





(6,979
)Financing activitiesRepayments of long-term debt




—





(364
)




—





—





—





(364
)Borrowings on revolver




—





95,291





—





—





—





95,291Repayments on revolver




—





(59,000
)




—





—





—





(59,000
)Net cash provided by financing activities




—





35,927





—





—





—





35,927Effect of exchange rate changes on cash




—





—





—





(147
)




—





(147
)(Decrease) increase in cash and cash equivalents




—





(193
)




(2
)




(4,329
)




—





(4,524
)Cash and cash equivalents at beginning of period




—





1,017





6





4,615





—





5,638Cash and cash equivalents at end of period



$
—




$
824




$
4




$
286




$
—




$
1,114


24

---



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)

13.    Related Party Transactions

The Company is party to a management agreement with Castle Harlan, Inc., an affiliate of the shareholder, under which Castle Harlan, Inc. provides business and organizational strategy, financial and investment management, advisory, merchant and investment banking services to the Company. The Company recorded expenses of $756 and $1,552 for the thirteen and twenty-six weeks ended March 29, 2008, respectively, related to the annual management fees which are included in selling, general and administrative expenses. The expenses for the thirteen and twenty-six weeks ended March 31, 2007 were $751 and $1,490, respectively. The management fees are payable quarterly in advance in accordance with the management agreement. The Company had no amounts payable to Castle Harlan, Inc. at March 29, 2008. At September 29, 2007, the Company had a payable to Castle Harlan of $42, which was included in trade accounts payable.

On June 28, 2004, certain management employees of ATT and affiliates became eligible to purchase Class B units of CHATT Holdings LLC at fair market value. These units vest based on three criteria: (1) time vesting based on a five year term, (2) performance vesting based on the financial results of ATT and (3) vesting based upon a targeted rate of return upon a change of control. There are certain acceleration clauses in the event of a change of control. As of March 29, 2008 and September 29, 2007, there were 155,033 and 156,535 units, respectively, issued to management and members of the CHATT Holdings LLC Board of Directors who are not employees of ATT or Castle Harlan, Inc. Additionally, an affiliate of Castle Harlan holds 41,444 and 39,485 units at March 29, 2008 and September 29, 2007, respectively. These units may not be sold, pledged or otherwise transferred except in compliance with applicable securities laws. Additional restrictions and limitations are set forth in the agreement.

14.    Commitments and Contingencies

Management continually evaluates the Company’s contingencies, including various lawsuits and claims which arise in the normal course of business, product and general liabilities, worker’s compensation, property losses and other fiduciary liabilities for which the Company is self-insured or retains a high exposure limit. Self-insurance reserves are established based on actuarial estimates. Legal costs incurred in connection with the resolution of claims, lawsuits and other contingencies generally are expensed as incurred. In the opinion of management, its assessment of contingencies is reasonable and related reserves are adequate; however, there can be no assurance that future quarterly or annual operating results will not be materially affected by final resolution of these matters. The following matter is significant of the Company’s identified contingencies.

During December 2004, a customer of Union was named in litigation that involved Union’s products. The complaint asserted causes of action against the defendant for improper advertisement to the consumer. The allegation suggests that advertisements led the consumer to believe that the hand tools sold were manufactured in the boundaries of the United States. The allegation asserts cause of action against the customer for common law fraud. In the event that courts would deem a judgment against our customer, there is a possibility that the customer would seek legal recourse for an unspecified amount in contributory damages. Presently, the Company cannot estimate the amount of loss, if any, if our customer were to seek legal recourse against the Company.

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

25

---



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

Forward Looking Statements

The following discussion and analysis of our parent’s results of operations and financial condition should be read in conjunction with and is qualified in its entirety by reference to the unaudited condensed consolidated financial statements and accompanying notes of ATT Holding Co. (the ‘‘Company’’) as it relates to the consolidated financial performance and results of operations of our parent, ATT Holding Co. and the wholly-owned subsidiaries of Ames True Temper, Inc., (‘‘ATT’’). A separate discussion for Ames True Temper, Inc. is not presented since our parent has no operations or assets separate from its investment in Ames True Temper, Inc. and since the Senior Subordinated Notes and the Senior Floating Rate Notes are guaranteed by our parent and all of our domestic subsidiaries. This Form 10-Q contains forward-looking statements. All statements other than statements of historical fact are ‘‘forward-looking statements’’ for purposes of federal and state securities laws.

Forward-looking statements are identified by terms and phrases such as ‘‘may,’’ ‘‘will,’’ ‘‘plans,’’ ‘‘estimates,’’ ‘‘anticipates,’’ ‘‘believes,’’ ‘‘expects,’’ ‘‘intends’’ and similar expressions and include references to assumptions and related to our future prospects, developments and business strategies. Although we believe that such statements are based on reasonable assumptions, these forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected or assumed in our forward-looking statements.

Factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to:

| |   |                                     
| | - | ------------------------------------
| | • | our liquidity and capital resources;

| |   |                                          
| | - | -----------------------------------------
| | • | increased concentration of our customers;

| |   |                                            
| | - | -------------------------------------------
| | • | sales levels to existing and new customers;

| |   |                                        
| | - | ---------------------------------------
| | • | availability and cost of raw materials;

| |   |                                                           
| | - | ----------------------------------------------------------
| | • | risks relating to foreign sourcing and foreign operations;

| |   |                                                                       
| | - | ----------------------------------------------------------------------
| | • | general economic conditions including downturns in the housing market;

| |   |                               
| | - | ------------------------------
| | • | changing consumer preferences;

| |   |                                            
| | - | -------------------------------------------
| | • | seasonality and adverse weather conditions;

| |   |                                  
| | - | ---------------------------------
| | • | competitive pressures and trends;

| |   |                          
| | - | -------------------------
| | • | product liability claims;

| |   |                                      
| | - | -------------------------------------
| | • | new product and customer initiatives;

| |   |                                                                 
| | - | ----------------------------------------------------------------
| | • | our ability to pay our debt or obtain alternative financing; and

| |   |                                                                   
| | - | ------------------------------------------------------------------
| | • | our ability to successfully consummate and integrate acquisitions.

Our actual results, performance or achievements, could differ materially from those expressed in, or implied by, the forward-looking statements. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. We do not intend, and we undertake no obligation, to update any forward-looking statement included in this report, whether as a result of new information, future events or otherwise, after the date of this report. This report should be read in conjunction with the Company’s most recent financial statements, Item 1A,Risk Factorsand the Management Discussion & Analysis (MD&A) included in the Company’s Form 10-K for the fiscal year ended September 29, 2007.

26

---



Overview

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (‘‘MD&A’’) is intended to help the reader understand Ames True Temper, Inc., our operations and our present business environment. MD&A is provided as a supplement to, and should be read in conjunction with, the condensed consolidated financial statements and the accompanying notes thereto of our parent, ATT Holding Co., contained in Item 1 of this report. The following discussion includes forward-looking statements that involve certain risks and uncertainties. See ‘‘Forward-Looking Statements.’’ This overview summarizes the MD&A, which includes the following sections:

| |   |                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------
| | • | Our Business – a general description of our business and a summary of critical accounting estimates and recent accounting pronouncements.

| |   |                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | Operations Review – an analysis of our Company’s consolidated results of operations for the thirteen and twenty-six week periods as presented in our unaudited condensed consolidated financial statements.

| |   |                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | Liquidity, Capital Resources and Financial Position – an analysis of cash flows; debt and other obligations; off-balance sheet arrangements; aggregate contractual obligations and an overview of financial position.

Our Business

General

Ames True Temper, Inc. is a leading North American manufacturer and marketer of non-powered lawn and garden tools and accessories.

We offer the following 14 distinct product lines: long handle tools, wheelbarrows, planters, hose reels, snow tools, striking tools, decorative accessories, lawn carts, pruning tools, repair handles, garden hoses, Hound Dog, landscape fabric, and specialty tools.

We sell our products primarily in the U.S. and Canada to (1) retail centers, including home centers and mass merchandisers, (2) wholesale chains, including hardware stores and garden centers and (3) industrial distributors.

We have a large portfolio of recognized brands that enables us to offer specific branding strategies for key retail customers. Our brands are recognized across our primary product categories in the North American non-powered lawn and garden products market. Our brand portfolio includes Ames, True Temper, Ames True Temper, Garant and Stanley (licensed from The Stanley Works), as well as contractor-oriented brands including UnionTools, Razor-Back Professional Tools, Jackson Professional Tools and John Deere (licensed from Deere & Company). This strong portfolio of brands allows us to build and maintain long-standing relationships with the leading companies that sell our product categories.

We believe that our global manufacturing strategy, based primarily upon a blend of domestic manufacturing and sourced product, makes us cost-competitive while allowing us to provide a high level of customer service.

Critical Accounting Estimates

For a description of the critical accounting estimates that require the use of significant judgment and estimates by management, refer to ‘‘Management Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates’’ included in our Form 10-K for the fiscal year ended September 29, 2007.

Recent Accounting Pronouncements

Refer to Note 2 of Notes to Condensed Consolidated Financial Statements for a discussion of recent accounting standards and pronouncements.

27

---



Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and the accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (‘‘US GAAP’’) and the rules of the Securities and Exchange Commission (‘‘SEC’’).

The accompanying unaudited condensed consolidated financial statements include the accounts of ATT Holding Co. and its wholly-owned subsidiaries. All material intercompany transactions have been eliminated in consolidation.

ATT Holding Co. is a holding company which has no interest, operations or activities other than through its ownership of 100% of ATT.

Operations Review

Thirteen weeks ended March 29, 2008 compared to thirteen weeks ended March 31, 2007

Company-Wide

The following table presents the major components of our statements of operations together with each component’s percentage of net sales for the thirteen week periods ended March 29, 2008 and March 31, 2007:

Thirteen Week Period EndedMarch 29, 2008


March 31, 2007(Dollars in Millions)Net sales



$
147.1





100.0
%



$
174.0





100.0
%Cost of goods sold




107.2





72.9
%




131.4





75.5
%Gross profit




39.9





27.1
%




42.6





24.5
%Selling, general, and administrative expenses




24.5





16.7
%




29.2





16.8
%Loss on disposal of fixed assets




0.3





0.1
%




0.1





0.1
%Amortization of intangible assets




0.3





0.2
%




0.4





0.2
%Impairment of fixed assets




0.0





0.0
%




—





—Operating income




14.8





10.1
%




12.9





7.4
%Interest expense, net




8.7





5.9
%




9.5





5.5
%Other expense




3.7





2.5
%




0.1





0.1
%Income before income taxes




2.4





1.6
%




3.3





1.9
%Income tax (benefit) expense




(0.9
)




-0.6
%




4.2





2.4
%Net income (loss)



$
3.3





2.2
%



$
(0.9
)




−0.5
%


Net Sales.Net sales for the thirteen week period ended March 29, 2008 decreased $26.9 million, or 15.5%, to $147.1 million from $174.0 million for the thirteen weeks ended March 31, 2007. Overall net sales decreased primarily from volume decreases as a result of the soft U.S. housing market and the recording of advertising allowances for certain customers as a reduction of revenue. In the thirteen week period ended March 29, 2008, the Company modified its contractual advertising arrangements with certain customers. These modifications were not in existence in the thirteen week period ended March 31, 2007. These decreases were offset by higher sales volumes in the snow tool category of $6.5 million due to significant snowfall in Canada and certain parts of the United States as compared to the prior year thirteen week period.

Gross Profit.Gross profit for the thirteen weeks ended March 29, 2008 decreased $2.7 million, or 6.3%, to $39.9 million from $42.6 million for the thirteen weeks ended March 31, 2007. The gross profit decrease was due to the impact from the lower sales volume and the recording of advertising allowances for certain customers as a reduction of revenue as discussed above. These decreases were partially offset by improved manufacturing efficiencies during the thirteen weeks ended March 29, 2008. During the thirteen week period ended March 31, 2007, the Company incurred

28

---



unfavorable absorption variances in conjunction with a planned inventory reduction. Gross profit as a percentage of net sales increased to 27.1% for the thirteen week period ended March 29, 2008 from 24.5% for the thirteen week period ended March 31, 2007 primarily from improved manufacturing efficiencies in the thirteen weeks ended March 29, 2008.

Selling, General and Administrative (‘‘SG&A’’) Expenses.SG&A expenses for the thirteen weeks ended March 29, 2008 decreased $4.7 million to $24.5 million from $29.2 million for the thirteen weeks ended March 31, 2007. The decrease relates primarily to lower selling and commission expenses associated with the lower sales volume and a reduction in administrative overhead that occurred in the fourth quarter of fiscal 2007. As a result of modifying its contractual advertising arrangements with certain customers as described above, the Company also incurred lower advertising expense in the thirteen week period ended March 29, 2008.

Amortization of Intangible Assets.During the thirteen weeks ended March 29, 2008, we recorded $0.3 million in amortization expense, as compared to $0.4 million during the thirteen week period ended March 31, 2007. The decrease was due to certain intangible assets becoming fully amortized.

Interest Expense, Net.Interest expense for the thirteen weeks ended March 29, 2008 decreased $0.8 million to $8.7 million from $9.5 million during the thirteen weeks ended March 31, 2007. The decrease was primarily the result of decreased borrowings and lower interest rates under our revolving credit facility.

Other Expense.Other expense for the thirteen weeks ended March 29, 2008 was $3.7 million and was primarily the result of an unrealized foreign currency translation loss of $3.8 million on a U.S. dollar denominated note issued by a Canadian subsidiary in September 2007 that is not of a long-term nature. Other expense for the thirteen weeks ended March 31, 2007 was $0.1 million.

Income Tax (Benefit) Expense.Income tax benefit for the thirteen weeks ended March 29, 2008, was $0.9 million or approximately 36.5% of income before taxes primarily due to a net tax benefit in certain foreign jurisdictions and recognition of approximately $430 of tax benefits due to the lapse of a statue of limitations. Income tax expense for the thirteen weeks ended March 31, 2007 was $4.2 million primarily due to the recording of a $3.1 million valuation allowance on U.S. federal and state deferred tax assets which were not otherwise offset by reversing deferred tax liabilities. As of March 29, 2008 and September 29, 2007, a deferred tax asset valuation allowance was necessary for substantially all of our U.S. domestic deferred tax assets, net of certain deferred tax liabilities. The Company expects to maintain a valuation allowance on these deferred tax assets until it can sustain a sufficient level of profits in the applicable jurisdictions that will demonstrate the ability to realize these net deferred tax assets.

29

---



Our Segments

The following table presents our net sales and operating income (loss) after intercompany eliminations by segment for the thirteen week periods ended March 29, 2008 and March 31, 2007:

Thirteen Week Period EndedMarch 29, 2008


March 31, 2007(Dollars in Millions)Net sales:United States



$
119.2





81.0
%



$
152.7





87.8
%Canada




25.8





17.5
%




19.3





11.1
%Other




2.1





1.5
%




2.0





1.1
%Total net sales



$
147.1





100
%



$
174.0





100.0
%Operating income (loss):United States



$
11.0





9.2
%



$
10.9





7.1
%Canada




3.9





15.1
%




2.0





10.4
%Other




(0.1
)




-4.8
%




0.0





0.0
%Total operating income



$
14.8





10.1
%



$
12.9





7.4
%


United States

Net Sales.Net sales for the thirteen week period ended March 29, 2008 decreased $33.5 million, or 21.9%, to $119.2 million from $152.7 million for the thirteen weeks ended March 31, 2007. Overall volume decreased primarily as a result of the soft U.S. housing market and the recording of advertising allowances for certain customers as discussed above. The decrease was slightly offset by higher sales volumes in the snow tool category of $1.4 million due to significant snowfall in certain parts of the United States as compared to the prior year thirteen week period.

Operating income.Operating income for the thirteen weeks ended March 29, 2008 increased $0.1 million to $11.0 million from $10.9 million for the thirteen weeks ended March 31, 2007. This increase was primarily due to a favorable mix of product sales with higher gross margins and improved manufacturing efficiencies, partially offset by the gross margin impact of lower sales volume.

Canada

Net Sales.Net sales for the thirteen week period ended March 29, 2008 increased $6.5 million, or 33.7%, to $25.8 million from $19.3 million for the thirteen weeks ended March 31, 2007. This increase is primarily due to snow tools sales increasing $5.1 million as compared to the same period in the prior year as a result of an extended snow season in Canada.

Operating income.Operating income for the thirteen weeks ended March 29, 2008 increased $1.9 million to $3.9 million from $2.0 million for the thirteen weeks ended March 31, 2007. This increase was primarily the result of increased sales volume in the snow tool category.

Other

Changes in net sales and gross profit for this segment were not significant for the periods presented.

30

---



Twenty-six weeks ended March 29, 2008 compared to twenty-six weeks ended March 31, 2007

Company-Wide

The following table presents the major components of our statements of operations together with each component’s percentage of net sales for the twenty-six week periods ended March 29, 2008 and March 31, 2007

Twenty-six Week Period EndedMarch 29, 2008


March 31, 2007(Dollars in Millions)Net sales



$
245.9





100.0
%



$
259.0





100.0
%Cost of goods sold




180.6





73.4
%




194.1





74.9
%Gross profit




65.3





26.6
%




64.9





25.1
%Selling, general, and administrative expenses




46.0





18.7
%




49.9





19.3
%Loss on disposal of fixed assets




0.5





0.2
%




0.6





0.2
%Amortization of intangible assets




0.7





0.3
%




0.8





0.3
%Impairment of fixed assets




0.0





0.0
%




—





—Operating income




18.1





7.4
%




13.6





5.3
%Interest expense, net




17.2





7.0
%




18.1





7.0
%Other expense




1.4





0.6
%




0.3





0.1
%Loss before taxes




(0.5
)




-0.2
%




(4.8
)




-1.8
%Income tax (benefit) expense




0.0





0.0
%




5.3





2.0
%Net loss



$
(0.5
)




-0.2
%



$
(10.1
)




-3.8
%


Net Sales.Net sales for the twenty-six week period ended March 29, 2008 decreased $13.1 million, or 5.1%, to $245.9 million from $259.0 million for the twenty-six weeks ended March 31, 2007. Overall net sales decreased primarily as a result of the soft U.S. housing market, the recording of store servicing fees as a reduction of revenue due to a change in the structure of the store serving arrangements and the recording of advertising allowances as a reduction of revenue as described above. The decrease was partially offset by higher sales volumes in the snow tool category of $17.4 million due to significant snowfall in Canada and certain parts of the United States as compared to the prior year twenty-six week period.

Gross Profit.Gross profit for the twenty-six weeks ended March 29, 2008 increased $0.4 million, or 0.6%, to $65.3 million from $64.9 million for the twenty-six weeks ended March 31, 2007. The increase was primarily due to improved manufacturing efficiencies partially offset by the negative impact from lower sales and the recording of advertising allowances for certain customers as a reduction of revenue in fiscal 2008 as described above. Gross profit as a percentage of net sales increased to 26.6% for the twenty-six week period ended March 29, 2008 from 25.1% for the twenty-six week period ended March 31, 2007.

Selling, General and Administrative (‘‘SG&A’’) Expenses.SG&A expenses for the twenty-six weeks ended March 29, 2008 decreased $3.9 million to $46.0 million from $49.9 million for the twenty-six weeks ended March 31, 2007. The decrease relates primarily to the recording of store servicing and advertising allowances for certain customers as a reduction of revenue in fiscal 2008, as described above and a reduction in administrative overhead that occurred in the fourth quarter of fiscal 2007.

Amortization of Intangible Assets.During the twenty-six weeks ended March 29, 2008, we recorded $0.7 million in amortization expense, as compared to $0.8 million during the twenty-six week period ended March 31, 2007.

Interest Expense, Net.Interest expense for the twenty-six weeks ended March 29, 2008 decreased $0.9 million to $17.2 million from $18.1 million during the twenty-six weeks ended March 31, 2007. The decrease was primarily the result of decreased borrowings and lower interest rates under our revolving credit facility.

31

---



Other Expense.Other expense for the twenty-six weeks ended March 29, 2008 was $1.4 million and was primarily the result of an unrealized foreign currency translation loss of $1.4 million on a U.S. dollar denominated note issued by a Canadian subsidiary in September 2007 that is not of a long-term nature. Other expense for the twenty-six weeks ended March 31, 2007 was $0.3 million.

Income Tax (Benefit) Expense.Income tax benefit for the twenty-six weeks ended March 29, 2008, was not material on a pre-tax loss of $0.5 million. Income tax expense for the twenty-six weeks ended March 31, 2007 was $5.3 million primarily due to the recording of a $6.9 million valuation allowance on U.S. federal and state deferred tax assets which were not otherwise offset by reversing deferred tax liabilities. As of March 29, 2008 and September 29, 2007, a deferred tax asset valuation allowance was necessary for substantially all of our U.S. domestic deferred tax assets, net of certain deferred tax liabilities. The Company expects to maintain a valuation allowance on these deferred tax assets until it can sustain a sufficient level of profits in the applicable jurisdictions that will demonstrate the ability to realize these net deferred tax assets.

Our Segments

The following table presents our net sales and operating income (loss) after intercompany eliminations by segment for the twenty-six week periods ended March 29, 2008 and March 31, 2007:

Twenty-Six Week Period EndedMarch 29, 2008


March 31, 2007(Dollars in Millions)Net sales:United States



$
193.9





78.9
%



$
221.4





85.5
%Canada




48.3





19.6
%




34.0





13.1
%Other




3.7





1.5
%




3.6





1.4
%Total net sales



$
245.9





100.0
%



$
259.0





100.0
%Operating income (loss):United States



$
11.3





5.8
%



$
10.6





4.8
%Canada




6.9





14.3
%




3.1





9.1
%Other




(0.1
)




−2.7
%




(0.1
)




−2.8
%Total operating income



$
18.1





7.4
%



$
13.6





5.3
%


United States

Net Sales.Net sales for the twenty-six week period ended March 29, 2008 decreased $27.5 million, or 12.4%, to $193.9 million from $221.4 million for the twenty-six weeks ended March 31, 2007. Overall net sales decreased primarily from lower sales volumes as a result of the soft U.S. housing market and by the recording of advertising allowances for certain customers as a reduction of revenue as discussed above. This decrease was partially offset by increases in the snow tool category of $6.1 million due to significant snowfall in certain parts of the United States as compared to the prior year twenty-six week period.

Operating income.Operating income for the twenty-six weeks ended March 29, 2008 increased $0.7 million to $11.3 million from $10.6 million for the twenty-six weeks ended March 31, 2007. This increase was primarily due to favorable mix of product sales with higher gross margins and improved manufacturing efficiencies as described above, partially offset by the margin impact from lower sales volume.

Canada

Net Sales.Net sales for the twenty-six week period ended March 29, 2008 increased $14.3 million, or 42.1%, to $48.3 million from $34.0 million for the twenty-six weeks ended March 31, 2007. This increase was primarily due to an increase of $11.4 million in snow tools sales due to heavy snowfall as compared to the same period in the prior year and the favorable impact of the foreign currency exchange rate.

32

---



Operating income.Operating income for the twenty-six weeks ended March 29, 2008 increased $3.8 million to $6.9 million from $3.1 million for the twenty-six weeks ended March 31, 2007. This increase was primarily the result of increased sales volume in the snow tool category.

Other

Changes in net sales and gross profit for this segment were not significant for the periods presented.

Liquidity and Capital Resources

Our principal liquidity requirements are to service our debt and meet our working capital and capital expenditure needs. Subject to our performance, which, if adversely affected, could adversely affect the availability of funds, we expect to be able to meet our liquidity requirements for the next several years through cash provided by operations and through borrowings available under our senior secured credit facility. However, we cannot assure you that this will be the case. We anticipate the need to refinance our indebtedness, particularly our Senior Subordinated Notes and our Senior Floating Rate Notes, on or before maturity in 2012. We cannot assure you that we would be able to refinance any of our indebtedness on commercially reasonable terms or at all.

Cash Flows from Operating Activities

Cash used in operating activities was $24.0 million and $33.3 million for the twenty-six week periods ended March 29, 2008 and March 31, 2007, respectively. The decrease in cash used in operations was primarily the result of a lower net loss and an improved working capital position as compared to the same period in the prior year.

Cash Flows from Investing Activities

Cash used in investing activities was $2.8 million and $7.0 million for the twenty-six week periods ended March 29, 2008 and March 31, 2007, respectively. Purchases of property, plant and equipment were the main investing activities of the Company during both periods. Fiscal 2008 capital expenditures are expected to be at or slightly below prior fiscal year levels.

Cash Flows from Financing Activities

Cash provided by financing activities was $31.0 million and $35.9 million for the twenty-six week periods ended March 29, 2008 and March 31, 2007, respectively. The decrease in cash provided by financing activities was primarily related to lower borrowings on our revolver which is $29.1 million lower than the balance at March 31, 2007.

Debt and Other Obligations

Senior Secured Credit Facility as Amended and Restated

On April 7, 2006, we entered into an amended and restated credit agreement with Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, Acorn Products, Inc., (‘‘Acorn’’) UnionTools, Inc., (‘‘Union’’) and Ames True Temper Properties, Inc. (‘‘ATTP’’); together with the Company, (the ‘‘Borrowers’’), ATT Holding Co., as guarantor, and each lender from time to time thereto (the ‘‘Credit Agreement’’). The Credit Agreement amends and restates our existing credit facility with, among others, Bank of America, N.A. Pursuant to the Credit Agreement, the lenders made available a five-year revolving credit facility of up to $130.0 million, including a sub-facility for letters of credit in an amount not to exceed $15.0 million and a sub-facility for swing-line loans in an amount not to exceed $15.0 million. The Borrowers’ obligations under the Credit Agreement are guaranteed by ATT Holding Co. The credit facility is collateralized by substantially all of the assets of ATT and ATTP. Future domestic subsidiaries will be required to guarantee the obligations and grant a lien on substantially all of their assets.

33

---



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

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

The terms of the Credit Agreement include various covenants that restrict our ability to, among other things, incur additional liens, incur additional indebtedness and make additional investments. In addition, the Borrowers are prohibited from incurring capital expenditures exceeding $15.0 million in any fiscal year (subject to the right to carry over the unused portion to the following year). In addition, under certain circumstances the Borrowers will be required to have Consolidated EBITDA, as defined by the Credit Agreement, of at least $41.0 million for each period of four fiscal quarters. The Credit Agreement also includes customary events of default, including, without limitation, payment defaults, cross defaults to other indebtedness and bankruptcy related defaults. As of March 29, 2008, we were in compliance with all of our financial covenants. As of March 29, 2008, we had $73.8 million of borrowings on the revolving portion of our senior credit facility, with $3.7 million of letters of credit outstanding under the Credit Agreement. At March 29, 2008, based on the borrowing base calculation, the revolver limit was $122.7 million, with $45.2 million available under the revolving credit facility.

Senior Subordinated Notes

On June 28, 2004, we completed a private offering of $150.0 million in aggregate principal amount at maturity of 10% Senior Subordinated Notes due July 15, 2012. The Senior Subordinated Notes are fully and unconditionally guaranteed by our parent, ATT Holding Co. and all domestic subsidiaries, on a senior subordinated basis. On August 10, 2004, we filed a registration statement with respect to new notes having substantially identical terms as the original notes, as part of an offer to exchange registered notes for the privately issued original Senior Subordinated Notes. The new notes evidence the same debt as the original Senior Subordinated Notes, are entitled to the benefits of the indenture governing the original Senior Subordinated Notes and are treated under the indenture as a single class with the original notes. The exchange offer was completed on November 24, 2004. We pay interest on the Senior Subordinated Notes semi-annually in cash, in arrears, on January 15 and July 15 at an annual rate of 10.0%.

The Senior Subordinated Notes are unsecured senior subordinated obligations and rank behind all of our existing and future senior debt, including borrowings under the Credit Agreement, equally with any of our future senior subordinated debt, ahead of any of our future debt that expressly provides for subordination to the Senior Subordinated Notes and effectively behind all of the existing and future liabilities of our subsidiaries, including trade payables.

The indenture governing Senior Subordinated Notes contains various affirmative and negative covenants, subject to a number of important limitations and exceptions, including but not limited to those limiting our ability and the ability of our restricted subsidiaries to borrow money, guarantee debt or sell preferred stock, create liens, pay dividends on or redeem or repurchase stock, make certain investments, sell stock in our restricted subsidiaries, restrict dividends or other payments from restricted subsidiaries, enter into transactions with affiliates and sell assets or merge with other companies. The indenture governing the Senior Subordinated Notes also contains various events of

34

---



default, including but not limited to those related to non-payment of principal, interest or fees; violations of certain covenants; certain bankruptcy-related events; invalidity of liens; non-payment of certain legal judgments and cross defaults with certain other indebtedness. We may redeem the Senior Subordinated Notes on or after July 15, 2008. We are required to redeem the Senior Subordinated Notes under certain circumstances involving changes of control. As of March 29, 2008 we were in compliance with all of our financial covenants.

Senior Floating Rate Notes

On January 14, 2005, we completed a private offering of $150.0 million principal amount at maturity of our Senior Floating Rate Notes due 2012, which was issued at a 0.5% discount. We pay interest on the Senior Floating Rate Notes quarterly in cash, in arrears, on January 15, April 15, July 15 and October 15 at a rate per annum, reset quarterly, equal to LIBOR plus 4.0%, starting on April 15, 2005. The Senior Floating Rate Notes are fully and unconditionally guaranteed by our parent and all domestic subsidiaries on a senior unsecured basis. On March 25, 2005 we filed a registration statement with respect to new notes having substantially identical terms as the original notes, as part of an offer to exchange registered notes for the privately issued original Senior Floating Rate Notes. The new notes evidence the same debt as the original Senior Floating Rate Notes, are entitled to the benefits of the indenture governing the original Senior Floating Rate Notes and are treated under the indenture as a single class with the original notes. The exchange offer was completed on May 23, 2005.

The Senior Floating Rate Notes are unsecured, unsubordinated obligations and are effectively subordinated to all of our existing and future secured debt, to the extent of the assets securing such debt, including borrowings under the senior secured credit facility,pari passuwith all future senior unsecured indebtedness, senior in right of payment to all existing and future senior subordinated debt, including our Senior Subordinated Notes due 2012, and effectively behind all of the existing and future liabilities of our subsidiaries, including trade payables.

The indenture governing the Senior Floating Rate Notes contains various affirmative and negative covenants, subject to a number of important limitations and exceptions, including but not limited to those limiting our ability and the ability of our restricted subsidiaries to borrow money, guarantee debt or sell preferred stock, create liens, pay dividends on or redeem or repurchase stock, make specified types of investments, sell stock in our restricted subsidiaries, restrict dividends or other payments from restricted subsidiaries, enter into transactions with affiliates and sell assets or merge with other companies. The indenture governing the Senior Floating Rate Notes also contains various events of default, including but not limited to those related to non-payment of principal, interest or fees; failure to perform or observe certain covenants; inaccuracy of representations and warranties in any material respect, cross defaults with certain other indebtedness, certain bankruptcy related events, monetary judgment defaults and material non-monetary judgment defaults, ERISA (Employee Retirement Income Security Act) defaults and change of control. We can redeem the Senior Floating Rate Notes, in whole or in part, at any time on or after January 15, 2007. In addition, we are required to redeem the Senior Floating Rate Notes under certain circumstances involving changes of control. As of March 29, 2008 we were in compliance with all financial covenants.

Other Debt

On July 19, 2005, we entered into a $2.7 million Term Note, Loan and Security Agreement and Subordination Agreement with a Lender. This note is payable in monthly installments over five years. The interest rate per annum is equal to 2.5% and secured by certain collateral, which was agreed to by the Administrative Agent of the Senior Secured Credit Facility, as amended and restated. Under the terms of this note, we are required to create 108 jobs at the new manufacturing facility in Pennsylvania within three years of the completion of the facility. The Term Note contains customary events of default (subject to customary exceptions, thresholds and grace periods), including, without limitation, nonpayment of principal, interest, fees and failure to perform or observe certain covenants. As of March 29, 2008, we were in compliance with these covenants.

35

---



Interest Rate Swaps

In connection with the offering of the Senior Floating Rate Notes, on January 11, 2005, we entered into interest rate swaps (the ‘‘Swaps’’) with Bank of America, N.A. and Wachovia Bank, N.A to hedge variable interest rate debt. Pursuant to the Swap with Bank of America, N.A., which became effective on January 17, 2006, we swap 3 month LIBOR rates for fixed interest rates of 4.31% on a notional amount of $100.0 million for the period from January 17, 2006 through January 15, 2008, approximately $66.7 million for the period from January 15, 2008 to January 15, 2009 and approximately $33.3 million for the period from January 15, 2009 through January 15, 2010. Pursuant to the Swap with Wachovia Bank, N.A., effective January 15, 2006, we swap 3 month LIBOR rates for fixed interest rates of 4.29% for a notional amount of $50 million for the period from January 15, 2006 through January 15, 2008, approximately $33.3 million for the period from January 15, 2008 to January 15, 2009 and approximately $16.7 million for the period from January 15, 2009 through January 15, 2010. These swaps fix the variable rate portion of the Senior Floating Rate Notes, while there is an additional margin of 4.00% that is fixed.

On January 10, 2008, we entered into an interest rate swap with Wachovia Bank, N.A to hedge variable interest rate debt in connection with our Senior Floating Rate Notes. The swap was entered into to replace a notional amount of $50.0 million that expired January 14, 2008. Pursuant to this swap with Wachovia Bank, N.A., which became effective on January 15, 2008, we swap 3 month LIBOR rates for fixed interest rates of 3.63% on a notional amount of $50.0 million for the period from January 15, 2008 through January 14, 2009. This swap fixes the variable rate portion of the notional amount, while there is an additional margin of 4.00% that is fixed.

The interest rate swaps are accounted for in accordance with Statement of Financial Accounting Standard (‘‘SFAS’’) No. 133,Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 138,Accounting for Certain Derivative Instruments and Certain Hedging Activitiesand SFAS No. 149,Amendment of Statement 133 on Derivative Instruments and Hedging Activities(collectively, ‘‘SFAS 133’’). SFAS 133 establishes accounting and reporting standards for derivative instruments and hedging activities. SFAS 133 requires that all derivatives be recognized as either assets or liabilities at fair value. As of March 29, 2008, the interest rate swaps were recorded as a liability of $2.8 million. For the twenty-six week period ended March 29, 2008, the change in fair value was recognized as a reduction of other comprehensive income of $3.2 million.

Off-Balance Sheet Arrangements

As of March 29, 2008 and September 29, 2007, we had no off-balance sheet arrangements.

36

---



Contractual Obligations and Commitments

The following table represents our contractual commitments associated with our debt and other obligations as of March 29, 2008.

Total


April
2008 to
September
2008


October
2008 to
September
2009


October
2009 to
September
2010


October
2010 to
September
2011


October
2011 to
September
2012


Thereafter(Dollars in Thousands)Contractual ObligationsRevolving credit facility



$
73,836




$
73,836




$
—




$
—




$
—




$
—




$
—Senior Floating Rate Notes




150,000





—





—





—





—





150,000





—Senior Subordinated Notes




150,000





—





—





—





—





150,000





—Term Note




1,306





272





555





479





—





—





—Interest on Notes




114,640





13,574





27,955





28,566





28,680





15,865





—Operating leases




84,362





5,087





9,714





9,475





9,365





7,811





42,910Pension and postretirement payments




12,430





2,227





2,460





2,570





3,081





2,092





—Medical self-insurance




3,698





3,698





—





—





—





—





—Open purchase orders




42,350





42,350





—





—





—





—





—Other commitments




1,018





518





500





—





—





—





—Total contractual obligations



$
633,640




$
141,562




$
41,184




$
41,090




$
41,126




$
325,768




$
42,910CommitmentsOutstanding letters of credit



$
3,682




$
3,682




$
—




$
—




$
—




$
—




$
—Total commitments



$
3,682




$
3,682




$
—




$
—




$
—




$
—




$
—


We adopted FIN 48, ‘‘Accounting for Uncertainty in Income Taxes’’ on September 30, 2007. As of adoption, the total amount of gross unrecognized tax benefits for uncertain tax positions, including positions impacting only the timing of tax benefits was $1.4 million. We do not expect a significant tax payment related to these obligations within the next year. Due to the uncertainty of the timing of these tax positions we have not included this liability in the above table.

We have determined and announced our intention to freeze benefit accruals under the domestic defined benefit plan (‘the Pension Plan’’) effective with the close of business on May 31, 2008. The U.S. plan obligations portion of the pension and postretirement payments listed in the above table reflect actual investment performance as of December 31, 2007 and assumes an 8% annualized rate of return from January 1, 2008 to December 31, 2008.

Financial Position

Our condensed consolidated balance sheet as of March 29, 2008, compared to our condensed consolidated balance sheet as of September 29, 2007, was impacted by the following:

| |   |                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | An increase in accounts receivable, inventory and accounts payable of $32.9 million, $17.3 million and $13.3 million, respectively, due to higher working capital requirements to fund our peak selling season.

| |   |                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------
| | • | An increase in our revolver of $31.3 million to fund our seasonal working capital requirements discussed above.

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Item 3.    Quantitative and Qualitative Disclosures About Market Risk

The Company’s cash flows and earnings are subject to fluctuations resulting from changes in interest rates, foreign currency exchange rates and raw material costs. We manage our exposure to these market risks through internally established policies and procedures and, when deemed appropriate, through the use of derivative financial instruments. Our policy does not allow speculation in derivative instruments for profit or execution of derivative instrument contracts for which there are no underlying exposures. We do not use financial instruments for trading purposes and are not a party to any leveraged derivatives. We monitor our underlying market risk exposures on an ongoing basis and believe that we can modify or adapt our hedging strategies as needed.

Interest Rate Risk

Our primary market risk is interest rate exposure with respect to our floating rate debt. We estimate a 1% change in interest rates would impact us by approximately $1.0 million on a pre-tax basis. The reset interest rate of the Senior Floating Rate Notes at March 29, 2008 was 8.26%. In connection with the offering of the Senior Floating Rate Notes, we entered into two interest rate swaps. These swaps effectively fix the variable interest rate portion of the Senior Floating Rate Notes at notional amounts of $150.0 million for two years beginning January 15, 2006, subsequently amortizing at a rate of $50.0 million per year until the maturity in 2010. The swaps fix the 3 month LIBOR rates at either 4.29% or 4.31% for the duration of the contracts. In January 2008, we entered into a new swap agreement to replace a notional amount of $50,000 that expired January 14, 2008. The swap fixes the 3 month LIBOR rates for a fixed rate of 3.63% for the period from January 15, 2008 through January 14, 2009. See ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations—Debt and Other Obligations—Senior Floating Rate Notes’’ and ‘‘—Interest Rate Swaps.’’

Foreign Operations; Currency Risk

We conduct foreign operations in Canada, Ireland and Mexico and utilize international suppliers and manufacturers. Additionally, we have a Canadian subsidiary that has issued a U.S. dollar denominated intercompany note to a U.S. subsidiary. As a result, we are subject to risk from changes in foreign exchange rates. These changes result in either cumulative translation adjustments, which are included in accumulated other comprehensive income (loss), transaction gains and losses which are included in operations during the period in which they occur or in other income and expense. We do not consider the potential loss resulting from a hypothetical 10% adverse change in quoted foreign currency exchange rates, as of March 29, 2008 to be material. We do not currently manage our foreign exchange risk through the use of derivative instruments.

Raw Material; Commodity Price Risk

We purchase certain raw materials such as resin, steel and wood that are subject to price volatility caused by unpredictable factors. Where possible, we employ fixed rate raw material purchase contracts and customer price adjustments to help us to manage this risk. We do not currently manage our raw materials risk through the use of derivative instruments.

Item 4.    Controls and Procedures

Evaluation of Controls and Procedures

We maintain a system of disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed by us in reports under Rule 13a-14 of the Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’) is accumulated and communicated to management, as appropriate, to allow timely decisions regarding required disclosures. Our management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e)

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and 15d-15(e) under the Exchange Act) as of the end of the period cover by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 29, 2008, our disclosure controls and procedures were not effective in alerting them on a timely basis to information required to be included in our submissions and filings with the SEC because of a material weakness in our internal control over financial reporting that was identified during the quarter ended September 29, 2007 and is discussed in further detail below. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

During the quarter ended September 29, 2007, in connection with the audit of the Company’s consolidated financial statements as of September 29, 2007, an error related to the calculation and review of income taxes was identified, resulting from a material weakness in the Company’s internal control over financial reporting related to the accounting for income taxes. This error resulted from an ineffective review process for the provision and balance sheet presentation of deferred income taxes. This error was corrected in connection with the finalization of the Company’s consolidated financial statements as of September 29, 2007 and had no impact on previously reported periods in fiscal 2007.

The Company is in the process of correcting the material weakness by implementing additional monitoring and oversight controls over the income tax process and improving the process documentation for income taxes to ensure compliance with accounting principles generally accepted in the United States. As of the quarter ended March 29, 2008, this material weakness has not been fully remediated.

Changes in Internal Control over Financial Reporting

Other than actions taken toward the remediation of the material weakness described above, there have not been any changes in our internal control over financial reporting (as term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II.    OTHER INFORMATION

Item 1.    Legal Proceedings

Not applicable

Item 1A.    Risk Factors

See ‘‘Risk Factors’’ disclosed in the Form 10-K for the fiscal year ended September 29, 2007.

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

None

Item 3.    Defaults Upon Senior Securities

None

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

None

Item 5.    Other Information

None

Item 6.    Exhibits

Exhibit 10.1


Employment Agreement, dated as of April 30, 2008 among Ames True Temper, Inc., and Lawrence D. Baab.Exhibit 31.1


Certification of Chief Executive Officer Pursuant to Rules 13a-14 and 15d-14, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Exhibit 31.2


Certification of Chief Financial Officer Pursuant to Rules 13a-14 and 15d-14, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Exhibit 32.1


Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.Exhibit 32.2


Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


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AMES TRUE TEMPER, INC.

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.

AMES TRUE TEMPER, INC.


Date: May 13, 2008


/s/ Richard DellRichard Dell
Director, President and Chief Executive Officer
(Principal Executive Officer)Date: May 13, 2008


/s/ David M. NutiDavid M. Nuti
Chief Financial Officer
(Principal Financial Officer)


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AMES TRUE TEMPER, INC.

EXHIBIT INDEX

Exhibit


Description10.1


Employment Agreement, dated as of April 30, 2008 among Ames True Temper, Inc., and Lawrence D. Baab.31.1


Certification of Chief Executive Officer Pursuant to Rules 13a-14 and 15d-14, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2


Certification of Chief Financial Officer Pursuant to Rules 13a-14 and 15d-14, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1


Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2


Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


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