##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 Form 10-Q
  þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended April 3, 2010
 OR
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from      to
 Commission File Number 333-118086
 AMES TRUE TEMPER, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    22-2335400(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)465 Railroad Avenue, Camp Hill, Pennsylvania
    
    17011(Address of principal executive offices)
    
    (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
  þ o
  o o
  Large accelerated filer o   
    Accelerated filer o
    Non-accelerated filer þ
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ




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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 April 3, 2010
and October 3, 2009
    
    
    1Condensed Consolidated Statements of Operations for the
thirteen week periods ended April 3, 2010 and March 28,
2009
    
    
    2Condensed Consolidated Statements of Operations for the
twenty-six week periods ended April 3, 2010 and March 28,
2009
    
    
    3Condensed Consolidated Statements of Cash Flows for the
twenty-six week periods ended April 3, 2010 and March 28,
2009
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    27Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    38Item 4T. Controls and Procedures
    
    
    39PART 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. [Removed and Reserved]
    
    
    40Item 5. Other Information
    
    
    40Item 6. Exhibits
    
    
    41Signatures
    
    
    42EX-10.1EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 ATT Holding Co.
 
 Condensed Consolidated Balance Sheets
 (Dollars In Thousands Except Per Share Amounts)
 (Unaudited)
 April 3,
    
    
    October 3,2010
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    19,468
    
    
    $
    33,609Trade receivables, net
    
    
    93,491
    
    
    
    42,449Inventories
    
    
    101,361
    
    
    
    90,305Prepaid expenses and other current assets
    
    
    5,955
    
    
    
    6,315Total current assets
    
    
    220,275
    
    
    
    172,678Property, plant and equipment, net
    
    
    40,699
    
    
    
    44,239Intangibles, net
    
    
    53,561
    
    
    
    53,681Goodwill
    
    
    58,643
    
    
    
    57,494Other noncurrent assets
    
    
    5,260
    
    
    
    6,531Total assets
    
    $
    378,438
    
    
    $
    334,623Liabilities and stockholders deficitCurrent liabilities:Trade payables
    
    $
    37,380
    
    
    $
    18,214Accrued interest payable
    
    
    5,152
    
    
    
    5,392Accrued expenses and other current liabilities
    
    
    24,745
    
    
    
    26,642Revolving loan
    
    
    28,500
    
    
    
    17,500Current portion of long-term debt and capital lease obligations
    
    
    252
    
    
    
    489Total current liabilities
    
    
    96,029
    
    
    
    68,237Deferred income taxes
    
    
    15,865
    
    
    
    13,672Long-term debt
    
    
    299,902
    
    
    
    299,791Accrued retirement benefits
    
    
    51,974
    
    
    
    51,836Other liabilities
    
    
    12,284
    
    
    
    12,661Total liabilities
    
    
    476,054
    
    
    
    446,197Commitments 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 April 3, 2010 and October 3, 2009
(Liquidation preference of $62,495 at April 3, 2010)
    
    
    
    
    
    
    Common
stockClass A, $.0001 per share par value; 1,600,000
shares authorized; 726,556 shares issued and outstanding as of
April 3, 2010 and October 3, 2009
    
    
    
    
    
    
    Common
stockClass B, $.0001 per share par value; 300,000
shares authorized; 267,448 shares issued and outstanding as of
April 3, 2009 and October 3, 2009
    
    
    
    
    
    
    Additional paid-in capital
    
    
    111,172
    
    
    
    111,168Predecessor basis adjustment
    
    
    (13,539
    )
    
    
    (13,539
    )Accumulated deficit
    
    
    (157,865
    )
    
    
    (167,272
    )Accumulated other comprehensive loss
    
    
    (37,384
    )
    
    
    (41,931
    )Total stockholders deficit
    
    
    (97,616
    )
    
    
    (111,574
    )Total liabilities and stockholders deficit
    
    $
    378,438
    
    
    $
    334,623
 See accompanying notes.
 1




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ATT Holding Co.
 
 Condensed Consolidated Statements of Operations
 (Dollars In Thousands)
 (Unaudited)
 Thirteen Week Period EndedApril 3,
    
    
    March 28,2010
    
    
    2009Net sales
    
    $
    139,379
    
    
    $
    142,293Cost of goods sold
    
    
    97,578
    
    
    
    107,490Gross profit
    
    
    41,801
    
    
    
    34,803Selling, general and administrative expenses
    
    
    23,774
    
    
    
    22,502(Gain) loss on disposal of fixed assets
    
    
    (92
    )
    
    
    270Amortization of intangible assets
    
    
    305
    
    
    
    304Operating income
    
    
    17,814
    
    
    
    11,727Interest expense
    
    
    6,661
    
    
    
    7,364Other expense
    
    
    692
    
    
    
    1,073Income before income taxes
    
    
    10,461
    
    
    
    3,290Income tax expense
    
    
    2,413
    
    
    
    1,123Net income
    
    $
    8,048
    
    
    $
    2,167
 See accompanying notes.
 2




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##### Table of Contents



ATT Holding Co.
 
 Condensed Consolidated Statements of Operations
 (Dollars In Thousands)
 (Unaudited)
 Twenty-Six Week Period EndedApril 3,
    
    
    March 28,2010
    
    
    2009Net sales
    
    $
    225,778
    
    
    $
    234,627Cost of goods sold
    
    
    156,806
    
    
    
    171,939Gross profit
    
    
    68,972
    
    
    
    62,688Selling, general and administrative expenses
    
    
    39,671
    
    
    
    40,300(Gain) loss on disposal of fixed assets
    
    
    (157
    )
    
    
    302Amortization of intangible assets
    
    
    609
    
    
    
    609Impairment charge
    
    
    
    
    
    
    476Operating income
    
    
    28,849
    
    
    
    21,001Interest expense
    
    
    13,482
    
    
    
    15,335Other expense
    
    
    1,892
    
    
    
    12,436Income (loss) before income taxes
    
    
    13,475
    
    
    
    (6,770
    )Income tax expense
    
    
    4,068
    
    
    
    1,301Net income (loss)
    
    $
    9,407
    
    
    $
    (8,071
    )
 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 EndedApril 3,
    
    
    March 28,2010
    
    
    2009Operating activitiesNet income (loss)
    
    $
    9,407
    
    
    $
    (8,071
    )Adjustments to reconcile net income (loss) to net cash used in
operating activities:Depreciation expense
    
    
    6,616
    
    
    
    7,943Amortization of intangible assets
    
    
    609
    
    
    
    609Amortization of loan fees
    
    
    1,085
    
    
    
    1,110(Benefit from) provision for deferred taxes
    
    
    (382
    )
    
    
    938Provision for bad debts
    
    
    65
    
    
    
    208Amortization of bond discount
    
    
    54
    
    
    
    54(Gain) loss on disposal of fixed assets
    
    
    (157
    )
    
    
    302Unrealized losses
    
    
    1,602
    
    
    
    13,682Impairment charges
    
    
    
    
    
    
    476Changes in assets and liabilities:Trade receivables
    
    
    (50,692
    )
    
    
    (29,494
    )Inventories
    
    
    (10,031
    )
    
    
    (23,974
    )Prepaid expenses and other assets
    
    
    530
    
    
    
    1,697Trade payables
    
    
    18,815
    
    
    
    1,856Accrued expenses and other liabilities
    
    
    (1,853
    )
    
    
    (3,413
    )Net cash used in operating activities
    
    
    (24,332
    )
    
    
    (36,077
    )Investing activitiesCash paid for property, plant and equipment
    
    
    (2,543
    )
    
    
    (3,908
    )Proceeds from sale of property, plant and equipment
    
    
    284
    
    
    
    39Net cash used in investing activities
    
    
    (2,259
    )
    
    
    (3,869
    )Financing activitiesRepayments of long-term debt
    
    
    (283
    )
    
    
    (275
    )Borrowings on revolving loan
    
    
    70,050
    
    
    
    99,590Repayments on revolving loan
    
    
    (59,050
    )
    
    
    (57,500
    )Principal payments under capital lease obligations
    
    
    (19
    )
    
    
    (3
    )Net cash provided by financing activities
    
    
    10,698
    
    
    
    41,812Effect of exchange rate changes on cash and cash equivalents
    
    
    1,752
    
    
    
    (2,652
    )Decrease in cash and cash equivalents
    
    
    (14,141
    )
    
    
    (786
    )Cash and cash equivalents at beginning of period
    
    
    33,609
    
    
    
    17,159Cash and cash equivalents at end of period
    
    $
    19,468
    
    
    $
    16,373Supplemental Cash Flow InformationCash paid for interest
    
    $
    12,663
    
    
    $
    15,273Cash paid for income taxes
    
    $
    1,303
    
    
    $
    155Property, plant and equipment in trade payables at end of period
    
    $
    303
    
    
    $
    323Equipment acquired under capital lease obligations
    
    $
    122
    
    
    $
    
 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
   2. Recent Accounting Pronouncements
 Adopted
   
    
    Recognizes and measures in its financial statements the identifiable assets acquired,
the liabilities assumed and any noncontrolling interest in the acquiree;
    
    Recognizes and measures the goodwill acquired in the business combination or a gain
from a bargain purchase; and
    
    Determines what information to disclose to enable users of the financial statements
to evaluate the nature and financial effects of the business combination.
    5




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ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
  To Be Adopted
   3. Inventories
  April 3,
    
    
    October 3,2010
    
    
    2009Finished goods
    
    $
    65,331
    
    
    $
    51,161Work in process
    
    
    12,420
    
    
    
    14,595Raw materials
    
    
    23,610
    
    
    
    24,549$
    101,361
    
    
    $
    90,305
 4. Goodwill and Other Intangibles
  United States
    
    
    Canada
    
    
    TotalGoodwill at October 3, 2009
    
    $
    43,605
    
    
    $
    13,889
    
    
    $
    57,494Currency translation adjustments
    
    
    
    
    
    
    1,149
    
    
    
    1,149Goodwill at April 3, 2010
    
    $
    43,605
    
    
    $
    15,038
    
    
    $
    58,643
 6




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
  April 3, 2010
    
    
    October 3, 2009Gross Carrying
    
    
    Accumulated
    
    
    Gross Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationIndefinite lived intangible assets:Trade names
    
    $
    48,321
    
    
    $
    
    
    
    $
    47,879
    
    
    $
    Finite lived intangible assets:Technology (patents)
    
    
    1,356
    
    
    
    1,165
    
    
    
    1,356
    
    
    
    1,142Non-compete agreements
    
    
    
    
    
    
    
    
    
    
    976
    
    
    
    965Customer relationships
    
    
    11,664
    
    
    
    6,615
    
    
    
    11,617
    
    
    
    6,04013,020
    
    
    
    7,780
    
    
    
    13,949
    
    
    
    8,147$
    61,341
    
    
    $
    7,780
    
    
    $
    61,828
    
    
    $
    8,147
  April 2010
 September 2010
    
    $
    600Fiscal 2011
    
    
    1,200Fiscal 2012
    
    
    1,180Fiscal 2013
    
    
    1,166Fiscal 2014
    
    
    895Thereafter
    
    
    199$
    5,240
 5. Income Taxes
     7




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 6. Debt Arrangements
  April 3,
    
    
    October 3,2010
    
    
    2009Revolving Loan (a)
    
    $
    28,500
    
    
    $
    17,500Senior Floating Rate Notes, net of unamortized
discount of $187 and $241, respectively
    
    
    149,813
    
    
    
    149,759Senior Subordinated Notes
    
    
    150,000
    
    
    
    150,000Term Note
    
    
    196
    
    
    
    479Capital lease obligations
    
    
    145
    
    
    
    42Total debt
    
    
    328,654
    
    
    
    317,780Less:Short-term Revolving Loan
    
    
    (28,500
    )
    
    
    (17,500
    )Current portion of capital lease obligations
    
    
    (56
    )
    
    
    (10
    )Current portion of long-term debt
    
    
    (196
    )
    
    
    (479
    )Long-term debt
    
    $
    299,902
    
    
    $
    299,791
 
 (a)
    
    The Company has commenced a process to extend the maturity of the Revolving Loan or to
refinance borrowings prior to maturity in April 2011. Letters of
    
    
    
    
    
    (c)Borrowing
    
    Credit
    
    (b)
    
    InterestMaximum
    
    Base as of
    
    Outstanding as
    
    Availability
    
    Rate as ofBorrowing
    
    April
    
    of April
    
    as of April
    
    April
    
    ExpirationAmount
    
    3, 2010
    
    3, 2010
    
    3, 2010
    
    3, 2010
    
    DateRevolving Loan
    
    $
    130,000
    
    
    $
    116,816
    
    
    $
    3,268
    
    
    $
    85,048
    
    
    
    2.0
    %
    
    Apr 7, 2011
 (e)

    
    
    
    
    (f)Original
    
    
    (d)
    
    
    Interest

    
    Maturity

    
    Call OptionPrincipal
    
    
    Interest Rate
    
    
    Payments
    
    Date
    
    DateJan 15, Apr 15,Senior Floating Rate Notes
    
    $
    150,000
    
    
    LIBOR + 4%
    
    Jul 15, Oct 15
    
    Jan 15, 2012
    
    Jan 15, 2007Senior Subordinated Notes
    
    
    150,000
    
    
    
    10
    %
    
    Jan 15, Jul 15
    
    Jul 15, 2012
    
    Jul 15, 2008Term Note
    
    
    2,700
    
    
    
    2.5
    %
    
    Monthly
    
    Jul 19, 2010
    
    
    

    n/a
 
 (b)
    
    Total amount available is limited by the amount of eligible accounts receivable,
inventory, machinery and equipment, and real estate less letters of credit outstanding.(c)
    
    The interest rate applicable to the loans under the Revolving Loan is either 1) the
Eurodollar Rate or London Interbank Offered Rate (LIBOR) plus a margin of 1.75% to 2.75%,
or 2) the Base Rate plus a margin of 0.50% to 1.50%. The Base Rate is calculated at 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 by the Amended and Restated Senior Secured
Credit Agreement.(d)
    
    LIBOR represents the three month London Interbank Offered Rate which resets quarterly.
LIBOR was .25% as of January 13, 2010. January 13, 2010 is the reset date for the April 15,
2010 interest payment.(e)
    
    Interest payments are in cash and paid in arrears.(f)
    
    The Senior Floating Rate Notes do not have a redemption premium. The Senior
Subordinated Notes have a redemption price of 102.5% of principal on or after July 15, 2009
and 100% of principal on or after July 15, 2010. 8




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ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 Interest Rate Swaps
  (a)EffectiveNotional
    
    
    InterestReceive

    
    Pay
    
    
    Amount
    
    
    RateJanuary 15, 2010 through January 15, 2011
    
    3-month LIBOR
    
    
    1.90
    %
    
    
    150,000
    
    
    
    5.90
    %January 18, 2011 through January 15, 2012
    
    3-month LIBOR
    
    
    2.50
    %
    
    
    150,000
    
    
    
    6.50
    %
 
 (a)
    
    Represents the effective interest rate on the respective portion of the Senior Floating
Rate Notes including the contractual terms of the interest rate swap for the periods
indicated. 7. Pension and Other Post-retirement Benefits
 Pension Benefits
    
    
    Other BenefitsThirteen Week Period Ended
    
    
    Thirteen Week Period EndedApril 3,
    
    
    March 28,
    
    
    April 3,
    
    
    March 28,2010
    
    
    2009
    
    
    2010
    
    
    2009Service Cost
    
    $
    34
    
    
    $
    109
    
    
    $
    1
    
    
    $
    Interest Cost
    
    
    2,096
    
    
    
    2,149
    
    
    
    21
    
    
    
    22Expected return on plan assets
    
    
    (2,429
    )
    
    
    (2,585
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    Amortization of unrecognized net
loss (gain)
    
    
    726
    
    
    
    98
    
    
    
    (29
    )
    
    
    (29
    )Net periodic benefit cost (credit)
    
    $
    427
    
    
    $
    (223
    )
    
    $
    (7
    )
    
    $
    (7
    )Employer contributions
    
    $
    283
    
    
    $
    61
    
    
    $
    14
    
    
    $
    
 Pension Benefits
    
    
    Other BenefitsTwenty-Six Week Period Ended
    
    
    Twenty-Six Week Period EndedApril 3,
    
    
    March 28,
    
    
    April 3,
    
    
    March 28,2010
    
    
    2009
    
    
    2010
    
    
    2009Service Cost
    
    $
    71
    
    
    $
    218
    
    
    $
    2
    
    
    $
    1Interest Cost
    
    
    4,201
    
    
    
    4,298
    
    
    
    41
    
    
    
    44Expected return on plan assets
    
    
    (4,867
    )
    
    
    (5,170
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    Amortization of unrecognized net
loss (gain)
    
    
    1,453
    
    
    
    196
    
    
    
    (57
    )
    
    
    (59
    )Net periodic benefit cost (credit)
    
    $
    858
    
    
    $
    (446
    )
    
    $
    (14
    )
    
    $
    (14
    )Employer contributions
    
    $
    571
    
    
    $
    2,230
    
    
    $
    27
    
    
    $
    
 9




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ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 8. Other Comprehensive Income (Loss)
 Thirteen Week Period EndedApril 3,
    
    
    March 28,2010
    
    
    2009Net income
    
    $
    8,048
    
    
    $
    2,167Other comprehensive income (loss):Currency translation adjustment
    
    
    2,533
    
    
    
    359Fair value adjustments of swaps, net of tax
    
    
    (660
    )
    
    
    (849
    )Comprehensive income
    
    $
    9,921
    
    
    $
    1,677
 Twenty-Six Week Period EndedApril 3,
    
    
    March 29,2010
    
    
    2008Net income (loss)
    
    $
    9,407
    
    
    $
    (8,071
    )Other comprehensive income (loss):Currency translation adjustment
    
    
    4,743
    
    
    
    5,678Fair value adjustments of swaps, net of tax
    
    
    (196
    )
    
    
    (1,449
    )Effect of pension measurement date provision, net of tax
    
    
    
    
    
    
    95Comprehensive income (loss)
    
    $
    13,954
    
    
    $
    (3,747
    )
 9. Segment Information
  Thirteen Week Period EndedApril 3, 2010United States
    
    
    Canada
    
    
    Other
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    116,832
    
    
    $
    20,948
    
    
    $
    1,599
    
    
    $
    
    
    
    $
    139,379Intersegment sales
    
    
    3,483
    
    
    
    2,427
    
    
    
    
    
    
    
    (5,910
    )
    
    
    Operating income (loss)
    
    
    14,165
    
    
    
    3,771
    
    
    
    (122
    )
    
    
    
    
    
    
    17,814Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,661Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    692Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    10,461
 10




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 Thirteen Week Period EndedMarch 28, 2009United States
    
    
    Canada
    
    
    Other
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    117,107
    
    
    $
    24,026
    
    
    $
    1,160
    
    
    $
    
    
    
    $
    142,293Intersegment sales
    
    
    5,339
    
    
    
    547
    
    
    
    587
    
    
    
    (6,473
    )
    
    
    Operating income (loss)
    
    
    8,855
    
    
    
    3,446
    
    
    
    (574
    )
    
    
    
    
    
    
    11,727Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,364Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,073Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3,290
 Twenty-Six Week Period EndedApril 3, 2010United States
    
    
    Canada
    
    
    Other
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    181,786
    
    
    $
    41,519
    
    
    $
    2,473
    
    
    $
    
    
    
    $
    225,778Intersegment sales
    
    
    4,636
    
    
    
    5,601
    
    
    
    
    
    
    
    (10,237
    )
    
    
    Operating income (loss)
    
    
    20,479
    
    
    
    8,941
    
    
    
    (571
    )
    
    
    
    
    
    
    28,849Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,482Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,892Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    13,475
 Twenty-Six Week Period EndedMarch 28, 2009United States
    
    
    Canada
    
    
    Other
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    183,607
    
    
    $
    48,351
    
    
    $
    2,669
    
    
    $
    
    
    
    $
    234,627Intersegment sales
    
    
    7,139
    
    
    
    1,458
    
    
    
    1,169
    
    
    
    (9,766
    )
    
    
    Operating income (loss)
    
    
    12,416
    
    
    
    9,332
    
    
    
    (747
    )
    
    
    
    
    
    
    21,001Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,335Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,436Loss before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (6,770
    )
  April 3,
    
    
    October 3,2010
    
    
    2009United States
    
    $
    299,084
    
    
    $
    242,774Canada
    
    
    73,235
    
    
    
    84,987Other
    
    
    6,119
    
    
    
    6,862Total
    
    $
    378,438
    
    
    $
    334,623
 11




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 10. Other Expense
  Thirteen Week Period EndedApril 3,
    
    
    March 28,2010
    
    
    2009Unrealized loss
    
    $
    520
    
    
    $
    1,840Realized loss (gain)
    
    
    172
    
    
    
    (767
    )Total
    
    $
    692
    
    
    $
    1,073
 Twenty-Six Week Period EndedApril 3,
    
    
    March 28,2010
    
    
    2009Unrealized loss
    
    $
    1,602
    
    
    $
    13,682Realized loss (gain)
    
    
    290
    
    
    
    (1,246
    )Total
    
    $
    1,892
    
    
    $
    12,436
    11. Condensed Guarantor Data
  12




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##### Table of Contents



ATT HOLDING CO.  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Dollars in Thousands)  (Unaudited)
    13




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##### Table of Contents



ATT HOLDING CO.  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Dollars in Thousands)  (Unaudited)
 ATT Holding Co.
Condensed Consolidating Balance Sheet
As of April 3, 2010
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper, Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    35
    
    
    $
    7
    
    
    $
    19,426
    
    
    $
    
    
    
    $
    19,468Trade receivables, net
    
    
    
    
    
    
    85,193
    
    
    
    
    
    
    
    8,298
    
    
    
    
    
    
    
    93,491Inventories
    
    
    
    
    
    
    82,654
    
    
    
    
    
    
    
    18,707
    
    
    
    
    
    
    
    101,361Prepaid expenses and other
current assets
    
    
    
    
    
    
    4,733
    
    
    
    37
    
    
    
    1,185
    
    
    
    
    
    
    
    5,955Total current assets
    
    
    
    
    
    
    172,615
    
    
    
    44
    
    
    
    47,616
    
    
    
    
    
    
    
    220,275Property, plant and equipment, net
    
    
    
    
    
    
    29,761
    
    
    
    
    
    
    
    10,938
    
    
    
    
    
    
    
    40,699Intangibles, net
    
    
    
    
    
    
    4,565
    
    
    
    41,900
    
    
    
    7,096
    
    
    
    
    
    
    
    53,561Goodwill
    
    
    
    
    
    
    43,605
    
    
    
    
    
    
    
    15,038
    
    
    
    
    
    
    
    58,643Other noncurrent assets
    
    
    
    
    
    
    5,225
    
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    5,260Intercompany receivable
    
    
    
    
    
    
    30,708
    
    
    
    179,352
    
    
    
    5,062
    
    
    
    (215,122
    )
    
    
    Investment in subsidiaries
    
    
    
    
    
    
    265,419
    
    
    
    172,275
    
    
    
    
    
    
    
    (437,694
    )
    
    
    Total assets
    
    $
    
    
    
    $
    551,898
    
    
    $
    393,571
    
    
    $
    85,785
    
    
    $
    (652,816
    )
    
    $
    378,438Liabilities and stockholders
(deficit) equityCurrent liabilities:Trade payables
    
    $
    
    
    
    $
    31,283
    
    
    $
    43
    
    
    $
    6,054
    
    
    $
    
    
    
    $
    37,380Accrued interest payable
    
    
    
    
    
    
    5,152
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,152Accrued expenses and other
current liabilities
    
    
    
    
    
    
    17,011
    
    
    
    
    
    
    
    7,734
    
    
    
    
    
    
    
    24,745Revolving loan
    
    
    
    
    
    
    28,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,500Current portion of long-term
debt and capital lease
obligations
    
    
    
    
    
    
    242
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    252Total current liabilities
    
    
    
    
    
    
    82,188
    
    
    
    43
    
    
    
    13,798
    
    
    
    
    
    
    
    96,029Deferred income taxes
    
    
    
    
    
    
    1,544
    
    
    
    13,233
    
    
    
    1,088
    
    
    
    
    
    
    
    15,865Long-term debt
    
    
    
    
    
    
    299,877
    
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    299,902Accrued retirement benefits
    
    
    
    
    
    
    51,099
    
    
    
    
    
    
    
    875
    
    
    
    
    
    
    
    51,974Other liabilities
    
    
    
    
    
    
    10,774
    
    
    
    1,366
    
    
    
    144
    
    
    
    
    
    
    
    12,284Intercompany payable
    
    
    
    
    
    
    203,882
    
    
    
    311
    
    
    
    10,929
    
    
    
    (215,122
    )
    
    
    Cumulative losses in subsidiaries
    
    
    97,616
    
    
    
    150
    
    
    
    164
    
    
    
    
    
    
    
    (97,930
    )
    
    
    Total liabilities
    
    
    97,616
    
    
    
    649,514
    
    
    
    15,117
    
    
    
    26,859
    
    
    
    (313,052
    )
    
    
    476,054Commitments and contingenciesStockholders (deficit) equity:Preferred
stock-Series A
    
    
    
    
    
    
    
    
    
    
    118,249
    
    
    
    49,622
    
    
    
    (167,871
    )
    
    
    Common stock-Class A
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock-Class B
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid-in capital
    
    
    111,172
    
    
    
    111,172
    
    
    
    154,502
    
    
    
    
    
    
    
    (265,674
    )
    
    
    111,172Predecessor basis adjustment
    
    
    (13,539
    )
    
    
    (13,539
    )
    
    
    
    
    
    
    
    
    
    
    13,539
    
    
    
    (13,539
    )(Accumulated deficit) retained
earnings
    
    
    (157,865
    )
    
    
    (157,865
    )
    
    
    90,038
    
    
    
    (5,363
    )
    
    
    73,190
    
    
    
    (157,865
    )Accumulated other comprehensive
(loss) income
    
    
    (37,384
    )
    
    
    (37,384
    )
    
    
    15,665
    
    
    
    14,667
    
    
    
    7,052
    
    
    
    (37,384
    )Total stockholders (deficit) equity
    
    
    (97,616
    )
    
    
    (97,616
    )
    
    
    378,454
    
    
    
    58,926
    
    
    
    (339,764
    )
    
    
    (97,616
    )Total liabilities and stockholders
(deficit) equity
    
    $
    
    
    
    $
    551,898
    
    
    $
    393,571
    
    
    $
    85,785
    
    
    $
    (652,816
    )
    
    $
    378,438
 14




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 ATT Holding Co.
Condensed Consolidating Balance Sheet
As of October 3, 2009
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper, Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    454
    
    
    $
    9
    
    
    $
    33,146
    
    
    $
    
    
    
    $
    33,609Trade receivables, net
    
    
    
    
    
    
    34,431
    
    
    
    
    
    
    
    8,018
    
    
    
    
    
    
    
    42,449Inventories
    
    
    
    
    
    
    71,933
    
    
    
    
    
    
    
    18,372
    
    
    
    
    
    
    
    90,305Prepaid expenses and other
current assets
    
    
    
    
    
    
    4,450
    
    
    
    
    
    
    
    1,865
    
    
    
    
    
    
    
    6,315Total current assets
    
    
    
    
    
    
    111,268
    
    
    
    9
    
    
    
    61,401
    
    
    
    
    
    
    
    172,678Property, plant and equipment, net
    
    
    
    
    
    
    33,246
    
    
    
    
    
    
    
    10,993
    
    
    
    
    
    
    
    44,239Intangibles, net
    
    
    
    
    
    
    5,098
    
    
    
    41,900
    
    
    
    6,683
    
    
    
    
    
    
    
    53,681Goodwill
    
    
    
    
    
    
    43,605
    
    
    
    
    
    
    
    13,889
    
    
    
    
    
    
    
    57,494Other noncurrent assets
    
    
    
    
    
    
    6,531
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,531Intercompany receivable
    
    
    
    
    
    
    29,980
    
    
    
    168,715
    
    
    
    2,941
    
    
    
    (201,636
    )
    
    
    Investment in subsidiaries
    
    
    
    
    
    
    248,762
    
    
    
    163,010
    
    
    
    
    
    
    
    (411,772
    )
    
    
    Total assets
    
    $
    
    
    
    $
    478,490
    
    
    $
    373,634
    
    
    $
    95,907
    
    
    $
    (613,408
    )
    
    $
    334,623Liabilities and stockholders
(deficit) equityCurrent liabilities:Trade payables
    
    $
    
    
    
    $
    12,485
    
    
    $
    31
    
    
    $
    5,698
    
    
    $
    
    
    
    $
    18,214Accrued interest payable
    
    
    
    
    
    
    5,392
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,392Accrued expenses and other
current liabilities
    
    
    
    
    
    
    19,189
    
    
    
    113
    
    
    
    7,340
    
    
    
    
    
    
    
    26,642Revolving loan
    
    
    
    
    
    
    17,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,500Current portion of long-term
debt and capital lease
obligations
    
    
    
    
    
    
    479
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    489Total current liabilities
    
    
    
    
    
    
    55,045
    
    
    
    144
    
    
    
    13,048
    
    
    
    
    
    
    
    68,237Deferred income taxes
    
    
    
    
    
    
    1,544
    
    
    
    11,115
    
    
    
    1,013
    
    
    
    
    
    
    
    13,672Long-term debt
    
    
    
    
    
    
    299,759
    
    
    
    
    
    
    
    32
    
    
    
    
    
    
    
    299,791Accrued retirement benefits
    
    
    
    
    
    
    50,893
    
    
    
    
    
    
    
    943
    
    
    
    
    
    
    
    51,836Other liabilities
    
    
    
    
    
    
    11,370
    
    
    
    1,184
    
    
    
    107
    
    
    
    
    
    
    
    12,661Intercompany payable
    
    
    
    
    
    
    171,453
    
    
    
    
    
    
    
    30,183
    
    
    
    (201,636
    )
    
    
    Cumulative losses in subsidiaries
    
    
    111,574
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (111,574
    )
    
    
    Total liabilities
    
    
    111,574
    
    
    
    590,064
    
    
    
    12,443
    
    
    
    45,326
    
    
    
    (313,210
    )
    
    
    446,197Commitments and contingenciesStockholders (deficit) equity:Preferred
stock-Series A
    
    
    
    
    
    
    
    
    
    
    118,249
    
    
    
    49,622
    
    
    
    (167,871
    )
    
    
    Common stock-Class A
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock-Class B
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid-in capital
    
    
    111,168
    
    
    
    111,168
    
    
    
    154,502
    
    
    
    
    
    
    
    (265,670
    )
    
    
    111,168Predecessor basis adjustment
    
    
    (13,539
    )
    
    
    (13,539
    )
    
    
    
    
    
    
    
    
    
    
    13,539
    
    
    
    (13,539
    )(Accumulated deficit) retained
earnings
    
    
    (167,272
    )
    
    
    (167,272
    )
    
    
    77,681
    
    
    
    (8,711
    )
    
    
    98,302
    
    
    
    (167,272
    )Accumulated other comprehensive
(loss) income
    
    
    (41,931
    )
    
    
    (41,931
    )
    
    
    10,759
    
    
    
    9,670
    
    
    
    21,502
    
    
    
    (41,931
    )Total stockholders (deficit) equity
    
    
    (111,574
    )
    
    
    (111,574
    )
    
    
    361,191
    
    
    
    50,581
    
    
    
    (300,198
    )
    
    
    (111,574
    )Total liabilities and stockholders
(deficit) equity
    
    $
    
    
    
    $
    478,490
    
    
    $
    373,634
    
    
    $
    95,907
    
    
    $
    (613,408
    )
    
    $
    334,623
 15




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##### Table of Contents



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 April 3, 2010
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper, Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    119,458
    
    
    $
    
    
    
    $
    25,633
    
    
    $
    (5,712
    )
    
    $
    139,379Cost of goods sold
    
    
    
    
    
    
    85,788
    
    
    
    
    
    
    
    17,502
    
    
    
    (5,712
    )
    
    
    97,578Gross profit
    
    
    
    
    
    
    33,670
    
    
    
    
    
    
    
    8,131
    
    
    
    
    
    
    
    41,801Selling, general and
administrative expenses
    
    
    
    
    
    
    19,234
    
    
    
    66
    
    
    
    4,474
    
    
    
    
    
    
    
    23,774Gain on disposal of fixed assets
    
    
    
    
    
    
    (84
    )
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    (92
    )Amortization of intangible assets
    
    
    
    
    
    
    267
    
    
    
    
    
    
    
    38
    
    
    
    
    
    
    
    305Operating income (loss)
    
    
    
    
    
    
    14,253
    
    
    
    (66
    )
    
    
    3,627
    
    
    
    
    
    
    
    17,814Interest expense (income)
    
    
    
    
    
    
    9,287
    
    
    
    (2,694
    )
    
    
    68
    
    
    
    
    
    
    
    6,661Other expense (income)
    
    
    
    
    
    
    2,767
    
    
    
    (3,164
    )
    
    
    1,089
    
    
    
    
    
    
    
    692Income before income taxes
    
    
    
    
    
    
    2,199
    
    
    
    5,792
    
    
    
    2,470
    
    
    
    
    
    
    
    10,461Income tax expense
    
    
    
    
    
    
    197
    
    
    
    1,722
    
    
    
    494
    
    
    
    
    
    
    
    2,413Equity in earnings of subsidiaries
    
    
    8,048
    
    
    
    6,046
    
    
    
    2,299
    
    
    
    
    
    
    
    (16,393
    )
    
    
    Net income
    
    $
    8,048
    
    
    $
    8,048
    
    
    $
    6,369
    
    
    $
    1,976
    
    
    $
    (16,393
    )
    
    $
    8,048
 ATT Holding Co.
Condensed Consolidating Statement of Operations
For the Thirteen Week Period Ended March 28, 2009
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper, Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    121,743
    
    
    $
    
    
    
    $
    26,397
    
    
    $
    (5,847
    )
    
    $
    142,293Cost of goods sold
    
    
    
    
    
    
    94,073
    
    
    
    
    
    
    
    19,264
    
    
    
    (5,847
    )
    
    
    107,490Gross profit
    
    
    
    
    
    
    27,670
    
    
    
    
    
    
    
    7,133
    
    
    
    
    
    
    
    34,803Selling, general and administrative
expenses
    
    
    
    
    
    
    18,268
    
    
    
    57
    
    
    
    4,177
    
    
    
    
    
    
    
    22,502Loss on disposal of fixed assets
    
    
    
    
    
    
    270
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    270Amortization of intangible assets
    
    
    
    
    
    
    266
    
    
    
    
    
    
    
    38
    
    
    
    
    
    
    
    304Operating income (loss)
    
    
    
    
    
    
    8,866
    
    
    
    (57
    )
    
    
    2,918
    
    
    
    
    
    
    
    11,727Interest expense (income)
    
    
    
    
    
    
    9,751
    
    
    
    (4,899
    )
    
    
    2,512
    
    
    
    
    
    
    
    7,364Other expense (income)
    
    
    
    
    
    
    2,432
    
    
    
    (2,976
    )
    
    
    1,617
    
    
    
    
    
    
    
    1,073(Loss) income before income taxes
    
    
    
    
    
    
    (3,317
    )
    
    
    7,818
    
    
    
    (1,211
    )
    
    
    
    
    
    
    3,290Income tax expense
    
    
    
    
    
    
    43
    
    
    
    227
    
    
    
    853
    
    
    
    
    
    
    
    1,123Equity (loss) in earnings of subsidiaries
    
    
    2,167
    
    
    
    5,527
    
    
    
    (1,446
    )
    
    
    
    
    
    
    (6,248
    )
    
    
    Net income (loss)
    
    $
    2,167
    
    
    $
    2,167
    
    
    $
    6,145
    
    
    $
    (2,064
    )
    
    $
    (6,248
    )
    
    $
    2,167
 16




---



##### Table of Contents



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 April 3, 2010
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper, Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    185,250
    
    
    $
    
    
    
    $
    50,439
    
    
    $
    (9,911
    )
    
    $
    225,778Cost of goods sold
    
    
    
    
    
    
    133,081
    
    
    
    
    
    
    
    33,636
    
    
    
    (9,911
    )
    
    
    156,806Gross profit
    
    
    
    
    
    
    52,169
    
    
    
    
    
    
    
    16,803
    
    
    
    
    
    
    
    68,972Selling, general and
administrative expenses
    
    
    
    
    
    
    31,179
    
    
    
    94
    
    
    
    8,398
    
    
    
    
    
    
    
    39,671Gain on disposal of fixed assets
    
    
    
    
    
    
    (149
    )
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    (157
    )Amortization of intangible assets
    
    
    
    
    
    
    533
    
    
    
    
    
    
    
    76
    
    
    
    
    
    
    
    609Operating income (loss)
    
    
    
    
    
    
    20,606
    
    
    
    (94
    )
    
    
    8,337
    
    
    
    
    
    
    
    28,849Interest expense (income)
    
    
    
    
    
    
    18,671
    
    
    
    (5,740
    )
    
    
    551
    
    
    
    
    
    
    
    13,482Other expense (income)
    
    
    
    
    
    
    3,898
    
    
    
    (4,819
    )
    
    
    2,813
    
    
    
    
    
    
    
    1,892(Loss) income before income taxes
    
    
    
    
    
    
    (1,963
    )
    
    
    10,465
    
    
    
    4,973
    
    
    
    
    
    
    
    13,475Income tax expense
    
    
    
    
    
    
    261
    
    
    
    2,182
    
    
    
    1,625
    
    
    
    
    
    
    
    4,068Equity in earnings of subsidiaries
    
    
    9,407
    
    
    
    11,631
    
    
    
    4,185
    
    
    
    
    
    
    
    (25,223
    )
    
    
    Net income
    
    $
    9,407
    
    
    $
    9,407
    
    
    $
    12,468
    
    
    $
    3,348
    
    
    $
    (25,223
    )
    
    $
    9,407
 ATT Holding Co.
Condensed Consolidating Statement of Operations
For the Twenty-Six Week Period Ended March 28, 2009
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper, Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    189,939
    
    
    $
    
    
    
    $
    53,192
    
    
    $
    (8,504
    )
    
    $
    234,627Cost of goods sold
    
    
    
    
    
    
    144,178
    
    
    
    
    
    
    
    36,265
    
    
    
    (8,504
    )
    
    
    171,939Gross profit
    
    
    
    
    
    
    45,761
    
    
    
    
    
    
    
    16,927
    
    
    
    
    
    
    
    62,688Selling, general and administrative
expenses
    
    
    
    
    
    
    31,925
    
    
    
    100
    
    
    
    8,275
    
    
    
    
    
    
    
    40,300Loss on disposal of fixed assets
    
    
    
    
    
    
    302
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    302Amortization of intangible assets
    
    
    
    
    
    
    533
    
    
    
    
    
    
    
    76
    
    
    
    
    
    
    
    609Impairment charge
    
    
    
    
    
    
    476
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    476Operating income (loss)
    
    
    
    
    
    
    12,525
    
    
    
    (100
    )
    
    
    8,576
    
    
    
    
    
    
    
    21,001Interest expense (income)
    
    
    
    
    
    
    20,056
    
    
    
    (9,788
    )
    
    
    5,067
    
    
    
    
    
    
    
    15,335Other expense (income)
    
    
    
    
    
    
    3,778
    
    
    
    (4,846
    )
    
    
    13,504
    
    
    
    
    
    
    
    12,436(Loss) income before income taxes
    
    
    
    
    
    
    (11,309
    )
    
    
    14,534
    
    
    
    (9,995
    )
    
    
    
    
    
    
    (6,770
    )Income tax expense
    
    
    
    
    
    
    99
    
    
    
    218
    
    
    
    984
    
    
    
    
    
    
    
    1,301(Loss) equity in earnings of subsidiaries
    
    
    (8,071
    )
    
    
    3,337
    
    
    
    (10,198
    )
    
    
    
    
    
    
    14,932
    
    
    
    Net (loss) income
    
    $
    (8,071
    )
    
    $
    (8,071
    )
    
    $
    4,118
    
    
    $
    (10,979
    )
    
    $
    14,932
    
    
    $
    (8,071
    )
 17




---



##### Table of Contents



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 April 3, 2010
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper, Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedOperating activitiesNet income
    
    $
    9,407
    
    
    $
    9,407
    
    
    $
    12,468
    
    
    $
    3,348
    
    
    $
    (25,223
    )
    
    $
    9,407Adjustments to reconcile net income to net
cash used in operating activities:Depreciation expense
    
    
    
    
    
    
    5,589
    
    
    
    
    
    
    
    1,027
    
    
    
    
    
    
    
    6,616Equity in earnings of subsidiaries
    
    
    (9,407
    )
    
    
    (11,631
    )
    
    
    (4,185
    )
    
    
    
    
    
    
    25,223
    
    
    
    Provision for (benefit from) deferred taxes
    
    
    
    
    
    
    
    
    
    
    1,997
    
    
    
    (2,379
    )
    
    
    
    
    
    
    (382
    )Other, net
    
    
    
    
    
    
    1,580
    
    
    
    
    
    
    
    76
    
    
    
    
    
    
    
    1,656Unrealized (gain) loss
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    1,607
    
    
    
    
    
    
    
    1,602Related party non-cash transactions
    
    
    
    
    
    
    (153
    )
    
    
    153
    
    
    
    
    
    
    
    
    
    
    
    Changes in assets and liabilities:Trade receivables
    
    
    
    
    
    
    (50,820
    )
    
    
    
    
    
    
    128
    
    
    
    
    
    
    
    (50,692
    )Inventories
    
    
    
    
    
    
    (10,721
    )
    
    
    
    
    
    
    690
    
    
    
    
    
    
    
    (10,031
    )Prepaid expenses and other current assets
    
    
    
    
    
    
    (259
    )
    
    
    (37
    )
    
    
    826
    
    
    
    
    
    
    
    530Trade payables
    
    
    
    
    
    
    18,799
    
    
    
    12
    
    
    
    4
    
    
    
    
    
    
    
    18,815Accrued expenses and other liabilities
    
    
    
    
    
    
    (2,839
    )
    
    
    190
    
    
    
    796
    
    
    
    
    
    
    
    (1,853
    )Intercompany accounts
    
    
    
    
    
    
    31,725
    
    
    
    (10,600
    )
    
    
    (21,125
    )
    
    
    
    
    
    
    Net cash (used in) provided by operating
activities
    
    
    
    
    
    
    (9,328
    )
    
    
    (2
    )
    
    
    (15,002
    )
    
    
    
    
    
    
    (24,332
    )Investing activitiesCash paid for property, plant and equipment
    
    
    
    
    
    
    (2,081
    )
    
    
    
    
    
    
    (462
    )
    
    
    
    
    
    
    (2,543
    )Proceeds from sale of property, plant and
equipment
    
    
    
    
    
    
    284
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    284Net cash used in investing activities
    
    
    
    
    
    
    (1,797
    )
    
    
    
    
    
    
    (462
    )
    
    
    
    
    
    
    (2,259
    )Financing activitiesRepayments of long-term debt
    
    
    
    
    
    
    (283
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (283
    )Borrowings on revolving loan
    
    
    
    
    
    
    70,050
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    70,050Repayments on revolving loan
    
    
    
    
    
    
    (59,050
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (59,050
    )Principal payments under capital lease
obligations
    
    
    
    
    
    
    (11
    )
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    (19
    )Net cash provided by (used in) financing
activities
    
    
    
    
    
    
    10,706
    
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    10,698Effect of exchange rate changes on cash and
cash equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,752
    
    
    
    
    
    
    
    1,752(Decrease) increase in cash and cash
equivalents
    
    
    
    
    
    
    (419
    )
    
    
    (2
    )
    
    
    (13,720
    )
    
    
    
    
    
    
    (14,141
    )Cash and cash equivalents at beginning of
period
    
    
    
    
    
    
    454
    
    
    
    9
    
    
    
    33,146
    
    
    
    
    
    
    
    33,609Cash and cash equivalents at end of period
    
    $
    
    
    
    $
    35
    
    
    $
    7
    
    
    $
    19,426
    
    
    $
    
    
    
    $
    19,468
 18




---



##### Table of Contents



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 28, 2009
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper, Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedOperating activitiesNet (loss) income
    
    $
    (8,071
    )
    
    $
    (8,071
    )
    
    $
    4,118
    
    
    $
    (10,979
    )
    
    $
    14,932
    
    
    $
    (8,071
    )Adjustments to reconcile (net loss) income
to net cash (used in) provided by operating
activities:Depreciation expense
    
    
    
    
    
    
    6,946
    
    
    
    
    
    
    
    997
    
    
    
    
    
    
    
    7,943Equity in loss (earnings) of subsidiaries
    
    
    8,071
    
    
    
    (3,337
    )
    
    
    10,198
    
    
    
    
    
    
    
    (14,932
    )
    
    
    Provision for deferred taxes
    
    
    
    
    
    
    
    
    
    
    548
    
    
    
    390
    
    
    
    
    
    
    
    938Other, net
    
    
    
    
    
    
    2,128
    
    
    
    
    
    
    
    155
    
    
    
    
    
    
    
    2,283Unrealized loss
    
    
    
    
    
    
    57
    
    
    
    
    
    
    
    13,625
    
    
    
    
    
    
    
    13,682Related party non-cash transactions
    
    
    
    
    
    
    3,502
    
    
    
    (3,600
    )
    
    
    98
    
    
    
    
    
    
    
    Impairment charges
    
    
    
    
    
    
    476
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    476Changes in assets and liabilities:Trade receivables
    
    
    
    
    
    
    (24,006
    )
    
    
    
    
    
    
    (5,488
    )
    
    
    
    
    
    
    (29,494
    )Inventories
    
    
    
    
    
    
    (18,375
    )
    
    
    
    
    
    
    (5,599
    )
    
    
    
    
    
    
    (23,974
    )Prepaid expenses and other current assets
    
    
    
    
    
    
    1,730
    
    
    
    
    
    
    
    (33
    )
    
    
    
    
    
    
    1,697Trade payables
    
    
    
    
    
    
    1,403
    
    
    
    8
    
    
    
    445
    
    
    
    
    
    
    
    1,856Accrued expenses and other liabilities
    
    
    
    
    
    
    (5,294
    )
    
    
    131
    
    
    
    1,750
    
    
    
    
    
    
    
    (3,413
    )Intercompany accounts
    
    
    
    
    
    
    4,484
    
    
    
    (11,398
    )
    
    
    6,914
    
    
    
    
    
    
    
    Net cash (used in) provided by operating
activities
    
    
    
    
    
    
    (38,357
    )
    
    
    5
    
    
    
    2,275
    
    
    
    
    
    
    
    (36,077
    )Investing activitiesCash paid for property, plant and equipment
    
    
    
    
    
    
    (3,590
    )
    
    
    
    
    
    
    (318
    )
    
    
    
    
    
    
    (3,908
    )Proceeds from sale of property, plant and
equipment
    
    
    
    
    
    
    39
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39Net cash used in investing activities
    
    
    
    
    
    
    (3,551
    )
    
    
    
    
    
    
    (318
    )
    
    
    
    
    
    
    (3,869
    )Financing activitiesRepayments of long-term debt
    
    
    
    
    
    
    (275
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (275
    )Borrowings on revolving loan
    
    
    
    
    
    
    99,590
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    99,590Repayments on revolving loan
    
    
    
    
    
    
    (57,500
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57,500
    )Principal payments under capital lease
obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Net cash provided by (used in) financing
activities
    
    
    
    
    
    
    41,815
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    41,812Effect of exchange rate changes on cash and
cash equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,652
    )
    
    
    
    
    
    
    (2,652
    )(Decrease) increase in cash and cash
equivalents
    
    
    
    
    
    
    (93
    )
    
    
    5
    
    
    
    (698
    )
    
    
    
    
    
    
    (786
    )Cash and cash equivalents at beginning of
period
    
    
    
    
    
    
    285
    
    
    
    5
    
    
    
    16,869
    
    
    
    
    
    
    
    17,159Cash and cash equivalents at end of period
    
    $
    
    
    
    $
    192
    
    
    $
    10
    
    
    $
    16,171
    
    
    $
    
    
    
    $
    16,373
 19




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
 12. Related Party Transactions
        20




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
     13. Fair Value Measurements
    
    
    Level 1  Inputs that represent quoted prices for identical instruments in active markets.
    

    Level 2  Inputs that represent quoted prices for similar instruments in active markets,
or quoted prices for identical instruments in non-active markets. Also includes valuation
techniques whose
 21




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
 inputs are derived principally from observable market data other than
quoted prices, such as interest rates or other market-corroborated means.
    

    Level 3  Inputs that are largely unobservable, as little or no market data exists for
the instrument being valued.
   April 3, 2010(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalForeign currency forward contracts
    
    $
    
    
    
    $
    117
    
    
    $
    
    
    
    $
    117Interest rate swaps
    
    $
    
    
    
    $
    2,921
    
    
    $
    
    
    
    $
    2,921Total liabilities
    
    $
    
    
    
    $
    3,038
    
    
    $
    
    
    
    $
    3,038
 October 3, 2009(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalForeign currency forward contracts
    
    $
    
    
    
    $
    113
    
    
    $
    
    
    
    $
    113Total assets
    
    $
    
    
    
    $
    113
    
    
    $
    
    
    
    $
    113Foreign currency forward contracts
    
    $
    
    
    
    $
    171
    
    
    $
    
    
    
    $
    171Interest rate swaps
    
    
    
    
    
    
    2,725
    
    
    
    
    
    
    
    2,725Total liabilities
    
    $
    
    
    
    $
    2,896
    
    
    $
    
    
    
    $
    2,896
  Balance Sheet
    
    Carrying
    
    FairClassification
    
    Value
    
    ValueSenior Floating Rate Notes
    
    Liability
    
    $
    149,813
    
    
    $
    141,750Senior Subordinated Notes
    
    Liability
    
    
    150,000
    
    
    
    146,460
  14. Derivative Instruments and Hedging Activities
  22




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
      April 3, 2010Asset Derivatives
    
    Liability DerivativesQualifies
    
    
    
    
    
    Balance
    
    Pretax Gain
    
    
    
    
    
    Balance
    
    Pretax LossDescription of
    
    for Hedge
    
    Fair
    
    Sheet
    
    Recognized
    
    Fair
    
    Sheet
    
    RecognizedDerivative
    
    Designation
    
    Value
    
    Location
    
    in OCI
    
    Value
    
    Location
    
    in OCIForeign
currency forward
contracts
    
    No
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    117
    
    
    
    (a
    )
    
    $
    Interest rate swaps
    
    Yes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,921
    
    
    
    (b
    )
    
    
    2,921
 
 (a)
    
    The balance sheet location for the foreign currency forward contracts is Accrued
expenses and other current liabilities.(b)
    
    The balance sheet location for the interest rate swaps is Other liabilities. October 3, 2009Asset Derivatives
    
    Liability DerivativesQualifies
    
    
    
    
    
    Balance
    
    Pretax Gain
    
    
    
    
    
    Balance
    
    Pretax LossDescription of
    
    for Hedge
    
    Fair
    
    Sheet
    
    Recognized
    
    Fair
    
    Sheet
    
    RecognizedDerivative
    
    Designation
    
    Value
    
    Location
    
    in AOCI
    
    Value
    
    Location
    
    in AOCIForeign currency forward
contracts
    
    No
    
    $
    113
    
    
    
    (a
    )
    
    $
    
    
    
    $
    171
    
    
    
    (b
    )
    
    $
    Interest rate swaps
    
    Yes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,725
    
    
    
    (c
    )
    
    
    2,725
 
 (a)
    
    The balance sheet location for the foreign currency forward contracts is Prepaid
expenses and other current assets.(b)
    
    The balance sheet location for the foreign currency forward contracts is Accrued
expenses and other current liabilities. (c)
    
    The balance sheet location for the interest rate swaps is Other liabilities.
 23




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
  April 3, 2010Location of pretax
    
    Amount of pretaxgain or (loss)
    
    gain or (loss)
    
    Location of pretax
    
    Amount ofQualifies
    
    reclassed from
    
    reclassed from
    
    gain or (loss)
    
    pretax gain orDescription of
    
    for Hedge
    
    AOCI into
    
    AOCI into
    
    recognized in
    
    (loss) recognizedDerivative
    
    Designation
    
    earnings
    
    earnings
    
    earnings
    
    in earningsForeign
currency forward
contracts
    
    No
    
    
    
    
    
    $
    
    
    
    Other expense
    
    $
    (307
    )Interest rate swaps
    
    Yes
    
    Interest expense
    
    
    (649
    )
    
    
    
    
    
    
    
 March 28, 2009Location of pretax
    
    Amount of pretaxgain or (loss)
    
    gain or (loss)
    
    Location of pretax
    
    Amount ofQualifies
    
    reclassed from
    
    reclassed from
    
    gain or (loss)
    
    pretax gain orDescription of
    
    for Hedge
    
    AOCI into
    
    AOCI into
    
    recognized in
    
    (loss) recognizedDerivative
    
    Designation
    
    earnings
    
    earnings
    
    earnings
    
    in earningsForeign
currency forward
contracts
    
    No
    
    
    
    
    
    $
    
    
    
    Other expense
    
    $
    210Other
    
    No
    
    
    
    
    
    
    
    
    
    SG&A
    
    
    (38
    )Other
    
    No
    
    
    
    
    
    
    
    
    
    Other expense
    
    
    24Interest rate swaps
    
    Yes
    
    Interest expense
    
    
    (329
    )
    
    
    
    
    
    
    
  April 3, 2010Location of pretax
    
    Amount of pretaxgain or (loss)
    
    gain or (loss)
    
    Location of pretax
    
    Amount ofQualifies
    
    reclassed from
    
    reclassed from
    
    gain or (loss)
    
    pretax gain orDescription of
    
    for Hedge
    
    AOCI into
    
    AOCI into
    
    recognized in
    
    (loss) recognizedDerivative
    
    Designation
    
    earnings
    
    earnings
    
    earnings
    
    in earningsForeign
currency forward
contracts
    
    No
    
    
    
    
    
    $
    
    
    
    Other expense
    
    $
    (503
    )Interest rate swaps
    
    Yes
    
    Interest expense
    
    
    (1,427
    )
    
    
    
    
    
    
    
 March 28, 2009Location of pretax
    
    Amount of pretaxgain or (loss)
    
    gain or (loss)
    
    Location of pretax
    
    Amount ofQualifies
    
    reclassed from
    
    reclassed from
    
    gain or (loss)
    
    pretax gain orDescription of
    
    for Hedge
    
    AOCI into
    
    AOCI into
    
    recognized in
    
    (loss) recognizedDerivative
    
    Designation
    
    earnings
    
    earnings
    
    earnings
    
    in earningsForeign
currency forward
contracts
    
    No
    
    
    
    
    
    $
    
    
    
    Other expense
    
    $
    1,847Other
    
    No
    
    
    
    
    
    
    
    
    
    SG&A
    
    
    (48
    )Other
    
    No
    
    
    
    
    
    
    
    
    
    Other expense
    
    
    (57
    )Interest rate swaps
    
    Yes
    
    Interest expense
    
    
    (220
    )
    
    
    
    
    
    
    
 24




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
   15. Commitments and Contingencies
    Balance as of October 3, 2009
    
    $
    2,541Adjustments to estimates
    
    
    Payments
    
    
    1,202Balance as of April 3, 2010
    
    $
    1,339
  25




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
  16. Other
  17. Subsequent Events
  26




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Forward-Looking Statements
   
    
    we depend on a small number of customers for a significant portion of our business;
    
    our results of operations may be adversely impacted by macroeconomic events;
    
    reliance on third party suppliers and manufacturers may impair our ability to meet
customer demands;
    
    if we are unable to obtain raw materials for our products at favorable prices it
could adversely impact our operating performance;
    
    we are subject to risks associated with our foreign operations;
    
    we are subject to risks associated with our operations in China;
    
    unseasonable weather could have a negative impact on our business and financial
results;
    
    our lawn and garden sales are highly seasonal which could impact our cash flow and
operating results;
    
    our industry is highly competitive and we may not be able to compete successfully;
    
    further consolidation in the retail industry may adversely affect our profitability;
    
    a failure to successfully introduce new products could result in a reduction in sales
and floor space at retailers that carry our products;
    
    the products that we manufacture could expose us to product liability claims;
    
    our ability to pay our debt or seek alternative financing may be adversely impacted;
    
    environmental health and safety laws, ordinances, and regulations impose risks and
costs on us;
    
    we depend on the service of key individuals, the loss of any of which could
materially harm our business;
    
    unionized employees could strike or participate in a work stoppage;
    
    we may be required to record impairment charges for goodwill, indefinite-lived
intangible assets and other long-lived assets; and
 27




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##### Table of Contents




    
    we may not be able to acquire complementary lawn and garden product manufacturers or
brands; in addition, our acquisition strategy may negatively impact our operating results,
divert managements attention from operating our core business, and expose us to other
risks.
  Overview
  
    
    Our Business  a general description of our business.
    
    Operations Review  an analysis of our consolidated results of operations.
    
    Liquidity and Capital Resources  an analysis of cash flows, debt and other
obligations, off-balance sheet arrangements and aggregate contractual obligations and an
overview of financial position.
 Our Business
 General
   Operations Review
 Company-Wide
  28




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##### Table of Contents



(Dollars in Millions)
 Q2
    
    
    Q2
    
    
    Increase/(Decrease)2010
    
    
    2009
    
    
    $
    
    
    %Net sales
    
    $
    139.4
    
    
    $
    142.3
    
    
    $
    (2.9
    )
    
    
    (2.0
    )%Cost of goods sold
    
    
    97.6
    
    
    
    107.5
    
    
    
    (9.9
    )
    
    
    (9.2
    )Gross profit
    
    
    41.8
    
    
    
    34.8
    
    
    
    7.0
    
    
    
    20.1Gross profit as a percentage of net sales
    
    
    30.0
    %
    
    
    24.5
    %Selling, general, and administrative expenses
    
    
    23.8
    
    
    
    22.5
    
    
    
    1.3
    
    
    
    5.8(Gain) loss on disposal of fixed assets
    
    
    (0.1
    )
    
    
    0.3
    
    
    
    (0.4
    )
    
    
    
    *Amortization of intangible assets
    
    
    0.3
    
    
    
    0.3
    
    
    
    
    
    
    
    Operating income
    
    
    17.8
    
    
    
    11.7
    
    
    
    6.1
    
    
    
    52.1Operating income as a percentage of net sales
    
    
    12.8
    %
    
    
    8.2
    %Interest expense
    
    
    6.7
    
    
    
    7.4
    
    
    
    (0.7
    )
    
    
    (9.5
    )Other expense
    
    
    0.7
    
    
    
    1.1
    
    
    
    (0.4
    )
    
    
    (36.4
    )Income before taxes
    
    
    10.5
    
    
    
    3.3
    
    
    
    7.2
    
    
    
    
    *Income tax expense
    
    
    2.4
    
    
    
    1.1
    
    
    
    1.3
    
    
    
    
    *Net income
    
    $
    8.0
    
    
    $
    2.2
    
    
    $
    5.8
    
    
    
    
    *
 
 *
    
    Greater than 100%.Note: Totals may not sum due to rounding. Q2 2010 compared to Q2 2009
 Net Sales.
 Gross Profit.
 Selling, General, and Administrative Expense (SG&A).
 (Gain) Loss on Disposal of Fixed Assets.
 Amortization of Intangible Assets.
 Interest Expense.
 Other Expense.
 29




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##### Table of Contents



Income Tax Expense.
 Our Segments
  (Dollars in Millions)
 Q2
    
    
    Q2
    
    
    Increase/(Decrease)2010
    
    
    2009
    
    
    $
    
    
    %Net sales:United States
    
    $
    116.8
    
    
    $
    117.1
    
    
    $
    (0.3
    )
    
    
    (0.3
    )%Canada
    
    
    20.9
    
    
    
    24.0
    
    
    
    (3.1
    )
    
    
    (12.9
    )Other
    
    
    1.6
    
    
    
    1.2
    
    
    
    0.4
    
    
    
    33.3Net sales
    
    $
    139.4
    
    
    $
    142.3
    
    
    $
    (2.9
    )
    
    
    (2.0
    )%Operating income (loss):United States
    
    $
    14.2
    
    
    $
    8.9
    
    
    $
    5.3
    
    
    
    59.6
    %Canada
    
    
    3.8
    
    
    
    3.4
    
    
    
    0.4
    
    
    
    11.8Other
    
    
    (0.1
    )
    
    
    (0.6
    )
    
    
    0.5
    
    
    
    83.3Operating income
    
    $
    17.8
    
    
    $
    11.7
    
    
    $
    6.1
    
    
    
    52.1
    %
 
 Note: Totals may not sum due to rounding. Q2 2010 compared to Q2 2009
 United States
 Net Sales.
 Operating income
 Canada
 Net Sales.
 30




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##### Table of Contents



Operating income.
 Other
  Company-Wide
  (Dollars in Millions)
 YTD
    
    
    YTD
    
    
    Increase/(Decrease)2010
    
    
    2009
    
    
    $
    
    
    %Net sales
    
    $
    225.8
    
    
    $
    234.6
    
    
    $
    (8.8
    )
    
    
    (3.8
    )%Cost of goods sold
    
    
    156.8
    
    
    
    171.9
    
    
    
    (15.1
    )
    
    
    (8.8
    )Gross profit
    
    
    69.0
    
    
    
    62.7
    
    
    
    6.3
    
    
    
    10.0Gross profit as a percentage of net sales
    
    
    30.6
    %
    
    
    26.7
    %Selling, general, and administrative expenses
    
    
    39.7
    
    
    
    40.3
    
    
    
    (0.6
    )
    
    
    (1.5
    )(Gain) loss on disposal of fixed assets
    
    
    (0.2
    )
    
    
    0.3
    
    
    
    (0.5
    )
    
    
    
    *Amortization of intangible assets
    
    
    0.6
    
    
    
    0.6
    
    
    
    
    
    
    
    Impairment charge
    
    
    
    
    
    
    0.5
    
    
    
    (0.5
    )
    
    
    (100.0
    )Operating income
    
    
    28.8
    
    
    
    21.0
    
    
    
    7.8
    
    
    
    37.1Operating income as a percentage of net sales
    
    
    12.8
    %
    
    
    9.0
    %Interest expense
    
    
    13.5
    
    
    
    15.3
    
    
    
    (1.8
    )
    
    
    (11.8
    )Other expense
    
    
    1.9
    
    
    
    12.4
    
    
    
    (10.5
    )
    
    
    (84.7
    )Income (loss) before taxes
    
    
    13.5
    
    
    
    (6.8
    )
    
    
    20.3
    
    
    
    
    *Income tax expense
    
    
    4.1
    
    
    
    1.3
    
    
    
    2.8
    
    
    
    
    *Net income (loss)
    
    $
    9.4
    
    
    $
    (8.1
    )
    
    $
    17.5
    
    
    
    
    *
 
 *
    
    Greater than 100%.Note: Totals may not sum due to rounding. YTD 2010 compared to YTD 2009
 Net Sales.
 Gross Profit.
 31




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##### Table of Contents



Selling, General and Administrative (SG&A) Expenses.
 (Gain) Loss on Disposal of Fixed Assets.
 Amortization of Intangible Assets.
 Impairment Charge.
 Interest Expense.
 Other Expense.
 Income Tax Expense.
 Our Segments
  32




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##### Table of Contents



(Dollars in Millions)
 YTD
    
    
    YTD
    
    
    Increase/(Decrease)2010
    
    
    2009
    
    
    $
    
    
    %Net sales:United States
    
    $
    181.8
    
    
    $
    183.6
    
    
    $
    (1.8
    )
    
    
    (1.0
    )%Canada
    
    
    41.5
    
    
    
    48.4
    
    
    
    (6.9
    )
    
    
    (14.3
    )Other
    
    
    2.5
    
    
    
    2.7
    
    
    
    (0.2
    )
    
    
    (7.4
    )Net sales
    
    $
    225.8
    
    
    $
    234.6
    
    
    $
    (8.8
    )
    
    
    (3.8
    )%Operating income (loss):United States
    
    $
    20.5
    
    
    $
    12.4
    
    
    $
    8.1
    
    
    
    65.3
    %Canada
    
    
    8.9
    
    
    
    9.3
    
    
    
    (0.4
    )
    
    
    (4.3
    )Other
    
    
    (0.6
    )
    
    
    (0.7
    )
    
    
    0.1
    
    
    
    14.3Operating income
    
    $
    28.8
    
    
    $
    21.0
    
    
    $
    7.8
    
    
    
    37.1
    %
 
 *
    
    Greater than 100%.Note: Totals may not sum due to rounding. YTD 2010 compared to YTD 2009
 United States
 Net Sales.
 Operating income
 Canada
 Net Sales.
 Operating income.
 Other
  Liquidity and Capital Resources
  33




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##### Table of Contents



(Dollars in Millions)
 YTD
    
    YTD
    
    Increase/(Decrease)2010
    
    2009
    
    $
    
    %Net cash used in operating activities
    
    $
    (24.3
    )
    
    $
    (36.1
    )
    
    $
    (11.8
    )
    
    
    (32.7
    )%Net cash used in investing activities
    
    
    (2.3
    )
    
    
    (3.9
    )
    
    
    (1.6
    )
    
    
    (41.0
    )Net cash provided by financing activities
    
    
    10.7
    
    
    
    41.8
    
    
    
    (31.1
    )
    
    
    (74.4
    )
 Cash Flows from Operating Activities
  Cash Flows from Investing Activities
  Cash Flows from Financing Activities
  Debt and Other Obligations
  April 3,
    
    
    October 3,2010
    
    
    2009Revolving Loan
    
    $
    28,500
    
    
    $
    17,500Senior Floating Rate Notes, net of unamortized discount of $187 and $241, respectively
    
    
    149,813
    
    
    
    149,759Senior Subordinated Notes
    
    
    150,000
    
    
    
    150,000Term Note
    
    
    196
    
    
    
    479Capital lease obligations
    
    
    145
    
    
    
    42Total debt
    
    
    328,654
    
    
    
    317,780Less:Short-term Revolving Loan
    
    
    (28,500
    )
    
    
    (17,500
    )Current portion of capital lease obligations
    
    
    (56
    )
    
    
    (10
    )Current portion of long-term debt
    
    
    (196
    )
    
    
    (479
    )Long-term debt
    
    $
    299,902
    
    
    $
    299,791
 Letters of
    
    
    
    
    
    (b)Borrowing
    
    Credit
    
    (a)
    
    InterestMaximum
    
    Base as of
    
    Outstanding as
    
    Availability
    
    Rate as ofBorrowing
    
    April
    
    of April
    
    as of April
    
    April
    
    ExpirationAmount
    
    3, 2010
    
    3, 2010
    
    3, 2010
    
    3, 2010
    
    DateRevolving Loan
    
    $
    130,000
    
    
    $
    116,816
    
    
    $
    3,268
    
    
    $
    85,048
    
    
    
    2.0
    %
    
    Apr 7, 2011
 34




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##### Table of Contents



(d)
    
    
    
    
    
    (e)Original
    
    (c)
    
    Interest
    
    Maturity
    
    Call OptionPrincipal
    
    Interest Rate
    
    Payments
    
    Date
    
    DateSenior Floating Rate Notes
    
    $
    150,000
    
    
    LIBOR + 4%
    
    Jan 15, Apr 15, Jul 15, Oct 15
    
    Jan 15, 2012
    
    Jan 15, 2007Senior Subordinated Notes
    
    
    150,000
    
    
    10%

    
    Jan 15, Jul 15
    
    Jul 15, 2012
    
    Jul 15, 2008Term Note
    
    
    2,700
    
    

    2.5%

    
    Monthly
    
    Jul 19, 2010
    
    
    n/a
 
 (a)
    
    Total amount available is limited by the amount of eligible accounts receivable,
inventory, machinery and equipment, and real estate less letters of credit outstanding.(b)
    
    The interest rate applicable to the loans under the Revolving Loan is either 1) the
Eurodollar Rate or London Interbank Offered Rate (LIBOR) plus a margin of 1.75% to 2.75%,
or 2) the Base Rate plus a margin of 0.50% to 1.50%. The Base Rate is calculated at 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 by the Amended and Restated Senior Secured
Credit Agreement.(c)
    
    LIBOR represents the three month London Interbank Offered Rate which resets quarterly.
LIBOR was .25% as of January 13, 2010. January 13, 2010 is the reset date for the April 15,
2010 interest payment.(d)
    
    Interest payments are in cash and paid in arrears.(e)
    
    The Senior Floating Rate Notes do not have a redemption premium. The Senior
Subordinated Notes have a redemption price of 102.5% of principal on or after July 15, 2009
and 100% of principal on or after July 15, 2010.(f)
    
    As of April 3, 2010 the Company was in compliance with all financial covenants under
its indebtedness agreements. Revolving Loan
   Senior Floating Rate Notes
 pari passu
  35




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##### Table of Contents



Senior Subordinated Notes
   Other Debt
  Interest Rate Swaps
  (Dollars in Thousands)
 (a)EffectiveNotional
    
    InterestReceive
    
    Pay
    
    Amount
    
    RateJanuary 15, 2010 through January 15, 2011
    
    3-month LIBOR
    
    
    1.90
    %
    
    
    150,000
    
    
    
    5.90
    %January 18, 2011 through January 15, 2012
    
    3-month LIBOR
    
    
    2.50
    %
    
    
    150,000
    
    
    
    6.50
    %
 
 (a)
    
    Represents the effective interest rate on the respective portion of the Senior Floating
Rate Notes including the contractual terms of the interest rate swap for the periods
indicated. 36




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##### Table of Contents



Off-Balance Sheet Arrangements
  Contractual Obligations and Commitments
  (Dollars in Thousands)
 April
    
    
    October
    
    
    October
    
    
    October
    
    
    October2010 to
    
    
    2010 to
    
    
    2011 to
    
    
    2012 to
    
    
    2013 toSeptember
    
    
    September
    
    
    September
    
    
    September
    
    
    SeptemberTotal
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    ThereafterContractual ObligationsRevolving Loan
    
    $
    28,500
    
    
    $
    28,500
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Senior Floating Rate Notes
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    Senior Subordinated Notes
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    Term Note
    
    
    196
    
    
    
    196
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Capital lease obligations
    
    
    145
    
    
    
    30
    
    
    
    45
    
    
    
    37
    
    
    
    25
    
    
    
    8
    
    
    
    Interest on notes
    
    
    51,131
    
    
    
    11,925
    
    
    
    24,487
    
    
    
    14,719
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    73,183
    
    
    
    4,817
    
    
    
    9,556
    
    
    
    8,968
    
    
    
    8,171
    
    
    
    7,188
    
    
    
    34,483Pension and postretirement payments
    
    
    53,382
    
    
    
    2,280
    
    
    
    6,360
    
    
    
    9,774
    
    
    
    8,136
    
    
    
    7,849
    
    
    
    18,983Medical self-insurance
    
    
    5,665
    
    
    
    3,537
    
    
    
    2,038
    
    
    
    90
    
    
    
    
    
    
    
    
    
    
    
    Open purchase orders
    
    
    38,329
    
    
    
    38,329
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forward purchase commitments
    
    
    1,896
    
    
    
    1,896
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other commitments
    
    
    1,251
    
    
    
    717
    
    
    
    494
    
    
    
    13
    
    
    
    13
    
    
    
    14
    
    
    
    Total contractual obligations
    
    $
    553,678
    
    
    $
    92,227
    
    
    $
    42,980
    
    
    $
    333,601
    
    
    $
    16,345
    
    
    $
    15,059
    
    
    $
    53,466CommitmentsOutstanding letters of credit
    
    $
    3,268
    
    
    $
    3,268
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Total commitments
    
    $
    3,268
    
    
    $
    3,268
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
  37




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##### Table of Contents



Financial Position
  (Dollars in Thousands)
 April 3,
    
    
    
    
    
    
    Increase/(Decrease)2010
    
    
    October 3, 2009
    
    
    $
    
    
    %Current assets:Cash and cash equivalents
    
    $
    19,468
    
    
    $
    33,609
    
    
    $
    (14,141
    )
    
    
    (42.1
    )%Trade receivables, net
    
    
    93,491
    
    
    
    42,449
    
    
    
    51,042
    
    
    
    
    *Inventories
    
    
    101,361
    
    
    
    90,305
    
    
    
    11,056
    
    
    
    12.2Prepaid expenses and other current assets
    
    
    5,955
    
    
    
    6,315
    
    
    
    (360
    )
    
    
    (5.7
    )Total current assets
    
    
    220,275
    
    
    
    172,678
    
    
    
    47,597
    
    
    
    27.6Current liabilities:Trade payables
    
    
    37,380
    
    
    
    18,214
    
    
    
    19,166
    
    
    
    
    *Accrued interest payable
    
    
    5,152
    
    
    
    5,392
    
    
    
    (240
    )
    
    
    (4.5
    )Accrued expenses and other current liabilities
    
    
    24,745
    
    
    
    26,642
    
    
    
    (1,897
    )
    
    
    (7.1
    )Revolving loan
    
    
    28,500
    
    
    
    17,500
    
    
    
    11,000
    
    
    
    62.9Current portion of long-term debt and capital lease obligations
    
    
    252
    
    
    
    489
    
    
    
    (237
    )
    
    
    (48.5
    )Total current liabilities
    
    
    96,029
    
    
    
    68,237
    
    
    
    27,792
    
    
    
    40.7Working capital
    
    $
    124,246
    
    
    $
    104,441
    
    
    $
    19,805
    
    
    
    19.0
    %
 
 *
    
    Greater than 100%.  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Risk
  Foreign Operations; Currency Risk
  38




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##### Table of Contents



Raw Material; Commodity Price Risk
  
 Item 4T. Controls and Procedures
 Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  39




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
 In April 2010, the Company was served with a complaint filed in the United States District
Court for the Eastern District of Texas by Patent Group, LLC (Patent Group) for falsely
marketing certain of products under 35 U.S.C. § 292. Patent Group claims the Company has
marketed and sold certain leaf rakes marked with patent references that have expired with the
intent to deceive the public and to gain a competitive advantage in the market. Patent Group is
seeking monetary damages and injunctive relief. While the Company believes there are
meritorious defenses to this claim, the Company is in the initial
stages of investigating the matter and, accordingly, can make no prediction as to the outcome of this case.
 
 Item 1A. Risk Factors
 See Risk Factors disclosed in the Form 10-K for the fiscal year ended October 3, 2009.
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 None
 
 Item 3. Defaults Upon Senior Securities
 None
 
 Item 4. [Removed and Reserved]
 
 Item 5. Other Information
 On May 11, 2010, the Company entered into an employment agreement with Daniel Yurovich. The
term of the employment agreement is one year and it will be automatically renewed for
consecutive one-year periods, unless within 60 days prior to the expiration of the employment
term, either party to the agreement provides notice of its election to terminate the agreement.
Pursuant to the employment agreement, Mr. Yurovich will receive a base salary of $216,315.
Mr. Yurovichs base salary is subject to increase from time to time, solely at the Companys
discretion. Mr. Yurovich is eligible to receive a discretionary bonus based on the achievement
of individual performance objectives and the Companys achievement of certain objectives
approved by the board of directors or compensation committee of CHATT Holdings LLC.
 In the event of a termination of Mr. Yurovichs employment by reason of death or
permanent disability, as defined in the employment agreement, by the Company for due
cause, as defined in the employment agreement, or by Mr. Yurovich voluntarily, the Company
will have no further obligation to Mr. Yurovich (or his estate) except for salary and benefits
accrued through the termination date. In the case of a termination based on permanent
disability, Mr. Yurovich will also be entitled to any benefits provided under our disability
insurance policy. If Mr. Yurovich is terminated by the Company without due cause or if he
terminates employment for good reason, as defined in the employment agreement, then Mr.
Yurovich will be entitled to receive severance in an amount equal to his base salary and
benefits for twelve months following termination, payable at regular payroll intervals.
 40




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##### Table of Contents



Item 6. Exhibits
 Exhibit 10.1
    
    Employment agreement, dated as of May 11, 2010, between Ames
True Temper, Inc. and Daniel Yurovich.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.
 41




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##### Table of Contents



AMES TRUE TEMPER, INC.
 
 SIGNATURES
  AMES TRUE TEMPER, INC.Date: May 14, 2010
    /s/ Duane R. GreenlyDuane R. GreenlyPresident and Chief Executive Officer
(Principal Executive Officer)Date: May 14, 2010
    /s/ David M. NutiDavid M. NutiChief Financial Officer
(Principal Financial Officer) 42




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##### Table of Contents



AMES TRUE TEMPER, INC.
 EXHIBIT INDEX
 Exhibit
    
    Description10.1
    
    Employment agreement, dated as of May 11, 2010, between Ames
True Temper, Inc. and Daniel Yurovich.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.
 43