##### 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 January 2, 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 January 2, 2010
and October 3, 2009
    
    
    1Condensed Consolidated Statements of Operations for the
thirteen week periods ended January 2, 2010 and
December 27,
2008
    
    
    2Condensed Consolidated Statements of Cash Flows for the
thirteen week periods ended January 2, 2010 and
December 27,
2008
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    21Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    29Item 4T. Controls and Procedures
    
    
    30PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    31Item 1A. Risk Factors
    
    
    31Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    31Item 3. Defaults Upon Senior Securities
    
    
    31Item 4. Submission of Matters to a Vote of Security Holders
    
    
    31Item 5. Other Information
    
    
    31Item 6. Exhibits
    
    
    31Signatures
    
    
    32EX-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)
 January 2,
    
    
    October 3,2010
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    41,308
    
    
    $
    33,609Trade receivables, net
    
    
    43,188
    
    
    
    42,449Inventories
    
    
    106,379
    
    
    
    90,305Prepaid expenses and other current assets
    
    
    6,042
    
    
    
    6,315Total current assets
    
    
    196,917
    
    
    
    172,678Property, plant and equipment, net
    
    
    42,063
    
    
    
    44,239Intangibles, net
    
    
    53,580
    
    
    
    53,681Goodwill
    
    
    57,971
    
    
    
    57,494Other noncurrent assets
    
    
    5,922
    
    
    
    6,531Total assets
    
    $
    356,453
    
    
    $
    334,623Liabilities and stockholders deficitCurrent liabilities:Trade accounts payable
    
    $
    34,701
    
    
    $
    18,214Accrued interest payable
    
    
    9,101
    
    
    
    5,392Accrued expenses and other current liabilities
    
    
    23,540
    
    
    
    26,642Revolving loan
    
    
    18,293
    
    
    
    17,500Current portion of long-term debt and capital lease obligations
    
    
    374
    
    
    
    489Total current liabilities
    
    
    86,009
    
    
    
    68,237Deferred income taxes
    
    
    14,034
    
    
    
    13,672Long-term debt
    
    
    299,886
    
    
    
    299,791Accrued retirement benefits
    
    
    51,907
    
    
    
    51,836Other liabilities
    
    
    12,156
    
    
    
    12,661Total liabilities
    
    
    463,992
    
    
    
    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
January 2, 2010 and October 3, 2009 (Liquidation preference of
$62,495 at January 2, 2010)
    
    
    
    
    
    
    Common stockClass A, $.0001 per share par value; 1,600,000
shares authorized; 726,556 shares issued and outstanding as of
January 2, 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
January 2, 2010 and October 3, 2009
    
    
    
    
    
    
    Additional paid-in capital
    
    
    111,170
    
    
    
    111,168Predecessor basis adjustment
    
    
    (13,539
    )
    
    
    (13,539
    )Accumulated deficit
    
    
    (165,913
    )
    
    
    (167,272
    )Accumulated other comprehensive loss
    
    
    (39,257
    )
    
    
    (41,931
    )Total stockholders deficit
    
    
    (107,539
    )
    
    
    (111,574
    )Total liabilities and stockholders deficit
    
    $
    356,453
    
    
    $
    334,623
 See accompanying notes.
 1




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##### Table of Contents



ATT Holding Co.
Condensed Consolidated Statements of Operations  (Dollars In Thousands)
 (Unaudited)
 Thirteen Week Period EndedJanuary 2,
    
    
    December 27,2010
    
    
    2008Net sales
    
    $
    86,399
    
    
    $
    92,334Cost of goods sold
    
    
    59,228
    
    
    
    64,449Gross profit
    
    
    27,171
    
    
    
    27,885Selling, general and administrative expenses
    
    
    15,897
    
    
    
    17,798(Gain) loss on disposal of property, plant and equipment
    
    
    (65
    )
    
    
    32Amortization of intangible assets
    
    
    304
    
    
    
    305Impairment charges
    
    
    
    
    
    
    476Operating income
    
    
    11,035
    
    
    
    9,274Interest expense
    
    
    6,821
    
    
    
    7,971Other expense
    
    
    1,200
    
    
    
    11,363Income (loss) before income taxes
    
    
    3,014
    
    
    
    (10,060
    )Income tax expense
    
    
    1,655
    
    
    
    178Net income (loss)
    
    $
    1,359
    
    
    $
    (10,238
    )
 See accompanying notes.
 2




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##### Table of Contents



ATT Holding Co.
Condensed Consolidated Statements of Cash Flows  (Dollars In Thousands)
 (Unaudited)
 Thirteen Week Period EndedJanuary 2,
    
    
    December 27,2010
    
    
    2008Operating activitiesNet income (loss)
    
    $
    1,359
    
    
    $
    (10,238
    )Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:Depreciation expense
    
    
    3,358
    
    
    
    3,887Amortization of intangible assets
    
    
    304
    
    
    
    305Amortization of loan fees
    
    
    555
    
    
    
    555Benefit from deferred taxes
    
    
    (2,409
    )
    
    
    (359
    )(Benefit from) provision for bad debts
    
    
    (58
    )
    
    
    132Amortization of bond discount
    
    
    27
    
    
    
    27(Gain) loss on disposal of property, plant and equipment
    
    
    (65
    )
    
    
    32Unrealized foreign currency losses
    
    
    1,007
    
    
    
    11,842Impairment charges
    
    
    
    
    
    
    476Changes in assets and liabilities:Trade receivables
    
    
    (480
    )
    
    
    66Inventories
    
    
    (15,623
    )
    
    
    (32,519
    )Prepaid expenses and other assets
    
    
    76
    
    
    
    (416
    )Trade accounts payable
    
    
    16,326
    
    
    
    7,646Accrued expenses and other liabilities
    
    
    2,438
    
    
    
    842Net cash provided by (used in) operating activities
    
    
    6,815
    
    
    
    (17,722
    )Investing activitiesCash paid for property, plant and equipment
    
    
    (944
    )
    
    
    (2,418
    )Proceeds from sale of property, plant and equipment
    
    
    184
    
    
    
    5Net cash used in investing activities
    
    
    (760
    )
    
    
    (2,413
    )Financing activitiesRepayments of long-term debt
    
    
    (143
    )
    
    
    (136
    )Borrowings on revolving loan
    
    
    14,923
    
    
    
    43,488Repayments on revolving loan
    
    
    (14,130
    )
    
    
    (18,900
    )Principal payments under capital lease obligations
    
    
    (2
    )
    
    
    Net cash provided by financing activities
    
    
    648
    
    
    
    24,452Effect of exchange rate changes on cash and cash equivalents
    
    
    996
    
    
    
    (2,488
    )Increase in cash and cash equivalents
    
    
    7,699
    
    
    
    1,829Cash and cash equivalents at beginning of period
    
    
    33,609
    
    
    
    17,159Cash and cash equivalents at end of period
    
    $
    41,308
    
    
    $
    18,988Supplemental Cash Flow InformationCash paid for interest
    
    $
    2,570
    
    
    $
    4,056Cash paid for income taxes
    
    $
    1,123
    
    
    $
    89Property, plant and equipment in trade accounts payable at end of period
    
    $
    16
    
    
    $
    1,054Property acquired under capital lease obligations
    
    $
    98
    
    
    $
    
 See accompanying notes.
 3




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##### Table of Contents



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.
   To Be Adopted
  4




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ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
   3. Inventories
  January 2,
    
    
    October 3,2010
    
    
    2009Finished goods
    
    $
    68,082
    
    
    $
    51,161Work in process
    
    
    13,649
    
    
    
    14,595Raw materials
    
    
    24,648
    
    
    
    24,549$
    106,379
    
    
    $
    90,305
 4. Goodwill and Other Intangibles
  United States
    
    
    Canada
    
    
    TotalGoodwill at October 3, 2009
    
    $
    43,605
    
    
    $
    13,889
    
    
    $
    57,494Currency translation adjustments
    
    
    
    
    
    
    477
    
    
    
    477Goodwill at January 2, 2010
    
    $
    43,605
    
    
    $
    14,366
    
    
    $
    57,971
  January 2, 2010
    
    
    October 3, 2009Gross Carrying
    
    
    Accumulated
    
    
    Gross Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationIndefinite lived intangible assets:Trade names
    
    $
    48,062
    
    
    $
    
    
    
    $
    47,879
    
    
    $
    Finite lived intangible assets:Technology (patents)
    
    
    1,356
    
    
    
    1,154
    
    
    
    1,356
    
    
    
    1,142Non-compete agreements
    
    
    976
    
    
    
    971
    
    
    
    976
    
    
    
    965Customer relationships
    
    
    11,638
    
    
    
    6,327
    
    
    
    11,617
    
    
    
    6,04013,970
    
    
    
    8,452
    
    
    
    13,949
    
    
    
    8,147$
    62,032
    
    
    $
    8,452
    
    
    $
    61,828
    
    
    $
    8,147
  5




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 January 2010  September 2010
    
    $
    905Fiscal 2011
    
    
    1,200Fiscal 2012
    
    
    1,180Fiscal 2013
    
    
    1,166Fiscal 2014
    
    
    867Thereafter
    
    
    200$
    5,518
 5. Income Taxes
     6. Debt Arrangements
  January 2,
    
    
    October 3,2010
    
    
    2009Revolving Loan
    
    $
    18,293
    
    
    $
    17,500Senior Floating Rate Notes, net of unamortized
discount of $214 and $241, respectively
    
    
    149,785
    
    
    
    149,759Senior Subordinated Notes
    
    
    150,000
    
    
    
    150,000Term Note
    
    
    338
    
    
    
    479Capital lease obligations
    
    
    137
    
    
    
    42Total debt
    
    
    318,553
    
    
    
    317,780Less:Short-term Revolving Loan
    
    
    (18,293
    )
    
    
    (17,500
    )Current portion of capital lease obligations
    
    
    (36
    )
    
    
    (10
    )Current portion of long-term debt
    
    
    (338
    )
    
    
    (479
    )Long-term debt
    
    $
    299,886
    
    
    $
    299,791
 6




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 Letters of
    
    (a)
    
    (b)Borrowing
    
    Credit
    
    Availability
    
    InterestMaximum
    
    Base as of
    
    Outstanding as
    
    as of
    
    Rate as ofBorrowing
    
    January
    
    of January
    
    January
    
    January
    
    ExpirationAmount
    
    2, 2010
    
    2, 2010
    
    2, 2010
    
    2, 2010
    
    DateRevolving Loan
    
    $
    130,000
    
    
    $
    76,660
    
    
    $
    3,268
    
    
    $
    55,099
    
    
    
    3.0
    %
    
    Apr 7, 2011
 (d)

    
    
    
    
    
    (e)Original
    
    
    (c)
    
    
    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
 
 (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 .28% as of October 13, 2009. October 13, 2009 represents the reset date for the
January 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. Interest Rate Swaps
  (a)EffectiveNotional
    
    
    InterestReceive

    
    Pay
    
    
    Amount
    
    
    RateJanuary 16, 2009 through January 15, 2010
    
    3-month LIBOR
    
    
    4.31
    %
    
    $
    33,333
    
    
    
    8.31
    %January 16, 2009 through January 15, 2010
    
    3-month LIBOR
    
    
    4.29
    %
    
    
    16,667
    
    
    
    8.29
    %January 15, 2009 through January 15, 2010
    
    3-month LIBOR
    
    
    1.40
    %
    
    
    100,000
    
    
    
    5.40
    %January 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




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ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 7. Pension and Other Post-retirement Benefits
 Pension Benefits
    
    
    Other BenefitsThirteen Week Period Ended
    
    
    Thirteen Week Period EndedJanuary 2,
    
    
    December 27,
    
    
    January 2,
    
    
    December 27,2010
    
    
    2008
    
    
    2010
    
    
    2008Service cost
    
    $
    37
    
    
    $
    109
    
    
    $
    1
    
    
    $
    1Interest cost
    
    
    2,105
    
    
    
    2,149
    
    
    
    20
    
    
    
    22Expected return on plan assets
    
    
    (2,438
    )
    
    
    (2,585
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    Amortization of unrecognized net loss
    
    
    727
    
    
    
    98
    
    
    
    (28
    )
    
    
    (30
    )Net periodic benefit (credit) cost
    
    $
    431
    
    
    $
    (223
    )
    
    $
    (7
    )
    
    $
    (7
    )Employer contributions
    
    $
    288
    
    
    $
    2,169
    
    
    $
    13
    
    
    $
    
 8. Other Comprehensive Income (Loss)
 Thirteen Week Period EndedJanuary 2,
    
    
    December 27,2010
    
    
    2008Net income (loss)
    
    $
    1,359
    
    
    $
    (10,238
    )Other comprehensive income (loss):Currency translation adjustment
    
    
    2,210
    
    
    
    5,319Fair value adjustments of swaps, net of tax
    
    
    464
    
    
    
    (600
    )Effect of pension measurement date provision, net of tax
    
    
    
    
    
    
    95Comprehensive income (loss)
    
    $
    4,033
    
    
    $
    (5,424
    )
 9. Segment Information
  8




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ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 Thirteen Week Period EndedJanuary 2, 2010United States
    
    
    Canada
    
    
    Other
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    64,953
    
    
    $
    20,571
    
    
    $
    875
    
    
    $
    
    
    
    $
    86,399Intersegment sales
    
    
    1,154
    
    
    
    3,173
    
    
    
    
    
    
    
    (4,327
    )
    
    
    Operating income (loss)
    
    
    6,314
    
    
    
    5,170
    
    
    
    (449
    )
    
    
    
    
    
    
    11,035Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,821Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,200Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3,014
 Thirteen Week Period EndedDecember 27, 2008United States
    
    
    Canada
    
    
    Other
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    66,500
    
    
    $
    24,325
    
    
    $
    1,509
    
    
    $
    
    
    
    $
    92,334Intersegment sales
    
    
    1,800
    
    
    
    911
    
    
    
    582
    
    
    
    (3,293
    )
    
    
    Operating income (loss)
    
    
    3,561
    
    
    
    5,886
    
    
    
    (173
    )
    
    
    
    
    
    
    9,274Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,971Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,363Loss before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (10,060
    )
  January 2,
    
    
    October 3,2010
    
    
    2009United States
    
    $
    259,753
    
    
    $
    242,774Canada
    
    
    90,373
    
    
    
    84,987Other
    
    
    6,327
    
    
    
    6,862Total
    
    $
    356,453
    
    
    $
    334,623
 10. Other Expense
  Thirteen Week Period EndedJanuary 2,
    
    
    December 27,2010
    
    
    2008Unrealized loss
    
    $
    1,007
    
    
    $
    11,842Realized loss (gain)
    
    
    193
    
    
    
    (479
    )Total
    
    $
    1,200
    
    
    $
    11,363
  9




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ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
  11. Condensed Guarantor Data
    10




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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 January 2, 2010
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    31
    
    
    $
    9
    
    
    $
    41,268
    
    
    $
    
    
    
    $
    41,308Trade receivables, net
    
    
    
    
    
    
    38,346
    
    
    
    
    
    
    
    4,842
    
    
    
    
    
    
    
    43,188Inventories
    
    
    
    
    
    
    87,822
    
    
    
    
    
    
    
    18,557
    
    
    
    
    
    
    
    106,379Prepaid expenses and other current assets
    
    
    
    
    
    
    4,351
    
    
    
    36
    
    
    
    1,655
    
    
    
    
    
    
    
    6,042Total current assets
    
    
    
    
    
    
    130,550
    
    
    
    45
    
    
    
    66,322
    
    
    
    
    
    
    
    196,917Property, plant and equipment, net
    
    
    
    
    
    
    31,204
    
    
    
    
    
    
    
    10,859
    
    
    
    
    
    
    
    42,063Intangibles, net
    
    
    
    
    
    
    4,831
    
    
    
    41,900
    
    
    
    6,849
    
    
    
    
    
    
    
    53,580Goodwill
    
    
    
    
    
    
    43,605
    
    
    
    
    
    
    
    14,366
    
    
    
    
    
    
    
    57,971Intercompany receivable
    
    
    
    
    
    
    30,792
    
    
    
    173,536
    
    
    
    3,474
    
    
    
    (207,802
    )
    
    
    Investment in subsidiaries
    
    
    
    
    
    
    256,790
    
    
    
    167,228
    
    
    
    
    
    
    
    (424,018
    )
    
    
    Other noncurrent assets
    
    
    
    
    
    
    5,922
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,922Total assets
    
    $
    
    
    
    $
    503,694
    
    
    $
    382,709
    
    
    $
    101,870
    
    
    $
    (631,820
    )
    
    $
    356,453Liabilities and stockholders deficitCurrent liabilities:Trade accounts payable
    
    $
    
    
    
    $
    27,975
    
    
    $
    20
    
    
    $
    6,706
    
    
    $
    
    
    
    $
    34,701Accrued interest payable
    
    
    
    
    
    
    9,101
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,101Accrued expenses and other current
liabilities
    
    
    
    
    
    
    16,476
    
    
    
    
    
    
    
    7,064
    
    
    
    
    
    
    
    23,540Revolving loan
    
    
    
    
    
    
    18,293
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,293Current portion of long-term debt and
capital lease obligations
    
    
    
    
    
    
    364
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    374Total current liabilities
    
    
    
    
    
    
    72,209
    
    
    
    20
    
    
    
    13,780
    
    
    
    
    
    
    
    86,009Deferred income taxes
    
    
    
    
    
    
    1,544
    
    
    
    11,446
    
    
    
    1,044
    
    
    
    
    
    
    
    14,034Long-term debt
    
    
    
    
    
    
    299,856
    
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    299,886Accrued retirement benefits
    
    
    
    
    
    
    50,997
    
    
    
    
    
    
    
    910
    
    
    
    
    
    
    
    51,907Other liabilities
    
    
    
    
    
    
    10,704
    
    
    
    1,310
    
    
    
    142
    
    
    
    
    
    
    
    12,156Intercompany payable
    
    
    
    
    
    
    175,731
    
    
    
    311
    
    
    
    31,760
    
    
    
    (207,802
    )
    
    
    Cumulative losses in subsidiaries
    
    
    107,539
    
    
    
    192
    
    
    
    190
    
    
    
    
    
    
    
    (107,921
    )
    
    
    Total liabilities
    
    
    107,539
    
    
    
    611,233
    
    
    
    13,277
    
    
    
    47,666
    
    
    
    (315,723
    )
    
    
    463,992Commitments 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
    
    
    111,170
    
    
    
    111,170
    
    
    
    154,502
    
    
    
    
    
    
    
    (265,672
    )
    
    
    111,170Predecessor basis adjustment
    
    
    (13,539
    )
    
    
    (13,539
    )
    
    
    
    
    
    
    
    
    
    
    13,539
    
    
    
    (13,539
    )(Accumulated deficit) retained earnings
    
    
    (165,913
    )
    
    
    (165,913
    )
    
    
    83,669
    
    
    
    (7,339
    )
    
    
    89,583
    
    
    
    (165,913
    )Accumulated other comprehensive (loss)
income
    
    
    (39,257
    )
    
    
    (39,257
    )
    
    
    13,012
    
    
    
    11,921
    
    
    
    14,324
    
    
    
    (39,257
    )Total stockholders (deficit) equity
    
    
    (107,539
    )
    
    
    (107,539
    )
    
    
    369,432
    
    
    
    54,204
    
    
    
    (316,097
    )
    
    
    (107,539
    )Total liabilities and stockholders deficit
    
    $
    
    
    
    $
    503,694
    
    
    $
    382,709
    
    
    $
    101,870
    
    
    $
    (631,820
    )
    
    $
    356,453
 11




---



##### 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
    
    
    
    
    
    
    
    57,494Intercompany receivable
    
    
    
    
    
    
    29,980
    
    
    
    168,715
    
    
    
    2,941
    
    
    
    (201,636
    )
    
    
    Investment in subsidiaries
    
    
    
    
    
    
    248,762
    
    
    
    163,010
    
    
    
    
    
    
    
    (411,772
    )
    
    
    Other noncurrent assets
    
    
    
    
    
    
    6,531
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,531Total assets
    
    $
    
    
    
    $
    478,490
    
    
    $
    373,634
    
    
    $
    95,907
    
    
    $
    (613,408
    )
    
    $
    334,623Liabilities and stockholders (deficit)
equityCurrent liabilities:Trade accounts payable
    
    $
    
    
    
    $
    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
 12




---



##### 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 January 2, 2010
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    65,792
    
    
    $
    
    
    
    $
    24,806
    
    
    $
    (4,199
    )
    
    $
    86,399Cost of goods sold
    
    
    
    
    
    
    47,293
    
    
    
    
    
    
    
    16,134
    
    
    
    (4,199
    )
    
    
    59,228Gross profit
    
    
    
    
    
    
    18,499
    
    
    
    
    
    
    
    8,672
    
    
    
    
    
    
    
    27,171Selling, general and administrative expenses
    
    
    
    
    
    
    11,945
    
    
    
    28
    
    
    
    3,924
    
    
    
    
    
    
    
    15,897Gain on disposal of property, plant and
equipment
    
    
    
    
    
    
    (65
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (65
    )Amortization of intangible assets
    
    
    
    
    
    
    266
    
    
    
    
    
    
    
    38
    
    
    
    
    
    
    
    304Operating income (loss)
    
    
    
    
    
    
    6,353
    
    
    
    (28
    )
    
    
    4,710
    
    
    
    
    
    
    
    11,035Interest expense (income)
    
    
    
    
    
    
    9,384
    
    
    
    (3,046
    )
    
    
    483
    
    
    
    
    
    
    
    6,821Other expense (income)
    
    
    
    
    
    
    1,131
    
    
    
    (1,655
    )
    
    
    1,724
    
    
    
    
    
    
    
    1,200(Loss) income before income taxes
    
    
    
    
    
    
    (4,162
    )
    
    
    4,673
    
    
    
    2,503
    
    
    
    
    
    
    
    3,014Income tax expense
    
    
    
    
    
    
    64
    
    
    
    460
    
    
    
    1,131
    
    
    
    
    
    
    
    1,655Equity in earnings of subsidiaries
    
    
    1,359
    
    
    
    5,585
    
    
    
    1,886
    
    
    
    
    
    
    
    (8,830
    )
    
    
    Net income
    
    $
    1,359
    
    
    $
    1,359
    
    
    $
    6,099
    
    
    $
    1,372
    
    
    $
    (8,830
    )
    
    $
    1,359
 ATT Holding Co.
Condensed Consolidating Statement of Operations
For the Thirteen Week Period Ended December 27, 2008
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    68,196
    
    
    $
    
    
    
    $
    26,795
    
    
    $
    (2,657
    )
    
    $
    92,334Cost of goods sold
    
    
    
    
    
    
    50,105
    
    
    
    
    
    
    
    17,001
    
    
    
    (2,657
    )
    
    
    64,449Gross profit
    
    
    
    
    
    
    18,091
    
    
    
    
    
    
    
    9,794
    
    
    
    
    
    
    
    27,885Selling, general and administrative expenses
    
    
    
    
    
    
    13,657
    
    
    
    43
    
    
    
    4,098
    
    
    
    
    
    
    
    17,798Loss on disposal of property, plant and
equipment
    
    
    
    
    
    
    32
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32Amortization of intangible assets
    
    
    
    
    
    
    267
    
    
    
    
    
    
    
    38
    
    
    
    
    
    
    
    305Impairment charges
    
    
    
    
    
    
    476
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    476Operating income (loss)
    
    
    
    
    
    
    3,659
    
    
    
    (43
    )
    
    
    5,658
    
    
    
    
    
    
    
    9,274Interest expense (income)
    
    
    
    
    
    
    10,305
    
    
    
    (4,889
    )
    
    
    2,555
    
    
    
    
    
    
    
    7,971Other expense (income)
    
    
    
    
    
    
    1,346
    
    
    
    (1,870
    )
    
    
    11,887
    
    
    
    
    
    
    
    11,363(Loss) income before income taxes
    
    
    
    
    
    
    (7,992
    )
    
    
    6,716
    
    
    
    (8,784
    )
    
    
    
    
    
    
    (10,060
    )Income tax expense (benefit)
    
    
    
    
    
    
    56
    
    
    
    (9
    )
    
    
    131
    
    
    
    
    
    
    
    178Loss in earnings of subsidiaries
    
    
    (10,238
    )
    
    
    (2,190
    )
    
    
    (8,752
    )
    
    
    
    
    
    
    21,180
    
    
    
    Net loss
    
    $
    (10,238
    )
    
    $
    (10,238
    )
    
    $
    (2,027
    )
    
    $
    (8,915
    )
    
    $
    21,180
    
    
    $
    (10,238
    )
 13




---



##### 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 Thirteen Week Period Ended January 2, 2010
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedOperating activitiesNet income
    
    $
    1,359
    
    
    $
    1,359
    
    
    $
    6,099
    
    
    $
    1,372
    
    
    $
    (8,830
    )
    
    $
    1,359Adjustments to reconcile net income
to net cash (used in) provided by
operating activities:Depreciation expense
    
    
    
    
    
    
    2,845
    
    
    
    
    
    
    
    513
    
    
    
    
    
    
    
    3,358Equity in losses of subsidiaries
    
    
    (1,359
    )
    
    
    (5,585
    )
    
    
    (1,886
    )
    
    
    
    
    
    
    8,830
    
    
    
    Provision for (benefit from)
deferred taxes
    
    
    
    
    
    
    5
    
    
    
    331
    
    
    
    (2,745
    )
    
    
    
    
    
    
    (2,409
    )Other, net
    
    
    
    
    
    
    767
    
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    763Unrealized foreign currency losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,007
    
    
    
    
    
    
    
    1,007Related party non-cash transactions
    
    
    
    
    
    
    (153
    )
    
    
    153
    
    
    
    
    
    
    
    
    
    
    
    Changes in assets and liabilities:Trade receivables
    
    
    
    
    
    
    (3,900
    )
    
    
    
    
    
    
    3,420
    
    
    
    
    
    
    
    (480
    )Inventories
    
    
    
    
    
    
    (15,889
    )
    
    
    
    
    
    
    266
    
    
    
    
    
    
    
    (15,623
    )Prepaid expenses and other assets
    
    
    
    
    
    
    618
    
    
    
    (37
    )
    
    
    (505
    )
    
    
    
    
    
    
    76Trade accounts payable
    
    
    
    
    
    
    15,491
    
    
    
    (11
    )
    
    
    846
    
    
    
    
    
    
    
    16,326Intercompany accounts
    
    
    
    
    
    
    3,578
    
    
    
    (4,662
    )
    
    
    1,084
    
    
    
    
    
    
    
    Accrued expense and other liabilities
    
    
    
    
    
    
    412
    
    
    
    13
    
    
    
    2,013
    
    
    
    
    
    
    
    2,438Net cash (used in) provided by
operating activities
    
    
    
    
    
    
    (452
    )
    
    
    
    
    
    
    7,267
    
    
    
    
    
    
    
    6,815Investing activitiesCash paid for property, plant and
equipment
    
    
    
    
    
    
    (806
    )
    
    
    
    
    
    
    (138
    )
    
    
    
    
    
    
    (944
    )Proceeds from sale of property,
plant and equipment
    
    
    
    
    
    
    184
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    184Net cash used in investing activities
    
    
    
    
    
    
    (622
    )
    
    
    
    
    
    
    (138
    )
    
    
    
    
    
    
    (760
    )Financing activitiesRepayments of long-term debt
    
    
    
    
    
    
    (143
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (143
    )Borrowings on revolving loan
    
    
    
    
    
    
    14,923
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,923Repayments on revolving loan
    
    
    
    
    
    
    (14,130
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,130
    )Principal payments under capital
lease obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    (2
    )Net cash provided by (used in)
financing activities
    
    
    
    
    
    
    650
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    648Effect of exchange rate changes on
cash and cash equivalents
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    995
    
    
    
    
    
    
    
    996(Decrease) increase in cash and cash
equivalents
    
    
    
    
    
    
    (423
    )
    
    
    
    
    
    
    8,122
    
    
    
    
    
    
    
    7,699Cash and cash equivalents at
beginning of period
    
    
    
    
    
    
    454
    
    
    
    9
    
    
    
    33,146
    
    
    
    
    
    
    
    33,609Cash and cash equivalents at end of
period
    
    $
    
    
    
    $
    31
    
    
    $
    9
    
    
    $
    41,268
    
    
    $
    
    
    
    $
    41,308
 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 Statement of Cash Flows
For the Thirteen Week Period Ended December 27, 2008
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedOperating activitiesNet loss
    
    $
    (10,238
    )
    
    $
    (10,238
    )
    
    $
    (2,027
    )
    
    $
    (8,915
    )
    
    $
    21,180
    
    
    $
    (10,238
    )Adjustments to reconcile net loss to
net cash (used in) provided by
operating activities:Depreciation expense
    
    
    
    
    
    
    3,395
    
    
    
    
    
    
    
    492
    
    
    
    
    
    
    
    3,887Equity in earnings of subsidiaries
    
    
    10,238
    
    
    
    2,190
    
    
    
    8,752
    
    
    
    
    
    
    
    (21,180
    )
    
    
    Provision for (benefit from)
deferred taxes
    
    
    
    
    
    
    
    
    
    
    274
    
    
    
    (633
    )
    
    
    
    
    
    
    (359
    )Other, net
    
    
    
    
    
    
    989
    
    
    
    
    
    
    
    62
    
    
    
    
    
    
    
    1,051Related party non-cash transactions
    
    
    
    
    
    
    (53
    )
    
    
    
    
    
    
    53
    
    
    
    
    
    
    
    Impairment charges
    
    
    
    
    
    
    476
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    476Unrealized foreign currency losses
    
    
    
    
    
    
    81
    
    
    
    
    
    
    
    11,761
    
    
    
    
    
    
    
    11,842Changes in assets and liabilities:Trade receivables
    
    
    
    
    
    
    3,874
    
    
    
    
    
    
    
    (3,808
    )
    
    
    
    
    
    
    66Inventories
    
    
    
    
    
    
    (30,002
    )
    
    
    
    
    
    
    (2,517
    )
    
    
    
    
    
    
    (32,519
    )Prepaid expenses and other assets
    
    
    
    
    
    
    197
    
    
    
    
    
    
    
    (613
    )
    
    
    
    
    
    
    (416
    )Trade accounts payable
    
    
    
    
    
    
    4,921
    
    
    
    (5
    )
    
    
    2,730
    
    
    
    
    
    
    
    7,646Intercompany accounts
    
    
    
    
    
    
    3,300
    
    
    
    (6,710
    )
    
    
    3,410
    
    
    
    
    
    
    
    Accrued expense and other liabilities
    
    
    
    
    
    
    (1,603
    )
    
    
    (283
    )
    
    
    2,728
    
    
    
    
    
    
    
    842Net cash (used in) provided by
operating activities
    
    
    
    
    
    
    (22,473
    )
    
    
    1
    
    
    
    4,750
    
    
    
    
    
    
    
    (17,722
    )Investing activitiesCash paid for property, plant and
equipment
    
    
    
    
    
    
    (2,223
    )
    
    
    
    
    
    
    (195
    )
    
    
    
    
    
    
    (2,418
    )Proceeds from sale of property,
plant and equipment
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Net cash used in investing activities
    
    
    
    
    
    
    (2,218
    )
    
    
    
    
    
    
    (195
    )
    
    
    
    
    
    
    (2,413
    )Financing activitiesRepayments of long-term debt
    
    
    
    
    
    
    (136
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (136
    )Borrowings on revolving loan
    
    
    
    
    
    
    43,488
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,488Repayments on revolving loan
    
    
    
    
    
    
    (18,900
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,900
    )Net cash provided by financing
activities
    
    
    
    
    
    
    24,452
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,452Effect of exchange rate changes on
cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,488
    )
    
    
    
    
    
    
    (2,488
    )(Decrease) increase in cash and cash
equivalents
    
    
    
    
    
    
    (239
    )
    
    
    1
    
    
    
    2,067
    
    
    
    
    
    
    
    1,829Cash and cash equivalents at
beginning of period
    
    
    
    
    
    
    285
    
    
    
    5
    
    
    
    16,869
    
    
    
    
    
    
    
    17,159Cash and cash equivalents at end of
period
    
    $
    
    
    
    $
    46
    
    
    $
    6
    
    
    $
    18,936
    
    
    $
    
    
    
    $
    18,988
 15




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 12. Related Party Transactions
        16




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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 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.
 17




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
  January 2, 2010(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalForeign currency forward contracts
    
    $
    
    
    
    
    336
    
    
    $
    
    
    
    $
    336Interest rate swaps
    
    
    
    
    
    
    2,261
    
    
    
    
    
    
    
    2,261Total liabilities
    
    $
    
    
    
    $
    2,597
    
    
    $
    
    
    
    $
    2,597
 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
    
    $
    149,785
    
    
    $
    135,750Senior Subordinated Notes
    
    Liability
    
    
    150,000
    
    
    
    134,370
  14. Derivative Instruments and Hedging Activities
   18




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
     Asset Derivatives
    
    Liability DerivativesQualifies
    
    
    
    
    
    Balance
    
    Pretax Gain
    
    
    
    
    
    Balance
    
    Pretax LossDescription of
    
    for Hedge
    
    Fair
    
    Sheet
    
    Recognized
    
    
    
    
    
    Sheet
    
    RecognizedDerivative
    
    Designation
    
    Value
    
    Location
    
    in AOCI
    
    Fair Value
    
    Location
    
    in AOCIForeign
currency forward
contracts
    
    No
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    336
    
    
    
    (a
    )
    
    $
    Interest rate swaps
    
    Yes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,261
    
    
    
    (b
    )
    
    
    2,261
 
 (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.  Location 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
    
    for Hedge
    
    AOCI into
    
    AOCI into
    
    recognized in
    
    (loss) recognizedof Derivative
    
    Designation
    
    earnings
    
    earnings
    
    earnings
    
    in earningsForeign
currency forward
contracts
    
    No
    
    
    
    
    
    $
    
    
    
    Other expense
    
    $
    (196
    )Interest rate swaps
    
    Yes
    
    Interest expense
    
    
    (779
    )
    
    
    
    
    
    
    
   15. Commitments and Contingencies
  19




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
    Balance as of October 3, 2009
    
    $
    2,541Adjustments to estimates
    
    
    Payments
    
    
    538Balance as of January 2, 2010
    
    $
    2,003
  16. Other
  17. Subsequent Events
  20




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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
 21




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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.
 Risk Factors
 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
  22




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##### Table of Contents



(Dollars in Millions)
 Q1
    
    
    Q1
    
    
    Increase/(Decrease)2010
    
    
    2009
    
    
    $
    
    
    %Net sales
    
    $
    86.4
    
    
    $
    92.3
    
    
    $
    (5.9
    )
    
    
    (6.4
    )%Cost of goods sold
    
    
    59.2
    
    
    
    64.4
    
    
    
    (5.2
    )
    
    
    (8.1
    )Gross profit
    
    
    27.2
    
    
    
    27.9
    
    
    
    (0.7
    )
    
    
    (2.5
    )Gross profit percentage
    
    
    31.5
    %
    
    
    30.2
    %Selling, general, and
administrative expenses
    
    
    15.9
    
    
    
    17.8
    
    
    
    (1.9
    )
    
    
    (10.7
    )Gain on disposal of fixed assets
    
    
    (0.1
    )
    
    
    
    
    
    
    (0.1
    )
    
    
    Amortization of intangible assets
    
    
    0.3
    
    
    
    0.3
    
    
    
    
    
    
    
    Impairment charges
    
    
    
    
    
    
    0.5
    
    
    
    (0.5
    )
    
    
    (100.0
    )Operating income
    
    
    11.0
    
    
    
    9.3
    
    
    
    1.7
    
    
    
    18.3Operating income percentage
    
    
    12.7
    %
    
    
    10.1
    %Interest expense
    
    
    6.8
    
    
    
    8.0
    
    
    
    (1.2
    )
    
    
    (15.0
    )Other expense
    
    
    1.2
    
    
    
    11.4
    
    
    
    (10.2
    )
    
    
    (89.5
    )Income (loss) before taxes
    
    
    3.0
    
    
    
    (10.1
    )
    
    
    13.1
    
    
    
    
    *Income tax expense
    
    
    1.7
    
    
    
    0.2
    
    
    
    1.5
    
    
    
    
    *Net income (loss)
    
    $
    1.4
    
    
    $
    (10.2
    )
    
    $
    11.6
    
    
    
    
    *
 
 *
    
    Greater than 100%.Note: Totals may not sum due to rounding. Net Sales.
 Gross Profit.
 Selling, General, and Administrative (SG&A).
 Amortization of Intangible Assets.
 Impairment Charges.
 Interest Expense.
 Other Expense.
 23




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##### Table of Contents



Income Tax Expense
 Our Segments
  (Dollars in Millions)
 Q1
    
    
    Q1
    
    
    Increase/(Decrease)2010
    
    
    2009
    
    
    $
    
    
    %Net sales:United States
    
    $
    65.0
    
    
    $
    66.5
    
    
    $
    (1.5
    )
    
    
    (2.3
    )%Canada
    
    
    20.6
    
    
    
    24.3
    
    
    
    (3.7
    )
    
    
    (15.2
    )Other
    
    
    0.9
    
    
    
    1.5
    
    
    
    (0.6
    )
    
    
    (40.0
    )Net sales
    
    $
    86.4
    
    
    $
    92.3
    
    
    $
    (5.9
    )
    
    
    (6.4
    )%Operating income (loss):United States
    
    $
    6.3
    
    
    $
    3.6
    
    
    $
    2.7
    
    
    
    75.0
    %Canada
    
    
    5.2
    
    
    
    5.9
    
    
    
    (0.7
    )
    
    
    (11.9
    )Other
    
    
    (0.4
    )
    
    
    (0.1
    )
    
    
    (0.2
    )
    
    
    100.0Operating income
    
    $
    11.0
    
    
    $
    9.3
    
    
    $
    1.7
    
    
    
    18.3
    %
 
 *
    
    Greater than 100%.*
    
    Note: Totals may not sum due to rounding. United States
 Net Sales.
 Operating income.
 24




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##### Table of Contents



Canada
 Net Sales.
 Operating income.
 Other
  Liquidity and Capital Resources
  (Dollars in Millions)
 Q1
    
    Q1
    
    Increase/(Decrease)2010
    
    2009
    
    $
    
    %Net cash provided by (used
in) operating activities
    
    $
    6.8
    
    
    $
    (17.7
    )
    
    $
    24.5
    
    
    
    
    *Net cash used in investing activities
    
    
    (0.8
    )
    
    
    (2.4
    )
    
    
    (1.6
    )
    
    
    66.7
    %Net cash provided by financing
activities
    
    
    0.6
    
    
    
    24.5
    
    
    
    (23.9
    )
    
    
    97.6
 
 *
    
    Greater than 100%. Cash Flows from Operating Activities
  Cash Flows from Investing Activities
  Cash Flows from Financing Activities
   Debt and Other Obligations
  25




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##### Table of Contents



(Dollars in Thousands)
 January 2,
    
    
    October 3,2010
    
    
    2009Revolving Loan
    
    $
    18,293
    
    
    $
    17,500Senior Floating Rate Notes, net of unamortized
discount of $214 and $241, respectively
    
    
    149,785
    
    
    
    149,759Senior Subordinated Notes
    
    
    150,000
    
    
    
    150,000Term Note
    
    
    338
    
    
    
    479Capital lease obligations
    
    
    137
    
    
    
    42Total debt
    
    
    318,553
    
    
    
    317,780Less:Short-term Revolving Loan
    
    
    (18,293
    )
    
    
    (17,500
    )Current portion of capital lease obligations
    
    
    (36
    )
    
    
    (10
    )Current portion of long-term debt
    
    
    (338
    )
    
    
    (479
    )Long-term debt
    
    $
    299,886
    
    
    $
    299,791
 Letters of
    
    (a)
    
    (b)Borrowing
    
    Credit
    
    Availability
    
    InterestMaximum
    
    Base as of
    
    Outstanding as
    
    as of
    
    Rate as ofBorrowing
    
    January
    
    of January
    
    January
    
    January
    
    ExpirationAmount
    
    2, 2010
    
    2, 2010
    
    2, 2010
    
    2, 2010
    
    DateRevolving Loan (f)
    
    $
    130,000
    
    
    $
    76,660
    
    
    $
    3,268
    
    
    $
    55,099
    
    
    
    3.0
    %
    
    Apr 7, 2011
 (d)
    
    
    
    
    
    (e)Original
    
    (c)
    
    Interest
    
    Maturity
    
    Call OptionPrincipal
    
    Interest Rate
    
    Payments
    
    Date
    
    DateSenior Floating Rate Notes (f)
    
    $
    150,000
    
    
    
    LIBOR + 4
    %
    
    Jan 15, Apr 15, Jul 15, Oct 15
    
    Jan 15, 2012
    
    Jan 15, 2007Senior Subordinated Notes (f)
    
    
    150,000
    
    
    
    10
    %
    
    Jan 15, Jul 15
    
    Jul 15, 2012
    
    Jul 15, 2008Term Note (f)
    
    
    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 .28% as of October 13, 2009. October 13, 2009 represents the reset date for the
January 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 January 2, 2010, the Company was in compliance with all financial covenants under
its indebtedness agreements. Revolving Loan
  26




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##### Table of Contents



Senior Floating Rate Notes
 pari passu
  Senior Subordinated Notes
   27




---



##### Table of Contents



Other Debt
  Interest Rate Swaps
  (Dollars in Thousands)
 (a)EffectiveNotional
    
    InterestReceive
    
    Pay
    
    Amount
    
    RateJanuary 16, 2009 through January 15, 2010
    
    3-month LIBOR
    
    
    4.31
    %
    
    $
    33,333
    
    
    
    8.31
    %January 16, 2009 through January 15, 2010
    
    3-month LIBOR
    
    
    4.29
    %
    
    
    16,667
    
    
    
    8.29
    %January 15, 2009 through January 15, 2010
    
    3-month LIBOR
    
    
    1.40
    %
    
    
    100,000
    
    
    
    5.40
    %January 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.  Off-Balance Sheet Arrangements
  Contractual Obligations and Commitments
  (Dollars in Thousands)
 January
    
    
    October
    
    
    October
    
    
    October
    
    
    October2010
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013through
    
    
    through
    
    
    through
    
    
    through
    
    
    throughSeptember
    
    
    September
    
    
    September
    
    
    September
    
    
    SeptemberTotal
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    ThereafterContractual ObligationsRevolving Loan
    
    $
    18,293
    
    
    $
    18,293
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Senior Floating Rate Notes
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    Senior Subordinated Notes
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    Term Note
    
    
    338
    
    
    
    338
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Capital lease obligations
    
    
    137
    
    
    
    27
    
    
    
    37
    
    
    
    38
    
    
    
    26
    
    
    
    9
    
    
    
    Interest on Notes
    
    
    57,124
    
    
    
    17,917
    
    
    
    24,488
    
    
    
    14,719
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    75,587
    
    
    
    7,227
    
    
    
    9,554
    
    
    
    8,965
    
    
    
    8,170
    
    
    
    7,188
    
    
    
    34,483Pension and postretirement
payments
    
    
    53,954
    
    
    
    2,607
    
    
    
    6,389
    
    
    
    9,803
    
    
    
    8,166
    
    
    
    7,879
    
    
    
    19,110Medical insurance
    
    
    7,547
    
    
    
    5,342
    
    
    
    2,099
    
    
    
    106
    
    
    
    
    
    
    
    
    
    
    
    Open purchase orders
    
    
    39,918
    
    
    
    39,918
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other purchase obligations
    
    
    521
    
    
    
    12
    
    
    
    471
    
    
    
    12
    
    
    
    13
    
    
    
    13
    
    
    
    Forward purchase obligations
    
    
    12,483
    
    
    
    12,483
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total contractual obligations
    
    $
    565,902
    
    
    $
    104,164
    
    
    $
    43,038
    
    
    $
    333,643
    
    
    $
    16,375
    
    
    $
    15,089
    
    
    $
    53,593CommitmentsOutstanding letters of credit
    
    $
    3,268
    
    
    $
    3,268
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Total commitments
    
    $
    3,268
    
    
    $
    3,268
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 28




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##### Table of Contents



Financial Position
  (Dollars in Thousands)
 January 2,
    
    
    October 3,
    
    
    Increase/(Decrease)2010
    
    
    2009
    
    
    $
    
    
    %Current assets:Cash and cash equivalents
    
    $
    41,308
    
    
    $
    33,609
    
    
    $
    7,699
    
    
    
    22.9
    %Trade receivables, net
    
    
    43,188
    
    
    
    42,449
    
    
    
    739
    
    
    
    1.7Inventories
    
    
    106,379
    
    
    
    90,305
    
    
    
    16,074
    
    
    
    17.8Prepaid expenses and
other current assets
    
    
    6,042
    
    
    
    6,315
    
    
    
    (273
    )
    
    
    (4.3
    )Total current assets
    
    
    196,917
    
    
    
    172,678
    
    
    
    24,239
    
    
    
    14.0Current liabilities:Trade accounts payable
    
    
    34,701
    
    
    
    18,214
    
    
    
    16,487
    
    
    
    90.5Accrued interest payable
    
    
    9,101
    
    
    
    5,392
    
    
    
    3,709
    
    
    
    68.8Accrued expenses and
other current
liabilities
    
    
    23,540
    
    
    
    26,642
    
    
    
    (3,102
    )
    
    
    (11.6
    )Revolving loan
    
    
    18,293
    
    
    
    17,500
    
    
    
    793
    
    
    
    4.5Current portion of
long-term debt and
capital lease
obligations
    
    
    374
    
    
    
    489
    
    
    
    (115
    )
    
    
    (23.5
    )Total current liabilities
    
    
    86,009
    
    
    
    68,237
    
    
    
    17,772
    
    
    
    26.0Working capital
    
    $
    110,908
    
    
    $
    104,441
    
    
    $
    6,467
    
    
    
    6.2
    %
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Risk
  29




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##### Table of Contents



Foreign Operations; Currency Risk
  Raw Material; Commodity Price Risk
  
 Item 4T. Controls and Procedures
 Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  30




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
 Not applicable
 
 Item 1A. Risk Factors
 See Risk Factors disclosed in the Form 10-K for the fiscal year ended October 3, 2009.
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 None
 
 Item 3. Defaults Upon Senior Securities
 None
 
 Item 4. Submission of Matters to a Vote of Security Holders
 None
 
 Item 5. Other Information
 None
 
 Item 6. Exhibits
 Exhibit 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 2002Exhibit 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 2002Exhibit 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 2002Exhibit 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
 31




---



##### Table of Contents



AMES TRUE TEMPER, INC.
 
 SIGNATURES
  AMES TRUE TEMPER, INC.Date: February 12, 2010
    /s/ Duane R. GreenlyDuane R. GreenlyPresident and Chief Executive Officer
(Principal Executive Officer)Date: February 12, 2010
    /s/ David M. NutiDavid M. NutiChief Financial Officer
(Principal Financial Officer) 32




---



##### Table of Contents



AMES TRUE TEMPER, INC.
 
 EXHIBIT INDEX
 Exhibit
    
    Description31.1
    
    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 200231.2
    
    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 200232.1
    
    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 200232.2
    
    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
 33