##### 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 December 27, 2008


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 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)


465 Railroad Avenue, Camp Hill, Pennsylvania(Address of principal executive offices)
    
    17011(Zip Code)


Registrants telephone number, including area code:  (717) 737-1500 Former name, former address and former fiscal year, if changed since last report:  NOT APPLICABLE
  þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer   þ
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
  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 December 27, 2008
and September 27, 2008
    
    
    1Condensed Consolidated Statements of Operations for the
thirteen week periods ended December 27, 2008 and December 29,
2007
    
    
    2Condensed Consolidated Statements of Cash Flows for the
thirteen week periods ended December 27, 2008 and December 29,
2007
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    20Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    29Item 4T. Controls and Procedures
    
    
    29PART 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-10.1:AMENDMENT TO EMPLOYMENT AGREEMENTEX-31.1:CERTIFICATIONEX-31.2:CERTIFICATIONEX-32.1:CERTIFICATIONEX-32.2:CERTIFICATION




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 ATT Holding Co.
 
 Condensed Consolidated Balance Sheets
 (In Thousands)
 (Unaudited)
 December 27,
    
    
    September 27,2008
    
    
    2008AssetsCurrent assets:Cash and cash equivalents
    
    $
    18,988
    
    
    $
    17,159Trade receivables, net
    
    
    57,457
    
    
    
    59,168Inventories
    
    
    140,766
    
    
    
    110,891Assets held for sale
    
    
    549
    
    
    
    1,025Prepaid expenses and other current assets
    
    
    7,090
    
    
    
    6,156Total current assets
    
    
    224,850
    
    
    
    194,399Property, plant and equipment, net
    
    
    52,103
    
    
    
    55,237Intangibles, net
    
    
    54,781
    
    
    
    56,149Goodwill
    
    
    55,831
    
    
    
    58,242Other noncurrent assets
    
    
    9,084
    
    
    
    9,798Total assets
    
    $
    396,649
    
    
    $
    373,825Liabilities and stockholders deficitCurrent liabilities:Trade accounts payable
    
    $
    42,246
    
    
    $
    35,691Accrued interest payable
    
    
    9,427
    
    
    
    6,021Accrued expenses and other current liabilities
    
    
    23,254
    
    
    
    27,634Revolving loan
    
    
    64,598
    
    
    
    40,010Current portion of long-term debt and capital lease obligations
    
    
    559
    
    
    
    554Total current liabilities
    
    
    140,084
    
    
    
    109,910Deferred income taxes
    
    
    11,352
    
    
    
    11,348Long-term debt
    
    
    300,016
    
    
    
    300,130Accrued retirement benefits
    
    
    23,209
    
    
    
    26,108Other liabilities
    
    
    11,004
    
    
    
    10,534Total liabilities
    
    
    485,665
    
    
    
    458,030Commitments 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
December 27, 2008 and September 27, 2008 (Liquidation
preference of $62,495 at December 27, 2008)
    
    
    
    
    
    
    Common stockClass A, $.0001 per share par value; 1,600,000
shares authorized; 726,556 shares issued and outstanding as of
December 27, 2008 and September 27, 2008
    
    
    
    
    
    
    Common stockClass B, $.0001 per share par value; 300,000
shares authorized; 267,448 shares issued and outstanding as of
December 27, 2008 and September 27, 2008
    
    
    
    
    
    
    Additional paid-in capital
    
    
    110,813
    
    
    
    110,500Predecessor basis adjustment
    
    
    (13,539
    )
    
    
    (13,539
    )Accumulated deficit
    
    
    (182,067
    )
    
    
    (172,129
    )Accumulated other comprehensive loss
    
    
    (4,223
    )
    
    
    (9,037
    )Total stockholders deficit
    
    
    (89,016
    )
    
    
    (84,205
    )Total liabilities and stockholders deficit
    
    $
    396,649
    
    
    $
    373,825
 See accompanying notes.
 1




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##### Table of Contents



ATT Holding Co.
 
 Condensed Consolidated Statements of Operations
 (In Thousands)
 (Unaudited)
 Thirteen Week Period EndedDecember 27,
    
    
    December 29,2008
    
    
    2007Net sales
    
    $
    92,334
    
    
    $
    98,781Cost of goods sold
    
    
    64,449
    
    
    
    73,407Gross profit
    
    
    27,885
    
    
    
    25,374Selling, general and administrative expenses
    
    
    17,798
    
    
    
    21,468Loss on disposal of fixed assets
    
    
    32
    
    
    
    286Amortization of intangible assets
    
    
    305
    
    
    
    342Impairment charge
    
    
    476
    
    
    
    Operating income
    
    
    9,274
    
    
    
    3,278Interest expense
    
    
    7,971
    
    
    
    8,506Other expense (income)
    
    
    11,363
    
    
    
    (2,290
    )Loss before income taxes
    
    
    (10,060
    )
    
    
    (2,938
    )Income tax expense
    
    
    178
    
    
    
    850Net loss
    
    $
    (10,238
    )
    
    $
    (3,788
    )
 See accompanying notes.
 2




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##### Table of Contents



ATT Holding Co.
 
 Condensed Consolidated Statements of Cash Flows
 (In Thousands)
 (Unaudited)
 Thirteen Week Period EndedDecember 27,
    
    
    December 29,2008
    
    
    2007Operating activitiesNet loss
    
    $
    (10,238
    )
    
    $
    (3,788
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation expense
    
    
    3,887
    
    
    
    3,878Amortization of intangible assets
    
    
    305
    
    
    
    342Amortization of loan fees
    
    
    555
    
    
    
    560Benefit from deferred taxes
    
    
    (359
    )
    
    
    (869
    )Provision for bad debts
    
    
    132
    
    
    
    210Noncash interest expense
    
    
    
    
    
    
    24Amortization of bond discount
    
    
    27
    
    
    
    27Loss on disposal of property, plant and equipment
    
    
    32
    
    
    
    286Unrealized loss (gain)
    
    
    11,842
    
    
    
    (2,322
    )Impairment charge
    
    
    476
    
    
    
    Changes in assets and liabilities:Accounts receivable
    
    
    66
    
    
    
    (3,040
    )Inventories
    
    
    (32,519
    )
    
    
    (14,904
    )Prepaid expenses and other assets
    
    
    (416
    )
    
    
    (417
    )Trade accounts payable
    
    
    7,646
    
    
    
    8,599Accrued expenses and other liabilities
    
    
    842
    
    
    
    4,025Net cash used in operating activities
    
    
    (17,722
    )
    
    
    (7,389
    )Investing activitiesCash paid for property, plant and equipment
    
    
    (2,418
    )
    
    
    (1,555
    )Proceeds from sale of property, plant and equipment
    
    
    5
    
    
    
    424Net cash used in investing activities
    
    
    (2,413
    )
    
    
    (1,131
    )Financing activitiesRepayments of long-term debt
    
    
    (136
    )
    
    
    (105
    )Borrowings on revolving loan
    
    
    43,488
    
    
    
    35,867Repayments on revolving loan
    
    
    (18,900
    )
    
    
    (24,600
    )Net cash provided by financing activities
    
    
    24,452
    
    
    
    11,162Effect of exchange rate changes on cash and cash equivalents
    
    
    (2,488
    )
    
    
    75Increase in cash and cash equivalents
    
    
    1,829
    
    
    
    2,717Cash and cash equivalents at beginning of period
    
    
    17,159
    
    
    
    5,182Cash and cash equivalents at end of period
    
    $
    18,988
    
    
    $
    7,899Supplemental Cash Flow InformationCash paid for interest
    
    $
    4,056
    
    
    $
    4,253Cash paid for income taxes
    
    $
    89
    
    
    $
    48Property, plant and equipment in trade accounts payable at end of period
    
    $
    1,054
    
    
    $
    273
 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
 Fair Value Measurements
 The Fair Value Option for Financial Assets
and Financial Liabilities, Including an Amendment of FASB Statement No. 115
 Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans  an amendment of FASB No. 87, 88, 106, and 132(R)
 4




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ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 To Be 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.
  Noncontrolling Interests in Consolidated
Financial Statementsan amendment of ARB No. 51
 Disclosures about Derivative Instruments and
Hedging Activities Accounting for Derivative Instruments and Hedging Activities.
 3. Inventories
  December 27,
    
    
    September 27,2008
    
    
    2008Finished goods
    
    $
    88,744
    
    
    $
    69,681Work in process
    
    
    15,780
    
    
    
    13,564Raw materials
    
    
    36,242
    
    
    
    27,646$
    140,766
    
    
    $
    110,891
 4. Goodwill and Other Intangibles
  United States
    
    
    Canada
    
    
    TotalGoodwill at September 27, 2008
    
    $
    43,605
    
    
    $
    14,637
    
    
    $
    58,242Currency translation adjustments
    
    
    
    
    
    
    (2,411
    )
    
    
    (2,411
    )Goodwill at December 27, 2008
    
    $
    43,605
    
    
    $
    12,226
    
    
    $
    55,831
 5




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
  Gross Carrying
    
    
    AccumulatedAmount
    
    
    AmortizationIndefinite lived intangible assets:Trade names
    
    $
    48,040
    
    
    $
    Finite lived intangible assets:Technology (patents)
    
    
    1,356
    
    
    
    1,107Non-compete agreements
    
    
    976
    
    
    
    949Customer relationships
    
    
    11,647
    
    
    
    5,18213,979
    
    
    
    7,238$
    62,019
    
    
    $
    7,238
  Gross Carrying
    
    
    AccumulatedAmount
    
    
    AmortizationIndefinite lived intangible assets:Trade names
    
    $
    48,967
    
    
    $
    Finite lived intangible assets:Technology (patents)
    
    
    1,356
    
    
    
    1,095Non-compete agreements
    
    
    976
    
    
    
    944Customer relationships
    
    
    11,775
    
    
    
    4,88614,107
    
    
    
    6,925$
    63,074
    
    
    $
    6,925
  January 2009  September 2009
    
    $
    916Fiscal 2010
    
    
    1,211Fiscal 2011
    
    
    1,200Fiscal 2012
    
    
    1,180Fiscal 2013
    
    
    1,166Thereafter
    
    
    1,068$
    6,741
 5. Income Taxes
  6




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##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
    6. Debt Arrangements
  December 27,
    
    
    September 27,2008
    
    
    2008Revolving Loan
    
    $
    64,598
    
    
    $
    40,010Senior Floating Rate Notes, net of
unamortized discount of $322 and $349,
respectively
    
    
    149,678
    
    
    
    149,651Senior Subordinated Notes
    
    
    150,000
    
    
    
    150,000Term Note
    
    
    897
    
    
    
    1,033Total debt
    
    
    365,173
    
    
    
    340,694Less short-term revolving loan
    
    
    (64,598
    )
    
    
    (40,010
    )Current portion of long-term debt
    
    
    (559
    )
    
    
    (554
    )Long-term debt
    
    $
    300,016
    
    
    $
    300,130
 7




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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 of
    
    as of
    
    Rate as ofBorrowing
    
    December
    
    December
    
    December
    
    December
    
    ExpirationAmount
    
    27, 2008
    
    27, 2008
    
    27, 2008
    
    27, 2008
    
    DateRevolving Loan
    
    $
    130,000
    
    
    $
    102,694
    
    
    $
    3,128
    
    
    $
    34,968
    
    
    
    3.94
    %
    
    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 as well as 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 4.75% as of October 13, 2008. October 13, 2008 represents the reset date for the
next 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 105.0% of principal on or after July 15,
2008, 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 15, 2008 through January 14, 2009
    
    3-month LIBOR
    
    
    3.63
    %
    
    $
    50,000
    
    
    
    7.63
    %January 16, 2008 through January 15, 2009
    
    3-month LIBOR
    
    
    4.31
    %
    
    
    66,667
    
    
    
    8.31
    %January 16, 2008 through January 15, 2009
    
    3-month LIBOR
    
    
    4.29
    %
    
    
    33,333
    
    
    
    8.29
    %January 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
    %
 
 (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.  8




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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 EndedDecember 27,
    
    
    December 29,
    
    
    December 27,
    
    
    December 29,2008
    
    
    2007
    
    
    2008
    
    
    2007Service cost
    
    $
    109
    
    
    $
    762
    
    
    $
    1
    
    
    $
    Interest cost
    
    
    2,149
    
    
    
    2,268
    
    
    
    22
    
    
    
    23Expected return on plan assets
    
    
    (2,585
    )
    
    
    (2,625
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    6
    
    
    
    6
    
    
    
    
    
    
    
    Amortization of unrecognized net loss
    
    
    98
    
    
    
    (5
    )
    
    
    (30
    )
    
    
    (29
    )Net periodic benefit (credit) cost
    
    $
    (223
    )
    
    $
    406
    
    
    $
    (7
    )
    
    $
    (6
    )
  Employer Contributions
   8. Other Comprehensive Loss
 Thirteen Week Period EndedDecember 27,
    
    
    December 29,2008
    
    
    2007Net loss
    
    $
    (10,238
    )
    
    $
    (3,788
    )Other comprehensive (loss) income:Currency translation adjustment
    
    
    5,319
    
    
    
    (1,069
    )Fair value adjustments of swaps, net of tax
    
    
    (600
    )
    
    
    (766
    )Effect of SFAS 158 adoption, net of tax (See Note 7)
    
    
    95
    
    
    
    Comprehensive loss
    
    
    (5,424
    )
    
    $
    (5,623
    )
 9. Segment Information
  9




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ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 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)
    
    
    3,604
    
    
    
    5,843
    
    
    
    (173
    )
    
    
    
    
    
    
    9,274Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,971Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,363Loss before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (10,060
    )
 Thirteen Week Period EndedDecember 29, 2007United States
    
    
    Canada
    
    
    Other
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    74,676
    
    
    $
    22,536
    
    
    $
    1,569
    
    
    $
    
    
    
    $
    98,781Intersegment sales
    
    
    1,436
    
    
    
    464
    
    
    
    879
    
    
    
    (2,779
    )
    
    
    Operating income (loss)
    
    
    361
    
    
    
    2,985
    
    
    
    (68
    )
    
    
    
    
    
    
    3,278Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,506Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,290
    )Loss before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (2,938
    )
  December 27,
    
    
    September 27,2008
    
    
    2008United States
    
    $
    274,670
    
    
    $
    250,964Canada
    
    
    114,374
    
    
    
    114,953Other
    
    
    7,605
    
    
    
    7,908Total
    
    $
    396,649
    
    
    $
    373,825
 10. Other Expense (Income)
  Thirteen Week Period EndedDecember 27,
    
    
    December 29,2008
    
    
    2007Unrealized loss (gain)
    
    $
    11,842
    
    
    $
    (2,329
    )Other
    
    
    (479
    )
    
    
    39Total
    
    $
    11,363
    
    
    $
    (2,290
    )
  10




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




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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 December 27, 2008
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    46
    
    
    $
    6
    
    
    $
    18,936
    
    
    $
    
    
    
    $
    18,988Trade receivables, net
    
    
    
    
    
    
    44,432
    
    
    
    
    
    
    
    13,025
    
    
    
    
    
    
    
    57,457Inventories
    
    
    
    
    
    
    121,414
    
    
    
    
    
    
    
    19,352
    
    
    
    
    
    
    
    140,766Assets held for sale
    
    
    
    
    
    
    549
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    549Prepaid expenses and other current assets
    
    
    
    
    
    
    4,274
    
    
    
    
    
    
    
    2,816
    
    
    
    
    
    
    
    7,090Total current assets
    
    
    
    
    
    
    170,715
    
    
    
    6
    
    
    
    54,129
    
    
    
    
    
    
    
    224,850Property, plant and equipment, net
    
    
    
    
    
    
    41,009
    
    
    
    
    
    
    
    11,094
    
    
    
    
    
    
    
    52,103Intangibles, net
    
    
    
    
    
    
    5,897
    
    
    
    42,700
    
    
    
    6,184
    
    
    
    
    
    
    
    54,781Goodwill
    
    
    
    
    
    
    43,605
    
    
    
    
    
    
    
    12,226
    
    
    
    
    
    
    
    55,831Intercompany receivable
    
    
    
    
    
    
    27,937
    
    
    
    247,595
    
    
    
    2,651
    
    
    
    (278,183
    )
    
    
    Investment in subsidiaries
    
    
    
    
    
    
    226,382
    
    
    
    56,590
    
    
    
    161,513
    
    
    
    (444,485
    )
    
    
    Other noncurrent assets
    
    
    
    
    
    
    9,084
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,084Total assets
    
    $
    
    
    
    $
    524,629
    
    
    $
    346,891
    
    
    $
    247,797
    
    
    $
    (722,668
    )
    
    $
    396,649Liabilities and stockholders deficitCurrent liabilities:Trade accounts payable
    
    $
    
    
    
    $
    33,092
    
    
    $
    41
    
    
    $
    9,113
    
    
    $
    
    
    
    $
    42,246Accrued interest payable
    
    
    
    
    
    
    9,427
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,427Accrued expenses and other current
liabilities
    
    
    
    
    
    
    17,568
    
    
    
    
    
    
    
    5,686
    
    
    
    
    
    
    
    23,254Revolving loan
    
    
    
    
    
    
    64,598
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64,598Current portion of long-term debt and
capital lease obligations
    
    
    
    
    
    
    559
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    559Total current liabilities
    
    
    
    
    
    
    125,244
    
    
    
    41
    
    
    
    14,799
    
    
    
    
    
    
    
    140,084Deferred income taxes
    
    
    
    
    
    
    112
    
    
    
    9,840
    
    
    
    1,400
    
    
    
    
    
    
    
    11,352Long-term debt
    
    
    
    
    
    
    300,016
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300,016Accrued retirement benefits
    
    
    
    
    
    
    21,681
    
    
    
    
    
    
    
    1,528
    
    
    
    
    
    
    
    23,209Other liabilities
    
    
    
    
    
    
    10,885
    
    
    
    79
    
    
    
    40
    
    
    
    
    
    
    
    11,004Intercompany payable
    
    
    
    
    
    
    155,707
    
    
    
    
    
    
    
    122,476
    
    
    
    (278,183
    )
    
    
    Cumulative losses in subsidiaries
    
    
    89,016
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (89,016
    )
    
    
    Total liabilities
    
    
    89,016
    
    
    
    613,645
    
    
    
    9,960
    
    
    
    140,243
    
    
    
    (367,199
    )
    
    
    485,665Commitments and contingenciesStockholders deficit:Preferred stock-Series A
    
    
    
    
    
    
    
    
    
    
    118,249
    
    
    
    58,253
    
    
    
    (176,502
    )
    
    
    Common stock-Class A
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock-Class B
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid-in capital
    
    
    110,813
    
    
    
    110,813
    
    
    
    154,502
    
    
    
    
    
    
    
    (265,315
    )
    
    
    110,813Predecessor basis adjustment
    
    
    (13,539
    )
    
    
    (13,539
    )
    
    
    
    
    
    
    
    
    
    
    13,539
    
    
    
    (13,539
    )Accumulated deficit
    
    
    (182,067
    )
    
    
    (182,067
    )
    
    
    48,565
    
    
    
    32,953
    
    
    
    100,549
    
    
    
    (182,067
    )Accumulated other comprehensive income
    
    
    (4,223
    )
    
    
    (4,223
    )
    
    
    15,615
    
    
    
    16,348
    
    
    
    (27,740
    )
    
    
    (4,223
    )Total stockholders deficit
    
    
    (89,016
    )
    
    
    (89,016
    )
    
    
    336,931
    
    
    
    107,554
    
    
    
    (355,469
    )
    
    
    (89,016
    )Total liabilities and stockholders deficit
    
    $
    
    
    
    $
    524,629
    
    
    $
    346,891
    
    
    $
    247,797
    
    
    $
    (722,668
    )
    
    $
    396,649
 12




---



##### 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 September 27, 2008
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    285
    
    
    $
    5
    
    
    $
    16,869
    
    
    $
    
    
    
    $
    17,159Trade receivables, net
    
    
    
    
    
    
    48,413
    
    
    
    
    
    
    
    10,755
    
    
    
    
    
    
    
    59,168Inventories
    
    
    
    
    
    
    91,411
    
    
    
    
    
    
    
    19,480
    
    
    
    
    
    
    
    110,891Assets held for sale
    
    
    
    
    
    
    1,025
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,025Prepaid expenses and other current assets
    
    
    
    
    
    
    4,313
    
    
    
    
    
    
    
    1,843
    
    
    
    
    
    
    
    6,156Total current assets
    
    
    
    
    
    
    145,447
    
    
    
    5
    
    
    
    48,947
    
    
    
    
    
    
    
    194,399Property, plant and equipment, net
    
    
    
    
    
    
    42,202
    
    
    
    
    
    
    
    13,035
    
    
    
    
    
    
    
    55,237Intangibles, net
    
    
    
    
    
    
    6,162
    
    
    
    42,701
    
    
    
    7,286
    
    
    
    
    
    
    
    56,149Goodwill
    
    
    
    
    
    
    43,605
    
    
    
    
    
    
    
    14,637
    
    
    
    
    
    
    
    58,242Intercompany receivable
    
    
    
    
    
    
    27,079
    
    
    
    241,936
    
    
    
    2,309
    
    
    
    (271,324
    )
    
    
    Investment in subsidiaries
    
    
    
    
    
    
    223,202
    
    
    
    58,343
    
    
    
    157,732
    
    
    
    (439,277
    )
    
    
    Other noncurrent assets
    
    
    
    
    
    
    9,798
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,798Total assets
    
    $
    
    
    
    $
    497,495
    
    
    $
    342,985
    
    
    $
    243,946
    
    
    $
    (710,601
    )
    
    $
    373,825Liabilities and stockholders (deficitCurrent liabilities:Trade accounts payable
    
    $
    
    
    
    $
    28,172
    
    
    $
    48
    
    
    $
    7,471
    
    
    $
    
    
    
    $
    35,691Accrued interest payable
    
    
    
    
    
    
    6,021
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,021Accrued expenses and other current
liabilities
    
    
    
    
    
    
    20,174
    
    
    
    
    
    
    
    7,460
    
    
    
    
    
    
    
    27,634Revolving loan
    
    
    
    
    
    
    40,010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,010Current portion of long-term debt and
capital lease obligations
    
    
    
    
    
    
    554
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    554Total current liabilities
    
    
    
    
    
    
    94,931
    
    
    
    48
    
    
    
    14,931
    
    
    
    
    
    
    
    109,910Deferred income taxes
    
    
    
    
    
    
    112
    
    
    
    9,566
    
    
    
    1,670
    
    
    
    
    
    
    
    11,348Long-term debt
    
    
    
    
    
    
    300,130
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300,130Accrued retirement benefits
    
    
    
    
    
    
    24,508
    
    
    
    
    
    
    
    1,600
    
    
    
    
    
    
    
    26,108Other liabilities
    
    
    
    
    
    
    10,487
    
    
    
    
    
    
    
    47
    
    
    
    
    
    
    
    10,534Intercompany payable
    
    
    
    
    
    
    151,532
    
    
    
    
    
    
    
    119,792
    
    
    
    (271,324
    )
    
    
    Cumulative losses in subsidiaries
    
    
    84,205
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (84,205
    )
    
    
    Total current liabilities
    
    
    84,205
    
    
    
    581,700
    
    
    
    9,614
    
    
    
    138,040
    
    
    
    (355,529
    )
    
    
    458,030Commitments and contingenciesStockholders (deficit) equity:Preferred stock-Series A
    
    
    
    
    
    
    
    
    
    
    118,249
    
    
    
    58,253
    
    
    
    (176,502
    )
    
    
    Common stock-Class A
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock-Class B
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid-in capital
    
    
    110,500
    
    
    
    110,500
    
    
    
    154,502
    
    
    
    
    
    
    
    (265,002
    )
    
    
    110,500Predecessor basis adjustment
    
    
    (13,539
    )
    
    
    (13,539
    )
    
    
    
    
    
    
    
    
    
    
    13,539
    
    
    
    (13,539
    )(Accumulated deficit) retained earnings
    
    
    (172,129
    )
    
    
    (172,129
    )
    
    
    50,548
    
    
    
    38,082
    
    
    
    83,499
    
    
    
    (172,129
    )Accumulated other comprehensive (loss)
income
    
    
    (9,037
    )
    
    
    (9,037
    )
    
    
    10,072
    
    
    
    9,571
    
    
    
    (10,606
    )
    
    
    (9,037
    )Total stockholders (deficit) equity
    
    
    (84,205
    )
    
    
    (84,205
    )
    
    
    333,371
    
    
    
    105,906
    
    
    
    (355,072
    )
    
    
    (84,205
    )Total liabilities and stockholders
(deficit) equity
    
    $
    
    
    
    $
    497,495
    
    
    $
    342,985
    
    
    $
    243,946
    
    
    $
    (710,601
    )
    
    $
    373,825
 13




---



##### 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 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 fixed assets
    
    
    
    
    
    
    32
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32Amortization of intangible assets
    
    
    
    
    
    
    267
    
    
    
    
    
    
    
    38
    
    
    
    
    
    
    
    305Impairment charge
    
    
    
    
    
    
    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
    
    
    
    
    
    
    
    178Equity in (loss) earnings of subsidiaries
    
    
    (10,238
    )
    
    
    (2,190
    )
    
    
    (8,708
    )
    
    
    3,780
    
    
    
    17,356
    
    
    
    Net (loss) income
    
    $
    (10,238
    )
    
    $
    (10,238
    )
    
    $
    (1,983
    )
    
    $
    (5,135
    )
    
    $
    17,356
    
    
    $
    (10,238
    )
 ATT Holding Co.
Condensed Consolidating Statement of Operations
For the Thirteen Week Period Ended December 29, 2007
 ATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Subsidiary Non-Holding Co.
    
    
    Temper Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    76,112
    
    
    $
    
    
    
    $
    24,494
    
    
    $
    (1,825
    )
    
    $
    98,781Cost of goods sold
    
    
    
    
    
    
    58,961
    
    
    
    
    
    
    
    16,271
    
    
    
    (1,825
    )
    
    
    73,407Gross profit
    
    
    
    
    
    
    17,151
    
    
    
    
    
    
    
    8,223
    
    
    
    
    
    
    
    25,374Selling, general and administrative expenses
    
    
    
    
    
    
    16,209
    
    
    
    25
    
    
    
    5,234
    
    
    
    
    
    
    
    21,468Loss on disposal of fixed assets
    
    
    
    
    
    
    286
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    286Amortization of intangible assets
    
    
    
    
    
    
    295
    
    
    
    
    
    
    
    47
    
    
    
    
    
    
    
    342Operating income (loss)
    
    
    
    
    
    
    361
    
    
    
    (25
    )
    
    
    2,942
    
    
    
    
    
    
    
    3,278Interest expense (income)
    
    
    
    
    
    
    10,542
    
    
    
    (4,374
    )
    
    
    2,338
    
    
    
    
    
    
    
    8,506Other expense (income)
    
    
    
    
    
    
    1,229
    
    
    
    (1,649
    )
    
    
    (1,870
    )
    
    
    
    
    
    
    (2,290
    )(Loss) income before income taxes
    
    
    
    
    
    
    (11,410
    )
    
    
    5,998
    
    
    
    2,474
    
    
    
    
    
    
    
    (2,938
    )Income tax (benefit) expense
    
    
    
    
    
    
    (2,069
    )
    
    
    2,099
    
    
    
    820
    
    
    
    
    
    
    
    850Equity in (loss) earnings of subsidiaries
    
    
    (3,788
    )
    
    
    5,553
    
    
    
    1,748
    
    
    
    2,363
    
    
    
    (5,876
    )
    
    
    Net (loss) income
    
    $
    (3,788
    )
    
    $
    (3,788
    )
    
    $
    5,647
    
    
    $
    4,017
    
    
    $
    (5,876
    )
    
    $
    (3,788
    )
 14




---



##### 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
    )
    
    $
    (1,983
    )
    
    $
    (5,135
    )
    
    $
    17,356
    
    
    $
    (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 (loss) of subsidiaries
    
    
    10,238
    
    
    
    2,190
    
    
    
    8,708
    
    
    
    (3,780
    )
    
    
    (17,356
    )
    
    
    (Benefit from) provision for deferred
taxes
    
    
    
    
    
    
    
    
    
    
    274
    
    
    
    (633
    )
    
    
    
    
    
    
    (359
    )Other, net
    
    
    
    
    
    
    989
    
    
    
    
    
    
    
    62
    
    
    
    
    
    
    
    1,051Unrealized (gain) loss
    
    
    
    
    
    
    81
    
    
    
    
    
    
    
    11,761
    
    
    
    
    
    
    
    11,842Impairment charge
    
    
    
    
    
    
    476
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    476Related party non-cash transactions
    
    
    
    
    
    
    (53
    )
    
    
    
    
    
    
    53
    
    
    
    
    
    
    
    Changes in assets and liabilities:Accounts receivable
    
    
    
    
    
    
    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




---



##### 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 29, 2007
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedOperating activitiesNet (loss) income
    
    $
    (3,788
    )
    
    $
    (3,788
    )
    
    $
    5,647
    
    
    $
    4,017
    
    
    $
    (5,876
    )
    
    $
    (3,788
    )Adjustments to reconcile net (loss)
income to net cash (used in) provided by
operating activities:Depreciation expense
    
    
    
    
    
    
    3,208
    
    
    
    
    
    
    
    670
    
    
    
    
    
    
    
    3,878Equity in earnings (loss) of subsidiaries
    
    
    3,788
    
    
    
    (5,553
    )
    
    
    (1,748
    )
    
    
    (2,363
    )
    
    
    5,876
    
    
    
    (Benefit from) provision for deferred
taxes
    
    
    
    
    
    
    (4,856
    )
    
    
    
    
    
    
    3,987
    
    
    
    
    
    
    
    (869
    )Other, net
    
    
    
    
    
    
    1,401
    
    
    
    
    
    
    
    48
    
    
    
    
    
    
    
    1,449Unrealized gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,322
    )
    
    
    
    
    
    
    (2,322
    )Changes in assets and liabilities:Accounts receivable
    
    
    
    
    
    
    1,098
    
    
    
    
    
    
    
    (4,138
    )
    
    
    
    
    
    
    (3,040
    )Inventories
    
    
    
    
    
    
    (16,302
    )
    
    
    
    
    
    
    1,398
    
    
    
    
    
    
    
    (14,904
    )Prepaid expenses and other assets
    
    
    
    
    
    
    (466
    )
    
    
    
    
    
    
    49
    
    
    
    
    
    
    
    (417
    )Trade accounts payable
    
    
    
    
    
    
    7,222
    
    
    
    (121
    )
    
    
    1,498
    
    
    
    
    
    
    
    8,599Intercompany accounts
    
    
    
    
    
    
    118
    
    
    
    (3,812
    )
    
    
    3,694
    
    
    
    
    
    
    
    Accrued expense and other liabilities
    
    
    
    
    
    
    7,705
    
    
    
    
    
    
    
    (3,680
    )
    
    
    
    
    
    
    4,025Net cash (used in) provided by operating
activities
    
    
    
    
    
    
    (10,213
    )
    
    
    (34
    )
    
    
    2,858
    
    
    
    
    
    
    
    (7,389
    )Investing activitiesCash paid for property, plant and
equipment
    
    
    
    
    
    
    (1,470
    )
    
    
    
    
    
    
    (85
    )
    
    
    
    
    
    
    (1,555
    )Proceeds from sale of property, plant
and equipment
    
    
    
    
    
    
    424
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    424Net cash used in investing activities
    
    
    
    
    
    
    (1,046
    )
    
    
    
    
    
    
    (85
    )
    
    
    
    
    
    
    (1,131
    )Financing activitiesRepayments of long-term debt
    
    
    
    
    
    
    (105
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (105
    )Borrowings on revolving loan
    
    
    
    
    
    
    35,867
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,867Repayments on revolving loan
    
    
    
    
    
    
    (24,600
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,600
    )Net cash provided by financing activities
    
    
    
    
    
    
    11,162
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,162Effect of exchange rate changes on cash
and cash equivalents
    
    
    
    
    
    
    
    
    
    
    34
    
    
    
    41
    
    
    
    
    
    
    
    75(Decrease) increase in cash and cash
equivalents
    
    
    
    
    
    
    (97
    )
    
    
    
    
    
    
    2,814
    
    
    
    
    
    
    
    2,717Cash and cash equivalents at beginning
of period
    
    
    
    
    
    
    276
    
    
    
    5
    
    
    
    4,901
    
    
    
    
    
    
    
    5,182Cash and cash equivalents at end of
period
    
    $
    
    
    
    $
    179
    
    
    $
    5
    
    
    $
    7,715
    
    
    $
    
    
    
    $
    7,899
 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. Commitments and Contingencies
    14. Assets Held for Sale
  15. Fair Value Measurements
   
    
    Level 1  Inputs that represent quoted prices for identical instruments in active markets.
 17




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 
    
    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.
  Items Measured at Fair Value on a Recurring Basis
  Quoted Pricesin Active
    
    
    Significant
    
    
    SignificantMarkets for
    
    
    Other
    
    
    OtherIdentical
    
    
    Observable
    
    
    Unobservable
    
    
    Total as ofAssets
    
    
    Inputs
    
    
    Inputs
    
    
    December 27,(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    2008Foreign currency forward contracts
    
    $
    
    
    
    $
    977
    
    
    $
    
    
    
    $
    977Total assets
    
    $
    
    
    
    $
    977
    
    
    $
    
    
    
    $
    977Interest rate swaps and other
    
    $
    
    
    
    $
    1,513
    
    
    $
    
    
    
    $
    1,513Total liabilities
    
    $
    
    
    
    $
    1,513
    
    
    $
    
    
    
    $
    1,513
 16. Other
  17. Subsequent Events
  18




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 (a)EffectiveNotional
    
    InterestReceive
    
    Pay
    
    Amount
    
    RateJanuary 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. 19




---



##### 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;
    
    increased reliance on third party suppliers and manufacturers may decrease 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, especially 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 results of
operations;
    
    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
by other factors listed herein;
    
    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; and
    
    we may not be able to acquire complementary lawn and garden product manufacturers or
brands; in addition, pursuing or completing acquisitions may negatively impact our
operating results, divert managements attention from operating our core business, and
expose us to other risks.
 20




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##### Table of Contents



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
  21




---



##### Table of Contents



(Dollars in Millions)
 Q1
    
    
    Q1
    
    
    Increase/(Decrease)2009
    
    
    2008
    
    
    $
    
    
    %Net sales
    
    $
    92.3
    
    
    $
    98.8
    
    
    
    (6.5
    )
    
    
    (6.6
    )%Cost of goods sold
    
    
    64.4
    
    
    
    73.4
    
    
    
    (9.0
    )
    
    
    (12.3
    )%Gross profit
    
    
    27.9
    
    
    
    25.4
    
    
    
    2.5
    
    
    
    9.8
    %Gross profit percentage
    
    
    30.2
    %
    
    
    25.7
    %Selling, general, and
administrative expenses
    
    
    17.8
    
    
    
    21.5
    
    
    
    (3.7
    )
    
    
    (17.2
    )%Loss on disposal of fixed assets
    
    
    
    
    
    
    0.3
    
    
    
    (0.3
    )
    
    
    (100.0
    )%Amortization of intangible assets
    
    
    0.3
    
    
    
    0.3
    
    
    
    
    
    
    
    Impairment charge
    
    
    0.5
    
    
    
    
    
    
    
    0.5
    
    
    
    Operating income
    
    
    9.3
    
    
    
    3.3
    
    
    
    6.0
    
    
    
    *Operating income percentage
    
    
    10.1
    %
    
    
    3.3
    %Interest expense
    
    
    8.0
    
    
    
    8.5
    
    
    
    (0.5
    )
    
    
    (5.9
    )%Other expense (income)
    
    
    11.4
    
    
    
    (2.3
    )
    
    
    13.7
    
    
    
    *Loss before taxes
    
    
    (10.1
    )
    
    
    (2.9
    )
    
    
    (7.2
    )
    
    
    *Income tax expense
    
    
    0.2
    
    
    
    0.9
    
    
    
    (0.7
    )
    
    
    (77.8
    )%Net loss
    
    
    (10.2
    )
    
    
    (3.8
    )
    
    
    (6.4
    )
    
    
    *
 
 *
    
    Greater than 100%.Note:  Totals may not sum due to rounding. Q1 2009 compared to Q1 2008
 Net Sales.
 Gross Profit.
 SG&A.
 Amortization of Intangible Assets.
 22




---



##### Table of Contents



Impairment Charge.
 Interest Expense.
 Other Expense (Income)
 Income Tax Expense
 Our Segments
  (Dollars in Millions)
 Q1
    
    
    Q1
    
    
    Increase/(Decrease)2009
    
    
    2008
    
    
    $
    
    
    %Net sales:United States
    
    $
    66.5
    
    
    $
    74.7
    
    
    
    (8.2
    )
    
    
    (11.0
    )%Canada
    
    
    24.3
    
    
    
    22.5
    
    
    
    1.8
    
    
    
    8.0
    %Other
    
    
    1.5
    
    
    
    1.6
    
    
    
    (0.1
    )
    
    
    (6.3
    )%Net sales
    
    $
    92.3
    
    
    $
    98.8
    
    
    
    (6.5
    )
    
    
    (6.6
    )%Operating income (loss):United States
    
    $
    3.6
    
    
    $
    0.3
    
    
    
    3.3
    
    
    
    *Canada
    
    
    5.8
    
    
    
    3.0
    
    
    
    2.8
    
    
    
    93.3
    %Other
    
    
    (0.1
    )
    
    
    
    
    
    
    (0.1
    )
    
    
    Operating income (loss)
    
    $
    9.3
    
    
    $
    3.3
    
    
    
    6.0
    
    
    
    *
 
 *
    
    Greater than 100%. Q1 2009 compared to Q1 2008
 United States
 Net Sales.
 23




---



##### Table of Contents



Operating income (loss).
 Canada
 Net Sales.
 Operating income.
 Other
  Liquidity and Capital Resources
  (Dollars in Millions)
 Q1
    
    Q1
    
    Increase/(Decrease)2009
    
    2008
    
    $
    
    %Net cash used in operating activities
    
    $
    (17.7
    )
    
    $
    (7.4
    )
    
    $
    10.3
    
    
    
    *Net cash used in investing activities
    
    
    (2.4
    )
    
    
    (1.1
    )
    
    
    1.3
    
    
    
    *Net cash provided by financing
activities
    
    
    24.5
    
    
    
    11.2
    
    
    
    13.3
    
    
    
    *
 
 *
    
    Greater than 100%. Cash Flows from Operating Activities
  Cash Flows from Investing Activities
  Cash Flows from Financing Activities
  24




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##### Table of Contents



Debt and Other Obligations
  (Dollars in Thousands)
 December 27,
    
    
    September 27,2008
    
    
    2008Revolving Loan
    
    $
    64,598
    
    
    $
    40,010Senior Floating Rate Notes, net of
unamortized discount of $322 and $349,
respectively
    
    
    149,678
    
    
    
    149,651Senior Subordinated Notes
    
    
    150,000
    
    
    
    150,000Term Note
    
    
    897
    
    
    
    1,033Total debt
    
    
    365,173
    
    
    
    340,694Less short-term revolving loan
    
    
    (64,598
    )
    
    
    (40,010
    )Current portion of long-term debt
    
    
    (559
    )
    
    
    (554
    )Long-term debt
    
    $
    300,016
    
    
    $
    300,130
 Letters of
    
    (a)
    
    (b)Borrowing
    
    Credit
    
    Availability
    
    InterestMaximum
    
    Base as of
    
    Outstanding as
    
    as of
    
    Rate as ofBorrowing
    
    December
    
    of December
    
    December
    
    December
    
    ExpirationAmount
    
    27, 2008
    
    27, 2008
    
    27, 2008
    
    27, 2008
    
    DateRevolving Loan (f)
    
    $
    130,000
    
    
    $
    102,694
    
    
    $
    3,128
    
    
    $
    34,968
    
    
    
    3.94
    %
    
    Apr 7, 2011
 (d)
    
    
    
    
    
    (e)Original
    
    (c)
    
    Interest
    
    Maturity
    
    Call OptionPrincipal
    
    Interest Rate
    
    Payments
    
    Date
    
    DateJan 15, Apr 15,Senior Floating Rate Notes (f)
    
    $
    150,000
    
    
    LIBOR + 4%
    
    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 as well as 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 4.75% as of December 27, 2008. October 13, 2008 represents the reset date for
the next 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 105.0% of principal on or after July 15,
2008, 102.5% of principal on or after July 15, 2009, and 100% of principal on or after July
15, 2010.(f)
    
    As of December 27. 2008, the Company was in compliance with all financial covenants
under its indebtedness agreements. Amended and Restated Senior Secured Credit Agreement (Revolving Loan)
  25




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##### Table of Contents



Senior Subordinated Notes
   Senior Floating Rate Notes
 pari passu
  26




---



##### Table of Contents



Other Debt
  Interest Rate Swaps
  (Dollars in Thousands)
 (a)EffectiveNotional
    
    InterestReceive
    
    Pay
    
    Amount
    
    RateJanuary 15, 2008 through January 14, 2009
    
    3-month LIBOR
    
    
    3.63
    %
    
    $
    50,000
    
    
    
    7.63
    %January 16, 2008 through January 15, 2009
    
    3-month LIBOR
    
    
    4.31
    %
    
    
    66,667
    
    
    
    8.31
    %January 16, 2008 through January 15, 2009
    
    3-month LIBOR
    
    
    4.29
    %
    
    
    33,333
    
    
    
    8.29
    %January 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
    %
 
 (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.   (Dollars in Thousands)
 (a)EffectiveNotional
    
    InterestReceive
    
    Pay
    
    Amount
    
    RateJanuary 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
  27




---



##### Table of Contents



(Dollars in Thousands)
 January
    
    
    October
    
    
    October
    
    
    October
    
    
    October2009 to
    
    
    2009 to
    
    
    2010 to
    
    
    2011 to
    
    
    2012 toSeptember
    
    
    September
    
    
    September
    
    
    September
    
    
    SeptemberTotal
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    ThereafterContractual ObligationsRevolving loan
    
    $
    64,598
    
    
    $
    64,598
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Senior Floating Rate Notes
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,000
    
    
    
    
    
    
    
    Senior Subordinated Notes
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,000
    
    
    
    
    
    
    
    Term Note
    
    
    897
    
    
    
    418
    
    
    
    479
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest on Notes
    
    
    39,667
    
    
    
    9,646
    
    
    
    13,063
    
    
    
    13,129
    
    
    
    3,829
    
    
    
    
    
    
    
    Operating leases
    
    
    77,035
    
    
    
    7,259
    
    
    
    9,502
    
    
    
    9,438
    
    
    
    7,867
    
    
    
    6,576
    
    
    
    36,393Pension and postretirement
payments
    
    
    43,671
    
    
    
    8,816
    
    
    
    8,625
    
    
    
    9,234
    
    
    
    8,743
    
    
    
    8,253
    
    
    
    Medical self-insurance
    
    
    6,450
    
    
    
    6,450
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Open purchase orders
    
    
    47,289
    
    
    
    47,289
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other purchase commitments
    
    
    2,734
    
    
    
    2,685
    
    
    
    12
    
    
    
    12
    
    
    
    12
    
    
    
    13
    
    
    
    Forward purchase commitments
    
    
    7,566
    
    
    
    7,566
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total contractual obligations
    
    $
    589,907
    
    
    $
    154,727
    
    
    $
    31,681
    
    
    $
    31,813
    
    
    $
    320,451
    
    
    $
    14,842
    
    
    $
    36,393CommitmentsOutstanding letters of credit
    
    $
    3,128
    
    
    $
    3,128
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Total commitments
    
    $
    3,128
    
    
    $
    3,128
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
  Financial Position
  (Dollars in Thousands)
 December 27,
    
    
    September 27,
    
    
    Increase/(Decrease)2008
    
    
    2008
    
    
    $
    
    
    %Current assets:Cash and cash equivalents
    
    $
    18,988
    
    
    $
    17,159
    
    
    $
    1,829
    
    
    
    10.7
    %Trade receivables, net
    
    
    57,457
    
    
    
    59,168
    
    
    
    (1,711
    )
    
    
    (2.9
    )%Inventories
    
    
    140,766
    
    
    
    110,891
    
    
    
    29,875
    
    
    
    26.9
    %Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Assets held for sale
    
    
    549
    
    
    
    1,025
    
    
    
    (476
    )
    
    
    (46.4
    )%Prepaid expenses and other current assets
    
    
    7,090
    
    
    
    6,156
    
    
    
    934
    
    
    
    15.2
    %Total current assets
    
    
    224,850
    
    
    
    194,399
    
    
    
    30,451
    
    
    
    15.7
    %Current liabilities:Trade accounts payable
    
    
    42,246
    
    
    
    35,691
    
    
    
    6,555
    
    
    
    18.4
    %Accrued interest payable
    
    
    9,427
    
    
    
    6,021
    
    
    
    3,406
    
    
    
    56.6
    %Accrued expenses and other current
liabilities
    
    
    23,254
    
    
    
    27,634
    
    
    
    (4,380
    )
    
    
    (15.9
    )%Revolving loan
    
    
    64,598
    
    
    
    40,010
    
    
    
    24,588
    
    
    
    61.5
    %Current portion of long-term debt and
capital lease obligations
    
    
    559
    
    
    
    554
    
    
    
    5
    
    
    
    0.9
    %Total current liabilities
    
    
    140,084
    
    
    
    109,910
    
    
    
    30,174
    
    
    
    27.5
    %Working capital
    
    $
    84,766
    
    
    $
    84,489
    
    
    $
    277
    
    
    
    0.3
    %
 28




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##### Table of Contents




    
    The increase in inventories was mainly due to the inventory build in anticipation of
the spring selling season, higher commodity costs, and lower sales volume in Q1 2009 as
compared to Q1 2008.
    
    The increase in trade accounts payable and the revolving loan balance were due to the
increase in inventories as discussed above.
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Risk
  Foreign Operations; Currency Risk
  Raw Material; Commodity Price Risk
  
 Item 4T. Controls and Procedures
 Disclosure Controls and Procedures
  29




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##### Table of Contents



Internal Control Over Financial Reporting
 Internal Controls-Integrated Framework
 Changes in Internal Control over Financial Reporting
  30




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 Exhibit 10.1
    
    Amendment to Employment Agreement, dated as of February 4,
2009, between Ames True Temper, Inc. and Duane R. GreenlyExhibit 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 6, 2009
    /s/ Duane R. GreenlyDuane
R. GreenlyPresident and Chief Executive Officer
     (Principal Executive Officer)Date: February 6, 2009
    /s/ David M. NutiDavid M. NutiChief Financial Officer
     (Principal Financial Officer) 32




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##### Table of Contents



AMES TRUE TEMPER, INC.
 EXHIBIT INDEX
 Exhibit
    
    Description10.1
    
    Amendment to Employment Agreement, dated as of February 4, 2009,
between Ames True Temper, Inc. and Duane R. Greenly31.1
    
    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