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UNITEDSTATES SECURITIES AND EXCHANGECOMMISSION

WASHINGTON, D.C.20549

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Form10-Q

(Markone)

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|  |   | Quarterly Report Pursuant toSection 13 or 15(d) of the Securities Exchange Act of1934 |

        For the quarterly period endedDecember  30,2006

OR

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|  |   | Transition reportpursuant to Section 13 or 15(d) of the Securities Exchange Act of1934 |

        For the transition period from                                    to                                     

Commission File Number 333-118086

AMES TRUE TEMPER,INC.

(Exact name of registrant as specified initscharter)

|                                                                                    |  |  |                                    |
|------------------------------------------------------------------------------------|--|--|------------------------------------|
| Delaware                                                                           |  |  | 22-2335400                         |
| (Stateor other jurisdiction ofincorporation ororganization)                        |  |  | (I.R.S. EmployerIdentificationNo.) |
| 465Railroad Avenue, Camp Hill, Pennsylvania(Address of principalexecutive offices) |  |  | 17011(ZipCode)                     |
|                                                                                    |

(717)737-1500

(Registrant’s telephone number,including area code)

NOTAPPLICABLE

(Former name, former address andformer fiscal year, if changed since lastreport)

Indicate by check mark whether theregistrant (1) has filed all reports required to be filed bySection  13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such a period that theregistrant was required to file such reports), and (2) has been subjectto such filing requirements for the past 90 days.

Yes            No 

Indicate by checkmark whether the Registrant is an accelerated filer (as defined in Rule12b-2 of the Exchange Act).

Yes            No 

Indicate by checkmark whether the Registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).

Yes            No 

As ofFebruary  13,  2007 the Registrant had 1,000 shares of itscommon stock, $1.00 par value,outstanding.

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ATTHOLDINGCO.

INDEX

|                                                               |  |  |                                                                                                                                                              |  |  |        |
|---------------------------------------------------------------|--|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--------|
| PartI.    FinancialInformation            |  |  | PageNo.                                                                                                                                                      |
| Item1.                                                        |  |  | FinancialStatements                                                                                                                                          |  |  |   |
|                                                          |  |  | CondensedConsolidated Balance Sheets of ATT Holding Co. as of December30, 2006 (unaudited) and September 30,2006                                             |  |  | 1      |
|                                                          |  |  | CondensedConsolidated Statements of Operations of ATT Holding Co. for thethirteen-week periods ended December 30, 2006 andDecember 31, 2005 –unaudited |  |  | 2      |
|                                                          |  |  | Condensed ConsolidatedStatements of Cash Flows of ATT Holding Co. for the thirteen-weeksended December 30, 2006 and December 31,2005 – unaudited       |  |  | 3      |
|                                                          |  |  | Notes toCondensed Consolidated Financial Statements –unaudited                                                                                         |  |  | 4      |
| Item2.                                                        |  |  | Management’s Discussion and Analysis of FinancialCondition and Results ofOperations                                                                    |  |  | 14     |
| Item3.                                                        |  |  | Quantitative and Qualitative Disclosures About MarketRisk                                                                                                    |  |  | 20     |
| Item 4.                                                       |  |  | ControlsandProcedures                                                                                                                                        |  |  | 21     |
| PartII.    Other Information andSignature |  |  |                                                                                                                                                         |
| Item1.                                                        |  |  | LegalProceedings                                                                                                                                             |  |  | 22     |
| Item2.                                                        |  |  | Unregistered Sales of Equity Securities and Use ofProceeds                                                                                                   |  |  | 22     |
| Item3.                                                        |  |  | Defaults Upon SeniorSecurities                                                                                                                               |  |  | 22     |
| Item4.                                                        |  |  | Submission of Matters to a Vote ofSecurity-Holders                                                                                                           |  |  | 22     |
| Item5.                                                        |  |  | OtherInformation                                                                                                                                             |  |  | 22     |
| Item6.                                                        |  |  | Exhibits                                                                                                                                                     |  |  | 22     |
|                                                          |  |  | Signature                                                                                                                                                    |  |  | 23     |
|                                                               |

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Table of Contents

Item1.    Financial Statements

ATT HoldingCo.Condensed Consolidated Balance Sheets(InThousands)

|                                                 |  |  |                  |   |          |                   |  |  |  |   |          |   |
|-------------------------------------------------|--|--|------------------|---|----------|-------------------|--|--|--|---|----------|---|
|                                            |  |  | December30, 2006 |   |          | September 30,2006 |
|                                            |  |  | (unaudited)      |   |          |              |
| Assets                                          |  |  |                  |   |     |                   |  |  |  |   |     |   |
| Currentassets:                                  |  |  |                  |   |     |                   |  |  |  |   |     |   |
| Cash and cashequivalents                        |  |  |                  | $ | 4,912    |                   |  |  |  | $ | 5,638    |   |
| Restrictedcash                                  |  |  |                  |   | 2,081    |                   |  |  |  |   | 2,081    |   |
| Tradereceivables,net                            |  |  |                  |   | 52,113   |                   |  |  |  |   | 66,418   |   |
| Inventories                                     |  |  |                  |   | 170,317  |                   |  |  |  |   | 141,239  |   |
| Deferredincometaxes                             |  |  |                  |   | 9,920    |                   |  |  |  |   | 8,521    |   |
| Prepaidexpenses and other currentassets         |  |  |                  |   | 6,379    |                   |  |  |  |   | 6,673    |   |
| Totalcurrentassets                              |  |  |                  |   | 245,722  |                   |  |  |  |   | 230,570  |   |
| Property,plant and equipment,net                |  |  |                  |   | 71,145   |                   |  |  |  |   | 72,680   |   |
| Intangibles,net                                 |  |  |                  |   | 77,822   |                   |  |  |  |   | 78,450   |   |
| Goodwill                                        |  |  |                  |   | 56,600   |                   |  |  |  |   | 58,359   |   |
| Othernoncurrentassets                           |  |  |                  |   | 14,943   |                   |  |  |  |   | 15,720   |   |
| Totalassets                                     |  |  |                  | $ | 466,232  |                   |  |  |  | $ | 455,779  |   |
| Liabilitiesand stockholders’deficit       |  |  |                  |   |     |                   |  |  |  |   |     |   |
| Currentliabilities:                             |  |  |                  |   |     |                   |  |  |  |   |     |   |
| Trade accountspayable                           |  |  |                  | $ | 50,961   |                   |  |  |  | $ | 39,773   |   |
| Accruedinterestpayable                          |  |  |                  |   | 10,247   |                   |  |  |  |   | 7,325    |   |
| Accruedexpenses and other currentliabilities    |  |  |                  |   | 26,543   |                   |  |  |  |   | 30,131   |   |
| Revolvingloan                                   |  |  |                  |   | 79,448   |                   |  |  |  |   | 66,608   |   |
| Currentportion of long-termdebt                 |  |  |                  |   | 531      |                   |  |  |  |   | 528      |   |
| Totalcurrentliabilities                         |  |  |                  |   | 167,730  |                   |  |  |  |   | 144,365  |   |
| Deferredincome taxes                            |  |  |                  |   | 26,142   |                   |  |  |  |   | 26,325   |   |
| Long-termdebt                                   |  |  |                  |   | 300,905  |                   |  |  |  |   | 301,012  |   |
| Accruedretirementbenefits                       |  |  |                  |   | 7,538    |                   |  |  |  |   | 7,812    |   |
| Otherliabilities                                |  |  |                  |   | 5,471    |                   |  |  |  |   | 6,992    |   |
| Totalliabilities                                |  |  |                  |   | 507,786  |                   |  |  |  |   | 486,506  |   |
| Stockholders’deficit:                     |  |  |                  |   |     |                   |  |  |  |   |     |   |
| Preferredstock-SeriesA                          |  |  |                  |   | —  |                   |  |  |  |   | —  |   |
| Commonstock-ClassA                              |  |  |                  |   | —  |                   |  |  |  |   | —  |   |
| Commonstock-ClassB                              |  |  |                  |   | —  |                   |  |  |  |   | —  |   |
| Additionalpaid-incapital                        |  |  |                  |   | 110,500  |                   |  |  |  |   | 110,500  |   |
| Predecessorbasisadjustment                      |  |  |                  |   | (13,539  | )                 |  |  |  |   | (13,539  | ) |
| Retaineddeficit                                 |  |  |                  |   | (146,773 | )                 |  |  |  |   | (137,597 | ) |
| Accumulatedother comprehensiveincome            |  |  |                  |   | 8,258    |                   |  |  |  |   | 9,909    |   |
| Totalstockholders’deficit                 |  |  |                  |   | (41,554  | )                 |  |  |  |   | (30,727  | ) |
| Totalliabilities and stockholders’deficit |  |  |                  | $ | 466,232  |                   |  |  |  | $ | 455,779  |   |
|                                                 |

Seeaccompanying notes.

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Table of Contents

ATT Holding Co.Condensed ConsolidatedStatements of Operations(InThousands)

|                                            |  |  |                                       |   |        |                                      |  |  |  |   |        |   |
|--------------------------------------------|--|--|---------------------------------------|---|--------|--------------------------------------|--|--|--|---|--------|---|
|                                       |  |  | Thirteenweeks ended December 30, 2006 |   |        | Thirteen weeksended December 31,2005 |
|                                       |  |  | (unaudited)                           |
| Netsales                                   |  |  |                                       | $ | 84,942 |                                      |  |  |  | $ | 88,531 |   |
| Cost of goodssold                          |  |  |                                       |   | 62,615 |                                      |  |  |  |   | 67,289 |   |
| Grossprofit                                |  |  |                                       |   | 22,327 |                                      |  |  |  |   | 21,242 |   |
| Selling,general and administrativeexpenses |  |  |                                       |   | 20,702 |                                      |  |  |  |   | 17,879 |   |
| Loss ondisposal of fixedassets             |  |  |                                       |   | 535    |                                      |  |  |  |   | 113    |   |
| Amortization ofintangibleassets            |  |  |                                       |   | 373    |                                      |  |  |  |   | 448    |   |
| Operatingincome                            |  |  |                                       |   | 717    |                                      |  |  |  |   | 2,802  |   |
| Interestexpense                            |  |  |                                       |   | 8,622  |                                      |  |  |  |   | 7,379  |   |
| Otherexpense                               |  |  |                                       |   | 129    |                                      |  |  |  |   | 74     |   |
| Lossbefore incometaxes                     |  |  |                                       |   | (8,034 | )                                    |  |  |  |   | (4,651 | ) |
| Income taxexpense(benefit)                 |  |  |                                       |   | 1,142  |                                      |  |  |  |   | (1,441 | ) |
| Netloss                                    |  |  |                                       | $ | (9,176 | )                                    |  |  |  | $ | (3,210 | ) |
|                                            |

Seeaccompanying notes.

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Table of Contents

ATT Holding Co.Condensed ConsolidatedStatements of Cash Flows(InThousands)

|                                                                           |  |  |                                       |   |         |                                      |  |  |  |   |         |   |
|---------------------------------------------------------------------------|--|--|---------------------------------------|---|---------|--------------------------------------|--|--|--|---|---------|---|
|                                                                      |  |  | Thirteenweeks ended December 30, 2006 |   |         | Thirteen weeksended December 31,2005 |
|                                                                      |  |  | (unaudited)                           |
| Operatingactivities                                                       |  |  |                                       |   |    |                                      |  |  |  |   |    |   |
| Netloss                                                                   |  |  |                                       | $ | (9,176  | )                                    |  |  |  | $ | (3,210  | ) |
| Adjustmentsto reconcile net loss to net cash used in operatingactivities: |  |  |                                       |   |    |                                      |  |  |  |   |    |   |
| Depreciationexpense                                                       |  |  |                                       |   | 3,890   |                                      |  |  |  |   | 2,652   |   |
| Amortizationof intangibleassets                                           |  |  |                                       |   | 373     |                                      |  |  |  |   | 448     |   |
| Amortizationof loanfees                                                   |  |  |                                       |   | 638     |                                      |  |  |  |   | 633     |   |
| Provision fordeferredtaxes                                                |  |  |                                       |   | (1,549  | )                                    |  |  |  |   | (2,061  | ) |
| Provisionfor baddebts                                                     |  |  |                                       |   | (319    | )                                    |  |  |  |   | (104    | ) |
| Noncashinterestexpense                                                    |  |  |                                       |   | 14      |                                      |  |  |  |   | 87      |   |
| Amortization ofbond discount                                              |  |  |                                       |   | 27      |                                      |  |  |  |   | 27      |   |
| Loss onsale of fixedassets                                                |  |  |                                       |   | 535     |                                      |  |  |  |   | 113     |   |
| Changesin assets and liabilities, net of effects ofacquisitions:          |  |  |                                       |   |    |                                      |  |  |  |   |    |   |
| Accountsreceivable                                                        |  |  |                                       |   | 14,624  |                                      |  |  |  |   | (1,150  | ) |
| Inventories                                                               |  |  |                                       |   | (29,078 | )                                    |  |  |  |   | (16,221 | ) |
| Prepaidexpenses and otherassets                                           |  |  |                                       |   | 336     |                                      |  |  |  |   | 36      |   |
| Accountspayable                                                           |  |  |                                       |   | 11,188  |                                      |  |  |  |   | 5,026   |   |
| Accruedexpenses and otherliabilities                                      |  |  |                                       |   | (1,453  | )                                    |  |  |  |   | 333     |   |
| Netcash used in operatingactivities                                       |  |  |                                       |   | (9,950  | )                                    |  |  |  |   | (13,391 | ) |
| Investingactivities                                                       |  |  |                                       |   |    |                                      |  |  |  |   |    |   |
| Purchase of fixedassets                                                   |  |  |                                       |   | (3,293  | )                                    |  |  |  |   | (4,044  | ) |
| Proceeds fromsale of fixedassets                                          |  |  |                                       |   | 164     |                                      |  |  |  |   | 208     |   |
| Netcash used in investingactivities                                       |  |  |                                       |   | (3,129  | )                                    |  |  |  |   | (3,836  | ) |
| Financingactivities                                                       |  |  |                                       |   |    |                                      |  |  |  |   |    |   |
| Repayments oflong-termdebt                                                |  |  |                                       |   | (131    | )                                    |  |  |  |   | (127    | ) |
| Borrowings onrevolver, net                                                |  |  |                                       |   | 12,840  |                                      |  |  |  |   | — |   |
| Debtissuancecosts                                                         |  |  |                                       |   | — |                                      |  |  |  |   | (142    | ) |
| Netcash provided by (used in) financingactivities                         |  |  |                                       |   | 12,709  |                                      |  |  |  |   | (269    | ) |
| Effect ofexchange rate changes oncash                                     |  |  |                                       |   | (356    | )                                    |  |  |  |   | (7      | ) |
| Changein cash and cashequivalents                                         |  |  |                                       |   | (726    | )                                    |  |  |  |   | (17,503 | ) |
| Cash andcash equivalents at beginning ofperiod                            |  |  |                                       |   | 5,638   |                                      |  |  |  |   | 21,394  |   |
| Cashand cash equivalents at end ofperiod                                  |  |  |                                       | $ | 4,912   |                                      |  |  |  | $ | 3,891   |   |
|                                                                           |

Seeaccompanying notes.

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Table of Contents

ATTHOLDING CO.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)(Dollars inthousands)

1.    Basis ofPresentation

The accompanying interim unaudited condensedconsolidated financial statements have been prepared in accordance withU.S. generally accepted accounting principles for interim financialinformation and, therefore, do not include all of the information andfootnotes required by U.S. generally accepted accounting principles forcomplete annual financial statements. The accompanying financialinformation reflects all adjustments (consisting only of normalrecurring adjustments), which are, in the opinion of management,necessary for a fair presentation of the results for the interimperiods. As our business has historically been seasonal, the results ofoperations for the thirteen-week period ended December30,  2006 are not necessarily indicative of the results to beexpected for the full fifty-two week fiscal year endingSeptember  29,  2007. These condensed consolidatedfinancial statements should be read in conjunction with theCompany’s consolidated financial statements and notes thereto inthe financial statements for the year ended September  30,2006, which is included in the Company’s Annual Report on Form10-K for the fiscal year ended September  30,  2006.

The consolidated balance sheet at September  30,  2006has been derived from the audited consolidated balance sheet at thatdate but does not include all of the information and footnotes requiredby U.S. generally accepted accounting principles for complete financialstatements. Certain amounts in the accompanying financial statementshave been reclassified to conform to the December  30,2006 presentation.

All entities and assets owned by ATT HoldingCo. subsequent to June  27,  2004 are referred tocollectively as the ‘‘Company.’’ Allentities and assets owned by ATT Holding Co. on June  27,2004 or prior are referred to collectively as the‘‘Predecessor.’’

The preparation offinancial statements in conformity with accounting principles generallyaccepted in the United States requires management to make estimates andassumptions that affect the amounts reported in the financialstatements and accompanying notes. Actual results could differ fromthose estimates.

2.    Recent AccountingPronouncements

In September  2006, the FinancialAccounting Standards Board (‘‘FASB’’)issued Statement of Financial Accounting Standards No. 158,‘‘Employers’ Accounting for Defined BenefitPension and Other Postretirement Plans, an amendment of SFASstatements No. 87, 88, 106 and 132(R)’’, (SFAS158), to improve financial reporting by requiring an employer torecognize the overfunded or underfunded status of a defined benefitpost-retirement plan as an asset or liability was issued. SFAS 158requires employers to recognize in its changes of financial positionthe funded status of a benefit plan, measured as the difference betweenplan assets at fair value and the benefit obligation. For pensionplans, the benefit obligation is the projected benefit obligation; forany other post-retirement benefit plan, such as a retiree health careplan, the benefit obligation is the accumulated benefit obligation. Ifplan assets exceed plan liabilities, an asset would be recognized, andif plan liabilities exceed plan assets, a liability would berecognized. In addition, SFAS 158 requires changes in the funded statusof a defined benefit post-retirement plan be recognized incomprehensive income in the year in which the changes occur. SFAS 158does not change the amount of the expense recorded in acompany’s statement of income related to defined benefitpost-retirement plans. SFAS 158 is effective for fiscal years endingafter June  15,  2007. The Company is currently evaluatingwhat effect, if any, adoption of SFAS 158 will have on theCompany’s consolidated financial statements, which will not bedetermined until the September  29,  2007 measurement dateof the assets and benefit obligations of the defined benefitplans.

In September  2006, the FASB issued Statement ofFinancial Accounting Standards No. 157, ‘‘Fair ValueMeasurements’’, (SFAS 157). SFAS 157 defines fairvalue, establishes a framework for measuring 

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ATTHOLDING CO.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)(Dollars inthousands)

fair value in generally accepted accountingprinciples (‘‘GAAP’’), and expandsdisclosures about fair value measurements. The statement applies underother accounting pronouncements that require or permit fair valuemeasurements. Accordingly, SFAS 157 does not require any new fair valuemeasurements. However, for some entities, the application of SFAS 157will change current practice. The Company is required to adopt SFAS 157in the first quarter of fiscal year 2009. The Company is currentlyevaluating what effect, if any, adoption of SFAS 157 will have on theCompany’s consolidated financial statements.

InSeptember  2006, the Securities and Exchange Commission issuedStaff Accounting Bulletin No.  108,‘‘Considering the Effects of Prior Year Misstatementswhen Quantifying Misstatements in Current Year FinancialStatements,’’ (SAB 108). SAB 108 requires companiesto evaluate the materiality of identified unadjusted errors on eachfinancial statement and related financial statement disclosure usingboth the rollover approach and the iron curtain approach. The rolloverapproach quantifies misstatements based on the amount of the error inthe current year financial statements whereas the iron curtain approachquantifies misstatements based on the effects of correcting themisstatement existing in the balance sheet at the end of the currentyear, irrespective of the misstatement’s year(s) of origin.Financial statements would require adjustment when either approachresults in quantifying misstatement that is material. Correcting prioryear financial statements for immaterial errors would not requirepreviously filed reports to be amended. SAB 108 is effective in thefiscal year ending September  29,  2007. The adoption ofSAB 108 had no impact on the Company’s financial position orstatement of operations.

In July  2006, the FASB issuedFASB Interpretation No. 48, ‘‘Accounting forUncertainty in Income Taxes, an interpretation of FASB StatementNo. 109,’’ (FIN 48). FIN 48 prescribes a recognitionthreshold and measurement attribute for the financial statementrecognition and measurement of a tax position taken or expected to betaken in a tax return. FIN 48 is effective for the fiscal year endingSeptember  27,  2008. The Company is currently evaluatingwhat effect, if any, adoption of FIN 48 will have on theCompany’s consolidated financialstatements.

3.    Acquisitions and PurchaseAccounting

Acquisition of Predecessor

On June 28,2004, the Company completed the sale of all outstanding common andpreferred stock of the Predecessor to affiliates of Castle Harlan,Inc., a private equity group. CHATT Holdings Inc., the‘‘buyer’’, and CHATT Holdings LLC, the‘‘buyer parent’’, were created to make theacquisition of the Company. Approximately 87% of the equityinterests of the buyer parent are owned by affiliates of Castle Harlan,and the remainder was issued to members of our management who heldcapital stock in the Predecessor, in lieu of cash consideration thatthey otherwise would have been entitled to receive in the acquisition.In addition, certain members of management that did not hold equity inthe Predecessor purchased an equity interest in the buyer parent forcash.

The acquisition of the Predecessor was accounted for as apurchase in accordance with SFAS  No. 141, BusinessCombinations, and Emerging Issues Task Force (EITF) Issue No.88-16, Basis in Leveraged Buyout Transactions. As such, theacquired assets and assumed liabilities have been recorded at fairmarket value for the interests acquired and estimates of assumedliabilities by new investors and at the carryover basis for continuinginvestors. The acquired assets and assumed liabilities were assignednew book values in the same proportion as the residual interests of thecontinuing investors and the new interests acquired by the newinvestors. Under EITF 88-16, the Company was revalued at the mergerdate to the fair value to the extent of the majoritystockholder’s approximately 87% controlling interest inthe Company. The remaining approximately 13% is 

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ATTHOLDING CO.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)(Dollars inthousands)

accounted for at the continuingstockholders’ carryover basis in the Company. An adjustment of$13,539 to record this effect is included as a reduction ofstockholders’ equity under the caption‘‘Predecessor basis adjustment.’’ Theexcess of the purchase price over the historical basis of the netassets acquired has been applied to adjust net assets to their fairvalues to the extent of the majority stockholder’s approximately87% ownership.

Acquisition of Acorn and HoundDog

On April  7,  2006, Ames True Temper, Inc.(‘‘ATT’’), a direct wholly-owned subsidiaryof the Company, acquired Acorn Products, Inc.(‘‘Acorn’’), a Delaware corporation and theparent company of UnionTools, Inc.(‘‘Union’’), a business engaged in themanufacture and distribution of non-powered lawn and garden tools,pursuant to an Agreement and Plan of Merger (the ‘‘AcornMerger Agreement’’) among ATT, Acorn and ATTUT Holdings,Inc., a Delaware corporation and wholly-owned subsidiary of ATT(‘‘Merger Sub’’). Pursuant to the AcornMerger Agreement, ATT acquired all of the issued and outstandingcapital stock of Acorn through the merger of Merger Sub with and intoAcorn, with Acorn surviving as a wholly-owned subsidiary of ATT (the‘‘Acorn Merger’’). The Acorn Merger wasconsummated simultaneously with the execution of the Acorn MergerAgreement. The aggregate cash consideration paid by ATT on the day ofthe transaction was $46,394.

On April  12,  2006, HDAcquisition Corp. (‘‘HDAC’’), awholly-owned subsidiary of ATT, completed the acquisition ofsubstantially all of the assets and intellectual property of Hound DogProducts, Inc. (‘‘Hound Dog’’), a businessthat designs, markets and distributes non-powered lawn and gardentools. The transaction was consummated simultaneously with theexecution of an Asset Purchase Agreement (the ‘‘AssetPurchase Agreement’’) among HDAC, Hound Dog and theshareholders of Hound Dog. The cash consideration paid by HDAC on theday of the transaction was $5,161.

These businesses were acquiredto expand the Company’s product lines. The operating results ofthe acquired companies have been included in the accompanyingconsolidated statements of operations from the respective dates ofacquisition. The acquisitions of Acorn and Hound Dog are beingaccounted for as purchases in accordance with SFAS No. 141,Business Combinations. The financial statements as ofDecember  30,  2006 reflect a preliminary allocation of thepurchase price based upon available information and are subject tofurther refinement. The Company expects any refinements to occur by theend of the second quarter of fiscal 2007 and primarly relate to pendinglitigation, state escheat audit results and the closure of certainfacilities. The Hound Dog acquisition is subject to purchase priceadjustments that are contingent upon the achievement of certainfinancial goals. Any contingent payment realized will be added to thecost of the acquisitions in excess of the fair value of the net assetsacquired. Goodwill resulting from this transaction is not deductiblefor income tax purposes. The following represents the preliminaryallocation of purchase price for the Acorn and Hound Dogacquisitions:

|                                                                                        |  |  |  |   |         |   |
|----------------------------------------------------------------------------------------|--|--|--|---|---------|---|
| Revolverdebt used for purchase price including acquisition costs, net of cashacquired  |  |  |  | $ | 50,126  |   |
| Other liabilitiesassumed                                                               |  |  |  |   | 19,535  |   |
| Fair value of assetsacquired, primarily accounts receivable, inventory and fixedassets |  |  |  |   | (47,434 | ) |
| Identified intangibleassets, primarily tradenames andpatents                           |  |  |  |   | (4,830  | ) |
| Cost inexcess of fair value of net assets acquired(goodwill)                           |  |  |  | $ | 17,397  |   |
|                                                                                        |

Inconnection with the Acorn acquisition, the Company formulatedrestructuring plans for the integration of the acquired business. SeeFootnote 4 for additional information regarding theseplans.

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ATTHOLDING CO.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)(Dollars inthousands)

As of the date of ownership change, Acornhad approximately $88,000 of federal net operating loss carryforwards. Due to the ownership change, the net operating losses of Acornwill be limited under Internal Revenue Code §382 and limited aswell under the normal expiration dates of federal net operating losscarryfowards. It is currently projected that ATT will be able toutilize only $1,100 of the losses.  In order to avoid negativetax consequences of allowing net operating losses to expire unutilized,ATT will elect to relinquish the portion of the net operating lossesthat are in excess of the amounts to beutilized.

4.    Restructuring

Restructuring Related toAcquisition of Predecessor

In connection with the acquisition ofthe Predecessor on June  28,  2004, the Company began toassess and formulate an exit and restructuring plan that includesreductions of workforce, facility closures and changes in businessstrategies. The Company’s plan met the conditions of EITF 95-3.This  exit and restructuring plan is intended to increaseoperating efficiencies. At June  28,  2004, the Companyrecorded a liability of $4,782 related to the reductions of workforceand facility closures and $4,795 related to changes in businessstrategies for a product line. Adjustments have been made to thesereserves as the cost estimates are refined and finalized. The Companyexpects to complete the implementation of these plans within the nextone to three years. During the period ended December  30,2006, the Company reduced the restructuring reserve based on paymentsand the refinement of cost estimates during the period.

AtDecember  30,  2006, the remaining restructuring reservesof $2,433 were included in accrued expenses and other currentliabilities and related to portions of the exit plans that are not yetcomplete. Changes to the restructuring reserves are as follows:

|                                 |  |  |  |   |       |   |
|---------------------------------|--|--|--|---|-------|---|
| Balanceas of September  30,2006 |  |  |  | $ | 3,470 |   |
| Accretion ofInterest            |  |  |  |   | 57    |   |
| Purchase AccountingAdjustments  |  |  |  |   | (284  | ) |
| Payments                        |  |  |  |   | (810  | ) |
| Balanceas of December  30,2006  |  |  |  | $ | 2,433 |   |
|                                 |

RestructuringRelated to Acquisition of Acorn

At date of acquisition, theCompany recorded a reserve of $1,547 associated with certain facilityclosures and reductions in workforce as part of a facilityconsolidation plan. The Company appropriately met the conditions asoutlined in EITF 95-3 to record such charges as liabilities in apurchase accounting combination. This plan was executed beginning inthe third quarter of fiscal 2006 and is expected to be completed infiscal 2007. As the Company obtains additional information regardingcosts to close certain facilities, adjustments may be made to therestructuring reserves. These restructuring reserves were included inaccrued expenses and other current liabilities and related to portionsof the exit plan that have not yet been completed. In addition, certainemployees were given retention packages totaling approximately $2,987to transition their current roles over 4-12 months. These costs arebeing recognized over the retention period and have not been includedin the purchase price or as a reduction to the net assets acquired.During the quarter ended December  30,  2006, theCompany’s operating results reflect a charge of $671 related tothe recognition of these retention packages. Severance payments forthese retention packages began in the Company’s fourth quarterof fiscal 2006 and will carry into fiscal 2007. The balance of therestructuring reserve at December  30,  2006 is $371 whichis included in accrued expenses and other currentliabilities.

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|                                    |  |  |  |   |       |   |
|------------------------------------|--|--|--|---|-------|---|
| Balanceas of September  30,2006    |  |  |  | $ | 1,175 |   |
| Payments                           |  |  |  |   | (804  | ) |
| Balanceas of December 30,2006 |  |  |  | $ | 371   |   |
|                                    |

5.    Inventories

Inventories are asfollows:

|                       |  |  |                 |   |         |                   |  |  |  |   |         |   |
|-----------------------|--|--|-----------------|---|---------|-------------------|--|--|--|---|---------|---|
|                  |  |  | December30,2006 |   |         | September 30,2006 |
| Finishedgoods         |  |  |                 | $ | 119,662 |                   |  |  |  | $ | 94,903  |   |
| Work inprocess        |  |  |                 |   | 21,867  |                   |  |  |  |   | 21,398  |   |
| Rawmaterials          |  |  |                 |   | 37,818  |                   |  |  |  |   | 33,626  |   |
|                  |  |  |                 |   | 179,347 |                   |  |  |  |   | 149,927 |   |
| Lessinventoryreserves |  |  |                 |   | (9,030  | )                 |  |  |  |   | (8,688  | ) |
|                  |  |  |                 | $ | 170,317 |                   |  |  |  | $ | 141,239 |   |
|                       |

6.    Goodwill and Other Intangibles

In accordance with SFASNo. 142, Goodwill and Other Intangible Assets, theCompany is required to test goodwill and indefinite lived intangibleassets for impairment on at least an annual basis. There can be noassurance that future impairment tests will not result in a charge toearnings. There was a revision to goodwill during the thirteen weeksended December  30,  2006, as a result of the refinement ofthe cost estimates relating to the restructuring reserve and the impactof foreign currency exchange rates. The cost of other acquiredintangible assets, including primarily customer relationships andcovenants not to compete, is amortized on a straight-line basis overthe estimated lives of 2 to 19 years. Amortization of other intangiblesamounted to $373 for the thirteen weeks ended December30,  2006. The estimated aggregate amortization expense for eachof the succeeding periods is as follows: $1,105 for the remainder offiscal 2007; $1,337 in fiscal 2008; $1,221 in fiscal 2009; $1,211 infiscal 2010; $1,200 in fiscal 2011 and $3,451 thereafter.

Thechanges in carrying amount of goodwill for the thirteen week periodended December  30,  2006 are asfollows:

|                                      |  |  |  |   |        |   |
|--------------------------------------|--|--|--|---|--------|---|
| Goodwillat September  30,2006        |  |  |  | $ | 58,359 |   |
| Revision of purchase priceallocation |  |  |  |   | (1,080 | ) |
| Currency translationadjustments      |  |  |  |   | (679   | ) |
| Goodwillat December  30,2006         |  |  |  | $ | 56,600 |   |
|                                      |

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ATTHOLDING CO.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)(Dollars inthousands)

The following table reflects the componentsof intangible assets other thangoodwill:

|                                   |  |  |                 |   |        |                   |  |  |  |   |        |   |
|-----------------------------------|--|--|-----------------|---|--------|-------------------|--|--|--|---|--------|---|
|                              |  |  | December30,2006 |   |        | September 30,2006 |
| Finite lived intangibleassets:    |  |  |                 |   |   |                   |  |  |  |   |   |   |
| Technology(patents)               |  |  |                 | $ | 1,356  |                   |  |  |  | $ | 1,356  |   |
| Non-competeagreements             |  |  |                 |   | 976    |                   |  |  |  |   | 976    |   |
| Customerrelationships             |  |  |                 |   | 11,633 |                   |  |  |  |   | 11,672 |   |
|                              |  |  |                 |   | 13,965 |                   |  |  |  |   | 14,004 |   |
| Accumulatedamortization:          |  |  |                 |   |   |                   |  |  |  |   |   |   |
| Technology(patents)               |  |  |                 |   | (697   | )                 |  |  |  |   | (619   | ) |
| Non-competeagreements             |  |  |                 |   | (907   | )                 |  |  |  |   | (902   | ) |
| Customerrelationships             |  |  |                 |   | (2,836 | )                 |  |  |  |   | (2,546 | ) |
|                              |  |  |                 |   | (4,440 | )                 |  |  |  |   | (4,067 | ) |
| Netfinite lived intangibleassets  |  |  |                 |   | 9,525  |                   |  |  |  |   | 9,937  |   |
|                              |  |  |                 |   |   |                   |  |  |  |   |   |   |
| Indefinitelived intangibleassets: |  |  |                 |   |   |                   |  |  |  |   |   |   |
| Tradenames                        |  |  |                 |   | 68,297 |                   |  |  |  |   | 68,513 |   |
| TotalIntangibles,net              |  |  |                 | $ | 77,822 |                   |  |  |  | $ | 78,450 |   |
|                                   |

Theabove amounts include identified intangible assets related to the Acornand Hound Dog acquisitions and are subject to further refinement asdiscussed in Note 3.

7.     Income Taxes

At the end ofeach interim reporting period, we estimate the effective tax rateexpected to be applicable for the full fiscal year. The rate determinedis used in providing for income taxes on a year-to-date basis. The taxeffect of significant unusual items is reflected in the period in whichthey occur. The decrease in the effective tax rate was primarily due tothe mixture of tax rates for domestic and foreign income and therecording of a deferred tax asset valuation allowance. The valuationallowance is primarily attributable to the uncertainty regarding therealization of the net operating losses.

8.     DebtArrangements

Senior Subordinated Notes

On June28,  2004, we completed a private offering of $150.0million in aggregate principal amount at maturity of 10% SeniorSubordinated Notes due July  15,  2012. The SeniorSubordinated Notes are fully and unconditionally guaranteed by theCompany on a senior subordinated basis. On August  10,2004, we filed a registration statement with respect to new noteshaving substantially identical terms as the original notes, as part ofan offer to exchange registered notes for the privately issued originalSenior Subordinated Notes. The new notes evidence the same debt as theoriginal Senior Subordinated Notes, are entitled to the benefits of theindenture governing the original Senior Subordinated Notes and aretreated under the indenture as a single class with the original notes.The exchange offer was completed on November  24,2004.

The new Senior Subordinated Notes are unsecured seniorsubordinated obligations and rank behind all of our existing and futuresenior debt, including borrowings under the Amended and 

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ATTHOLDING CO.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)(Dollars inthousands)

Restated Senior Secured Credit Agreement,equally with any of our future senior subordinated debt, ahead of anyof our future debt that expressly provides for subordination to the newSenior Subordinated Notes and effectively behind all of the existingand future liabilities of our subsidiaries, including trade payables.The Company also guarantees the new Senior Subordinated Notes on asenior subordinated basis. This guarantee ranks behind all existing andfuture senior debt of the Company, including the guarantee of theAmended and Restated Senior Secured Credit Facility and the SeniorFloating Rate Notes, equal to all future senior subordinatedindebtedness and ahead of all future debt that expressly provides thatit is subordinated to the guarantee.

We pay interest on the newSenior Subordinated Notes semi-annually in cash, in arrears, onJanuary 15 and July  15 at an annual rate of 10.0%.The indenture governing new Senior Subordinated Notes contains variousaffirmative and negative covenants, subject to a number of importantlimitations and exceptions, including but not limited to those limitingour ability and the ability of our restricted subsidiaries to borrowmoney, guarantee debt or sell preferred stock, create liens, paydividends on or redeem or repurchase stock, make certain investments,sell stock in our restricted subsidiaries, restrict dividends or otherpayments from restricted subsidiaries, enter into transactions withaffiliates and sell assets or merge with other companies.

Theindenture governing the new Senior Subordinated Notes contains variousevents of default, including but not limited to those related tonon-payment of principal, interest or fees; violations of certaincovenants; certain bankruptcy-related events; invalidity of liens;non-payment of certain legal judgments; and cross defaults with certainother indebtedness. We may redeem the Senior Subordinated Notes on orafter July  15,  2008, except we may redeem up to35% of the new Senior Subordinated Notes prior to July15,  2007 with the proceeds of one or more public equityofferings. We are required to redeem the new Senior Subordinated Notesunder certain circumstances involving changes of control.

SeniorFloating Rate Notes

On January  14,  2005, ATTcompleted the offering of $150,000 Senior Floating Rate Notes due 2012.The proceeds of this offering were used by the Company to repay theentire balance of Term Loan B, which amounted to $139,300.Additionally, the proceeds were used to pay transaction fees and repaya portion of the revolving credit facility. As a result of thetransaction, the Company recorded a charge of $4,102 to interestexpense to write-off the portion of prepaid bank fees related to TermLoan B.

The Senior Floating Rate Notes, issued at a 0.5%discount, bear interest at a floating rate per annum, reset quarterly,equal to LIBOR plus 4%, which was 9.37% atDecember  30,  2006. The Senior Floating Rate Notes payinterest quarterly in cash in arrears on January  15,April  15, July  15 and October  15 of each year. TheSenior Floating Rate Notes mature on January  15,  2012,unless earlier redeemed or repurchased, and are subject to the termsand conditions set forth in the Indenture. The Company guarantees theSenior Floating Rate Notes.

The Senior Floating Rate Notes areunsecured, unsubordinated obligations of ATT. They are effectivelysubordinated to all existing and future secured debt, to the extent ofthe assets securing such debt, including borrowings under the Amendedand Restated Senior Secured Credit Agreement, pari passu with allfuture senior unsecured indebtedness, senior in right of payment to allexisting and future senior subordinated debt, including the SeniorSubordinated Notes, and effectively behind all of the existing andfuture liabilities of ATT’s subsidiaries, including tradepayables.

Interest Rate Swaps

In connection with theissuance of the Senior Floating Rate Notes, ATT entered into interestrate swaps (the ‘‘Swaps’’) with Bank ofAmerica, N.A. and Wachovia Bank, N.A. Pursuant to the Swap

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ATTHOLDING CO.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)(Dollars inthousands)

with Bank of America, N.A., which becameeffective on January  17,  2006, ATT swaps 3-month LIBORrates for fixed interest rates of 4.31% on a notional amount of$100,000 for the period from January  17,  2006 throughJanuary  15,  2008, $66,667 for the period fromJanuary  16,  2008 to January  15,  2009 and$33,333 for the period from January  16,  2009 throughJanuary  15,  2010. Pursuant to the Swap with WachoviaBank, N.A., effective January  15,  2006, ATT swaps 3 monthLIBOR rates for fixed interest rates of 4.29% on a notionalamount of $50,000 for the period from January  15,  2006through January  15,  2008, $33,333 for the period fromJanuary  16,  2008 to January  15,  2009 and$16,667 for the period from January  16,  2009 throughJanuary  15,  2010. These swaps fix the variable rateportion of the Senior Floating Rate Notes, while there is an additionalmargin of 4.00% that is fixed.

The Company has accountedfor the interest rate swaps in accordance with Statement of FinancialAccounting Standards (‘‘SFAS’’) No. 133,Accounting for Derivative Instruments and Hedging Activities, asamended by SFAS No. 138, Accounting for Certain DerivativeInstruments and Certain Hedging Activities and SFAS No. 149,Amendment of Statement 133 on Derivative Instruments and HedgingActivities (collectively, ‘‘SFAS133’’).  SFAS 133 establishes accounting andreporting standards for derivative instruments and hedging activities. SFAS 133 requires that all derivatives be recognized as eitherassets or liabilities at fair value. The Company has accounted for theswaps as cash flow hedges. As of December  30,  2006, theinterest rate swaps were recorded as an asset of $2,523. For thethirteen-week period ended December  30,  2006, the changein fair value was accumulated as other comprehensive income of $64, netof deferred taxes of $33.

Term Note

On July19,  2005, the Company entered into a $2,700 Term Note, Loan andSecurity Agreement and Subordination Agreement with a Lender. This noteis payable in monthly installments over five years. The interest rateper annum is equal to 2.5% and secured by certain collateral,which was agreed to by the Administrative Agent of the Senior SecuredCredit Facility. Under the terms of this note, the Company is requiredto create 108 jobs at the new manufacturing facility in Pennsylvaniawithin three years of the completion of the facility. The Term Notecontains customary events of default (subject to customary exceptions,thresholds and grace periods), including, without limitation:nonpayment of principal, interest, fees and failure to perform orobserve certain covenants. As of December  30,  2006, theCompany was in compliance with these covenants.

Amended andRestated Senior Secured Credit Agreement

On April7,  2006, in conjunction with the acquisition of Acorn, ATTentered into an amended and restated Senior Secured Credit Agreementwith Bank of America, N.A., as administrative agent, swing line lenderand letter of credit issuer, Acorn, Union, and Ames True TemperProperties, Inc. (‘‘ATTP’’); together withATT (the ‘‘Borrowers’’), the Company, asguarantor, and each lender from time to time thereto (the‘‘Credit Agreement’’). The Credit Agreementamends and restates ATT’s existing credit facility with, amongothers, Bank of America, N.A. Pursuant to the Credit Agreement, thelenders made available a five-year revolving credit facility of up to$130,000 in order to finance the acquisition of Acorn, pay fees andexpenses associated with the acquisition, repay outstanding debt andprovide for ongoing working capital.

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ATTHOLDING CO.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)(Dollars inthousands)

Borrowings outstanding under the revolvingcredit facility as of December  30,  2006 andSeptember  30,  2006 were $79,448 and $66,608,respectively. The Company had letters of credit outstanding totaling$4,392 and $4,392 as of December  30,  2006 andSeptember  30,  2006, respectively. The total amountavailable under the revolving credit facility at December30,  2006 was $38,144. The interest rate for base rate loansunder the revolving credit facility is calculated as the higher of 1)the prevailing Federal Funds rate plus 50 basis points or 2) theadministrative agent’s prime interest rate plus an applicablerate determined by the Company’s consolidated leverage ratio asdefined in the Credit Agreement. The interest rate for base rate loansunder the revolving credit facility was 9.25% at December30,  2006.

Total indebtedness is asfollows:

|                                                   |  |  |                 |   |         |                   |  |  |  |   |         |   |
|---------------------------------------------------|--|--|-----------------|---|---------|-------------------|--|--|--|---|---------|---|
|                                              |  |  | December30,2006 |   |         | September 30,2006 |
| Revolving loan facility dated 4/7/06, expires2011 |  |  |                 | $ | 79,448  |                   |  |  |  | $ | 66,608  |   |
| Term Note due2010                                 |  |  |                 |   | 1,972   |                   |  |  |  |   | 2,103   |   |
| Senior FloatingRate Notes due2012                 |  |  |                 |   | 150,000 |                   |  |  |  |   | 150,000 |   |
| 10%Senior Subordinated Notes due2012              |  |  |                 |   | 150,000 |                   |  |  |  |   | 150,000 |   |
| Totaldebt                                         |  |  |                 |   | 381,420 |                   |  |  |  |   | 368,711 |   |
| Less short-termrevolving loanfacilities           |  |  |                 |   | (79,448 | )                 |  |  |  |   | (66,608 | ) |
| Lesscurrent portion of long-termdebt              |  |  |                 |   | (531    | )                 |  |  |  |   | (528    | ) |
| Less unamortizeddiscount                          |  |  |                 |   | (536    | )                 |  |  |  |   | (563    | ) |
| Long-termdebt                                     |  |  |                 | $ | 300,905 |                   |  |  |  | $ | 301,012 |   |
|                                                   |

TheCredit Agreement and the Senior Subordinated Notes contain variousaffirmative and negative covenants customary for similar creditfacilities (subject to customary exceptions and certain existingobligations and liabilities), including, but not limited to,restrictions (with exceptions) on: liens; debt; loans, acquisitions,joint ventures and other investments; mergers and consolidations,sales, transfers and other dispositions of property or assets;dividends, distributions, redemptions and other restricted payments;changes in the nature of the Company’s business; transactionswith affiliates; and prepayment, redemption or repurchase of certaindebt. In addition, the Credit Agreement and term note require that theCompany meet certain financial covenants. Capital expenditures aresubject to fiscal year limitations of $16,125 in 2007 and $15,000thereafter. In the event the Company triggers Cash Dominion as definedin the Credit Agreement, the Company is required to maintain a minimumconsolidated EBITDA of $41,000 for any period of four quarters endingon the last day of any fiscal quarter. As of December  30,2006, the Company was in compliance with all applicable debtcovenants.

9.     Pension and Other Post-retirementBenefits

|                                      |  |  |                     |   |        |                     |  |  |                 |   |        |                  |  |  |  |   |         |   |  |  |  |   |         |  |
|--------------------------------------|--|--|---------------------|---|--------|---------------------|--|--|-----------------|---|--------|------------------|--|--|--|---|---------|---|--|--|--|---|---------|--|
|                                 |  |  | PensionBenefits     |   |        | OtherBenefits       |
|                                 |  |  | Thirteenweeks ended |   |        | Thirteen weeksended |
|                                 |  |  | December30,2006     |   |        | December 31,2005    |  |  | December30,2006 |   |        | December 31,2005 |
| ServiceCost                          |  |  |                     | $ | 796    |                     |  |  |                 | $ | 888    |                  |  |  |  | $ | — |   |  |  |  | $ | 1       |  |
| InterestCost                         |  |  |                     |   | 2,138  |                     |  |  |                 |   | 1,652  |                  |  |  |  |   | 27      |   |  |  |  |   | 36      |  |
| Expectedreturn on planassets         |  |  |                     |   | (2,894 | )                   |  |  |                 |   | (2,418 | )                |  |  |  |   | — |   |  |  |  |   | — |  |
| Amortizationof unrecognized net loss |  |  |                     |   | (12    | )                   |  |  |                 |   | 128    |                  |  |  |  |   | (28     | ) |  |  |  |   | — |  |
| Netperiodic benefit cost             |  |  |                     | $ | 28     |                     |  |  |                 | $ | 250    |                  |  |  |  | $ | (1      | ) |  |  |  | $ | 37      |  |
|                                      |

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ATTHOLDING CO.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)(Dollars inthousands)

Employer Contributions

Duringthe thirteen-week periods ended December  30,  2006 andDecember  31,  2005, the Company contributed $275 and $45,respectively, to its defined benefit pension plans.

During thethirteen-week period ended December  30,  2006, the Companymade no contributions to its post-retirement benefit plans. During thethirteen-week period ended December  31,  2005, the Companycontributed $56 to its post-retirement benefit plan.

OnDecember  31,  2006, the Union pension and other benefitplans were merged into the ATT’s pension and other benefitplans.

10.     Other ComprehensiveLoss

|                                           |  |  |                                     |   |         |                                     |  |  |  |   |        |   |
|-------------------------------------------|--|--|-------------------------------------|---|---------|-------------------------------------|--|--|--|---|--------|---|
|                                      |  |  | ThirteenweeksendedDecember 30, 2006 |   |         | ThirteenweeksendedDecember 31, 2005 |
| Netloss                                   |  |  |                                     | $ | (9,176  | )                                   |  |  |  | $ | (3,210 | ) |
| Othercomprehensive (loss)income:          |  |  |                                     |   |    |                                     |  |  |  |   |   |   |
| Currencytranslationadjustment             |  |  |                                     |   | (1,587  | )                                   |  |  |  |   | 15     |   |
| Fairvalue adjustments of swaps, net oftax |  |  |                                     |   | (64     | )                                   |  |  |  |   | 483    |   |
| Comprehensiveloss                         |  |  |                                     | $ | (10,827 | )                                   |  |  |  | $ | (2,712 | ) |
|                                           |

11.    Segment Information

The Company’s operations areclassified into one business segment. These operations are conductedprimarily in the United States, and to a lesser extent, in Canada andEurope. The following table presents certain data by geographicareas:

|              |  |  |                                      |   |        |                                     |  |  |          |   |        |                                  |  |  |  |   |        |  |  |  |  |   |        |   |
|--------------|--|--|--------------------------------------|---|--------|-------------------------------------|--|--|----------|---|--------|----------------------------------|--|--|--|---|--------|--|--|--|--|---|--------|---|
|         |  |  | Thirteenweeks endedDecember 30, 2006 |   |        | Thirteen weeksendedDecember 31,2005 |
|         |  |  | NetSales                             |   |        | (Loss)Earnings BeforeIncome Taxes   |  |  | NetSales |   |        | (Loss)Earnings BeforeIncomeTaxes |
| UnitedStates |  |  |                                      | $ | 68,698 |                                     |  |  |          | $ | (8,703 | )                                |  |  |  | $ | 69,985 |  |  |  |  | $ | (6,795 | ) |
| Europe       |  |  |                                      |   | 1,517  |                                     |  |  |          |   | (171   | )                                |  |  |  |   | 1,156  |  |  |  |  |   | (76    | ) |
| Canada       |  |  |                                      |   | 14,727 |                                     |  |  |          |   | 840    |                                  |  |  |  |   | 17,390 |  |  |  |  |   | 2,220  |   |
| Total        |  |  |                                      | $ | 84,942 |                                     |  |  |          | $ | (8,034 | )                                |  |  |  | $ | 88,531 |  |  |  |  | $ | (4,651 | ) |
|              |

|              |  |  |                    |   |         |                    |  |  |  |   |         |  |
|--------------|--|--|--------------------|---|---------|--------------------|--|--|--|---|---------|--|
|         |  |  | IdentifiableAssets |
|         |  |  | December30,2006    |   |         | September 30, 2006 |
| UnitedStates |  |  |                    | $ | 406,753 |                    |  |  |  | $ | 399,890 |  |
| Europe       |  |  |                    |   | 6,508   |                    |  |  |  |   | 6,589   |  |
| Canada       |  |  |                    |   | 52,971  |                    |  |  |  |   | 49,300  |  |
| Total        |  |  |                    | $ | 466,232 |                    |  |  |  | $ | 455,779 |  |
|              |

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Item2.    Management’s Discussion and Analysis of FinancialCondition and Results of Operations

The followingdiscussion relates to the consolidated financial performance andresults of operations of our parent, ATT Holding Co. A separatediscussion for Ames True Temper, Inc. is not presented since our parenthas no operations or assets separate from its investment in Ames TrueTemper, Inc. and since the Senior Subordinated Notes and the SeniorFloating Rate Notes are guaranteed by our parent. The followingdiscussion of our parent’s results of operations and financialcondition should be read in conjunction with our financial statementsand notes thereto included elsewhere in this Form 10-Q. This Form 10-Qcontains forward-looking statements. All statements other thanstatements of historical fact are ‘‘forward-lookingstatements’’ for purposes of federal and state securitieslaws. Forward-looking statements may include the words‘‘may,’’‘‘will,’’‘‘plans,’’‘‘estimates,’’‘‘anticipates,’’‘‘believes,’’‘‘expects,’’‘‘intends’’ and similar expressions.Although we believe that such statements are based on reasonableassumptions, these forward-looking statements are subject to numerousfactors, risks and uncertainties that could cause actual outcomes andresults to be materially different from those projected or assumed inour forward-looking statements. These factors, risks and uncertaintiesinclude, among others, the following: our liquidity and capitalresources; sales levels to existing and new customers; increasedconcentration of our customers; seasonality and adverse weatherconditions; competitive pressures and trends; changing consumerpreferences; new product and customer initiatives; risks relating toforeign sourcing and foreign operations and availability of rawmaterials; our ability to successfully consummate and integrateacquisitions; and general economic conditions. Our actual results,performance or achievements could differ materially from thoseexpressed in, or implied by, the forward-looking statements. We cangive no assurances that any of the events anticipated by theforward-looking statements will occur or, if any of them do, whatimpact they will have on our results of operations and financialcondition. We do not intend, and we undertake no obligation, to updateany forward-looking statement.

Overview

Ames TrueTemper, Inc. (‘‘ATT’’,‘‘us’’, ‘‘we’’,‘‘our’’ or the‘‘Company’’) is a leading North Americanmanufacturer and marketer of non-powered lawn and garden tools andaccessories. We offer the following 14 distinct product lines with over4,800 active SKUs: long handle tools, wheelbarrows, planters, hosereels, snow tools, striking tools, decorative accessories, lawn carts,pruning tools, repair handles, garden hoses, Hound Dog, brooms andspecialty tools. We sell our products primarily in the U.S. and Canadathrough (1) retail centers, including home centers and massmerchandisers, (2) wholesale chains, including hardware stores andgarden centers, and (3) industrial distributors.

In June2004, affiliates of Castle Harlan, Inc., a New York-basedprivate-equity investment firm, together with certain of our employees,completed the acquisition of our company from Wind Point Partners. Inorder to acquire our company, CHATT Holdings Inc., ‘‘thebuyer’’, and CHATT Holdings LLC, ‘‘thebuyer parent’’, were formed. Upon completion of theacquisition, affiliates of Castle Harlan, Inc. (Castle Harlan PartnersIV, L.P., or CHP IV, and affiliates) owned approximately 87% ofthe buyer-parent and management owned approximately 13%. Inorder to finance the acquisition, repay our outstanding debt and payrelated fees and expenses:

|  |           |                                                                                                                                                                                                                       |
|--|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (a)  | we entered into a$215.0  million senior credit facility consisting of a$75.0  million revolving credit facility and a $140.0million term loan, as described in ‘‘Debt and OtherObligations;’’ |

|  |           |                                                                                                                                      |
|--|-----------|--------------------------------------------------------------------------------------------------------------------------------------|
|  | (b)  | we issued$150.0  million of 10% senior subordinated notes, asdescribed in ‘‘Debt and OtherObligations’’; and |

|  |           |                                                                                                                      |
|--|-----------|----------------------------------------------------------------------------------------------------------------------|
|  | (c)  | the buyerparent received a $110.5  million equity capital contributionfrom CHP IV and its affiliates and management. |

On April7,  2006, we acquired Acorn, the parent company of Union, abusiness engaged in the manufacture and distribution of non-poweredlawn and garden tools, pursuant to an Agreement and Plan of Merger (the‘‘Acorn Merger Agreement’’) among us, Acornand ATTUT Holdings, Inc., a Delaware corporation and wholly-ownedsubsidiary of ours (‘‘Merger Sub’’).Pursuant to the Acorn 

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Merger Agreement, we acquired all of theissued and outstanding capital stock of Acorn through the merger ofMerger Sub with and into Acorn, with Acorn surviving as a wholly-ownedsubsidiary of ours (the ‘‘Acorn Merger’’).The Acorn Merger was consummated simultaneously with the execution ofthe Acorn Merger Agreement. The aggregate cash consideration paid by uson the day of the transaction was $46.4  million.

OnApril  12,  2006, HD Acquisition Corp.(‘‘HDAC’’), a wholly-owned subsidiary ofours, completed the acquisition of substantially all of the assets andproperty of Hound Dog, a business that designs, markets and distributesnon-powered lawn and garden tools. The transaction was consummatedsimultaneously with the execution of an Asset Purchase Agreement (the‘‘Asset Purchase Agreement’’) among HDAC,Hound Dog and the shareholders of Hound Dog. The cash considerationpaid by HDAC on the day of the transaction was $5.2million.

These businesses were acquired to expand theCompany’s product lines. The operating results of the acquiredcompanies have been included in the accompanying consolidatedstatements of operations from the respective dates of acquisition.Prior to the end of fiscal year 2006, Acorn, Union and HDAC were mergedinto Ames True Temper.

Results ofOperations

Thirteen weeks ended December  30,2006 compared to thirteen weeks ended December  31,2005

Net Sales.    Net sales for thethirteen-week period ended December  30,  2006 decreased$3.6  million, or 4.1%, to $84.9  million comparedto $88.5  million for the thirteen weeks ended December31,  2005. Overall net sales decreased primarily from lower salesvolumes due to a slow retail quarter for the major retailers, primarilyin the snow tool category, but were partially offset by incrementalsales volume from the Union acquisition.

GrossProfit.    Gross profit for the thirteen weeks endedDecember  30,  2006 increased $1.1  million to$22.3  million from $21.2  million for the thirteen weeksended December  31,  2005. This was due to a favorable mixof product sales, with higher gross margins, partially offset byincreased commodity costs, primarily steel and resin. Gross profit as apercentage of net sales increased to 26.3% from 24.0%during this period.

Selling, General and Administrative(‘‘SG&A’’)Expenses.    SG&A expenses for the thirteen weeks endedDecember  30,  2006 increased $2.8  million to$20.7  million from $17.9  million for the thirteen weeksended December  31,  2005. The increase relates primarilyto incremental costs associated with the Union acquisition, increasedprofessional services, new product development costs and higherdistribution expenses, partially offset by recoveries under U.S.anti-dumping provisions and lower variable selling costs, such ascommissions and certain customer programs.

Amortization ofIntangible Assets.    During the thirteen weeks endedDecember  30,  2006, we recorded $0.4  million inamortization expense, as compared to $0.4  million during thethirteen-week period ended December  31,  2005.

Interest Expense.    Interest expense for the thirteenweeks ended December  30,  2006 increased $1.2million to $8.6  million from $7.4  million during thethirteen weeks ended December  31,  2005. The increase wasa result of borrowings under our revolving credit facility for theacquisitions of Union and Hound Dog in April  2006 and higheraverage interest rates as compared to prior year. For the thirteenweeks ended December  31,  2005, there was no balance underour revolving credit facility.

Income Tax Expense(Benefit).    Income tax expense for the thirteen weeks endedDecember  30,  2006, was $1.1  million orapproximately 14.2% of loss before taxes. Income tax benefit forthe thirteen weeks ended December  31,  2005 was$1.4  million, or approximately 31.0% of loss beforetaxes. At the end of each interim reporting period, we estimate theeffective tax rate expected to be applicable for the full fiscal year.The rate determined is used in providing for income taxes on ayear-to-date basis. The tax effect of significant unusual items isreflected in the period in which they occur. The decrease in theeffective tax rate was primarily due to the mixture of tax rates fordomestic 

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and foreign income and the recording of anadditional deferred tax asset valuation allowance. Deferred incometaxes are provided for the future tax consequences attributable to thedifferences between the carrying amounts of assets and liabilities andtheir respective tax base. Deferred tax assets are reduced by avaluation allowance when, in our opinion, it is more likely than notthat some portion of the deferred tax assets will not be realized. Asof December  30,  2006 and September  30,2006, a deferred tax asset valuation allowance was necessary for aportion of our deferred tax assets. We believe that our projections offuture taxable income makes it more likely than not that the remainderof our deferred tax assets will be realized. If our projection offuture taxable income changes in the future, we may be required toreduce deferred tax assets by an additional valuation allowance.

Liquidity and Capital Resources

Our principal liquidityrequirements are to service our debt and meet our working capital andcapital expenditure needs. Subject to our performance, which, ifadversely affected, could adversely affect the availability of funds,we expect to be able to meet our liquidity requirements for theforeseeable future through cash provided by operations and throughborrowings available under our senior credit facility. We cannot assureyou, however, that this will be the case.

CashFlows

Cash used in operating activities for the thirteenweeks ended December  30,  2006 was $10.0  million,compared to $13.4 million of cash used in operating activitiesfor the thirteen weeks ended December  31,  2005. Thislower cash usage in fiscal 2007 as compared to fiscal 2006 is primarilythe result of higher seasonal inventory build as a result of theacquisitions of Union and Hound Dog offset by higher collections ofaccounts receivables. During our first two quarters of the fiscal year,we typically use our available cash and our revolving loan facility tofund our seasonal build of inventory. Cash used in investing activitiesof $3.1  million and $3.8  million for the thirteen-weekperiods ended December  30,  2006 and December31,  2005, respectively, was due primarily to the purchase offixed assets. Cash provided by financing activities was $12.7million for the thirteen weeks ended December  30,  2006primarily the result of borrowings on the revolver for seasonal workingcapital needs, and was offset by repayments of long-term debt. Cashused in financing activities was $0.3  million for the thirteenweeks December  31,  2005 and was primarily related to therepayments of debt and the incurrence of debt issuance costs.

Debt and Other Obligations

Senior SecuredCredit Facility as Amended and Restated on April  7,2006

On April  7,  2006, we entered into anamended and restated credit agreement with Bank of America, N.A., asadministrative agent, swing line lender and letter of credit issuer,Acorn, Union, and Ames True Temper Properties, Inc.(‘‘ATTP’’); together with the Company, (the‘‘Borrowers’’), ATT Holding Co., asguarantor, and each lender from time to time thereto (the‘‘Credit Agreement’’). The Credit Agreementamends and restates our existing credit facility with, among others,Bank of America, N.A. Pursuant to the Credit Agreement, the lendersmade available a five-year revolving credit facility of up to$130.0  million, including a sub-facility for letters of creditin an amount not to exceed $15.0  million and a sub-facility forswing-line loans in an amount not to exceed $15.0  million. TheBorrowers’ obligations under the credit agreement are guaranteedby ATT Holding Co. The credit facilities will be collateralized bysubstantially all of our assets, including our domestic subsidiaries,and guaranteed by ATT Holding Co. Future domestic subsidiaries will berequired to guarantee the obligations and grant a lien on substantiallyall of their assets.

The interest rate applicable to the loansunder the senior secured credit agreement is either: (1)  the‘‘Eurodollar Rate’’ plus a margin of1.75% to 2.75% or (2) the ‘‘BaseRate’’ plus a margin of 0.50% to 1.50%. Theinitial applicable margin for loans based on the Eurodollar Rate willbe 2.25%, and the applicable margin for loans based on the BaseRate will be 1.00%. ‘‘EurodollarRate’’ is 

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defined as the London interbank offered rate,adjusted for statutory reserve requirements. The ‘‘BaseRate’’ is the higher of: (1) prime rate publiclyannounced by Bank of America, N.A. or (2) the Federal Funds effectiverate plus 0.50%, adjusted for statutory reserve requirements.The applicable margin may under certain limited circumstances beincreased slightly, if Bank of America, N.A. cannot otherwise syndicatethe credit facility.

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

The terms of the Credit Agreement include variouscovenants that restrict our ability to, among other things, incuradditional liens, incur additional indebtedness and make additionalinvestments. In addition, the Borrowers are prohibited from incurringcapital expenditures exceeding $16.125  million in fiscal year2007 and $15.0  million in any fiscal year thereafter (subject tothe right to carry over the unused portion to the following year). Inaddition, under certain circumstances the Borrowers will be required tohave consolidated EBITDA of at least $41.0  million for eachperiod of four fiscal quarters. The Credit Agreement also includescustomary events of default, including, without limitation, paymentdefaults, cross defaults to other indebtedness and bankruptcy relateddefaults. As of December  30,  2006, we were in compliancewith all of our financial covenants. As of December  30,2006, we had $79.4  million of borrowings on the revolvingportion of our senior credit facility, with $2.4  million ofletters of credit outstanding. At December  30,  2006,based on the borrowing base calculation, the revolver limit was$120.0  million, with $38.1  million available under therevolving credit facility. In addition, the Company had $2.0million of letters of credit outstanding with another financialinstitution as of December  30,  2006. These letters ofcredit were supported by $2.1  million of restricted cash in theform of an escrow deposit at this financialinstitution.

Senior Subordinated Notes

OnJune  28,  2004, we completed a private offering of$150.0  million in aggregate principal amount at maturity of10% Senior Subordinated Notes due July  15,  2012.The Senior Subordinated Notes are fully and unconditionally guaranteedby our parent, ATT Holding Co., on a senior subordinated basis. OnAugust  10,  2004, we filed a registration statement withrespect to new notes having substantially identical terms as theoriginal notes, as part of an offer to exchange registered notes forthe privately issued original Senior Subordinated Notes. The new notesevidence the same debt as the original Senior Subordinated Notes, areentitled to the benefits of the indenture governing the original SeniorSubordinated Notes and are treated under the indenture as a singleclass with the original notes. The exchange offer was completed onNovember  24,  2004.

The Senior Subordinated Notesare unsecured senior subordinated obligations and rank behind all ofour existing and future senior debt, including borrowings under thesenior credit facility, equally with any of our future seniorsubordinated debt, ahead of any of our future debt that expresslyprovides for subordination to the Senior Subordinated Notes andeffectively behind all of the existing and future liabilities of oursubsidiaries, including trade payables.

We pay interest on theSenior Subordinated Notes semi-annually in cash, in arrears, onJanuary 15 and July  15 at an annual rate of 10.0%.The indenture governing Senior Subordinated Notes contains variousaffirmative and negative covenants, subject to a number of importantlimitations and exceptions, including but not limited to those limitingour ability and the ability of our restricted subsidiaries to borrowmoney, guarantee debt or sell preferred stock, create liens, paydividends on or redeem or repurchase stock, make certain investments,sell stock in our restricted subsidiaries, restrict dividends or otherpayments from restricted subsidiaries, enter into transactions withaffiliates and sell assets or merge with other companies.

Theindenture governing the Senior Subordinated Notes contains variousevents of default, including but not limited to those related tonon-payment of principal, interest or fees; violations of certaincovenants; certain bankruptcy-related events; invalidity of liens;non-payment of certain legal 

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judgments; and cross defaults with certainother indebtedness. We may redeem the Senior Subordinated Notes on orafter July  15,  2008, except we may redeem up to35% of the Senior Subordinated Notes prior to July15,  2007 with the proceeds of one or more public equityofferings. We are required to redeem the Senior Subordinated Notesunder certain circumstances involving changes ofcontrol.

Senior Floating Rate Notes

OnJanuary  14,  2005, we completed a private offering of$150.0  million principal amount at maturity of our SeniorFloating Rate Notes due 2012, which was issued at a 0.5%discount. Net proceeds for the offering were used to repay our termloan B in full, repay a portion of our revolving credit facility andpay related fees and expenses. The Senior Floating Rate Notes are fullyand unconditionally guaranteed by our parent on a senior unsecuredbasis. On March  25,  2005 we filed a registrationstatement with respect to new notes having substantially identicalterms as the original notes, as part of an offer to exchange registerednotes for the privately issued original Senior Floating Rate Notes. Thenew notes evidence the same debt as the original Senior Floating RateNotes, are entitled to the benefits of the indenture governing theoriginal Senior Floating Rate Notes and are treated under the indentureas a single class with the original notes. The exchange offer wascompleted on May  23,  2005.

The Senior FloatingRate Notes are unsecured, unsubordinated obligations and areeffectively subordinated to all of our existing and future secureddebt, to the extent of the assets securing such debt, includingborrowings under the senior secured credit facility, pari passuwith all future senior unsecured indebtedness, senior in right ofpayment to all existing and future senior subordinated debt, includingour Senior Subordinated Notes due 2012, and effectively behind all ofthe existing and future liabilities of our subsidiaries, includingtrade payables.

We pay interest on the Senior Floating Rate Notesquarterly in cash, in arrears, on January  15, April  15,July  15 and October  15 at a rate per annum, resetquarterly, equal to LIBOR plus 4.0%, starting on April15,  2005. The indenture governing the Senior Floating Rate Notescontains various affirmative and negative covenants, subject to anumber of important limitations and exceptions, including but notlimited to those limiting our ability and the ability of our restrictedsubsidiaries to borrow money, guarantee debt or sell preferred stock,create liens, pay dividends on or redeem or repurchase stock, makespecified types of investments, sell stock in our restrictedsubsidiaries, restrict dividends or other payments from restrictedsubsidiaries, enter into transactions with affiliates and sell assetsor merge with other companies.

The indenture governing the SeniorFloating Rate Notes contains various events of default, including butnot limited to those related to non-payment of principal, interest orfees; failure to perform or observe certain covenants; inaccuracy ofrepresentations and warranties in any material respect, cross defaultswith certain other indebtedness, certain bankruptcy related events,monetary judgment defaults and material non-monetary judgment defaults,ERISA defaults and change of control. We can redeem the Senior FloatingRate Notes, in whole or in part, at any time on or after January15,  2007. In addition, we may redeem up to 35% of theSenior Floating Rate Notes prior to January  15,  2007 withthe net proceeds of one or more public equity offerings. We arerequired to redeem the Senior Floating Rate Notes under certaincircumstances involving changes of control.

OtherDebt

On July  19,  2005, we entered into a$2.7  million Term Note, Loan and Security Agreement andSubordination Agreement with a Lender. This note is payable in monthlyinstallments over five years. The interest rate per annum is equal to2.5% and secured by certain collateral, which was agreed to bythe Administrative Agent of the Senior Secured Credit Facility, asamended and restated. Under the terms of this note, we are required tocreate 108 jobs at the new manufacturing facility in Pennsylvaniawithin three years of the completion of the facility. The Term Notecontains customary events of default (subject to customary exceptions,thresholds and grace periods), including, without limitation,nonpayment of principal, interest, fees and failure to perform orobserve certain covenants. As of December  30,  2006, wewere in compliance with these covenants.

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Interest RateSwaps

In connection with the offering of the SeniorFloating Rate Notes, on January  11,  2005, we entered intointerest rate swaps (the ‘‘Swaps’’) withBank of America, N.A. and Wachovia Bank, N.A to hedge variable interestrate debt. Pursuant to the Swap with Bank of America, N.A., whichbecame effective on January  17,  2006, we swap 3 monthLIBOR rates for fixed interest rates of 4.31% on a notionalamount of $100.0  million for the period from January17,  2006 through January  15,  2008, approximately$66.7  million for the period from January  15,  2008to January  15,  2009 and approximately $33.3million for the period from January  15,  2009 throughJanuary  15,  2010. Pursuant to the Swap with WachoviaBank, N.A., effective January  15,  2006, we swap 3 monthLIBOR rates for fixed interest rates of 4.29% for a notionalamount of $50  million for the period from January15,  2006 through January  15,  2008, approximately$33.3  million for the period from January  15,  2008to January  15,  2009 and approximately $16.7million for the period from January  15,  2009 throughJanuary  15,  2010. These swaps fix the variable rateportion of the Senior Floating Rate Notes, while there is an additionalmargin of 4.00% that is fixed.

The interest rate swaps areaccounted for in accordance with Statement of Financial AccountingStandard (‘‘SFAS’’) No. 133 Accountingfor Derivative Instruments and Hedging Activities, as amended bySFAS No. 138, Accounting for Certain Derivative Instruments andCertain Hedging Activities and SFAS No. 149, Amendment ofStatement 133 on Derivative Instruments and Hedging Activities(collectively, ‘‘SFAS 133’’). SFAS 133 establishes accounting and reporting standards forderivative instruments and hedging activities.  SFAS 133requires that all derivatives be recognized as either assets orliabilities at fair value. The Company has accounted for the swaps ascash flow hedges. As of December  30,  2006, the interestrate swaps were recorded as an asset of $2.5  million. For thethirteen-week period ended December  30,  2006, the changein fair value was accumulated as other comprehensive income of$0.1  million, net of deferred taxes.

RecentAccounting Pronouncements

In September  2006, theFinancial Accounting Standards Board(‘‘FASB’’) issued Statement of FinancialAccounting Standards No. 158, ‘‘Employers’Accounting for Defined Benefit Pension and Other PostretirementPlans, an amendment of SFAS statements No. 87, 88, 106 and132(R)’’, (SFAS  158), to improve financialreporting by requiring an employer to recognize the overfunded orunderfunded status of a defined benefit post-retirement plan as anasset or liability was issued. SFAS  158 requires employers torecognize in its changes of financial position the funded status of abenefit plan, measured as the difference between plan assets at fairvalue and the benefit obligation. For pension plans, the benefitobligation is the projected benefit obligation; for any otherpost-retirement benefit plan, such as a retiree health care plan, thebenefit obligation is the accumulated benefit obligation. If planassets exceed plan liabilities, an asset would be recognized, and ifplan liabilities exceed plan assets, a liability would be recognized.In addition, SFAS 158 requires changes in the funded status of adefined benefit post-retirement plan be recognized in comprehensiveincome in the year in which the changes occur. SFAS 158 does not changethe amount of the expense recorded in a company’s statement ofincome related to defined benefit pos-retirement plans. SFAS  158is effective for fiscal years ending after June  15,  2007.The Company is currently evaluating what effect, if any, adoption ofSFAS 158 will have on the Company’s consolidated financialstatements, which will not be determined until the September29,  2007 measurement date of the assets and benefit obligationsof the defined benefit plans.

In September  2006, the FASBissued Statement of Financial Accounting Standards No. 157,‘‘Fair Value Measurements’’, (SFAS157). SFAS 157 defines fair value, establishes a framework formeasuring fair value in generally accepted accounting principles(‘‘GAAP’’), and expands disclosures aboutfair value measurements. The statement applies under other accountingpronouncements that require or permit fair value measurements.Accordingly, SFAS 157 does not require any new fair value measurements.However, for some entities, the application of SFAS 157 will changecurrent practice. The Company is required to adopt SFAS 157 in thefirst quarter of fiscal year 2009. The Company is currently evaluatingwhat effect, if any, adoption of SFAS 157 will have on theCompany’s consolidated financial statements.

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In September  2006, the Securitiesand Exchange Commission issued Staff Accounting Bulletin No.108, ‘‘Considering the Effects of Prior YearMisstatements when Quantifying Misstatements in Current Year FinancialStatements,’’ (SAB 108). SAB 108 requires companiesto evaluate the materiality of identified unadjusted errors on eachfinancial statement and related financial statement disclosure usingboth the rollover approach and the iron curtain approach. The rolloverapproach quantifies misstatements based on the amount of the error inthe current year financial statements whereas the iron curtain approachquantifies misstatements based on the effects of correcting themisstatement existing in the balance sheet at the end of the currentyear, irrespective of the misstatement’s year(s) of origin.Financial statements would require adjustment when either approachresults in quantifying misstatement that is material. Correcting prioryear financial statements for immaterial errors would not requirepreviously filed reports to be amended. SAB 108 is effective in thefiscal year ending September  29,  2007. The adoption ofSAB 108 had no impact on the Company’s financial position orstatement of operations.

In July  2006, the FASB issuedFASB Interpretation No. 48, ‘‘Accounting forUncertainty in Income Taxes, an interpretation of FASB StatementNo. 109,’’ (FIN 48). FIN 48 prescribes a recognitionthreshold and measurement attribute for the financial statementrecognition and measurement of a tax position taken or expected to betaken in a tax return. FIN 48 is effective for the fiscal year endingSeptember  27,  2008. The Company is currently evaluatingwhat effect, if any, adoption of FIN 48 will have on theCompany’s consolidated financial statements.

Item3.    Quantitative and Qualitative Disclosures About MarketRisk

The Company’s cash flows and earnings aresubject to fluctuations resulting from changes in interest rates,foreign currency exchange rates and raw material costs.  Wemanage our exposure to these market risks through internallyestablished policies and procedures and, when deemed appropriate,through the use of derivative financial instruments. Our policy doesnot allow speculation in derivative instruments for profit or executionof derivative instrument contracts for which there are no underlyingexposures.  We do not use financial instruments for tradingpurposes and are not a party to any leveraged derivatives.  Wemonitor our underlying market risk exposures on an ongoing basis andbelieve that we can modify or adapt our hedging strategies asneeded.

Our primary market risk is interest rate exposure withrespect to our floating rate debt. The interest rate of the SeniorFloating Rate Notes at December  30,  2006 was9.25%. In connection with the offering of the Senior FloatingRate Notes, we entered into two interest rate swaps. These swapseffectively fix the variable interest rate portion of the SeniorFloating Rate Notes at notional amounts of $150.0  million fortwo years beginning January  15,  2006, subsequentlyamortizing at a rate of $50.0  million per year until thematurity in 2010. The swaps fix the 3 month LIBOR rates at either4.29% or 4.31% for the duration of the contracts. See‘‘Management’s Discussion and Analysis ofFinancial Condition and Results of Operations — Debt and OtherObligations — Senior Floating Rate Notes’’ and‘‘— Interest Rate Swaps.’’

Weconduct foreign operations in Canada and Ireland and utilizeinternational suppliers and manufacturers. As a result, we are subjectto risk from changes in foreign exchange rates. These changes result incumulative translation adjustments, which are included in accumulatedother comprehensive income (loss). We do not consider the potentialloss resulting from a hypothetical 10% adverse change in quotedforeign currency exchange rates, as of December  30,  2006to be material.

We purchase certain raw materials such as resin,steel, and wood that are subject to price volatility caused byunpredictable factors. Where possible, we employ fixed rate rawmaterial purchase contracts and customer price adjustments to help usto manage this risk. We do not currently use derivatives to manage rawmaterials risk.

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Item 4.    Controls andProcedures

Under the supervision and with the participationof management, including our principal executive officer and principalfinancial officer, we have evaluated the effectiveness of the designand operation of our disclosure controls and procedures as of the endof the period covered by this report, and based on their evaluation,the principal executive officer and principal financial officer haveconcluded that these controls and procedures are effective. There wereno changes in our internal controls that have materially affected orare reasonably likely to materially affect our internal control overfinancial reporting.

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PARTII.    OTHER INFORMATION AND SIGNATURE

Item 1.    Legal Proceedings

During December  2004, acustomer of Union’s was named in litigation that involved thecompany’s products. The complaint asserted causes of actionagainst the defendant for improper advertisement to the consumer. Theallegation suggests that advertisements lead the consumer to believethat the hand tools sold were manufactured in the boundaries of theUnited States. The allegation asserts cause of action against thecustomer for common law fraud. In the event that courts would deem ajudgment against our customer, there is a possibility that the customerwould seek legal recourse for a unspecified amount in contributorydamages.

From approximately 1993 through 1999, we manufacturedand sold 647,000 wheelbarrows with poly wheel hubs. Various claims weresubmitted, and lawsuits filed, to recover for injuries sustained whileinflating tires on these wheelbarrows. In 2002, we participated in avoluntary ‘‘fast track’’ recall of thesewheelbarrows with the Consumer Product Safety Commission. We againvoluntarily recalled these wheelbarrows in June  2004 incooperation with the Consumer Product Safety Commission. However, lessthan 1% of the total products sold were returned, leaving anunknown number in service. To date, we have responded to 31 claimsinvolving this product. All open claims have been resolved. We arecurrently named as a defendant in one wheelbarrow claim. Although webelieve that we have sufficient insurance coverage in place to coverthese claims, a successful claim may exceed the limits of ourcoverage.

We are involved in various claims and legal actionsthat arise in the ordinary course of business. We do not believe thatthe ultimate resolution of any of these actions will have a materialadverse effect on our consolidated financial position, results ofoperations, liquidity or capital resources.

Item 2.    Unregistered Sales of Equity Securities and Use ofProceeds

None

Item 3.     DefaultsUpon Senior Securities

None

Item 4.    Submission of Matters to a Vote of SecurityHolders

None

Item 5.     OtherInformation

None

Item 6.    Exhibits

|             |  |  |                                                                                                                                                      |
|-------------|--|--|------------------------------------------------------------------------------------------------------------------------------------------------------|
| Exhibit31.1 |  |  | Certification of Chief Executive Officer Pursuant to Rules13a-14 and 15d-14, As Adopted Pursuant to Section 302 of theSarbanes-Oxley Act of 2002     |
| Exhibit31.2 |  |  | Certification of Principal Financial Officer Pursuant toRules 13a-14 and 15d-14, As Adopted Pursuant to Section 302 of theSarbanes-Oxley Act of 2002 |
| Exhibit32.1 |  |  | Certification of Chief Executive Officer Pursuant to 18U.S.C. Section 1350, As Adopted Pursuant to Section 906 of theSarbanes-Oxley Act Of 2002      |
| Exhibit32.2 |  |  | Certification of Principal Financial Officer Pursuant to18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of theSarbanes-Oxley Act Of 2002  |
|             |

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AMES TRUE TEMPER,INC.

SIGNATURE

Pursuant to the requirements of theSecurities Exchange Act of 1934, the Registrant has duly caused thisreport to be signed on its behalf by the undersigned thereunto dulyauthorized.

|  | AMES TRUE TEMPER,INC. |
|--|-----------------------|

|                                                |  |  |                                                                                                                                                                                                                                                                                                   |
|------------------------------------------------|--|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Date:February 13, 2007     |  |  |             /s/ RichardDell                                                               |
|                                           |  |  |             RichardDell                                                                                                                                                                                                               |
|                                           |  |  |             Chief ExecutiveOfficer            (Principal ExecutiveOfficer            and AuthorizedSignatory) |
|                                                |

|                         |  |  |                                                                                                                                                                                                                                                                                         |
|-------------------------|--|--|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Date: February 13, 2007 |  |  |             /s/David M.Nuti                                                     |
|                    |  |  |             DavidM.  Nuti            Chief FinancialOfficer            (Principal FinancialOfficer) |
|                         |

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AMES TRUE TEMPER, INC.

EXHIBITINDEX

|         |    |    |             |  |  |                                                                                                                                                          |
|---------|----|----|-------------|--|--|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| Exhibit |    |    | Description |
|         | 31 | .1 |             |  |  | Certification of Chief Executive Officer Pursuant to Rules 13a-14and 15d-14, As Adopted Pursuant to Section 302 of the Sarbanes-OxleyAct of 2002         |
|         | 31 | .2 |             |  |  | Certification ofPrincipal Financial Officer Pursuant to Rules 13a-14 and 15d-14, AsAdopted Pursuant to Section 302 of the Sarbanes-Oxley Act of2002      |
|         | 32 | .1 |             |  |  | Certification of Chief ExecutiveOfficer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuantto Section 906 of the Sarbanes-Oxley Act of 2002.    |
|         | 32 | .2 |             |  |  | Certification of Principal Financial OfficerPursuant to 18 U.S.C. Section 1350, As Adopted Pursuant toSection 906 of the Sarbanes-Oxley Act of2002. |
|         |

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