##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 Form 10-Q
  þ
          
 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended July 3, 2010
 OR
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from     to
 Commission File Number 333-118086
 AMES TRUE TEMPER, INC.
 (Exact name of registrant as specified in its charter)
 Delaware(State or other jurisdiction of
 incorporation or organization)
    
    22-2335400(I.R.S. Employer
 Identification No.)
 465 Railroad Avenue, Camp Hill, Pennsylvania(Address of principal executive offices)
    
    17011(Zip Code)
 Registrants telephone number, including area code:
 (717) 737-1500
 Former name, former address and former fiscal year, if changed since last report:
 NOT APPLICABLE
  þ o
  o o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer þ(Do not check if a smaller reporting company)
Smaller reporting company o  o þ




---



##### 



ATT HOLDING CO.
  
 TABLE OF CONTENTS
 Page No.PART I.FINANCIAL INFORMATIONItem 1.Financial Statements (unaudited):Condensed Consolidated Balance Sheets as of July 3, 2010 and October 3, 2009
    
    
    1Condensed Consolidated Statements of Operations for the thirteen week
periods ended July 3, 2010 and June 27, 2009
    
    
    2Condensed Consolidated Statements of Operations for the thirty-nine week
periods ended July 3, 2010 and June 27, 2009
    
    
    3Condensed Consolidated Statements of Cash Flows for the thirty-nine week
periods ended July 3, 2010 and June 27, 2009
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5Item 2.Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    29Item 3.Quantitative and Qualitative Disclosures About Market Risk
    
    
    41Item 4T.Controls and Procedures
    
    
    41PART II.OTHER INFORMATIONItem 1.Legal Proceedings
    
    
    42Item 1A.Risk Factors
    
    
    42Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    42Item 3.Defaults Upon Senior Securities
    
    
    42Item 4.[Removed and Reserved]
    
    
    42Item 5.Other Information
    
    
    42Item 6.Exhibits
    
    
    42Signatures
    
    
    43EX-10.1EX-31.1EX-31.2EX-32.1EX-32.2




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 ATT Holding Co.
Condensed Consolidated Balance Sheets  (Dollars In Thousands Except Per Share Amounts)
 (Unaudited)
 July 3,
    
    
    October 3,2010
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    30,435
    
    
    $
    33,609Trade receivables, net
    
    
    58,544
    
    
    
    42,449Inventories
    
    
    103,085
    
    
    
    90,305Prepaid expenses and other current assets
    
    
    7,429
    
    
    
    6,315Total current assets
    
    
    199,493
    
    
    
    172,678Property, plant and equipment, net
    
    
    39,250
    
    
    
    44,239Intangibles, net
    
    
    52,620
    
    
    
    53,681Goodwill
    
    
    57,835
    
    
    
    57,494Other noncurrent assets
    
    
    5,731
    
    
    
    6,531Total assets
    
    $
    354,929
    
    
    $
    334,623Liabilities and stockholders deficitCurrent liabilities:Trade payables
    
    $
    29,227
    
    
    $
    18,214Accrued interest payable
    
    
    8,864
    
    
    
    5,392Accrued expenses and other current liabilities
    
    
    28,960
    
    
    
    26,642Revolving loan
    
    
    
    
    
    
    17,500Current portion of long-term debt and capital lease obligations
    
    
    103
    
    
    
    489Total current liabilities
    
    
    67,154
    
    
    
    68,237Deferred income taxes
    
    
    17,490
    
    
    
    13,672Long-term debt
    
    
    299,931
    
    
    
    299,791Accrued retirement benefits
    
    
    51,837
    
    
    
    51,836Other liabilities
    
    
    11,963
    
    
    
    12,661Total liabilities
    
    
    448,375
    
    
    
    446,197Commitments and contingenciesStockholders deficit:Preferred stock  Series A, $.0001 per share par value;
100,000 shares authorized; 62,495 shares issued and
outstanding as of July 3, 2010 and October 3, 2009
(Liquidation preference of $62,495 at July 3, 2010)
    
    
    
    
    
    
    Common stock  Class A, $.0001 per share par value; 1,600,000
shares authorized; 726,556 shares issued and outstanding as of
July 3, 2010 and October 3, 2009
    
    
    
    
    
    
    Common stock  Class B, $.0001 per share par value; 300,000
shares authorized; 267,448 shares issued and outstanding as of
July 3, 2010 and October 3, 2009
    
    
    
    
    
    
    Additional paid-in capital
    
    
    111,174
    
    
    
    111,168Predecessor basis adjustment
    
    
    (13,539
    )
    
    
    (13,539
    )Accumulated deficit
    
    
    (149,614
    )
    
    
    (167,272
    )Accumulated other comprehensive loss
    
    
    (41,467
    )
    
    
    (41,931
    )Total stockholders deficit
    
    
    (93,446
    )
    
    
    (111,574
    )Total liabilities and stockholders deficit
    
    $
    354,929
    
    
    $
    334,623
 See accompanying notes.
 1




---



##### Table of Contents



ATT Holding Co.

Condensed Consolidated Statements of Operations  (Dollars In Thousands)
 (Unaudited)
 Thirteen Week Period EndedJuly 3,
    
    
    June 27,2010
    
    
    2009Net sales
    
    $
    123,360
    
    
    $
    130,036Cost of goods sold
    
    
    80,813
    
    
    
    96,362Gross profit
    
    
    42,547
    
    
    
    33,674Selling, general and administrative expenses
    
    
    24,803
    
    
    
    21,843Loss on disposal of fixed assets
    
    
    128
    
    
    
    599Amortization of intangible assets
    
    
    300
    
    
    
    302Impairment charges
    
    
    300
    
    
    
    451Operating income
    
    
    17,016
    
    
    
    10,479Interest expense
    
    
    6,630
    
    
    
    7,085Other income
    
    
    (790
    )
    
    
    (6,793
    )Income before income taxes
    
    
    11,176
    
    
    
    10,187Income tax expense
    
    
    2,925
    
    
    
    941Net income
    
    $
    8,251
    
    
    $
    9,246
 See accompanying notes.
 2




---



##### Table of Contents



ATT Holding Co.
Condensed Consolidated Statements of Operations  (Dollars In Thousands)
 (Unaudited)
 Thirty-Nine Week Period EndedJuly 3,
    
    
    June 27,2010
    
    
    2009Net sales
    
    $
    349,138
    
    
    $
    364,663Cost of goods sold
    
    
    237,619
    
    
    
    268,301Gross profit
    
    
    111,519
    
    
    
    96,362Selling, general and administrative expenses
    
    
    64,474
    
    
    
    62,143(Gain) loss on disposal of fixed assets
    
    
    (29
    )
    
    
    901Amortization of intangible assets
    
    
    909
    
    
    
    911Impairment charges
    
    
    300
    
    
    
    927Operating income
    
    
    45,865
    
    
    
    31,480Interest expense
    
    
    20,112
    
    
    
    22,420Other expense
    
    
    1,102
    
    
    
    5,643Income before income taxes
    
    
    24,651
    
    
    
    3,417Income tax expense
    
    
    6,993
    
    
    
    2,242Net income
    
    $
    17,658
    
    
    $
    1,175
 See accompanying notes.
 3




---



##### Table of Contents



ATT Holding Co.
Condensed Consolidated Statements of Cash Flows  (Dollars In Thousands)
 (Unaudited)
 Thirty-Nine Week Period EndedJuly 3,
    
    
    June 27,2010
    
    
    2009Operating activitiesNet income
    
    $
    17,658
    
    
    $
    1,175Adjustments to reconcile net income to net cash provided by operating activities:Depreciation expense
    
    
    9,788
    
    
    
    11,825Amortization of intangible assets
    
    
    909
    
    
    
    911Amortization of loan fees included in interest expense
    
    
    1,634
    
    
    
    1,665Provision for deferred taxes
    
    
    2,270
    
    
    
    1,106(Benefit from) provision for bad debts
    
    
    (29
    )
    
    
    46Amortization of bond discount
    
    
    80
    
    
    
    80(Gain) loss on disposal of fixed assets
    
    
    (29
    )
    
    
    901Unrealized losses
    
    
    1,282
    
    
    
    7,047Impairment charges
    
    
    300
    
    
    
    927Changes in assets and liabilities:Trade receivables
    
    
    (16,014
    )
    
    
    (884
    )Inventories
    
    
    (12,738
    )
    
    
    12,262Prepaid expenses and other assets
    
    
    (804
    )
    
    
    2,261Trade payables
    
    
    10,906
    
    
    
    (12,593
    )Accrued expenses and other liabilities
    
    
    4,608
    
    
    
    (4,166
    )Net cash provided by operating activities
    
    
    19,821
    
    
    
    22,563Investing activitiesCash paid for property, plant and equipment
    
    
    (5,016
    )
    
    
    (5,016
    )Proceeds from sale of property, plant and equipment
    
    
    333
    
    
    
    49Restricted cash placed in escrow
    
    
    (1,186
    )
    
    
    Net cash used in investing activities
    
    
    (5,869
    )
    
    
    (4,967
    )Financing activitiesRepayments of long-term debt
    
    
    (426
    )
    
    
    (414
    )Borrowings on revolver
    
    
    93,377
    
    
    
    120,422Repayments on revolver
    
    
    (110,877
    )
    
    
    (128,417
    )Principal payments under capital lease obligations
    
    
    (31
    )
    
    
    (3
    )Net cash used in financing activities
    
    
    (17,957
    )
    
    
    (8,412
    )Effect of exchange rate changes on cash
    
    
    831
    
    
    
    (708
    )(Decrease) increase in cash and cash equivalents
    
    
    (3,174
    )
    
    
    8,476Cash and cash equivalents at beginning of period
    
    
    33,609
    
    
    
    17,159Cash and cash equivalents at end of period
    
    $
    30,435
    
    
    $
    25,635Supplemental Cash Flow InformationCash paid for interest
    
    $
    15,046
    
    
    $
    18,128Cash paid for income taxes
    
    $
    1,887
    
    
    $
    274Property, plant and equipment in trade accounts payable at end of period
    
    $
    378
    
    
    $
    216Equipment acquired under capital lease obligations
    
    $
    131
    
    
    $
    
 See accompanying notes.
 4




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 1. Basis of Presentation
   2. Recent Accounting Pronouncements
 Adopted
   
    
    Recognizes and measures in its financial statements the identifiable assets acquired,
the liabilities assumed and any noncontrolling interest in the acquiree;
    
    Recognizes and measures the goodwill acquired in the business combination or a gain
from a bargain purchase; and
    
    Determines what information to disclose to enable users of the financial statements
to evaluate the nature and financial effects of the business combination.
   5




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
  To Be Adopted
    3. Inventories
  July 3,
    
    
    October 3,2010
    
    
    2009Finished goods
    
    $
    67,521
    
    
    $
    51,161Work in process
    
    
    11,737
    
    
    
    14,595Raw materials
    
    
    23,827
    
    
    
    24,549$
    103,085
    
    
    $
    90,305
 4. Goodwill and Other Intangibles
  United States
    
    
    Canada
    
    
    TotalGoodwill at October 3, 2009
    
    $
    43,605
    
    
    $
    13,889
    
    
    $
    57,494Currency translation adjustments
    
    
    
    
    
    
    341
    
    
    
    341Goodwill at July 3, 2010
    
    $
    43,605
    
    
    $
    14,230
    
    
    $
    57,835
 6




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
   July 3, 2010
    
    
    October 3, 2009Gross Carrying
    
    
    Accumulated
    
    
    Gross Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationIndefinite lived intangible assets:Trade names
    
    $
    47,710
    
    
    $
    
    
    
    $
    47,879
    
    
    $
    Finite lived intangible assets:Technology (patents)
    
    
    1,356
    
    
    
    1,177
    
    
    
    1,356
    
    
    
    1,142Non-compete agreements
    
    
    
    
    
    
    
    
    
    
    976
    
    
    
    965Customer relationships
    
    
    11,665
    
    
    
    6,934
    
    
    
    11,617
    
    
    
    6,04013,021
    
    
    
    8,111
    
    
    
    13,949
    
    
    
    8,147$
    60,731
    
    
    $
    8,111
    
    
    $
    61,828
    
    
    $
    8,147
  July 2010  September 2010
    
    $
    299Fiscal 2011
    
    
    1,196Fiscal 2012
    
    
    1,176Fiscal 2013
    
    
    1,161Fiscal 2014
    
    
    879Thereafter
    
    
    199$
    4,910
 5. Other Noncurrent Assets
  6. Income Taxes
  7




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
    7. Debt Arrangements
  July 3,
    
    
    October 3,2010
    
    
    2009Revolving Loan (a)
    
    $
    
    
    
    $
    17,500Senior Floating Rate Notes, net of unamortized
discount of $161 and $241,
respectively
    
    
    149,839
    
    
    
    149,759Senior Subordinated Notes
    
    
    150,000
    
    
    
    150,000Term Note
    
    
    53
    
    
    
    479Capital lease obligations
    
    
    142
    
    
    
    42Total debt
    
    
    300,034
    
    
    
    317,780Less:Short-term Revolving Loan
    
    
    
    
    
    
    (17,500
    )Current portion of capital lease obligations
    
    
    (50
    )
    
    
    (10
    )Current portion of long-term debt
    
    
    (53
    )
    
    
    (479
    )Long-term debt
    
    $
    299,931
    
    
    $
    299,791
 8




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 Letters ofBorrowing
    
    Credit
    
    (b)
    
    InterestMaximum
    
    Base as
    
    Outstanding
    
    Availability
    
    Rate as ofBorrowing
    
    of July 3,
    
    as of July 3,
    
    as of July 3,
    
    July 3,
    
    ExpirationAmount
    
    2010
    
    2010
    
    2010
    
    2010
    
    DateRevolving Loan (a)
    
    $
    130,000
    
    
    $
    90,248
    
    
    $
    3,268
    
    
    $
    86,980
    
    
    (c)
    
    Apr 7, 2011
 (e)
    
    
    
    (f)Original
    
    
    (d)
    
    
    Interest
    
    Maturity
    
    Call OptionPrincipal
    
    

Interest Rate
    
    
    Payments
    
    Date
    
    DateJan 15, Apr 15,Senior Floating Rate Notes
    
    $
    150,000
    
    
    LIBOR + 4
    %

    
    Jul 15, Oct 15
    
    Jan 15, 2012
    
    Jan 15, 2007Senior Subordinated Notes
    
    
    150,000
    
    

    10
    %
    
    Jan 15, Jul 15
    
    Jul 15, 2012
    
    Jul 15, 2008Term Note
    
    
    2,700
    
    
    
    2.5
    %
    
    Monthly
    
    Jul 19, 2010
    
    n/a
 
 (a)
    
    See Note 19 for further information regarding the expiration of the Revolving Loan.(b)
    
    Total amount available is limited by the amount of eligible accounts receivable,
inventory, machinery and equipment, and real estate less letters of credit outstanding.(c)
    
    The interest rate applicable to the loans under the Revolving Loan is either 1) the
Eurodollar Rate or London Interbank Offered Rate (LIBOR) plus a margin of 1.75% to 2.75%,
or 2) the Base Rate plus a margin of 0.50% to 1.50%. The Base Rate is calculated at the
higher of 1) the prevailing Federal Funds rate plus 50 basis points or 2) the
administrative agents prime interest rate plus an applicable rate determined by the
Companys consolidated leverage ratio as defined by the Amended and Restated Senior Secured
Credit Agreement. As of July 3, 2010, there were no amounts outstanding under the Revolving
Loan.(d)
    
    LIBOR represents the three month London Interbank Offered Rate which resets quarterly.
LIBOR was .3% as of April 13, 2010. April 13, 2010 is the reset date for the July 15, 2010
interest payment.(e)
    
    Interest payments are in cash and paid in arrears.(f)
    
    The Senior Floating Rate Notes do not have a redemption premium. The Senior
Subordinated Notes have a redemption price of 100% of principal on or after July 15, 2010. Interest Rate Swaps
  (a)EffectiveNotional
    
    
    InterestReceive

    
    Pay
    
    
    Amount
    
    
    RateJanuary 15, 2010 through January 15, 2011
    
    3-month LIBOR
    
    
    1.90
    %
    
    
    150,000
    
    
    
    5.90
    %January 18, 2011 through January 15, 2012
    
    3-month LIBOR
    
    
    2.50
    %
    
    
    150,000
    
    
    
    6.50
    %
 
 (a)
    
    Represents the effective interest rate on the respective portion of the Senior Floating
Rate Notes including the contractual terms of the interest rate swap for the periods
indicated. 9




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 8. Pension and Other Post-retirement Benefits
 Pension Benefits
    
    
    Other BenefitsThirteen Week Period Ended
    
    
    Thirteen Week Period EndedJuly 3,
    
    
    June 27,
    
    
    July 3,
    
    
    June 27,2010
    
    
    2009
    
    
    2010
    
    
    2009Service Cost
    
    $
    22
    
    
    $
    110
    
    
    $
    1
    
    
    $
    Interest Cost
    
    
    2,058
    
    
    
    2,151
    
    
    
    21
    
    
    
    23Expected return on plan assets
    
    
    (2,393
    )
    
    
    (2,588
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    Amortization of unrecognized net
loss (gain)
    
    
    722
    
    
    
    99
    
    
    
    (29
    )
    
    
    (30
    )Net periodic benefit cost (credit)
    
    $
    409
    
    
    $
    (222
    )
    
    $
    (7
    )
    
    $
    (7
    )Employer contributions
    
    $
    461
    
    
    $
    1,352
    
    
    $
    19
    
    
    $
    
 Pension Benefits
    
    
    Other BenefitsThirty-nine Week Period Ended
    
    
    Thirty-nine Week Period EndedJune 3,
    
    
    June 27,
    
    
    July 3,
    
    
    June 27,2010
    
    
    2009
    
    
    2010
    
    
    2009Service Cost
    
    $
    93
    
    
    $
    328
    
    
    $
    3
    
    
    $
    1Interest Cost
    
    
    6,259
    
    
    
    6,449
    
    
    
    62
    
    
    
    67Expected return on plan assets
    
    
    (7,260
    )
    
    
    (7,758
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    
    
    
    
    18
    
    
    
    
    
    
    
    Amortization of unrecognized net
loss (gain)
    
    
    2,175
    
    
    
    295
    
    
    
    (86
    )
    
    
    (89
    )Net periodic benefit cost (credit)
    
    $
    1,267
    
    
    $
    (668
    )
    
    $
    (21
    )
    
    $
    (21
    )Employer contributions
    
    $
    1,032
    
    
    $
    3,581
    
    
    $
    46
    
    
    $
    
 9. Other Comprehensive Income
 Thirteen Week Period EndedJuly 3,
    
    
    June 27,2010
    
    
    2009Net income
    
    $
    8,251
    
    
    $
    9,246Other comprehensive income:Currency translation adjustment
    
    
    (3,795
    )
    
    
    (3,015
    )Fair value adjustments of swaps, net of tax
    
    
    (288
    )
    
    
    611Comprehensive income
    
    $
    4,168
    
    
    $
    6,842
 Thirty-nine Week Period EndedJuly 3,
    
    
    June 27,2010
    
    
    2009Net income
    
    $
    17,658
    
    
    $
    1,175Other comprehensive income:Currency translation adjustment
    
    
    948
    
    
    
    2,663Fair value adjustments of swaps, net of tax
    
    
    (484
    )
    
    
    (838
    )Effect of pension measurement date provision, net of tax
    
    
    
    
    
    
    95Comprehensive income
    
    $
    18,122
    
    
    $
    3,095
 10




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 10. Segment Information
  Thirteen Week Period EndedJuly 3, 2010United States
    
    
    Canada
    
    
    Other
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    102,565
    
    
    $
    19,479
    
    
    $
    1,316
    
    
    $
    
    
    
    $
    123,360Intersegment sales
    
    
    3,361
    
    
    
    1,441
    
    
    
    
    
    
    
    (4,802
    )
    
    
    Operating income (loss)
    
    
    13,692
    
    
    
    3,520
    
    
    
    (196
    )
    
    
    
    
    
    
    17,016Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,630Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (790
    )Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    11,176
 Thirteen Week Period EndedJune 27, 2009United States
    
    
    Canada
    
    
    Other
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    109,695
    
    
    $
    19,124
    
    
    $
    1,217
    
    
    $
    
    
    
    $
    130,036Intersegment sales
    
    
    3,979
    
    
    
    527
    
    
    
    483
    
    
    
    (4,989
    )
    
    
    Operating income (loss)
    
    
    11,030
    
    
    
    648
    
    
    
    (1,199
    )
    
    
    
    
    
    
    10,479Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,085Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,793
    )Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    10,187
 Thirty-nine Week Period EndedJuly 3, 2010United States
    
    
    Canada
    
    
    Other
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    284,351
    
    
    $
    60,998
    
    
    $
    3,789
    
    
    $
    
    
    
    $
    349,138Intersegment sales
    
    
    7,997
    
    
    
    7,041
    
    
    
    
    
    
    
    (15,038
    )
    
    
    Operating income (loss)
    
    
    34,172
    
    
    
    12,461
    
    
    
    (768
    )
    
    
    
    
    
    
    45,865Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,112Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,102Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    24,651
 11




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
 Thirty-nine Week Period EndedJune 27, 2009United States
    
    
    Canada
    
    
    Other
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    293,302
    
    
    $
    67,475
    
    
    $
    3,886
    
    
    $
    
    
    
    $
    364,663Intersegment sales
    
    
    11,118
    
    
    
    1,985
    
    
    
    1,652
    
    
    
    (14,755
    )
    
    
    Operating income (loss)
    
    
    23,446
    
    
    
    9,980
    
    
    
    (1,946
    )
    
    
    
    
    
    
    31,480Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,420Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,643Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3,417
  July 3,
    
    
    October 3,2010
    
    
    2009United States
    
    $
    277,776
    
    
    $
    242,774Canada
    
    
    71,723
    
    
    
    84,987Other
    
    
    5,430
    
    
    
    6,862Total
    
    $
    354,929
    
    
    $
    334,623
 11. Other (Income) Expense
  Thirteen Week Period EndedJuly 3,
    
    
    June 27,2010
    
    
    2009Unrealized gain
    
    $
    (320
    )
    
    $
    (6,530
    )Realized gain
    
    
    (470
    )
    
    
    (263
    )Total
    
    $
    (790
    )
    
    $
    (6,793
    )
 Thirty-nine Week Period EndedJuly 3,
    
    
    June 27,2010
    
    
    2009Unrealized loss
    
    $
    1,282
    
    
    $
    7,047Realized gain
    
    
    (180
    )
    
    
    (1,404
    )Total
    
    $
    1,102
    
    
    $
    5,643
  12




---



##### Table of Contents



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




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
 ATT Holding Co.
Condensed Consolidating Balance Sheet
As of July 3, 2010
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    

Temper, Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    8,888
    
    
    $
    9
    
    
    $
    21,538
    
    
    $
    
    
    
    $
    30,435Trade receivables, net
    
    
    
    
    
    
    51,879
    
    
    
    
    
    
    
    6,665
    
    
    
    
    
    
    
    58,544Inventories
    
    
    
    
    
    
    84,311
    
    
    
    
    
    
    
    18,774
    
    
    
    
    
    
    
    103,085Prepaid expenses and other
current assets
    
    
    
    
    
    
    6,588
    
    
    
    36
    
    
    
    805
    
    
    
    
    
    
    
    7,429Total current assets
    
    
    
    
    
    
    151,666
    
    
    
    45
    
    
    
    47,782
    
    
    
    
    
    
    
    199,493Property, plant and equipment, net
    
    
    
    
    
    
    29,215
    
    
    
    
    
    
    
    10,035
    
    
    
    
    
    
    
    39,250Intangibles, net
    
    
    
    
    
    
    4,304
    
    
    
    41,600
    
    
    
    6,716
    
    
    
    
    
    
    
    52,620Goodwill
    
    
    
    
    
    
    43,605
    
    
    
    
    
    
    
    14,230
    
    
    
    
    
    
    
    57,835Other noncurrent assets
    
    
    
    
    
    
    5,697
    
    
    
    
    
    
    
    34
    
    
    
    
    
    
    
    5,731Intercompany receivable
    
    
    
    
    
    
    30,960
    
    
    
    184,950
    
    
    
    5,090
    
    
    
    (221,000
    )
    
    
    Investment in subsidiaries
    
    
    
    
    
    
    267,827
    
    
    
    171,693
    
    
    
    
    
    
    
    (439,520
    )
    
    
    Total assets
    
    $
    
    
    
    $
    533,274
    
    
    $
    398,288
    
    
    $
    83,887
    
    
    $
    (660,520
    )
    
    $
    354,929Liabilities and stockholders
(deficit) equityCurrent liabilities:Trade payables
    
    $
    
    
    
    $
    24,811
    
    
    $
    26
    
    
    $
    4,390
    
    
    $
    
    
    
    $
    29,227Accrued interest payable
    
    
    
    
    
    
    8,864
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,864Accrued expenses and other
current liabilities
    
    
    
    
    
    
    20,432
    
    
    
    
    
    
    
    8,528
    
    
    
    
    
    
    
    28,960Revolving loan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Current portion of long-term
debt and capital lease
obligations
    
    
    
    
    
    
    94
    
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    103Total current liabilities
    
    
    
    
    
    
    54,201
    
    
    
    26
    
    
    
    12,927
    
    
    
    
    
    
    
    67,154Deferred income taxes
    
    
    
    
    
    
    1,544
    
    
    
    14,911
    
    
    
    1,035
    
    
    
    
    
    
    
    17,490Long-term debt
    
    
    
    
    
    
    299,910
    
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    299,931Accrued retirement benefits
    
    
    
    
    
    
    51,014
    
    
    
    
    
    
    
    823
    
    
    
    
    
    
    
    51,837Other liabilities
    
    
    
    
    
    
    10,457
    
    
    
    1,390
    
    
    
    116
    
    
    
    
    
    
    
    11,963Intercompany payable
    
    
    
    
    
    
    209,594
    
    
    
    311
    
    
    
    11,095
    
    
    
    (221,000
    )
    
    
    Cumulative losses in subsidiaries
    
    
    93,446
    
    
    
    
    
    
    
    336
    
    
    
    
    
    
    
    (93,782
    )
    
    
    Total liabilities
    
    
    93,446
    
    
    
    626,720
    
    
    
    16,974
    
    
    
    26,017
    
    
    
    (314,782
    )
    
    
    448,375Commitments and contingenciesStockholders (deficit) equity:Preferred
stock-Series A
    
    
    
    
    
    
    
    
    
    
    118,249
    
    
    
    49,622
    
    
    
    (167,871
    )
    
    
    Common stock-Class A
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock-Class B
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid-in capital
    
    
    111,174
    
    
    
    111,174
    
    
    
    154,502
    
    
    
    150
    
    
    
    (265,826
    )
    
    
    111,174Predecessor basis adjustment
    
    
    (13,539
    )
    
    
    (13,539
    )
    
    
    
    
    
    
    
    
    
    
    13,539
    
    
    
    (13,539
    )(Accumulated deficit) retained
earnings
    
    
    (149,614
    )
    
    
    (149,614
    )
    
    
    96,780
    
    
    
    (2,583
    )
    
    
    55,417
    
    
    
    (149,614
    )Accumulated other comprehensive
(loss) income
    
    
    (41,467
    )
    
    
    (41,467
    )
    
    
    11,783
    
    
    
    10,681
    
    
    
    19,003
    
    
    
    (41,467
    )Total stockholders (deficit) equity
    
    
    (93,446
    )
    
    
    (93,446
    )
    
    
    381,314
    
    
    
    57,870
    
    
    
    (345,738
    )
    
    
    (93,446
    )Total liabilities and stockholders
(deficit) equity
    
    $
    
    
    
    $
    533,274
    
    
    $
    398,288
    
    
    $
    83,887
    
    
    $
    (660,520
    )
    
    $
    354,929
 14




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
 ATT Holding Co.
Condensed Consolidating Balance Sheet
As of October 3, 2009
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    

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




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
 ATT Holding Co.
Condensed Consolidating Statement of Operations
For the Thirteen Week Period Ended July 3, 2010
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper, Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    105,210
    
    
    $
    
    
    
    $
    22,909
    
    
    $
    (4,759
    )
    
    $
    123,360Cost of goods sold
    
    
    
    
    
    
    70,333
    
    
    
    
    
    
    
    15,239
    
    
    
    (4,759
    )
    
    
    80,813Gross profit
    
    
    
    
    
    
    34,877
    
    
    
    
    
    
    
    7,670
    
    
    
    
    
    
    
    42,547Selling, general and
administrative expenses
    
    
    
    
    
    
    20,447
    
    
    
    43
    
    
    
    4,313
    
    
    
    
    
    
    
    24,803Loss on disposal of fixed assets
    
    
    
    
    
    
    128
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    128Amortization of intangible assets
    
    
    
    
    
    
    261
    
    
    
    
    
    
    
    39
    
    
    
    
    
    
    
    300Impairment of fixed assets
    
    
    
    
    
    
    
    
    
    
    300
    
    
    
    
    
    
    
    
    
    
    
    300Operating income (loss)
    
    
    
    
    
    
    14,041
    
    
    
    (343
    )
    
    
    3,318
    
    
    
    
    
    
    
    17,016Interest expense (income)
    
    
    
    
    
    
    9,342
    
    
    
    (2,770
    )
    
    
    58
    
    
    
    
    
    
    
    6,630Other expense (income)
    
    
    
    
    
    
    2,560
    
    
    
    (2,889
    )
    
    
    (461
    )
    
    
    
    
    
    
    (790
    )Income before income taxes
    
    
    
    
    
    
    2,139
    
    
    
    5,316
    
    
    
    3,721
    
    
    
    
    
    
    
    11,176Income tax expense
    
    
    
    
    
    
    192
    
    
    
    1,793
    
    
    
    940
    
    
    
    
    
    
    
    2,925Equity in earnings of subsidiaries
    
    
    8,251
    
    
    
    6,304
    
    
    
    3,219
    
    
    
    
    
    
    
    (17,774
    )
    
    
    Net income
    
    $
    8,251
    
    
    $
    8,251
    
    
    $
    6,742
    
    
    $
    2,781
    
    
    $
    (17,774
    )
    
    $
    8,251
 ATT Holding Co.
Condensed Consolidating Statement of Operations
For the Thirteen Week Period Ended June 27, 2009
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper, Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    112,795
    
    
    $
    
    
    
    $
    21,703
    
    
    $
    (4,462
    )
    
    $
    130,036Cost of goods sold
    
    
    
    
    
    
    83,650
    
    
    
    
    
    
    
    17,174
    
    
    
    (4,462
    )
    
    
    96,362Gross profit
    
    
    
    
    
    
    29,145
    
    
    
    
    
    
    
    4,529
    
    
    
    
    
    
    
    33,674Selling, general and
administrative expenses
    
    
    
    
    
    
    17,228
    
    
    
    66
    
    
    
    4,549
    
    
    
    
    
    
    
    21,843Loss on disposal of fixed assets
    
    
    
    
    
    
    599
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    599Amortization of intangible assets
    
    
    
    
    
    
    266
    
    
    
    
    
    
    
    36
    
    
    
    
    
    
    
    302Impairment of fixed assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    451
    
    
    
    
    
    
    
    451Operating income (loss)
    
    
    
    
    
    
    11,052
    
    
    
    (66
    )
    
    
    (507
    )
    
    
    
    
    
    
    10,479Interest expense (income)
    
    
    
    
    
    
    9,515
    
    
    
    (4,993
    )
    
    
    2,563
    
    
    
    
    
    
    
    7,085Other expense (income)
    
    
    
    
    
    
    2,292
    
    
    
    (2,629
    )
    
    
    (6,456
    )
    
    
    
    
    
    
    (6,793
    )(Loss) income before income taxes
    
    
    
    
    
    
    (755
    )
    
    
    7,556
    
    
    
    3,386
    
    
    
    
    
    
    
    10,187Income tax expense (benefit)
    
    
    
    
    
    
    137
    
    
    
    1,585
    
    
    
    (781
    )
    
    
    
    
    
    
    941Equity in earnings of subsidiaries
    
    
    9,246
    
    
    
    10,138
    
    
    
    5,323
    
    
    
    
    
    
    
    (24,707
    )
    
    
    Net income
    
    $
    9,246
    
    
    $
    9,246
    
    
    $
    11,294
    
    
    $
    4,167
    
    
    $
    (24,707
    )
    
    $
    9,246
 16




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
 ATT Holding Co.
Condensed Consolidating Statement of Operations
For the Thirty-Nine Week Period Ended July 3, 2010
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper, Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    290,460
    
    
    $
    
    
    
    $
    73,348
    
    
    $
    (14,670
    )
    
    $
    349,138Cost of goods sold
    
    
    
    
    
    
    203,414
    
    
    
    
    
    
    
    48,875
    
    
    
    (14,670
    )
    
    
    237,619Gross profit
    
    
    
    
    
    
    87,046
    
    
    
    
    
    
    
    24,473
    
    
    
    
    
    
    
    111,519Selling, general and
administrative expenses
    
    
    
    
    
    
    51,626
    
    
    
    137
    
    
    
    12,711
    
    
    
    
    
    
    
    64,474Gain on disposal of fixed assets
    
    
    
    
    
    
    (21
    )
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    (29
    )Amortization of intangible assets
    
    
    
    
    
    
    794
    
    
    
    
    
    
    
    115
    
    
    
    
    
    
    
    909Impairment of fixed assets
    
    
    
    
    
    
    
    
    
    
    300
    
    
    
    
    
    
    
    
    
    
    
    300Operating income (loss)
    
    
    
    
    
    
    34,647
    
    
    
    (437
    )
    
    
    11,655
    
    
    
    
    
    
    
    45,865Interest expense (income)
    
    
    
    
    
    
    28,013
    
    
    
    (8,510
    )
    
    
    609
    
    
    
    
    
    
    
    20,112Other expense (income)
    
    
    
    
    
    
    6,458
    
    
    
    (7,708
    )
    
    
    2,352
    
    
    
    
    
    
    
    1,102Income before income taxes
    
    
    
    
    
    
    176
    
    
    
    15,781
    
    
    
    8,694
    
    
    
    
    
    
    
    24,651Income tax expense
    
    
    
    
    
    
    453
    
    
    
    3,975
    
    
    
    2,565
    
    
    
    
    
    
    
    6,993Equity in earnings of subsidiaries
    
    
    17,658
    
    
    
    17,935
    
    
    
    7,404
    
    
    
    
    
    
    
    (42,997
    )
    
    
    Net income
    
    $
    17,658
    
    
    $
    17,658
    
    
    $
    19,210
    
    
    $
    6,129
    
    
    $
    (42,997
    )
    
    $
    17,658
 ATT Holding Co.
Condensed Consolidating Statement of Operations
For the Thirty-Nine Week Period Ended June 27, 2009
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper, Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    302,734
    
    
    $
    
    
    
    $
    74,895
    
    
    $
    (12,966
    )
    
    $
    364,663Cost of goods sold
    
    
    
    
    
    
    227,828
    
    
    
    
    
    
    
    53,439
    
    
    
    (12,966
    )
    
    
    268,301Gross profit
    
    
    
    
    
    
    74,906
    
    
    
    
    
    
    
    21,456
    
    
    
    
    
    
    
    96,362Selling, general and
administrative expenses
    
    
    
    
    
    
    49,153
    
    
    
    166
    
    
    
    12,824
    
    
    
    
    
    
    
    62,143Loss on disposal of fixed assets
    
    
    
    
    
    
    901
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    901Amortization of intangible assets
    
    
    
    
    
    
    799
    
    
    
    
    
    
    
    112
    
    
    
    
    
    
    
    911Impairment of fixed assets
    
    
    
    
    
    
    476
    
    
    
    
    
    
    
    451
    
    
    
    
    
    
    
    927Operating income (loss)
    
    
    
    
    
    
    23,577
    
    
    
    (166
    )
    
    
    8,069
    
    
    
    
    
    
    
    31,480Interest expense (income)
    
    
    
    
    
    
    29,571
    
    
    
    (14,781
    )
    
    
    7,630
    
    
    
    
    
    
    
    22,420Other expense (income)
    
    
    
    
    
    
    6,070
    
    
    
    (7,475
    )
    
    
    7,048
    
    
    
    
    
    
    
    5,643(Loss) income before income taxes
    
    
    
    
    
    
    (12,064
    )
    
    
    22,090
    
    
    
    (6,609
    )
    
    
    
    
    
    
    3,417Income tax expense
    
    
    
    
    
    
    236
    
    
    
    1,803
    
    
    
    203
    
    
    
    
    
    
    
    2,242Equity in earnings of subsidiaries
    
    
    1,175
    
    
    
    13,475
    
    
    
    (4,875
    )
    
    
    
    
    
    
    (9,775
    )
    
    
    Net income (loss)
    
    $
    1,175
    
    
    $
    1,175
    
    
    $
    15,412
    
    
    $
    (6,812
    )
    
    $
    (9,775
    )
    
    $
    1,175
 17




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
 ATT Holding Co.
Condensed Consolidating Statement of Cash Flows
For the Thirty-Nine Week Period Ended July 3, 2010
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper, Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedOperating activitiesNet income
    
    $
    17,658
    
    
    $
    17,658
    
    
    $
    19,210
    
    
    $
    6,129
    
    
    $
    (42,997
    )
    
    $
    17,658Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:Depreciation expense
    
    
    
    
    
    
    8,265
    
    
    
    
    
    
    
    1,523
    
    
    
    
    
    
    
    9,788Equity in earnings of subsidiaries
    
    
    (17,658
    )
    
    
    (17,935
    )
    
    
    (7,404
    )
    
    
    
    
    
    
    42,997
    
    
    
    Provision for (benefit from) deferred
taxes
    
    
    
    
    
    
    
    
    
    
    3,766
    
    
    
    (1,496
    )
    
    
    
    
    
    
    2,270Other, net
    
    
    
    
    
    
    2,495
    
    
    
    
    
    
    
    70
    
    
    
    
    
    
    
    2,565Unrealized loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,282
    
    
    
    
    
    
    
    1,282Impairment charge
    
    
    
    
    
    
    
    
    
    
    300
    
    
    
    
    
    
    
    
    
    
    
    300Related party non-cash transactions
    
    
    
    
    
    
    (153
    )
    
    
    153
    
    
    
    
    
    
    
    
    
    
    
    Changes in assets and liabilities:Trade receivables
    
    
    
    
    
    
    (17,457
    )
    
    
    
    
    
    
    1,443
    
    
    
    
    
    
    
    (16,014
    )Inventories
    
    
    
    
    
    
    (12,378
    )
    
    
    
    
    
    
    (360
    )
    
    
    
    
    
    
    (12,738
    )Prepaid expenses and other current
assets
    
    
    
    
    
    
    (1,752
    )
    
    
    (37
    )
    
    
    985
    
    
    
    
    
    
    
    (804
    )Trade payables
    
    
    
    
    
    
    12,327
    
    
    
    (5
    )
    
    
    (1,416
    )
    
    
    
    
    
    
    10,906Accrued expenses and other
liabilities
    
    
    
    
    
    
    3,425
    
    
    
    123
    
    
    
    1,060
    
    
    
    
    
    
    
    4,608Intercompany accounts
    
    
    
    
    
    
    37,285
    
    
    
    (16,106
    )
    
    
    (21,179
    )
    
    
    
    
    
    
    Net cash provided by (used in)
operating activities
    
    
    
    
    
    
    31,780
    
    
    
    
    
    
    
    (11,959
    )
    
    
    
    
    
    
    19,821Investing activitiesCash paid for property, plant and
equipment
    
    
    
    
    
    
    (4,392
    )
    
    
    
    
    
    
    (624
    )
    
    
    
    
    
    
    (5,016
    )Proceeds from sale of property, plant
and equipment
    
    
    
    
    
    
    333
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    333Restricted
cash placed in escrow
    
    
    
    
    
    
    (1,186
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,186
    )Investment in subsidiary
    
    
    
    
    
    
    (150
    )
    
    
    
    
    
    
    
    
    
    
    150
    
    
    
    Net cash used in investing activities
    
    
    
    
    
    
    (5,395
    )
    
    
    
    
    
    
    (624
    )
    
    
    150
    
    
    
    (5,869
    )Financing activitiesRepayments of long-term debt
    
    
    
    
    
    
    (426
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (426
    )Borrowings on revolver
    
    
    
    
    
    
    93,377
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93,377Repayments on revolver
    
    
    
    
    
    
    (110,877
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (110,877
    )Principal payments under capital lease
obligations
    
    
    
    
    
    
    (25
    )
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    (31
    )Capital contribution
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150
    
    
    
    (150
    )
    
    
    Net cash (used in) provided by
financing activities
    
    
    
    
    
    
    (17,951
    )
    
    
    
    
    
    
    144
    
    
    
    (150
    )
    
    
    (17,957
    )Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    831
    
    
    
    
    
    
    
    831Increase (decrease) in cash and cash
equivalents
    
    
    
    
    
    
    8,434
    
    
    
    
    
    
    
    (11,608
    )
    
    
    
    
    
    
    (3,174
    )Cash and cash equivalents at beginning
of period
    
    
    
    
    
    
    454
    
    
    
    9
    
    
    
    33,146
    
    
    
    
    
    
    
    33,609Cash and cash equivalents at end of
period
    
    $
    
    
    
    $
    8,888
    
    
    $
    9
    
    
    $
    21,538
    
    
    $
    
    
    
    $
    30,435
 18




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
 ATT Holding Co.
Condensed Consolidating Statement of Cash Flows
For the Thirty-Nine Week Period Ended June 27, 2009
 SubsidiaryATT
    
    
    Ames True
    
    
    Subsidiary
    
    
    Non-Holding Co.
    
    
    Temper, Inc.
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedOperating activitiesNet income (loss)
    
    $
    1,175
    
    
    $
    1,175
    
    
    $
    15,412
    
    
    $
    (6,812
    )
    
    $
    (9,775
    )
    
    $
    1,175Adjustments to reconcile net income to
net cash provided by operating
activities:Depreciation expense
    
    
    
    
    
    
    10,234
    
    
    
    
    
    
    
    1,591
    
    
    
    
    
    
    
    11,825Equity in (earnings) losses of
subsidiaries
    
    
    (1,175
    )
    
    
    (13,475
    )
    
    
    4,875
    
    
    
    
    
    
    
    9,775
    
    
    
    Provision for (benefit from) deferred
taxes
    
    
    
    
    
    
    677
    
    
    
    823
    
    
    
    (394
    )
    
    
    
    
    
    
    1,106Other, net
    
    
    
    
    
    
    3,485
    
    
    
    
    
    
    
    118
    
    
    
    
    
    
    
    3,603Unrealized loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,047
    
    
    
    
    
    
    
    7,047Impairment charges
    
    
    
    
    
    
    476
    
    
    
    
    
    
    
    451
    
    
    
    
    
    
    
    927Related party non-cash transactions
    
    
    
    
    
    
    4,674
    
    
    
    (5,677
    )
    
    
    1,003
    
    
    
    
    
    
    
    Changes in assets and liabilities:Trade receivables
    
    
    
    
    
    
    (1,472
    )
    
    
    
    
    
    
    588
    
    
    
    
    
    
    
    (884
    )Inventories
    
    
    
    
    
    
    15,625
    
    
    
    
    
    
    
    (3,363
    )
    
    
    
    
    
    
    12,262Prepaid expenses and other current
assets
    
    
    
    
    
    
    2,537
    
    
    
    
    
    
    
    (276
    )
    
    
    
    
    
    
    2,261Trade payables
    
    
    
    
    
    
    (10,551
    )
    
    
    (6
    )
    
    
    (2,036
    )
    
    
    
    
    
    
    (12,593
    )Accrued expenses and other liabilities
    
    
    
    
    
    
    (7,543
    )
    
    
    3,057
    
    
    
    320
    
    
    
    
    
    
    
    (4,166
    )Intercompany accounts
    
    
    
    
    
    
    7,322
    
    
    
    (18,481
    )
    
    
    11,159
    
    
    
    
    
    
    
    Net cash provided by operating activities
    
    
    
    
    
    
    13,164
    
    
    
    3
    
    
    
    9,396
    
    
    
    
    
    
    
    22,563Investing activitiesCash paid for property, plant and
equipment
    
    
    
    
    
    
    (4,581
    )
    
    
    
    
    
    
    (435
    )
    
    
    
    
    
    
    (5,016
    )Proceeds from sale of property, plant
and equipment
    
    
    
    
    
    
    49
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49Net cash used in investing activities
    
    
    
    
    
    
    (4,532
    )
    
    
    
    
    
    
    (435
    )
    
    
    
    
    
    
    (4,967
    )Financing activitiesRepayments of long-term debt
    
    
    
    
    
    
    (414
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (414
    )Borrowings on revolver
    
    
    
    
    
    
    120,422
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120,422Repayments on revolver
    
    
    
    
    
    
    (128,417
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (128,417
    )Principal payments under capital lease
obligation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Net cash used in financing activities
    
    
    
    
    
    
    (8,409
    )
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (8,412
    )Effect of exchange rate changes on cash
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (707
    )
    
    
    
    
    
    
    (708
    )Increase in cash and cash equivalents
    
    
    
    
    
    
    222
    
    
    
    3
    
    
    
    8,251
    
    
    
    
    
    
    
    8,476Cash and cash equivalents at beginning
of period
    
    
    
    
    
    
    285
    
    
    
    5
    
    
    
    16,869
    
    
    
    
    
    
    
    17,159Cash and cash equivalents at end of
period
    
    $
    
    
    
    $
    507
    
    
    $
    8
    
    
    $
    25,120
    
    
    $
    
    
    
    $
    25,635
 19




---



##### Table of Contents



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




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
     14. Fair Value Measurements
  
    
    Level 1  Inputs that represent quoted prices for identical instruments in active markets.
    
    Level 2  Inputs that represent quoted prices for similar instruments in active markets,
or quoted prices for identical instruments in non-active markets. Also includes valuation
techniques whose
inputs are derived principally from observable market data other than quoted prices, such
as interest rates or other market-corroborated means.
    
    Level 3  Inputs that are largely unobservable, as little or no market data exists for
the instrument being valued.
 Financial Assets and Liabilities that are Measured at Fair Value on a Recurring Basis
  21




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
    July 3, 2010(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalInterest rate swaps
    
    $
    
    
    
    $
    3,209
    
    
    $
    
    
    
    $
    3,209Total liabilities
    
    $
    
    
    
    $
    3,209
    
    
    $
    
    
    
    $
    3,209
 October 3, 2009(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalForeign currency forward contracts
    
    $
    
    
    
    $
    113
    
    
    $
    
    
    
    $
    113Total assets
    
    $
    
    
    
    $
    113
    
    
    $
    
    
    
    $
    113Foreign currency forward contracts
    
    $
    
    
    
    $
    171
    
    
    $
    
    
    
    $
    171Interest rate swaps
    
    
    
    
    
    
    2,725
    
    
    
    
    
    
    
    2,725Total liabilities
    
    $
    
    
    
    $
    2,896
    
    
    $
    
    
    
    $
    2,896
  July 3, 2010
    
    October 3, 2009Balance Sheet
    
    Carrying
    
    Fair
    
    Carrying
    
    FairClassification
    
    Value
    
    Value
    
    Value
    
    ValueSenior Floating Rate Notes
    
    Liability
    
    $
    149,839
    
    
    $
    141,375
    
    
    $
    149,759
    
    
    $
    131,070Senior Subordinated Notes
    
    Liability
    
    
    150,000
    
    
    
    150,000
    
    
    
    150,000
    
    
    
    127,425
  Non-Financial Assets and Liabilities that are Measured at Fair Value on a Nonrecurring
Basis
   22




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
  July 3, 2010(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalDynamic Design trade name
    
    $
    
    
    
    $
    
    
    
    $
    2,700
    
    
    $
    2,700Total liabilities
    
    $
    
    
    
    $
    
    
    
    $
    2,700
    
    
    $
    2,700
 15. Derivatives
     23




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
  July 3, 2010Asset Derivatives
    
    Liability DerivativesQualifies
    
    
    
    
    
    
    Balance
    
    
    Pretax Gain
    
    
    
    
    
    
    Balance
    
    
    Pretax LossDescription of
    
    for Hedge
    
    
    Fair
    
    
    Sheet
    
    
    Recognized
    
    
    Fair
    
    
    Sheet
    
    
    RecognizedDerivative
    
    Designation
    
    
    Value
    
    
    Location
    
    
    in OCI
    
    
    Value
    
    
    Location
    
    
    in OCIInterest rate swaps
    
    Yes
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,050
    
    
    
    (a
    )
    
    $
    1,050Interest rate swaps
    
    Yes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,159
    
    
    
    (b
    )
    
    
    2,159
 
 (a)
    
    The interest rate swap is included in Accrued expenses and other current liabilities.(b)
    
    The interest rate swaps are included in Other liabilities. October 3, 2009Asset Derivatives
    
    Liability DerivativesQualifies
    
    
    
    
    
    
    Balance
    
    
    Pretax Gain
    
    
    
    
    
    
    Balance
    
    
    Pretax LossDescription of
    
    for Hedge
    
    
    Fair
    
    
    Sheet
    
    
    Recognized
    
    
    Fair
    
    
    Sheet
    
    
    RecognizedDerivative
    
    Designation
    
    
    Value
    
    
    Location
    
    
    in OCI
    
    
    Value
    
    
    Location
    
    
    in OCIForeign currency forward
contracts
    
    No
    
    $
    113
    
    
    
    (a
    )
    
    $
    
    
    
    
    $171
    
    
    
    (b
    )
    
    
    $Interest rate swaps
    
    Yes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,725
    
    
    
    (c
    )
    
    
    2,725
 
 (a)
    
    The foreign currency forward contracts are included in Prepaid expenses and other
current assets.(b)
    
    The foreign currency forward contracts are included in Accrued expenses and other
current liabilities.(c)
    
    The interest rate swaps are included in Other liabilities.  July 3, 2010Location of  pretax
    
    
    Amount of pretaxgain or (loss)
    
    
    gain or (loss)
    
    
    Location of pretax
    
    
    Amount ofQualifies
    
    
    reclassed from
    
    
    reclassed from
    
    
    gain or (loss)
    
    
    pretax gain orDescription of
    
    for Hedge
    
    
    AOCI into
    
    
    AOCI into
    
    
    recognized in
    
    
    (loss) recognizedDerivative
    
    Designation
    
    
    earnings
    
    
    earnings
    
    
    earnings
    
    
    in earningsForeign
currency forward
contracts
    
    No
    
    
    
    
    
    
    $
    
    
    Other expense
    
    $
    (58
    )Interest rate swaps
    
    Yes
    
    Interest expense
    
    
    (601
    )
    
    
    
    
    
    
    
 June 27, 2009Location of  pretax
    
    
    Amount of pretaxgain or (loss)
    
    
    gain or (loss)
    
    
    Location of pretax
    
    
    Amount ofQualifies
    
    
    reclassed from
    
    
    reclassed from
    
    
    gain or (loss)
    
    
    pretax gain orDescription of
    
    for Hedge
    
    
    AOCI into
    
    
    AOCI into
    
    
    recognized in
    
    
    (loss) recognizedDerivative
    
    Designation
    
    
    earnings
    
    
    earnings
    
    
    earnings
    
    
    in earningsForeign
currency forward
contracts
    
    No
    
    
    
    
    
    
    
    
    
    Other expense
    
    $
    (221
    )Other
    
    No
    
    
    
    
    
    
    
    
    
    SG&A
    
    
    (30
    )Other
    
    No
    
    
    
    
    
    
    
    
    
    Other expense
    
    
    45Interest rate swaps
    
    Yes
    
    Interest expense
    
    $
    (583
    )
    
    
    
    
    
    
    
 24




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
  July 3, 2010Location of pretax
    
    Amount of pretaxgain or (loss)
    
    gain or (loss)
    
    Location of pretax
    
    Amount ofQualifies
    
    reclassed from
    
    reclassed from
    
    gain or (loss)
    
    pretax gain orDescription of
    
    for Hedge
    
    AOCI into
    
    AOCI into
    
    recognized  in
    
    (loss) recognizedDerivative
    
    Designation
    
    earnings
    
    earnings
    
    earnings
    
    in earningsForeign
currency forward
contracts
    
    No
    
    
    
    
    
    $
    
    
    
    Other expense
    
    $
    (561
    )Interest rate swaps
    
    Yes
    
    Interest expense
    
    
    (2,036
    )
    
    
    
    
    
    
    
 June 27, 2009Location of pretax
    
    Amount of pretaxgain or (loss)
    
    gain or (loss)
    
    Location of pretax
    
    Amount ofQualifies
    
    reclassed from
    
    reclassed from
    
    gain or (loss)
    
    pretax gain orDescription of
    
    for Hedge
    
    AOCI into
    
    AOCI into
    
    recognized  in
    
    (loss) recognizedDerivative
    
    Designation
    
    earnings
    
    earnings
    
    earnings
    
    in earningsForeign
currency forward
contracts
    
    No
    
    
    
    
    
    
    
    
    
    Other expense
    
    $
    1,626Other
    
    No
    
    
    
    
    
    
    
    
    
    SG&A
    
    
    (78
    )Other
    
    No
    
    
    
    
    
    
    
    
    
    Other expense
    
    
    (12
    )Interest rate swaps
    
    Yes
    
    Interest expense
    
    $
    (692
    )
    
    
    
    
    
    
    
  16. Commitments and Contingencies
    25




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
  Balance as of October 3, 2009
    
    $
    2,541Adjustments to estimates
    
    
    Payments
    
    
    1,914Balance as of July 3, 2010
    
    $
    627
   17. Other
  18. Contract Termination Costs
  Balance as of October 3, 2009
    
    $
    1,236Costs paid
    
    
    (782
    )Exit liability expense
    
    
    454Accretion expense
    
    
    43Fair value adjustment
    
    
    902Balance as
of July 3, 2010
    
    $
    1,853
 19. Subsequent Events
   26




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
         27




---



##### Table of Contents



ATT HOLDING CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited
    28




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
  Forward-Looking Statements
   
    
    we depend on a small number of customers for a significant portion of our business;
    
    our results of operations may be adversely impacted by macroeconomic events;
    
    reliance on third party suppliers and manufacturers may impair our ability to meet
customer demands;
    
    if we are unable to obtain raw materials for our products at favorable prices it
could adversely impact our operating performance;
    
    we are subject to risks associated with our foreign operations;
    
    we are subject to risks associated with our operations in China;
    
    unseasonable weather could have a negative impact on our business and financial
results;
    
    our lawn and garden sales are highly seasonal which could impact our cash flow and
operating results;
    
    we may not be able to acquire complementary lawn and garden product manufacturers or
brands; in addition, our acquisition strategy may negatively impact our operating results,
divert managements attention from operating our core business, and expose us to other
risks;
    
    our industry is highly competitive and we may not be able to compete successfully;
    
    further consolidation in the retail industry may adversely affect our profitability;
    
    a failure to successfully introduce new products could result in a reduction in sales
and floor space at retailers that carry our products;
    
    the products that we manufacture could expose us to product liability claims;
    
    our ability to pay our debt or seek alternative financing may be adversely impacted;
    
    environmental health and safety laws, ordinances, and regulations impose risks and
costs on us;
    
    we depend on the service of key individuals, the loss of any of which could
materially harm our business;
    
    unionized employees could strike or participate in a work stoppage; and
 29




---



##### Table of Contents




    
    we may be required to record impairment charges for goodwill, indefinite-lived
intangible assets and other long-lived assets.
  Overview
  
    
    Our Business - a general description of our business.
    
    Operations Review  -  an analysis of our consolidated results of operations.
    
    Liquidity and Capital Resources  -  an analysis of cash flows, debt and other
obligations, off-balance sheet arrangements and aggregate contractual obligations and an
overview of financial position.
 Our Business
 General
      30




---



##### Table of Contents



Operations Review
 Company-Wide
  (Dollars in Millions)
 Q3
    
    
    Q3
    
    
    Increase/(Decrease)2010
    
    
    2009
    
    
    $
    
    
    %Net sales
    
    $
    123.4
    
    
    $
    130.0
    
    
    $
    (6.6
    )
    
    
    (5.1
    )%Cost of goods sold
    
    
    80.8
    
    
    
    96.4
    
    
    
    (15.6
    )
    
    
    (16.2
    )Gross profit
    
    
    42.5
    
    
    
    33.7
    
    
    
    8.8
    
    
    
    26.1Gross profit percentage
    
    
    34.4
    %
    
    
    25.9
    %Selling, general and
administrative
expenses
    
    
    24.8
    
    
    
    21.8
    
    
    
    3.0
    
    
    
    13.8Loss on disposal of
fixed assets
    
    
    0.1
    
    
    
    0.6
    
    
    
    (0.5
    )
    
    
    (83.3
    )Amortization of
intangible assets
    
    
    0.3
    
    
    
    0.3
    
    
    
    
    
    
    
    Impairment charges
    
    
    0.3
    
    
    
    0.5
    
    
    
    (0.2
    )
    
    
    (40.0
    )Operating income
    
    
    17.0
    
    
    
    10.5
    
    
    
    6.5
    
    
    
    61.9Operating income
percentage
    
    
    13.8
    %
    
    
    8.1
    %Interest expense
    
    
    6.6
    
    
    
    7.1
    
    
    
    (0.5
    )
    
    
    (7.0
    )Other income
    
    
    (0.8
    )
    
    
    (6.8
    )
    
    
    6.0
    
    
    
    (88.2
    )Income before income taxes
    
    
    11.2
    
    
    
    10.2
    
    
    
    1.0
    
    
    
    9.8Income tax expense
    
    
    2.9
    
    
    
    0.9
    
    
    
    2.0
    
    
    
    
    *Net income
    
    $
    8.3
    
    
    $
    9.2
    
    
    $
    (0.9
    )
    
    
    (9.8
    )%
 
 *
    
    Greater than 100%.  Q3 2010 compared to Q3 2009
 Net Sales.
 Gross Profit.
 Selling, General and Administrative (SG&A) Expenses.
 31




---



##### Table of Contents



Loss on Disposal of Fixed Assets.
 Amortization of Intangible Assets.
 Impairment Charges.
 Interest Expense.
 Other Income.
 Income Tax Expense.
 Our Segments
  32




---



##### Table of Contents



(Dollars in Millions)
 Q3
    
    
    Q3
    
    
    Increase/(Decrease)2010
    
    
    2009
    
    
    $
    
    
    %Net sales:United States
    
    $
    102.6
    
    
    $
    109.7
    
    
    $
    (7.1
    )
    
    
    (6.5
    )%Canada
    
    
    19.5
    
    
    
    19.1
    
    
    
    0.4
    
    
    
    2.1Other
    
    
    1.3
    
    
    
    1.2
    
    
    
    0.1
    
    
    
    8.3Net sales
    
    $
    123.4
    
    
    $
    130.0
    
    
    $
    (6.6
    )
    
    
    (5.1
    )%Operating income (loss):United States
    
    $
    13.7
    
    
    $
    11.0
    
    
    $
    2.7
    
    
    
    24.5
    %Canada
    
    
    3.5
    
    
    
    0.6
    
    
    
    2.9
    
    
    
    *Other
    
    
    (0.2
    )
    
    
    (1.2
    )
    
    
    1.0
    
    
    
    83.3Operating income
    
    $
    17.0
    
    
    $
    10.5
    
    
    $
    6.5
    
    
    
    61.9
    %
 
 *
    
    Greater than 100%.  Q3 2010 compared to Q3 2009
 United States
 Net Sales.
 Operating income
 Canada
 Net Sales.
 Operating income.
 Other
  Company-Wide
  33




---



##### Table of Contents



(Dollars in Millions)
 YTD
    
    
    YTD
    
    
    Increase/(Decrease)2010
    
    
    2009
    
    
    $
    
    
    %Net sales
    
    $
    349.1
    
    
    $
    364.7
    
    
    $
    (15.6
    )
    
    
    (4.3
    )%Cost of goods sold
    
    
    237.6
    
    
    
    268.3
    
    
    
    (30.7
    )
    
    
    (11.4
    )Gross profit
    
    
    111.5
    
    
    
    96.4
    
    
    
    15.1
    
    
    
    15.7Gross profit percentage
    
    
    31.9
    %
    
    
    26.4
    %Selling, general and
administrative
expenses
    
    
    64.5
    
    
    
    62.1
    
    
    
    2.4
    
    
    
    3.9Loss on disposal of
fixed assets
    
    
    
    
    
    
    0.9
    
    
    
    (0.9
    )
    
    
    (100.0
    )Amortization of
intangible assets
    
    
    0.9
    
    
    
    0.9
    
    
    
    
    
    
    
    Impairment charges
    
    
    0.3
    
    
    
    0.9
    
    
    
    (0.6
    )
    
    
    (66.7
    )Operating income
    
    
    45.9
    
    
    
    31.5
    
    
    
    14.4
    
    
    
    45.7Operating income
percentage
    
    
    13.1
    %
    
    
    8.6
    %Interest expense
    
    
    20.1
    
    
    
    22.4
    
    
    
    (2.3
    )
    
    
    (10.3
    )Other expense
    
    
    1.1
    
    
    
    5.6
    
    
    
    (4.5
    )
    
    
    (80.4
    )Income before income taxes
    
    
    24.7
    
    
    
    3.4
    
    
    
    21.3
    
    
    
    
    *Income tax expense
    
    
    7.0
    
    
    
    2.2
    
    
    
    4.8
    
    
    
    
    *Net income
    
    $
    17.7
    
    
    $
    1.2
    
    
    $
    16.5
    
    
    
    
    *
 
 *
    
    Greater than 100%.  YTD 2010 compared to YTD 2009
 Net Sales.
 Gross Profit.
 SG&A.
 Loss on Disposal of Fixed Assets.
 Amortization of Intangible Assets.
 Impairment Charges.
 34




---



##### Table of Contents



Interest Expense.
 Other Expense.
 Income Tax Expense.
 Our Segments
  (Dollars in Millions)
 YTD
    
    
    YTD
    
    
    Increase/(Decrease)2010
    
    
    2009
    
    
    $
    
    
    %Net sales:United States
    
    $
    284.4
    
    
    $
    293.3
    
    
    $
    (8.9
    )
    
    
    (3.0
    )%Canada
    
    
    61.0
    
    
    
    67.5
    
    
    
    (6.5
    )
    
    
    (9.6
    )Other
    
    
    3.8
    
    
    
    3.9
    
    
    
    (0.1
    )
    
    
    (2.6
    )Net sales
    
    $
    349.1
    
    
    $
    364.7
    
    
    $
    (15.6
    )
    
    
    (4.3
    )%Operating income (loss):United States
    
    $
    34.2
    
    
    $
    23.4
    
    
    $
    10.8
    
    
    
    46.2
    %Canada
    
    
    12.5
    
    
    
    10.0
    
    
    
    2.5
    
    
    
    25.0Other
    
    
    (0.8
    )
    
    
    (1.9
    )
    
    
    1.1
    
    
    
    57.9Operating income
    
    $
    45.9
    
    
    $
    31.5
    
    
    $
    14.4
    
    
    
    45.7
    %
 
 *
    
    Greater than 100%.  35




---



##### Table of Contents



United States
 Net Sales.
 Operating income
 Canada
 Net Sales.
 Operating income.
 Other
 Net Sales.
 Operating loss.
 Liquidity and Capital Resources
   (Dollars in Millions)
 YTD
    
    YTD
    
    Increase/(Decrease)2010
    
    2009
    
    $
    
    %Net cash provided by operating activities
    
    $
    19.8
    
    
    $
    22.6
    
    
    $
    (2.8
    )
    
    
    (12.4
    )%Net cash used in investing activities
    
    
    (5.9
    )
    
    
    (5.0
    )
    
    
    0.9
    
    
    
    18.0Net cash used in financing activities
    
    
    (18.0
    )
    
    
    (8.4
    )
    
    
    9.6
    
    
    
    
    *
 
 *
    
    Greater than 100%. Cash Flows from Operating Activities
  36




---



##### Table of Contents



Cash Flows from Investing Activities
  Cash Flows from Financing Activities
  Debt and Other Obligations
  July 3,
    
    
    October 3,2010
    
    
    2009Revolving Loan
    
    $
    
    
    
    $
    17,500Senior Floating Rate Notes, net of
unamortized discount of $161
and
$241, respectively
    
    
    149,839
    
    
    
    149,759Senior Subordinated Notes
    
    
    150,000
    
    
    
    150,000Term Note
    
    
    53
    
    
    
    479Capital lease obligations
    
    
    142
    
    
    
    42Total debt
    
    
    300,034
    
    
    
    317,780Less:Short-term Revolving Loan
    
    
    
    
    
    
    (17,500
    )Current portion of capital lease obligation
    
    
    (50
    )
    
    
    (10
    )Current portion of long-term debt
    
    
    (53
    )
    
    
    (479
    )Long-term debt
    
    $
    299,931
    
    
    $
    299,791
 Letters ofBorrowing
    
    Credit
    
    (a)
    
    InterestMaximum
    
    Base as
    
    Outstanding
    
    Availability
    
    Rate as ofBorrowing
    
    of July 3,
    
    as of July 3,
    
    as of July 3,
    
    July 3,
    
    ExpirationAmount
    
    2010
    
    2010
    
    2010
    
    2010
    
    DateRevolving Loan
    
    $
    130,000
    
    
    $
    90,248
    
    
    $
    3,268
    
    
    $
    86,980
    
    
    (b)
    
    Apr 7, 2011
 (d)
    
    
    
    (e)Original
    
    (c)
    
    Interest
    
    Maturity
    
    Call OptionPrincipal
    
    Interest Rate
    
    Payments
    
    Date
    
    DateSenior Floating Rate Notes
    
    $
    150,000
    
    
    LIBOR + 4
    %
    
    Jan 15, Apr 15,
Jul 15, Oct 15
    
    Jan 15, 2012
    
    Jan 15, 2007Senior Subordinated Notes
    
    
    150,000
    
    
    
    10
    %
    
    Jan 15, Jul 15
    
    Jul 15, 2012
    
    Jul 15, 2008Term Note
    
    
    2,700
    
    
    
    2.5
    %
    
    Monthly
    
    Jul 19, 2010
    
    n/a
 
 (a)
    
    Total amount available is limited by the amount of eligible accounts receivable,
inventory, machinery and equipment, and real estate less letters of credit outstanding.(b)
    
    The interest rate applicable to the loans under the Revolving Loan is either 1) the
Eurodollar Rate or London Interbank Offered Rate (LIBOR) plus a margin of 1.75% to 2.75%,
or 2) the Base Rate plus a margin of 0.50% to 1.50%. The Base Rate is calculated at the
higher of 1) the prevailing Federal Funds rate plus 50 basis points or 2) the
administrative agents prime interest rate plus an applicable rate determined by the
Companys consolidated leverage ratio as defined by the Amended and Restated Senior Secured
Credit Agreement. As of July 3, 2010, there were no amounts outstanding under the Revolving
Loan.(c)
    
    LIBOR represents the three month London Interbank Offered Rate which resets quarterly.
LIBOR was .3% as of April 13, 2010. April 13, 2010 is the reset date for the July 15, 2010
interest payment.(d)
    
    Interest payments are in cash and paid in arrears. 37




---



##### Table of Contents



(e)
    
    The Senior Floating Rate Notes do not have a redemption premium. The Senior
Subordinated Notes have a redemption price of 100% of principal on or after July 15, 2010.(f)
    
    As of July 3, 2010, the Company was in compliance with all financial covenants under
its indebtedness agreements. Revolving Loan
   Senior Floating Rate Notes
 pari passu
  Senior Subordinated Notes
  38




---



##### Table of Contents



Other Debt
  Interest Rate Swaps
  (Dollars in Thousands)
 (a)EffectiveNotional
    
    InterestReceive
    
    Pay
    
    Amount
    
    RateJanuary 15, 2010 through January 15, 2011
    
    3-month LIBOR
    
    
    1.90
    %
    
    
    150,000
    
    
    
    5.90
    %January 18, 2011 through January 15, 2012
    
    3-month LIBOR
    
    
    2.50
    %
    
    
    150,000
    
    
    
    6.50
    %
 
 (a)
    
    Represents the effective interest rate on the respective portion of the Senior Floating
Rate Notes including the contractual terms of the interest rate swap for the periods
indicated.  Off-Balance Sheet Arrangements
  39




---



##### Table of Contents



Contractual Obligations and Commitments
  (Dollars in Thousands)
 July
    
    
    October
    
    
    October
    
    
    October
    
    
    October2010 to
    
    
    2010 to
    
    
    2011 to
    
    
    2012 to
    
    
    2013 toSeptember
    
    
    September
    
    
    September
    
    
    September
    
    
    SeptemberTotal
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    ThereafterContractual ObligationsRevolving Loan
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Senior Floating Rate Notes
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    150,000
    
    
    
    

    
    
    
    
    
    
    
    Senior Subordinated Notes
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    150,000
    
    
    
    

    
    
    
    
    
    
    
    Term Note
    
    
    53
    
    
    
    53
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Capital lease obligations
    
    
    142
    
    
    
    14
    
    
    
    44
    
    
    
    35
    
    
    
    30
    
    
    
    15
    
    
    
    4Interest on Notes
    
    
    48,919
    
    
    
    9,713
    
    
    
    24,487
    
    
    
    14,719
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    70,771
    
    
    
    2,405
    
    
    
    9,556
    
    
    
    8,968
    
    
    
    8,171
    
    
    
    7,188
    
    
    
    34,483Pension and postretirement
payments
    
    
    57,893
    
    
    
    1,764
    
    
    
    6,152
    
    
    
    9,981
    
    
    
    8,543
    
    
    
    8,639
    
    
    
    22,814Medical insurance
    
    
    6,954
    
    
    
    1,773
    
    
    
    5,091
    
    
    
    90
    
    
    
    
    
    
    
    
    
    
    
    Open purchase orders
    
    
    24,241
    
    
    
    24,241
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Westmix agreement
    
    
    11,865
    
    
    
    11,865
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other commitments
    
    
    1,338
    
    
    
    803
    
    
    
    497
    
    
    
    12
    
    
    
    13
    
    
    
    13
    
    
    
    Total contractual obligations
    
    $
    522,176
    
    
    $
    52,631
    
    
    $
    45,827
    
    
    $
    333,805
    
    
    $
    16,757
    
    
    $
    15,855
    
    
    $
    57,301CommitmentsOutstanding letters of credit
    
    $
    3,268
    
    
    $
    3,268
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Total commitments
    
    $
    3,268
    
    
    $
    3,268
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
  Financial Position
  (Dollars in Thousands)
 July 3,
    
    
    October 3,
    
    
    Increase/(Decrease)2010
    
    
    2009
    
    
    $
    
    
    %Current assets:Cash and cash equivalents
    
    $
    30,435
    
    
    $
    33,609
    
    
    $
    (3,174
    )
    
    
    (9.4
    )%Trade receivables, net
    
    
    58,544
    
    
    
    42,449
    
    
    
    16,095
    
    
    
    37.9Inventories
    
    
    103,085
    
    
    
    90,305
    
    
    
    12,780
    
    
    
    14.2Prepaid expenses and
other current assets
    
    
    7,429
    
    
    
    6,315
    
    
    
    1,114
    
    
    
    17.6Total current assets
    
    
    199,493
    
    
    
    172,678
    
    
    
    26,815
    
    
    
    15.5Current liabilities:Trade payables
    
    
    29,227
    
    
    
    18,214
    
    
    
    11,013
    
    
    
    60.5Accrued interest payable
    
    
    8,864
    
    
    
    5,392
    
    
    
    3,472
    
    
    
    64.4Accrued expenses and
other current
liabilities
    
    
    28,960
    
    
    
    26,642
    
    
    
    2,318
    
    
    
    8.7Revolving loan
    
    
    
    
    
    
    17,500
    
    
    
    (17,500
    )
    
    
    100.0Current portion of
long-term debt and
capital lease
obligations
    
    
    103
    
    
    
    489
    
    
    
    (386
    )
    
    
    (78.9
    )Total current liabilities
    
    
    67,154
    
    
    
    68,237
    
    
    
    (1,083
    )
    
    
    (1.6
    )Working capital
    
    $
    132,339
    
    
    $
    104,441
    
    
    $
    27,898
    
    
    
    26.7
    %
 40




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Risk
  Foreign Operations; Currency Risk
  Raw Material; Commodity Price Risk
  
 Item 4T. Controls and Procedures
 Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  41




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. [Removed and Reserved]
 
 Item 5. Other Information
  
 Item 6. Exhibits
 Exhibit 10.1
    
    Business Sale Agreement, dated as of July 5, 2010, by and
among Ames True Temper Australia Pty Ltd, West Barrows Mix
Pty Ltd, Michelangelo Cantone and Jewell CantoneExhibit 31.1
    
    Certification of Chief Executive Officer Pursuant to Rules
13a-14 and 15d-14, As Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.Exhibit 31.2
    
    Certification of Chief Financial Officer Pursuant to Rules
13a-14 and 15d-14, As Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.Exhibit 32.1
    
    Certification of Chief Executive Officer Pursuant to 18
U.S.C. Section 1350, As Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.Exhibit 32.2
    
    Certification of Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, As Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
 42




---



##### Table of Contents



AMES TRUE TEMPER, INC.
 
 SIGNATURES
  AMES TRUE TEMPER, INC.Date: August 5, 2010
    /s/ Duane R. GreenlyDuane R. GreenlyPresident and Chief Executive Officer
(Principal Executive Officer)Date: August 5, 2010
    /s/ David M. NutiDavid M. NutiChief Financial Officer
(Principal Financial Officer) 43




---



##### Table of Contents



AMES TRUE TEMPER, INC.
 EXHIBIT INDEX
 Exhibit
    
    Description10.1
    
    Business Sale Agreement, dated as of July 5, 2010, by and
among Ames True Temper Australia Pty Ltd, West Barrows Mix
Pty Ltd, Michelangelo Cantone and Jewell Cantone31.1
    
    Certification of Chief Executive Officer Pursuant to Rules
13a-14 and 15d-14, As Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer Pursuant to Rules
13a-14 and 15d-14, As Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer Pursuant to 18
U.S.C. Section 1350, As Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, As Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
 44