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________________________________________________________________________________


UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549




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FORM 10-K



|  |                                                                                      
|- | -------------------------------------------------------------------------------------
|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31,
2001

OR



|  |                                                                                          
|- | -----------------------------------------------------------------------------------------
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934

Commission file number 333-72343



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TRUE TEMPER SPORTS, INC.

(Exact name of registrant as specified in its
charter)


|                                                                |  |                                                           |  |                                         
|--------------------------------------------------------------- |  | --------------------------------------------------------- |  | ----------------------------------------
|Delaware                                                        |  | 3949                                                      |  | 52-2112620                              
|(State of other jurisdiction of incorporation
	or organization) |  | (Primary Standard Industrial
	Classification Code Number) |  | (I.R.S. Employer
	Identification Number)

8275 Tournament Drive

Suite 200


Memphis, Tennessee 38125


Telephone: (901) 746-2000


(Address, including zip code, and telephone
number,


including area code, of registrants
principal executive offices)




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Securities registered pursuant to
section 12(b) of the Act: None

Securities registered pursuant to
section 12(g) of the Act: None

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past
90 days.  Yes  x  No  o

Indicate by checkmark if disclosure by delinquent
filers pursuant to item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of the
registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this
Form 10-K.  x

As of April 1, 2002 the Registrant had 100
shares of Common Stock, $0.01 par value per share, outstanding.
All of the Registrants outstanding shares were held by
True Temper Corporation, the Registrants parent company,
as of April 1, 2002.

Documents Incorporated by Reference:

Part IV incorporates certain information by
reference from the Registrants Registration Statement on
Form S-4, as filed with the Securities & Exchange
Commission on June 7, 1999, and declared effective on
June 10, 1999.



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|                                              |  |  |  |  |  |  |  | 
|--------------------------------------------- |  |  |  |  |  |  |  | 
|EX-10.10: AMENDMENT NO. 3 TO CREDIT AGREEMENT
|EX-12.1: COMPUTATION OF RATIO OF EARNINGS    



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TRUE TEMPER SPORTS, INC.

ANNUAL REPORT ON FORM 10-K

For the Fiscal Year Ended December 31,
2001


INDEX

|              |         |  |                                                                                        |      |  |    | 
|------------- | ------- |  | -------------------------------------------------------------------------------------- | ---- |  | -- | 
|              |         |  |                                                                                        | Page
|              |         |  |                                                                                        |     
|PART I        |         |  |                                                                                        |      |  |   
|              | Item 1  |  | Business                                                                               |      |  | 1  | 
|              | Item 2  |  | Properties                                                                             |      |  | 11 | 
|              | Item 3  |  | Legal Proceedings                                                                      |      |  | 12 | 
|              | Item 4  |  | Submission of Matters to a Vote of Security
	Holders                                   |      |  | 12 | 
|PART II       |         |  |                                                                                        |      |  |   
|              | Item 5  |  | Market for Registrants Common Equity and
	Related Stockholder Matters                 |      |  | 13 | 
|              | Item 6  |  | Selected Financial Data                                                                |      |  | 13 | 
|              | Item 7  |  | Managements Discussion and Analysis of
	Financial Condition and Results of Operations |      |  | 15 | 
|              | Item 7A |  | Quantitative and Qualitative Disclosures About
	Market Risk                            |      |  | 26 | 
|              | Item 8  |  | Financial Statements and Supplementary Data                                            |      |  | 28 | 
|              | Item 9  |  | Changes in and Disagreements With Accountants on
	Accounting and Financial Disclosures |      |  | 49 | 
|             
|PART III      |         |  |                                                                                        |      |  |   
|              | Item 10 |  | Directors and Executive Officers of the Registrant                                     |      |  | 49 | 
|              | Item 11 |  | Executive Compensation                                                                 |      |  | 50 | 
|              | Item 12 |  | Security Ownership of Certain Beneficial Owners
	and Management                        |      |  | 53 | 
|              | Item 13 |  | Certain Relationships and Related Transactions                                         |      |  | 53 | 
|             
|PART IV       |         |  |                                                                                        |      |  |   
|              | Item 14 |  | Exhibits, Financial Statements Schedule, and
	Reports on Form 8-K                      |      |  | 56 | 
|SIGNATURES    |         |  | 57                                                                                     |     
|EXHIBIT INDEX |         |  | 58                                                                                     |     

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PART I

Item 1.  Business

General

We are the worlds leading designer,
manufacturer and marketer of golf club shafts. Since the
1930s we have manufactured golf club shafts under the
widely recognized True Temper brand. In 2001, over 70% of our
revenues were generated through the sale of steel golf club
shafts, a market in which we have an estimated worldwide share
of over 65%. We are a major supplier of steel shafts to the top
20 domestic golf club designers and distributors, including
Callaway, PING, Titleist, Mizuno, Wilson, Cleveland, Adams,
TaylorMade and Golfsmith. In addition, we are a leading
manufacturer of premium graphite shafts in the highly fragmented
graphite golf club shaft market.

Our products include over 1,000 proprietary
models (with our customers brand name, label or trademark
affixed to the shaft) and 2,000 branded models (with the True
Temper and/or Grafalloy brand name, label or trademark affixed
to the shaft) of golf club shafts, including a full range of
commercial and premium grade steel shafts and a full line of
premium graphite shafts. True Temper offers a wide range of
steel shaft lines, including:



| |     |                                                                                                                                  
| | --- | ---------------------------------------------------------------------------------------------------------------------------------
| | (1) | Dynamic Gold, a leading steel shaft on the PGA
	Tour for the last 20 years;                                                      
|
| | (2) | Sensicore, which utilizes patented vibration
	damping technology, to combine the feel of graphite with the
	consistency of steel;
|
| | (3) | BiMatrx, a patented multi-material technology
	combining the benefits of steel with the benefits of graphite
	into one shaft;    
|
| | (4) | TX 90, one of the lightest steel shafts in
	golf; and                                                                            
|
| | (5) | co-branded products, including Callaways
	Memphis 10, PINGs JZ and ZZ Lite and Wilsons Fat
	Shaft.                            

From 1990 to 2001, our steel shafts were played
by over 82% of the PGAs major championship winners,
including 11 of the last 12 Masters champions.

We also design, manufacture and market
approximately 75 lines of graphite (carbon fiber based
composite) shafts under the True Temper and Grafalloy brand
names, including EI-70, Rocket Graphite, TT Lite, ProLite,
ProLogic, AttackLite and PowerLite. Our graphite shafts also
have a strong presence on the professional tours, where they
have been used by players such as David Duval, Davis
Love III and Justin Leonard, each of whom have won
professional tour events during the past three years playing our
graphite shafts.

In addition, we manufacture a variety of high
strength, high tolerance tubular components for the bicycle,
automotive and recreational sports markets. During 2000 we
expanded the design and manufacturing capability of our
performance tubing business segment to include not only steel
tubing applications but also composite tubing. Our first product
offerings of this type are graphite hockey and lacrosse stick
shafts designed for the premier manufacturers in these two
markets. In 2001 we further expanded our composite tubing
capabilities with the acquisition of substantially all capital
assets and intellectual property rights of Advanced Materials
Engineering (AME). AME is a designer and
manufacturer of composite carbon fiber bicycle forks for use in
high-end road bikes under the Alpha Q brand name.

The Golf Club Shaft Industry

Golf clubs are assembled using shafts that are
made from two primary materials. Steel shafts are used to
produce most of the iron products sold today, some of the driver
and fairway woods, and almost all of the putters. Graphite
shafts are used to produce most of the driver and fairway woods,
as well as some of the iron products.

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We estimate that in recent years steel shafts
represented close to 60% of the total worldwide unit sales, and
graphite represented the remainder. We believe new product
innovations and consumer preferences indicate the trend toward
steel shafts is growing.

The steel shaft market is highly concentrated,
with only a few manufacturers worldwide. We believe that this
concentration is due in part to the significant capital
investment and customized manufacturing process required for the
production of steel shafts. We have invested significant capital
in our manufacturing facilities and estimate the replacement
cost of machinery and equipment at our steel shaft manufacturing
facility to be in the range of $50 million to $60 million.

Unlike steel, the graphite shaft market is
characterized by many smaller manufacturers who require limited
capital investment to produce graphite shafts in quantity.
Although there are a few graphite shaft suppliers with scale,
none of them have a majority share in the graphite market.
Typically the graphite manufacturers have a highly concentrated
customer base with most of their sales going to only a few
customers.

Like most golf shaft manufacturers we sell shafts
to both original equipment manufacturers
(OEMs) like Callaway, Titleist, PING, Wilson
and others, as well as to golf equipment distributors like
Golfsmith. OEMs purchase proprietary products uniquely
designed for them as well as products that the Company sells to
any other customer under the True Temper or Grafalloy brand
names. Distributors, who service custom club builders and pro
shops, prefer to purchase True Temper and Grafalloy brand name
shafts that have a high degree of consumer recognition.

Business Strategy

Our goal is to increase revenues and operating
performance by capitalizing on our position as the leading
worldwide designer, manufacturer and marketer of technologically
innovative, performance-oriented golf club shafts. Our business
strategy to achieve this goal consists of the following
objectives:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Continue to Increase Our Share of the Steel
	and Graphite Shaft Markets.We intend
	to continue to increase our share of the steel and graphite
	shaft markets by leveraging the True Temper and Grafalloy brands
	and continuing to introduce new products and technologies
	tailored to the specific needs of golfers. Our plans are to
	continue to develop innovative premium steel shafts with
	performance characteristics and features that support higher
	than average selling prices and gross margins. We also expect
	our lower-priced commercial golf club shaft business to grow due
	to increased consumer interest in golf, particularly by women,
	junior and minority golfers. We expect to increase our share of
	the highly fragmented graphite shaft market by capitalizing on
	our technological leadership to introduce new, higher
	performance premium products under the True Temper and Grafalloy
	brands. In addition, we expect to leverage our brand and
	international distribution capabilities to increase our share of
	the growing international market, which represents approximately
	one-third of the worldwide golf club shaft market.                                                                                                                                                                                                                   
|
| |  | Leverage Technological Leadership to Introduce
	New Products.We intend to capitalize
	on our design expertise and couple our internal resources with
	our supplier partnerships to continue to develop and introduce
	new products for the future as we have in the past. In 2001,
	over 37% of our revenues were derived from products introduced
	during the past 2 years. In 1996, True Temper developed and
	introduced Sensicore, a highly successful line of premium steel
	shafts that incorporates our patented vibration damping
	technology. We believe the Sensicore technology incorporates the
	performance characteristics and consistency of steel with the
	feel of graphite, while offering the lowest vibration levels of
	any steel or graphite shaft on the market. In 1998 True Temper
	successfully expanded the patented Sensicore technology into
	graphite shafts and in 1999 we continued the product line
	development with the launch of Sensicore Gold, with variable
	damping technology. During the past several years we developed
	the revolutionary new BiMatrx technology, which combines the
	favorable performance characteristics of both steel and graphite
	into one shaft. The BiMatrx driver and fairway wood products
	were launched at the January 2001 PGA merchandise show in
	Orlando, Florida, and achieved sales success throughout last
	year.

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| |   |                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Capitalize on the Long-Term Favorable Trends
	Affecting the Golf Equipment Industry.We expect to continue to benefit from the long-term positive
	trends affecting the golf equipment industry. These trends
	include:



| |     |                                                                                                                                                                                 
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | increased consumer spending since 1990 on
	recreational activities in general, and on golf equipment in
	particular;                                                            
|
| | (2) | growth in the number of golf courses;                                                                                                                                           
|
| | (3) | increased interest in golf by woman, junior and
	minority golfers;                                                                                                              
|
| | (4) | projected population growth of golfers who are 40
	to 60 years old, the segment of the population which
	generally plays the most rounds and spends the most on golf
	equipment;
|
| | (5) | substantial increase in media exposure; and                                                                                                                                     
|
| | (6) | the rapid evolution of golf club designs and
	technology.                                                                                                                       



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Enhance Long-Term Customer
	Relationships.We are a major supplier
	to the top 20 domestic golf club manufacturers. We intend to
	continue to play a critical role in designing new shaft
	technologies to meet the specific performance requirements of
	our customers new products. We utilize a computer-aided
	design program that evaluates a new shafts design with
	respect to weight, torque, flex point, tip and butt flexibility,
	swing weight and other critical shaft design criteria. In
	addition, we further enhance our customer relationships by
	developing co-branded products, such as the Memphis 10 for
	Callaway, the Fat Shaft for Wilson, and the JZ and ZZ Lite for
	PING.
|
| |  | Continue to Build the True Temper and
	Grafalloy Brands.We intend to
	continue to increase awareness of the True Temper and Grafalloy
	brands and to support our new product introductions with
	targeted consumer advertising campaigns. From 1999 to 2001 we
	increased advertising expenditures by approximately 9.6% to $5.0
	million, or approximately 4.5% of our 2001 revenues. We are
	currently the only golf club shaft manufacturer that routinely
	advertises on national television. Our marketing programs also
	include:                                                                                                                                                               



| |     |                                                                                                                                                                                                                                                      
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | advertising in major industry publications and
	other media channels both independently and in cooperation with
	certain of the leading golf club manufacturers;                                                                                     
|
| | (2) | promoting our products among tour and teaching
	professionals, college players, coaches and other leaders in the
	golf community; and                                                                                                                
|
| | (3) | maintaining promotional vans to provide technical
	support to professional golfers at the major events on each of
	golfs professional tours. In addition we have established
	a warehouse operation in Hong Kong to service our customers in
	China.



| |                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------
| | We also promote our brands in international
	markets through our sales and distribution offices in Japan,
	Australia and the United Kingdom.



| |   |                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Continue to Improve Productivity and Operating
	Margins.From the year ended December
	31, 1999 to 2001, we increased our operating income margins from
	19.1% to 23.1% and our Adjusted EBITDA (as defined in
	Item 6 of this annual report) margins from 27.2% to 29.2%,
	primarily as a result of

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| |  |                                                                                                                                   
| |  | ----------------------------------------------------------------------------------------------------------------------------------
| |  | reducing our overall cost structure. Management
	believes there are opportunities to improve future gross profit
	margins through:



| |     |                                                                                            
| | --- | -------------------------------------------------------------------------------------------
| | (1) | new product introductions;                                                                 
|
| | (2) | productivity improvements from enhanced
	manufacturing processes and work flow designs; and
|
| | (3) | reduced scrap and product waste expenses from
	improved quality standards and processes.   

Products

We design, manufacture and market steel and
graphite golf club shafts, as well as a variety of high
strength, high tolerance tubular components for the bicycle,
automotive and recreational sports markets. We manufacture over
1,000 custom and 2,000 standard golf club shafts featuring
different combinations of performance characteristics, including
weight, flex, torque and bend profile. Our custom
(proprietary) shafts, which accounted for approximately 33%
of revenues in 2001, are designed, and frequently co-branded in
partnership with our customers, to accommodate specific golf
club designs. Our branded products with the True Temper and
Grafalloy names and designs are typically sold to golf club
manufacturers, distributors and various custom club assemblers,
and are used to either assemble new clubs or to replace the
shafts in existing clubs.

Steel Golf Club
Shafts.We manufacture a wide range of
steel golf club shaft lines, including shafts with the Sensicore
and Sensicore Gold insert, which are well-recognized as the
leading shafts to combine the performance advantages of steel
with the vibration damping characteristics of graphite; the
Dynamic Gold shaft, which has been one of the most widely used
shafts on the PGA Tour for the last 20 years; and the
TX 90 shaft, which is one of the lightest weight steel
shafts in golf.

Our steel golf club shafts can be divided into
the following two primary product lines:

(1) premium steel shafts; and

(2) commercial steel shafts.

Premium steel shafts, such as our Sensicore,
Dynamic Gold and TX 90 product lines, are high performance
products and generally yield higher profit margins than
commercial steel shafts. Our commercial steel shafts, however,
are more attractively priced for entry level golfers, resulting
in lower per unit margins coupled with higher production volume
and unit sales.

Graphite Golf Club
Shafts.We manufacture a wide range of
graphite golf club shaft lines, which are offered in a variety
of weights, torques and flexes. Our graphite golf club shafts
include the True Temper EI-70 and Grafalloy ProLite which are
currently being played by over 100 touring professionals on the
PGA and Senior PGA Tours; the Sensicore Graphite shaft, which
utilizes our patented vibration damping technology. Our graphite
shafts are also sold under the True Temper and Grafalloy product
brands such as, TT Lite, ProLogic, Powerlite, Attacklite, and
Rocket.

Golf Club Shafts With Combined
Materials.During the last several
years we have been working to develop golf club shafts that
combine multiple materials such as steel and graphite into one
shaft. Late in 2000 we introduced a custom iron product for
Adams Golf that combines steel shaft with a graphite tip section
to produce a shaft that provides a new feel for irons.

We used this same patented technology to
introduce the True Temper branded product known as BiMatrx in
January 2001. The BiMatrx shaft consists of a graphite shaft
with a steel tip section that is currently designed for use in
driver and fairway wood applications.

Performance Tubing
Products.We also manufacture and sell
a wide variety of high performance tubular components for the
bicycle, automotive and recreational sports markets. In 2001, we
sold our performance tubing products to a broad range of
original equipment manufacturers, including Trek Bicycle, Dana
Corporation, Autodyne Manufacturing, Starline Baton, STX and
Sherwood Hockey.

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Customers

We maintain long-standing relationships with a
highly diversified customer base consisting of the premier golf
club manufacturers and distributors in the world. We are a major
supplier of shafts to each of the top 20 domestic golf club
designers in the world, including Callaway, PING, Titleist,
Mizuno, Wilson, Cleveland, Adams, TaylorMade and Golfsmith. In
2001, True Temper had in excess of 800 customers, including
approximately 700 golf club manufacturers and more than
100 distributors.

We believe that our close customer relationships
and responsive service have been significant elements to our
success and that our engineering and manufacturing expertise
provide us with a strong competitive advantage. We have
developed and co-branded several proprietary shafts with our
customers, which include customized steel shafts for Callaway,
under the Memphis 10 brand; for PING, under the JZ and ZZ Lite
brands; and for Wilson to produce the Fat Shaft line of clubs.

Competition

We operate in a highly competitive environment.
We believe that we compete principally on the basis of:



| |   |                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------
| |  | our ability to provide a broad range of high
	quality steel and graphite shafts at competitive prices;                                   
|
| |  | our ability to deliver customized products in
	large quantities on a timely basis through distribution channels
	around the world;       
|
| |  | the acceptance of steel and graphite shafts in
	general, and our shafts in particular, by professional and other
	golfers;               
|
| |  | our ability to develop and produce innovative new
	products that provide performance features which benefit golfers
	of all skill levels.

We estimate that we have over 65% of the
worldwide steel shaft market, and that our next largest steel
competitor has about one third of our volume. Until recently, we
primarily competed with four other steel golf shaft
manufacturers: Royal Precision, Inc., a domestic based steel
shaft manufacturer, Far East Machinery Co., Ltd. (Femco) located
in Taiwan, Nippon Shaft Co., Ltd., a low volume Japanese brand,
and Coyote Sports Inc., the owner of the Apollo Sports steel
shaft brand. However, late in 1999, Coyote Sports Inc. filed for
bankruptcy, and a creditor placed its steel shaft subsidiary,
Apollo, into Receivership under the laws in the United Kingdom.
In early 2000, the Apollo shaft manufacturing operations were
shut down and the majority of its steel shaft manufacturing
equipment was purchased by True Temper.

Unlike steel, the graphite shaft manufacturing
industry is highly fragmented with a large number of suppliers
selling to only a few customers. We believe there are anywhere
from fifty to eighty graphite shaft manufacturers worldwide. A
few of these companies reside in North America and most are
located in Far East Asia. We do not believe that there are any
graphite suppliers currently with a market share in graphite
that is in any way comparable to the market share True Temper
has in steel. We believe True Temper is one of the top five
highest volume premium grade graphite shaft producers in the
world. Our major competitors in the graphite shaft market
include Aldila, Inc., United Sports Technologies, Inc., (UST),
Graphite Design International, Fujikura Composite America Inc.,
and Horizon Sports Technology (HST).

We believe we are the only major shaft supplier
that produces both steel and graphite shafts in significant
volumes for the OEM and distributor markets.

Design & Development

We design and develop products for both
proprietary/co-branded market applications and for the True
Temper/ Grafalloy branded product names.

The larger golf club manufacturers often request
exclusively designed proprietary or co-branded steel and
graphite golf club shafts for their club systems, which require
golf club shafts, heads and grips engineered to work together.
We are committed to serving this market by maintaining our role
as a leader in innovative shaft designs for both steel and
graphite materials technology. Shaft designs and modifications
are frequently the

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direct result of our combined efforts with that
of our customers to develop an exclusive shaft specifically
designed for that customers clubs. We use a computer aided
design analysis program to evaluate a new shafts design
with respect to weight, torque, flex point, tip and butt
flexibility, swing weight and other critical shaft design
criteria.


In addition to our proprietary/co-branded product
applications, we are very active in designing and developing new
products under the True Temper and Grafalloy brand names that
meet the performance needs of golfers of all ages and skill
levels. We develop these branded products based upon our
internal research and evaluation of consumer needs and
preferences.

The materials typically used in production of our
designs include several different high strength steel alloys and
advanced composite systems of graphite and glass fibers with
thermosetting epoxy resin systems.

Using computer aided design, we generate a design
which is then analyzed by computer for stiffness and strength
properties. Our research and development efforts focus on
technology development and new materials as an essential
precursor to successful new product development. Our design
research focuses on improvements in graphite shaft asthetics
since cosmetic appearance has become increasingly important to
customers. To supplement our design and development we employ
extensive testing that includes laboratory durability and stress
tests, robotic testing and individual player evaluation.

In addition, our pursuit of strategic vendor
alliances complement our abilities and needs, an approach which
allows us to exploit technical capabilities beyond our own while
minimizing the risk and investment required to enter the market
with new products.

Research and development costs for the years
ended December 31, 2001, 2000 and 1999 were $1.6 million,
$1.6 million and $1.8 million, respectively.

Manufacturing

We believe that our manufacturing expertise and
production capabilities enable us to respond quickly to
customers orders and provide sufficient quantities on a
timely basis. We believe that our investment in capital
equipment and personnel training has enabled us to establish a
reputation as one of the leading manufacturers of steel and
graphite shafts.

Steel Shaft Manufacturing
Process.The process of manufacturing
a steel shaft has many distinct phases. Generally, a large steel
coil is unrolled and then formed lengthwise, welded and cut into
cylinders. The tubing is then treated and fitted over a metal
rod or mandrel that is used to determine the precise
inside diameter of the cylinder as it is drawn. The tubing is
stretched, cut into sections, and then weighed and balanced.
Later, through a process that we pioneered, the sections are
tapered to give each shaft model a particular flex and
frequency. The shafts are cleaned, straightened, heat-treated
and tempered. The shafts are straightened by machines designed
and built by True Temper. The shafts are plated with layers of
nickel to prevent corrosion and then covered with a fine layer
of chrome. Finally, shafts are dried, polished and inspected for
cosmetic flaws before our name and logo is affixed to the shaft.
It takes an average of 10 days to manufacture a True Temper
steel shaft.

Graphite Shaft Manufacturing
Process.There are two processes which
are used to manufacture a graphite shaft: flag-wrapping and
filament-winding. Most of our graphite shafts are produced using
the flag-wrapping process. The flag-wrapping process uses
graphite fiber materials or prepreg in sheet form
which requires refrigeration until use. Each new roll of prepreg
is allowed to reach room temperature before the material is cut
into pennant-shaped patterns called flags for each particular
shaft design. Layer by layer, various combinations of prepreg
flags are wrapped around mandrels specified for each particular
shaft design. The layered materials are then encased in thin
layers of clear tape for compaction and heated at high
temperatures to harden the material. At the end of the process,
the shafts are painted and stylized using a variety of colors,
patterns and designs. The filament-winding process, on the other
hand, begins with a spool, rather than a sheet, of graphite
fiber, which is fed onto the reel of a machine which then wraps
the fiber around a mandrel by turning the mandrel and
simultaneously moving the graphite fiber from one end of the
mandrel

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to the other. Once the mandrel is wrapped, the
process uses the same encasing and heating techniques as the
flag wrapping process.


Raw Materials.We
use several raw materials to produce steel golf shafts,
including several steel alloys sourced from two or three primary
vendors, nickel and plating chemicals, Sensicore inserts and
various sundry supplies, boxes and labels. Graphite shafts are
produced with a variety of graphite fiber materials in both
sheet and spool form that we source from several different
vendors. In addition, graphite shafts are finished with a wide
variety of paints and inks. We believe that there are adequate
alternative suppliers of these materials, and, therefore, we do
not believe that we are dependent on any one supplier. See
Business Risks  Risk Associated with
Fluctuations in Raw Material Cost and Availability and
Qualitative and Quantitative Disclosures About Market
Risk  Commodity Risk for risks relating to
price increases in raw materials and to delays in receiving
supplies.

Marketing & Promotion

Our marketing strategy is designed around new
product development and targeted advertising and promotion
programs. Through our ability to anticipate and address consumer
trends in the golf equipment market, as well as the performance
demands of professional golfers, we are able to successfully
market our products to golf club manufacturers while
strengthening brand awareness. During the last several years,
our marketing efforts through the utilization of a wide variety
of promotional channels, including mass media advertising, print
and television, sponsorship of golf-related events, equipment
endorsements and product demonstrations, have increased our
overall exposure in the golf industry.

For example, we have maintained a strong presence
among PGA Tour players, particularly since 1981, when we began
sending our PGA Tour van to all major PGA events. The Tour van
functions as a golf club repair shop on wheels, visiting over 50
professional tour events during 2001. Typically, the van is
located on the practice tee and lends technical support to the
tour professionals while simultaneously promoting the True
Temper and Grafalloy brands with representatives of original
equipment manufacturers. In addition, we provide technical
support to the players on the Senior PGA Tour, the LPGA Tour,
and the Buy.Com Tour (formerly the Nike Tour).

Although we do not pay any professional golfer to
play our shafts in competition, we believe that the use of our
products by professional golfers enhances our reputation for
quality and performance while also promoting the use of our
shafts. Recognizing the influence professional golfers
product choices have on consumer preferences, we also engage in
special promotional efforts to encourage professional golfers to
use clubs with our shafts. Similarly, we contribute shafts to
college athletic programs and teaching professionals in order to
expose those who may influence future club purchases to the
advantages of True Temper and Grafalloy shafts.

Much of our advertising and promotional spending
is dedicated to print and television advertising, including
cooperative advertising with our customers. We believe we are
currently the only golf club shaft manufacturer that routinely
advertises on national television. Additional advertising and
promotional spending is allocated to promotional events such as
trade shows, consumer golf shows and PGA Tour activities. In a
1998 New York Times research poll, True Temper was ranked as the
top golf shaft company in terms of brand familiarity. Of those
surveyed, 93% recognized the True Temper brand.

Advertising and promotional costs for the years
ended December 31, 2001, 2000 and 1999 were $5.0 million,
$4.6 million and $4.6 million, respectively.

Distribution & Sales

We primarily sell our shafts to golf club
manufacturers and distributors. Typically, distributors resell
our products to custom club assemblers, pro shops and
individuals. Sales to golf club manufacturers accounted for
approximately 77% of revenues in 2001.

We believe that we have one of the most
experienced and respected sales staffs in the industry. Our
sales and marketing department includes domestic sales managers,
international sales managers, a customer service

7



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group and a team of design professionals who
provide field support to our sales representatives. We believe
that our international market presence, which comprised
approximately 20% of our total 2001 revenues, provides an
opportunity for future growth. We market our products in Japan,
Europe, Australia and Southeast Asia and maintain a distribution
operation in each region.


Employees

As of December 31, 2001, we had 610
full-time employees, including 26 in sales and marketing, 25 in
research, development and manufacturing engineering, 529 in
production and the balance in administrative and support roles.
In addition, as of December 31, 2001, we had 68 individuals
working in production at our El Cajon facility through a
temporary employment agency. The El Cajon plant has historically
used a certain portion of temporary workers in order to more
effectively match the workforce level with the required
production level at various times of the year.

The hourly employees at our steel plant in Amory,
Mississippi are represented by the United Steel Workers of
America. In May 1999, the United Steel Workers union at our
Amory, Mississippi facility voted to accept a new collective
bargaining agreement that covers a four year period beginning in
May 1999 and expiring in July 2003. We believe that our
relationships with the union and our employees are good. See
Risk Factors  Labor Relations for a
description of how our company would be adversely affected in
the event of a labor disruption or work stoppage affecting our
employees.

Intellectual Property

As of December 31, 2001 we held 24 patents
worldwide relating to various products and proprietary
technologies, including the Sensicore technology, and had 5
patent applications pending. We also hold numerous trademarks
related to, among other things, our True Temper and Grafalloy
branded products.

While we consider our patents and trademarks to
be valuable assets, we do not believe that our competitive
position is dependent solely on patent or trademark protection,
or that our operations are dependent on any individual patent or
trademark.

Environmental, Health and Safety
Matters

We are subject to federal, state and local
environmental and workplace health and safety laws and
regulations, including requirements governing discharges to the
air and water, the handling and disposal of solid and hazardous
wastes, and the remediation of contamination associated with
releases of hazardous substances. Based on a recent review
conducted by independent environmental consultants, we believe
that we are currently in material compliance with environmental
and workplace health and safety laws and regulations.
Nevertheless, our manufacturing operations involve the use of
hazardous substances and, as is the case with manufacturers in
general, if a release of hazardous substances occurs or has
occurred on or from our facilities, we may be held liable and
may be required to pay the cost of remedying the condition. The
amount of any such liability could be material.

We devote significant resources to maintaining
compliance with, and believe we are in material compliance with,
our environmental obligations. Despite such efforts, the
possibility exists that instances of noncompliance could occur
or be identified in the future, the penalties or corrective
action costs associated with which could be material.

Like any manufacturer, we are subject to the
possibility that we may receive notices of potential liability,
pursuant to CERCLA or analogous state laws, for cleanup costs
associated with onsite or offsite waste recycling or disposal
facilities at which waste associated with our operations have
allegedly come to be located. Liability under CERCLA is strict,
retroactive, and joint and several. No such notices are
currently pending.

We have made, and will continue to make, capital
expenditures to comply with current and future environmental
obligations. Because environmental requirements are becoming
increasingly stringent, our expenditures for environmental
compliance may increase in the future.

8



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Business Risks

This annual report on Form 10-K includes
forward looking statements including, in particular,
the statements about our plans, strategies, and prospects under
the headings Managements Discussion and Analysis of
Financial Condition and Results of Operations, and
Business. Although we believe that our plans,
intentions and expectations reflected in or suggested by such
forward-looking statements are reasonable, we can give no
assurance that such plans, intentions or expectations will be
achieved. Important factors that could cause actual results to
differ materially from the forward looking statements we make in
this report are set forth below and elsewhere in this report.
All forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety
by the following cautionary statements.

SUBSTANTIAL
LEVERAGE Our substantial
indebtedness could adversely affect the financial health of our
company. For example, it could:



| |   |                                                                                                                                                                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | make it more difficult for us to satisfy our
	obligations with respect to our Senior Subordinated Notes;                                                                                                                                                                         
|
| |  | increase our vulnerability to increases in
	interest rates because our secured credit facility, under which
	our indebtedness was $16.5 million as of December 31, 2001,
	is subject to a variable interest rate;                                                                
|
| |  | limit our ability to fund future working capital,
	capital expenditures, research and development costs,
	acquisitions and other general corporate requirements;                                                                                                                 
|
| |  | require a substantial amount of our annual cash
	flow from operations for debt service, thereby reducing the
	availability of our cash flow to fund working capital, capital
	expenditures, research and development efforts, acquisitions and
	other general corporate purposes;
|
| |  | limit our flexibility to plan for, or react to,
	changes in our business and the industry in which we operate;                                                                                                                                                                   
|
| |  | place us at a competitive disadvantage compared
	to our competitors that have less debt; and                                                                                                                                                                                     
|
| |  | limit our ability to borrow additional funds.                                                                                                                                                                                                                                    

ABILITY TO SERVICE
DEBT Due largely to
factors beyond our control, we may not in the future be able to
generate the cash we need to service our indebtedness. Our
ability to make payments on and to refinance our indebtedness,
and to fund planned capital expenditures and research and
development efforts will depend on our ability to generate cash
in the future. This, to a certain extent, is subject to general
economic, financial, competitive, legislative, regulatory and
other factors that are beyond our control. Based on our current
level of operations, we believe our cash flow from operations,
available cash and available borrowings under our senior bank
facilities will be adequate to meet our future liquidity needs.

We cannot assure you, however, that our business
will generate sufficient cash flow from operations, or that
future borrowings will be available to us under our senior bank
facilities in an amount sufficient to enable us to pay our
indebtedness, or to fund our other liquidity needs. We may need
to refinance all or a portion of our indebtedness on or before
maturity. We might not be able to refinance any of our
indebtedness on commercially reasonable terms or at all.

DEPENDENCE ON DISCRETIONARY CONSUMER
SPENDING Sales of golf
clubs are dependent on discretionary consumer spending which may
be affected by general economic conditions resulting in a
decrease in consumer spending on golf equipment. In addition,
our future results of operations could be affected adversely by
a number of other factors that influence discretionary consumer
spending including, unseasonal weather patterns, demand for our
existing and future products, new product introductions by our
competitors, an overall decline in participation in golf
activities, shifting consumer preferences between graphite and
steel golf club shafts or other materials that we currently do
not produce, and competitive pressures that otherwise result in
lower than expected average selling prices. Any one or more of
these factors could result in our failure to achieve our
expectations as to future sales or earnings. Because most
operating expenses are relatively fixed in the short-term, we
may be unable to adjust spending to compensate for any
unexpected sales shortfall, which could adversely affect our
results of operations.

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NEW PRODUCT
INTRODUCTION There can be
no assurance that we will continue to develop competitive
products, develop or use technology on a timely or competitive
basis or otherwise respond to emerging market trends. Because
the introduction of new golf club shafts using steel, graphite
or other composite and combined materials is critical to our
future success, our continued growth will depend, in large part,
on our ability to successfully develop and introduce new
products in the marketplace. Should golf consumers prefer to use
golf clubs made from materials other than steel or graphite,
there could be a material adverse effect on the results of our
operations. In addition, the design of new golf clubs is also
greatly influenced by the rules and interpretations of the
U.S. Golf Association (USGA). Although the golf
equipment standards established by the USGA generally apply
mainly to competitive events sanctioned by that organization, we
believe that it is critical for our future success that our new
shafts comply with USGA standards. No assurance can be given
that any new products will receive USGA approval or that
existing USGA standards will not be altered in ways that
adversely affect the sales of our current or future products.

LABOR
RELATIONS If any labor
disruption or work stoppages affect our employees, the results
of our operation could be adversely affected. At
December 31, 2001, we employed approximately 610 full-time
individuals. Of these, approximately 366 hourly employees at our
Amory, Mississippi facility are represented by the United Steel
Workers of America. Although we believe that relations with our
employees and the union are generally good, there can be no
assurance that we will not be subject to work stoppages or other
labor disruption and, if such events were to occur, that there
would not be a material adverse effect on our results of
operations.

COMPETITION WITH OTHER GOLF CLUB SHAFT
DESIGNERS AND
MANUFACTURERS We operate
in a highly competitive environment and compete against a number
of established golf club shaft designers, manufacturers and
distributors. We also compete indirectly with manufacturers that
produce shafts internally and face potential competition from
golf club manufacturers that currently purchase golf club shaft
components from third parties but which may have, develop or
acquire the ability to manufacture shafts internally. Unlike the
steel shaft industry, the graphite shaft industry is highly
fragmented. As a result, we compete with many players involved
in the design and manufacture of graphite shafts. See
Business  Competition for a description
of the bases on which we compete and the number of competitors
in our industry.

INDUSTRY
CONSOLIDATION If the
industry and customer base continues to consolidate, then it is
possible a consolidation of several of our existing customers
into one company could represent a significant portion of our
annual revenues. If this were to occur, and this customer
selected an alternative shaft supplier, it could have a material
adverse effect on our results of operations. If this
consolidated company were to remain a True Temper customer it
could represent an increased credit risk due to its size in
relation to our total accounts receivable.

FLUCTUATIONS IN COST AND AVAILABILITY OF RAW
MATERIAL Since our company
is dependent upon certain suppliers for steel, nickel, graphite
prepreg and other materials, we are subject to price increases
and delays in receiving materials. Although we have several
sources for most of the key raw materials we purchase, and we
attempt to establish purchase price commitments for one-year
periods, we are subject to price increases for raw materials
used in the manufacture of golf club shafts and to delays in
receiving these materials. As key components to the manufacture
of golf club shafts, a substantial price increase to one or more
of these raw materials or any extended delay in their delivery
could result in a material adverse effect on our results of
operations.

FLUCTUATIONS IN COST AND AVAILABILITY OF
ENERGY SOURCES Our
graphite shaft manufacturing operation is located in Southern
California and is dependent upon a consistent and affordable
supply of electricity. If there is a prolonged shortage of
electrical supply to our California facility and/or a
significant increase in the cost of electrical power, it could
result in the temporary or permanent closure of our graphite
shaft operations, which could have a material adverse affect on
the results of our operations.

In addition, our steel shaft manufacturing plant
located in Mississippi relies upon a consistent and affordable
supply of both natural gas and electrical power in order to
conduct normal operations. If the

10



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Mississippi facility should experience a shortage
in supply of either power source, or a significant increase in
cost, it could have a material adverse affect on our results of
operations.


FLUCTUATION IN AVAILABILITY OF ENERGY TO
CUSTOMERS There are a
significant number of golf equipment assemblers who are
headquartered and conduct manufacturing operations in Southern
California. In aggregate these companies account for a
significant share of the golf equipment market and also account
for a considerable portion of True Tempers sales revenue.
With the recent disruption of electrical power to California and
other Western states there is a risk that our customers
manufacturing operations may be adversely affected by power
shortages. If this were to occur they may reduce their purchases
of shafts from True Temper causing a significant adverse impact
to our revenues and results of operations.

FLUCTUATIONS IN COST OF HEALTH
INSURANCE Health insurance
coverage is a valuable benefit in retaining and attracting
employees and has been subject to significant price increases by
health industry providers. Since we do not plan to eliminate
providing health benefits to our employees, the rising costs
could have a material adverse affect on the results of our
operations.

PATENTS AND PROTECTION OF PROPRIETARY
TECHNOLOGY There can be no
assurance that the patents we hold relating to certain of our
products and technologies offer complete protection against
infringement of our proprietary rights by others. As of
December 31, 2001 we held 38 patents worldwide relating to
various products and proprietary technologies, including the
Sensicore technology, and had 18 patent applications pending.
There can be no assurance, however, as to the degree of
protection afforded by these patents or as to the likelihood
that patents will be issued from the pending patent
applications. Moreover, these patents may have limited
commercial value or may not protect our products. Additionally,
the U.S. patents that we hold do not preclude competitors
from developing or marketing products similar to our products in
international markets.

ENVIRONMENTAL, HEALTH AND SAFETY
MATTERS We are subject to
federal, state, and local environmental and workplace health and
safety laws, regulations and requirements which, if contravened,
could result in significant costs to our company. Our
manufacturing operations involve the use of hazardous substances
and should there be a release of such substances from our
facilities, we may be held liable. Although we believe we are in
material compliance with all such laws, regulations and
requirements, instances of noncompliance could occur or be
identified in the future. The penalties or corrective action
costs associated with noncompliance could be material. In
addition, we may receive notices of potential liability pursuant
to federal or state laws for cleanup costs associated with waste
recycling or disposal facilities at which wastes associated with
our operations have allegedly come to be located.

RESTRICTIONS IMPOSED BY OUR SENIOR CREDIT
FACILITIES AND THE INDENTURE FOR OUR 10 7/8% SENIOR
SUBORDINATED NOTES DUE 2008 (THE
NOTES) As more
fully described in Note 8 to the financial statements
located elsewhere in this annual report, we are subject to
restrictions contained in our senior bank facilities and in the
indenture. Failure to comply with any of the restrictions could
result in acceleration of our debt. The senior credit facilities
and the indenture restrict our ability to:



| |   |                                                                        
| | - | -----------------------------------------------------------------------
| |  | incur additional indebtedness;                                         
|
| |  | pay dividends and make distributions; and                              
|
| |  | make certain investments, loans, or advances
	(including acquisitions).

In the event that we fail to comply with any of
these restrictions, or receive a waiver from compliance, we will
be required to pay to our lenders our outstanding debt or we may
be subject to foreclosure on the collateral securing our
obligations under the senior credit facilities.

Item 2.  Properties

Our administrative offices and manufacturing
facilities currently occupy approximately 440,000 square feet.
Our shafts are manufactured at two separate facilities, a steel
shaft facility located in Amory, Mississippi and a composite
graphite shaft facility located in El Cajon, California. In
addition, we have a multi-material shaft assembly facility
located in Olive Branch, Mississippi. Our executive offices are
located in a leased

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##### Table of Contents



facility in Memphis, Tennessee. The following
table sets forth certain information regarding significant
facilities operated by True Temper as of December 31, 2001:


|                         |  |          |                           |         |  |        |         |            |  |  |        |  |  |  |               |    
|------------------------ |  | -------- | ------------------------- | ------- |  | ------ | ------- | ---------- |  |  | ------ |  |  |  | ------------- | ---
|                         |  |          |                           |         |  |        |         | Lease     
|                         |  |          |                           | Approx. |  | Owned/ |         | Expiration
|Facility                 |  | Location |                           | sq. Ft. |  | Leased |         | Date      
|                         |  |          |                           |         |  |        |         |           
|Corporate Offices        |  |          | Memphis, Tennessee        |         |  |        | 13,500  |            |  |  | Leased |  |  |  | December 2005 |    
|Steel Shaft/ Tubing Mfg. |  |          | Amory, Mississippi        |         |  |        | 335,000 |            |  |  | Leased |  |  |  | January 2063  | (1)
|Composite Shaft Mfg.     |  |          | El Cajon, California      |         |  |        | 45,907  |            |  |  | Leased |  |  |  | March 2004    |    
|Building                 |  |          | Olive Branch, Mississippi |         |  |        | 45,000  |            |  |  | Owned  |  |  |  |              |    



---



|    |                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Amory, Mississippi lease is structured in
	5 year automatically renewable terms, extending through
	January 2063. The lease covers the original land and building of
	the Amory facility.

In addition, we promote our products in
international markets through sales offices in Australia, Japan
and the United Kingdom.

To the extent that any such properties are
leased, we expect to be able to renew such leases or to lease
comparable facilities on terms commercially acceptable to us.

Item 3.     Legal
Proceedings

Various claims and legal proceedings, generally
incidental to the normal course of business, are pending or
threatened against us. While we cannot predict the outcome of
these matters, in the opinion of management, any liability
arising from these matters will not have a material adverse
effect on our business, financial condition or results of
operations.

Item
4.     Submission of Matters to a
Vote of Security Holders

There were no matters submitted to a vote of
security holders during 2001.

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PART II

Item 5.     Market
for Registrants Common Equity and Related Stockholder
Matters

There is no public market for the Companys
equity securities. All of the Companys capital stock is
owned by True Temper Corporation.

The Company declared and paid dividends quarterly
on its shares of common stock during fiscal 2001 totaling
$3.6 million. The Company declared and paid dividends on
its shares of common stock during fiscal 2000 in the amount of
$1.2 million. The Company did not declare any dividends on
its shares of common stock during fiscal year 1999.

Our various debt instruments impose restrictions
on the payment of dividends by means of covenants. The Company
was in compliance with all debt covenants as of
December 31, 2001.

Item
6.     Selected Financial
Data

Set forth below are our selected historical
financial data for the five fiscal years ended December 31,
2001. The historical financial data were derived from our
audited financial statements and the notes thereto (except
EBITDA, Adjusted EBITDA, and ratio of earnings to fixed charges
data), for which the December 31, 2001, 2000 and 1999
financial statements are included herein.

|                                       |                                              |                         |   |         |   |      |   |         |   |      |   |         |   |  |   |         |   |  |   |         |  
|-------------------------------------- | -------------------------------------------- | ----------------------- | - | ------- | - | ---- | - | ------- | - | ---- | - | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                       |                                              |                        
|                                       |                                              | Year Ended December 31,
|                                       |                                              |                        
|                                       |                                              | 2001                    |   | 2000    |   | 1999 |   | 1998(1) |   | 1997
|                                       |                                              |                         |   |         |   |      |   |         |   |     
|                                       |                                              |                        
|                                       |                                              | (Dollars in thousands) 
|STATEMENT OF OPERATIONS DATA:          |                                              |                         |   |         |   |      |   |         |   |      |   |         |   |  |   |         |   |  |   |        
|                                       | Net sales                                    |                         | $ | 111,083 |   |      | $ | 110,636 |   |      | $ | 92,215  |   |  | $ | 91,450  |   |  | $ | 82,597  |  
|                                       | Gross profit                                 |                         |   | 43,348  |   |      |   | 45,254  |   |      |   | 36,131  |   |  |   | 32,198  |   |  |   | 28,711  |  
|                                       | Selling, general and administrative expenses |                         |   | 14,963  |   |      |   | 16,899  |   |      |   | 15,156  |   |  |   | 13,464  |   |  |   | 13,324  |  
|                                       | Allocated corporate expenses(2)              |                         |   |        |   |      |   |        |   |      |   |        |   |  |   | 763     |   |  |   | 927     |  
|                                       | Amortization of goodwill                     |                         |   | 2,695   |   |      |   | 2,701   |   |      |   | 2,701   |   |  |   | 2,505   |   |  |   | 3,746   |  
|                                       | Goodwill writeoff(3)                         |                         |   |        |   |      |   |        |   |      |   |        |   |  |   | 40,000  |   |  |   |        |  
|                                       | Recapitalization transaction expenses        |                         |   |        |   |      |   |        |   |      |   |        |   |  |   | 5,698   |   |  |   |        |  
|                                       | Impairment charge on long lived assets(4)    |                         |   |        |   |      |   | 1,053   |   |      |   |        |   |  |   | 750     |   |  |   |        |  
|                                       | Restructuring charges(5)                     |                         |   |        |   |      |   | 7       |   |      |   | 622     |   |  |   | 400     |   |  |   | 520     |  
|                                       | Operating income (loss)                      |                         |   | 25,690  |   |      |   | 24,594  |   |      |   | 17,652  |   |  |   | (31,382 | ) |  |   | 10,194  |  
|                                       | Interest expense, net of interest
	income    |                         |   | 12,660  |   |      |   | 13,693  |   |      |   | 14,341  |   |  |   | 3,462   |   |  |   |        |  
|                                       | Income tax (benefit) expense (6)             |                         |   | (11,539 | ) |      |   | 5,218   |   |      |   | 2,318   |   |  |   | 2,887   |   |  |   | 5,277   |  
|                                       | Net income (loss)                            |                         | $ | 24,571  |   |      | $ | 5,627   |   |      | $ | 1,002   |   |  | $ | (37,811 | ) |  | $ | 4,863   |  
|BALANCE SHEET DATA (AT END OF PERIOD): |                                              |                         |   |         |   |      |   |         |   |      |   |         |   |  |   |         |   |  |   |        
|                                       | Working capital(7)                           |                         | $ | 14,748  |   |      | $ | 9,881   |   |      | $ | 11,200  |   |  | $ | 8,942   |   |  | $ | 6,418   |  
|                                       | Total assets                                 |                         |   | 189,330 |   |      |   | 175,888 |   |      |   | 186,963 |   |  |   | 189,626 |   |  |   | 160,341 |  
|                                       | Total debt(8)                                |                         |   | 116,522 |   |      |   | 118,448 |   |      |   | 136,522 |   |  |   | 137,545 |   |  |   | 349     |  
|                                       | Total stockholders equity                   |                         | $ | 61,303  |   |      | $ | 40,320  |   |      | $ | 35,881  |   |  | $ | 34,879  |   |  | $ | 146,716 |  
|OTHER FINANCIAL DATA:                  |                                              |                         |   |         |   |      |   |         |   |      |   |         |   |  |   |         |   |  |   |        
|                                       | EBITDA(9)                                    |                         | $ | 31,898  |   |      | $ | 30,830  |   |      | $ | 23,857  |   |  | $ | 14,449  |   |  | $ | 17,543  |  
|                                       | EBITDA margin(9)                             |                         |   | 28.7    | % |      |   | 27.9    | % |      |   | 25.9    | % |  |   | 15.8    | % |  |   | 21.2    | %
|                                       | Adjusted EBITDA(9)                           |                         | $ | 32,398  |   |      | $ | 32,390  |   |      | $ | 25,087  |   |  | $ | 21,622  |   |  | $ | 18,063  |  
|                                       | Adjusted EBITDA Margin(9)                    |                         |   | 29.2    | % |      |   | 29.3    | % |      |   | 27.2    | % |  |   | 23.6    | % |  |   | 21.9    | %
|                                       | Cash from operating activities               |                         | $ | 12,162  |   |      | $ | 20,607  |   |      | $ | 7,619   |   |  | $ | 4,661   |   |  | $ | 12,999  |  

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|                                         |  |                         |        |      |  |      |         |         |  |      |        |   |  |   |        |   |  |   |         |  
|---------------------------------------- |  | ----------------------- | ------ | ---- |  | ---- | ------- | ------- |  | ---- | ------ | - |  | - | ------ | - |  | - | ------- | -
|                                         |  |                        
|                                         |  | Year Ended December 31,
|                                         |  |                        
|                                         |  | 2001                    |        | 2000 |  | 1999 |         | 1998(1) |  | 1997
|                                         |  |                         |        |      |  |      |         |         |  |     
|                                         |  |                        
|                                         |  | (Dollars in thousands) 
|Cash used in investing activities        |  |                         | (2,291 | )    |  |      | (3,543  | )       |  |      | (1,572 | ) |  |   | (8,531 | ) |  |   | (2,439  | )
|Cash from (used in) financing activities |  |                         | (5,862 | )    |  |      | (19,323 | )       |  |      | (1,885 | ) |  |   | 4,836  |   |  |   | (10,054 | )
|Depreciation and amortization            |  |                         | 6,208  |      |  |      | 6,236   |         |  |      | 6,205  |   |  |   | 5,831  |   |  |   | 7,349   |  
|Capital expenditures                     |  | $                       | 2,201  |      |  | $    | 3,621   |         |  | $    | 1,620  |   |  | $ | 2,366  |   |  | $ | 2,452   |  
|Ratio of earnings to fixed charges(10)   |  |                         | 2.0x   |      |  |      | 1.8x    |         |  |      | 1.2x   |   |  |   |       |   |  |   |        |  




| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | On June 29, 1998, Black & Decker
	Corporation, along with its True Temper Sports Division, and
	True Temper Sports LLC (an affiliate of Cornerstone Equity
	Investors LLC), entered into an agreement pursuant to which True
	Temper Sports LLC acquired, effective on September 30,
	1998, an 89% equity interest in True Temper Corporation, our
	parent company (collectively referred to as the
	Recapitalization). The Recapitalization was
	accounted for as a leveraged recapitalization, and accordingly
	our assets and liabilities remained at their historical bases
	for financial reporting purposes; however, for income tax
	purposes the transaction was treated as a taxable business
	combination.                                                                                                                                                                
|
| | (2) | Prior to the recapitalization, True Temper
	received certain services provided by Black & Decker that
	included cash management, tax reporting, risk management and
	internal audits. Charges for these corporate services were based
	upon a general allocation methodology determined by
	Black & Decker, and used to allocate all corporate
	overhead expenses to Black & Deckers operating
	divisions and subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | (3) | In connection with Black & Deckers
	change in accounting policy with respect to the measurement of
	goodwill impairment, $40,000 of goodwill related to True Temper
	was written off, effective January 1, 1998, as a change in
	accounting estimate inseparable from a change in principle.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | (4) | Impairment charge on long-lived assets reflects
	the 2000 write-down of the roller hearth oven, and the 1998
	write-down of certain fixed assets associated with the transfer
	of composite shaft manufacturing from our Olive Branch,
	Mississippi facility to our El Cajon, California facility; both
	of which are more fully described in footnote 4 to the
	financial statements, located elsewhere in this annual report.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | (5) | Reflects severance and other costs related to the
	consolidation of manufacturing and administrative facilities.
	Charges in 2000, 1999 and 1998 are directly related to the
	consolidation of True Tempers Olive Branch, Mississippi
	composite manufacturing operations into the El Cajon,
	California facility. See footnote 4 to the financial
	statements included elsewhere in this annual report.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (6) | The 2001 income tax benefit reflects the
	elimination of the $17.6 million valuation allowance. See
	footnote 9 to the 2001 financial statements included
	elsewhere in this document for further discussion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | (7) | Working capital excludes cash and cash
	equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| | (8) | Total debt includes both the current and
	long-term portions of debt and capital lease obligations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (9) | EBITDA represents operating income or loss plus
	depreciation, amortization and goodwill write-off. Adjusted
	EBITDA represents EBITDA plus recapitalization transaction
	expenses, restructuring charges, management services fee, the
	1999 union ratification bonus and impairment charge on
	long-lived assets; less the non-cash pension curtailment gain.
	EBITDA is presented because it is a widely accepted financial
	indicator used by certain investors and analysts to analyze and
	compare companies on the basis of operating performance. EBITDA
	and Adjusted EBITDA are not intended to represent cash flows for
	the period, nor has it been presented as an alternative to
	operating income as an indicator of operating performance and
	should not be considered in isolation or as a substitute for
	measures of performance prepared in accordance with GAAP.



|     |                                                                                                                                                                                                                                                                                                                            
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Information relating to the ratio of earnings to
	fixed charge for 1997 has been excluded as the fixed charges
	were less than $200 for 1997 and thus immaterial for that year.
	Earnings were not sufficient to cover fixed charges by $34,924
	in 1998, due to a $40,000 goodwill write-off taken as of
	January 1, 1998.

14



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##### Table of Contents



Item 7.  Managements
Discussion and Analysis of Financial Condition and Results of
Operations

THE FOLLOWING DISCUSSION SHOULD BE READ IN
CONJUNCTION WITH THE MORE DETAILED INFORMATION IN THE AUDITED
FINANCIAL STATEMENTS, INCLUDING THE RELATED NOTES, APPEARING
ELSEWHERE IN THIS ANNUAL REPORT ON FORM 10-K.

Company Overview

True Temper Sports, Inc. or True
Temper, a wholly owned subsidiary of True Temper
Corporation, is a leading designer, manufacturer and marketer of
both steel and composite graphite golf club shafts for original
equipment manufacturers and distributors in the golf equipment
industry. In addition, True Temper produces and sells a variety
of performance tubing products that offer high strength and
tight tolerance tubular components to the bicycle, automotive
and recreational sports markets. In 2001, golf shaft sales
represented 96% of total revenues, and performance-tubing sales
represented 4%.

Year in Review  2001

The past year was a very challenging one for the
overall global economy, and proved to be equally difficult for
the golf equipment industry and True Temper as well. As is now
widely publicized, the US economy was in the beginning of a
slowdown during the second half of 2000, which continued
throughout 2001. The health of the U.S. economy further
deteriorated until it was finally declared a recession in the
third quarter of 2001. These trends were also reflected in the
general conditions of the golf equipment industry, which showed
signs of softening during the second half of 2000. Although some
golf equipment companies performed reasonably well during 2001,
as did True Temper, most suffered the negative impact from the
weak economy and lackluster demand from golf equipment
consumers. Many trade reports and analysis indicate that rounds
played and unit sales for equipment such as clubs and balls were
down anywhere from 3 to 5 % in 2001, when compared to 2000.

True Temper performed well on a full year basis
by recording sales of $111.1 million in 2001 compared to
$110.6 million in 2000 and reporting an improvement in
operating income to $25.7 million from $24.6 million
for the respective periods. Although this performance was
relatively flat year over year, the sales trends during the
second half of 2001 reflected a deteriorating landscape.

In the first half of 2001 True Tempers net
sales increased 9.9% to $68.9 million from
$62.7 million in the first half of 2000. This increase was
driven by the very successful launch of our new BiMatrx shaft
technology for drivers and fairway woods. In fact the product
was so successful on the PGA tour, that it was used by the 2001
winner of the Phoenix Open to set a new record for the lowest
cumulative score in a PGA tour event. Another PGA professional
used the BiMatrx shaft in his fairway wood to record a hole in
one on his way to winning the 2001 PGA Championship.

In the second half of 2001 the growing weakness
in the US economy and golf consumer demand impacted True Temper
and our net sales decreased by 11.9% to $42.1 million from
$47.9 million recorded during the second half of 2000.

For the year True Temper was able to increase
operating income by $1.1 million. This increase was
generated by several offsetting factors in our operating
performance. Gross profit and gross profit margins declined
between years as True Temper was negatively impacted by a
dilutive mix of products sold, foreign currency exchange rates,
and the substantial increases in utility costs. This $1.9
million decline in gross profit was fully offset by
$1.9 million of reduced SG&A expenses in 2001 and the
non reoccurrence of a $1.1 million asset impairment charge
in 2000. If you exclude the asset impairment charge in 2000,
operating income would have been flat between 2000 and 2001.

Outlook for 2002

Despite the weakness and softer performance
during the second half of 2001, we saw some encouraging signs
for 2002. We have maintained our strong position in market share
for golf shafts, and continue to be selected as the supplier of
choice by many of the major golf OEMs for their new 2002
product lines.

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In addition, during 2001 we focused our efforts
to develop recreational products for markets outside of golf. We
believe that during 2001 we positioned ourselves to be the
number two supplier of composite hockey shafts in North America
and we made our first shipments of graphite and metal based
shafts for the lacrosse market. Finally, in an effort to grow
our composite capability for the high end bicycle market, we
purchased the assets and technology for carbon fiber bicycle
forks from Advanced Materials Engineering during the third
quarter of 2001. We believe that these initiatives from the
second half of 2001 will begin to yield greater results for the
performance tubing segment in 2002 as a growing percentage of
the True Temper business.

Although we believe our long term outlook is
positive, our incoming orders during the fourth quarter of 2001
and the early part of 2002 are weaker than the same period last
year. We believe this trend presents a challenging environment
for producing year over year improvements in the near term,
especially when compared to the very strong results we posted in
the first and second quarters of 2001. The overall weakness in
the economy may continue to adversely affect our business, and
our customers have been planning and forecasting very
conservatively.

Due to these factors, we remain cautious in our
overall outlook for 2002. At this time we do not anticipate
generating significant improvements in sales and operating
performance for the full year and expect to see some
deterioration during the first half of the year.

With the general state of the economy, and the
current weakness in demand for golf equipment, we may take a
more aggressive approach to identify and pursue opportunities to
utilize our free cash flow to grow the business through
acquisitions in 2002 or improve long-term profitability through
capital investment to support cost reduction initiatives.

Results of Operations

The following table sets forth the components of
net income as a percentage of net sales for the periods
indicated:

|                                             |                              |                     |       |      |   |      |       |      |   |  |       |      |  
|-------------------------------------------- | ---------------------------- | ------------------- | ----- | ---- | - | ---- | ----- | ---- | - |  | ----- | ---- | -
|                                             |                              |                    
|                                             |                              | For the Years Ended
|                                             |                              | December 31,       
|                                             |                              |                    
|                                             |                              | 2001                |       | 2000 |   | 1999
|                                             |                              |                     |       |      |   |     
|Net sales                                    |                              |                     | 100.0 | %    |   |      | 100.0 | %    |   |  | 100.0 | %   
|Cost of sales                                |                              |                     | 61.0  |      |   |      | 59.1  |      |   |  | 60.8  |     
|                                             | Gross profit                 |                     |       | 39.0 |   |      |       | 40.9 |   |  |       | 39.2 |  
|Selling, general and administrative expenses |                              |                     | 13.5  |      |   |      | 15.3  |      |   |  | 16.4  |     
|Amortization of goodwill                     |                              |                     | 2.4   |      |   |      | 2.4   |      |   |  | 2.9   |     
|Impairment charge on long-lived assets       |                              |                     |      |      |   |      | 1.0   |      |   |  |      |     
|Restructuring costs                          |                              |                     |      |      |   |      | 0.0   |      |   |  | 0.7   |     
|                                             | Operating income (loss)      |                     |       | 23.1 |   |      |       | 22.2 |   |  |       | 19.1 |  
|Interest expenses, net of interest income    |                              |                     | 11.4  |      |   |      | 12.4  |      |   |  | 15.6  |     
|Other expenses, net                          |                              |                     | 0.0   |      |   |      | 0.1   |      |   |  | 0.0   |     
|                                             | Earnings before income taxes |                     |       | 11.7 |   |      |       | 9.8  |   |  |       | 3.6  |  
|Income taxes (benefit) expense               |                              |                     | (10.4 | )    |   |      | 4.7   |      |   |  | 2.5   |     
|                                             | Net income                   |                     |       | 22.1 | % |      |       | 5.1  | % |  |       | 1.1  | %
|EBITDA                                       |                              |                     | 28.7  | %    |   |      | 27.9  | %    |   |  | 25.9  | %   
|Adjusted EBITDA                              |                              |                     | 29.2  | %    |   |      | 29.3  | %    |   |  | 27.2  | %   

Year Ended December 31, 2001 Compared to
the Year Ended December 31, 2000

Net salesfor
2001 increased $0.4 million, or 0.4%, to
$111.1 million from $110.6 million in 2000. Net sales
of golf shafts decreased slightly by approximately
$0.3 million to $106.3 million in 2001 from
$106.6 million in 2000. The change in golf shaft sales was
generated from a combination of offsetting factors. The Company
realized a strong increase in sales of shafts for driver and
fairway woods, especially in the first half of 2001, with the
successful introduction of the BiMatrx shafts. This increase was
offset by a decrease in the sales of our existing golf shaft
products which we believe is the result of (i) poor spring
weather conditions

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in many key geographic regions for golf
participation, (ii) the soft domestic and worldwide
economies, and (iii) a general slowdown in the golf
equipment market during 2001 from an apparent lack of new
product offerings by OEMs that provide an incremental
improvement in performance for the avid core golfer.


Performance tubing sales increased 16.0%, or
approximately $0.7 million, to $4.8 million in 2001
from $4.1 million in 2000. This growth in sales was
generated from an emphasis in the development and sales of
recreational product offerings such as hockey shafts and
lacrosse sticks.

Net sales to our international customers
increased $3.2 million, or 15.8%, to $23.4 million in
2001 from $20.2 million in 2000. Almost all of this
increase was derived from increased sales into Asia, as original
equipment manufacturers continued during 2001 to move a portion
of their golf equipment assembly operations from the United
States into Far East Asia. The average exchange rate for the
U.S. dollar strengthened in 2001 versus 2000 in all the major
foreign currencies in which we conduct business. If the average
foreign exchange rate had remained unchanged from 2000, we would
have recorded approximately $1.4 million more of net sales
to international customers.

Gross Profitfor the year decreased
$1.9 million, or 4.2%, to $43.4 million in 2001 from
$45.3 million in 2000. Gross profit as a percentage of net
sales decreased to 39.0% from 40.9% the prior year. The decrease
in gross profit dollars and margin was driven by several
factors, including (i) a change in the mix of sales to
lower margin products, (ii) higher utility costs for
natural gas at our manufacturing plants, and (iii) the
negative impact from changes in the average foreign currency
exchange rates in the United Kingdom, Japan and Australia.

Finally, upon acceptance by the Internal Revenue
Service, we completed the termination of one of our defined
benefit plans in the fourth quarter of 2000. After we satisfied
all liabilities of the terminated plan and reverted the
remaining assets back to the Company, we recorded a net
settlement/curtailment gain of $0.7 million in fourth
quarter of 2000 associated with the plan termination, of which
$0.4 million was recorded as a reduction to cost of sales.
The Company did not record a similar transaction in 2001.

Selling, General and Administrative
Expensesfor the year decreased
$1.9 million, or 11.5%, to $15.0 million in 2001 from
$16.9 million in 2000. As a percentage of net sales,
SG&A decreased to 13.5% in 2001 from 15.3% the prior year.
Although we increased in our annual spending for advertising and
promotions to promote our new BiMatrx products, these
investments were more than offset by reduced expenditures for
business travel and management incentive programs. In addition,
our provision for uncollectible accounts receivable was lower in
2001 versus 2000 as we experienced significant customer
bankruptcies during 2000.

As described above, we completed the termination
of one of our defined benefit plans. After satisfying all
liabilities of the terminated plan and reverting the remaining
assets back to the Company, we recorded a net settlement/
curtailment gain of $0.7 million in the fourth quarter of 2000,
of which $0.3 million was recorded as a reduction to the 2000
SG&A expenses. The Company did not record a similar
transaction in 2001.

Operating Incomein 2001 increased by $1.1 million.
This increase reflects the impact of the $1.9 million decrease
in gross profit, offset by $1.9 million of reduced SG&A
expenses in 2001, and the non reoccurrence of a $1.1 million
asset impairment charge in 2000.

Interest Expensefor the year decreased by $1.0
million, to $12.7 million in 2001 from $13.7 million in 2000.
The decrease was generated from the decline in the average
outstanding balance of our term bank debt between periods and
the lower weighted average interest rates on our variable rate
debt between years.

Income Taxexpense changed by
$16.8 million, to an $11.5 million benefit in 2001
from a $5.2 million expense in 2000. In 2001 the Company
determined it is more likely than not the Company will realize
the tax benefit of its deferred tax assets and eliminated its
$17.6 million valuation allowance recorded against its
deferred tax assets. The change in the valuation allowance was
recorded as a deferred tax benefit in the fourth quarter of
2001. Excluding the impact of the valuation allowance
elimination, income tax expense increased by $0.9 million, to
$6.1 million in 2001, compared to $5.2 million in 2000. The
effective tax rate during these periods differs from a federal
statutory rate of 34% due primarily to the pre-tax income added
back for the non-deductible portion of goodwill amortization,
the incremental tax rate for state and foreign income tax

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purposes and in 2001, the elimination of the
valuation allowance. Management expects the effective tax rate
in 2002 to approximate such rate in 2000, excluding the impact,
if any, of the adoption in 2002 of SFAS 142.


Net Incomefor the year 2001 increased to
$24.6 million from $5.6 million in 2000, and reflects the impact
of the changes described above.

EBITDA and Adjusted
EBITDAare measurements used by some
to gauge our operating performance. EBITDA represents operating
income plus depreciation and amortization of goodwill. Adjusted
EBITDA represents EBITDA plus restructuring costs, management
service fees, and the impairment charge on long-lived assets.

EBITDA and Adjusted EBITDA for the years ended
December 31, 2001 and 2000 are calculated as follows:

|                 |                                        |      |        |       |  |   |        |       | 
|---------------- | -------------------------------------- | ---- | ------ | ----- |  | - | ------ | ----- | 
|                 |                                        | 2001 |        | 2000 
|                 |                                        |      |        |      
|Operating income |                                        | $    | 25,690 |       |  | $ | 24,594 |      
|Plus:            |                                        |      |        |       |  |   |        |      
|                 | Depreciation                           |      |        | 3,513 |  |   |        | 3,535 | 
|                 | Amortization of goodwill               |      |        | 2,695 |  |   |        | 2,701 | 
|                 |                                        |      |        |       |  |   |        |      
|EBITDA           |                                        |      | 31,898 |       |  |   | 30,830 |      
|Plus:            |                                        |      |        |       |  |   |        |      
|                 | Restructuring costs                    |      |        |      |  |   |        | 7     | 
|                 | Management services fee                |      |        | 500   |  |   |        | 500   | 
|                 | Impairment charge on long-lived assets |      |        |      |  |   |        | 1,053 | 
|                 |                                        |      |        |       |  |   |        |      
|Adjusted EBITDA  |                                        | $    | 32,398 |       |  | $ | 32,390 |      
|                 |                                        |      |        |       |  |   |        |      

Year Ended December 31, 2000 Compared to
the Year Ended December 31, 1999

Net salesfor
2000 increased $18.4 million, or 20.0%, to $110.6 million from
$92.2 million in 1999. Golf shaft sales increased $18.4 million,
or 20.8%, to $106.6 million in 2000 from $88.2 million in 1999.
We believe this increase was driven by several factors,
including an increase in consumer demand resulting from
innovative new product introductions we made in late 1999 such
as TriGold and SensiCore Gold; an estimated increase in our
steel market share; and a resurgence during the first half of
2000 in the golf industry in general, which had begun showing
signs of recovery during the second half of 1999. In particular,
the industry showed considerable momentum towards iron products.
During this year of the iron several major
OEMs and other True Temper customers introduced new iron
products. Since the majority of irons are sold with steel
shafts, we realized a substantial increase in sales of premium
grade steel shafts to these accounts. Finally, our sales of
graphite shafts also increased as we continued to post solid
results with our branded products such as EI-70 and ProLite, as
well as the proprietary graphite products we produce for certain
OEMs.

Performance tubing sales increased to $4.1
million in 2000 from $4.0 million in 1999. We attribute this
modest increase, primarily, to the growth in our recreational
product categories which was partially offset by general
weakness in the industrial base of our tubing product lines.
During 2000 we repositioned our performance tubing segment and
entered several new markets, including hockey, which we believe
can provide more aggressive growth rates in future years.

Net sales to international customers increased
$6.0 million, or 42.2% to $20.2 million in 2000 from $14.2
million in 1999. This increase was driven primarily by sales
growth in Asia and substantial gains in the UK/Europe, where it
appears that True Temper has gained market share. In addition to
the underlying gain in market share, we believe that some of the
growth in our international sales, specifically in Asia,
reflects the movement of golf equipment assembly operations from
the United States into far east regions such as China.

Gross Profitfor 2000 increased approximately $9.1 million, or 25.2%, to
$45.3 million from $36.1 million in 1999. Gross profit as a
percentage of net sales increased to 40.9% in 2000 from 39.2% in
1999. This increase in gross profit margin was driven by several
factors, including cost reduction and productivity improvement
programs at both our steel and graphite manufacturing plants and
the added fixed cost leverage provided by

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the increase in unit sales volume experienced
during 2000. This improvement in gross profit margin was
partially offset by the negative impact of foreign currency
rates in the United Kingdom and Australia, as well as the
unfavorable shift in the mix of products we sell. During 2000
the sales of our lower margin commercial grade steel shafts
increased at a greater rate than our higher margin premium grade
steel shafts.


In addition, during the second quarter of 1999 we
paid a ratification bonus of $0.4 million to the union members
at our steel golf shaft plant in Mississippi, in conjunction
with the signing of a four year collective bargaining agreement
that expires in July 2003. In the fourth quarter of 1999 we
recorded a non-cash pension curtailment gain of $0.3 million
associated with the closure of our composite manufacturing
facility in Mississippi. Upon acceptance by the Internal Revenue
Service, we completed the termination of one of our defined
benefit plans in the fourth quarter of 2000. After we satisfied
all liabilities of the terminated plan and reverted the
remaining assets back to the Company, we recorded a net
settlement/ curtailment gain of $0.7 million in the fourth
quarter of 2000 associated with the plan termination of which
$0.4 million was recorded against cost of sales.

Excluding the 1999 impact of the ratification
bonus and curtailment gain, and the 2000 impact of the gain
associated with the termination and reversion of certain defined
benefit plan assets, gross profit for 2000 would have increased
$8.6 million, or 23.7%, to $44.8 million from $36.2 million in
1999. Gross profit as a percentage of net sales would have
increased to 40.5% from 39.3%

Selling, General and
Administrative(SG&A)expenses
increased $1.7 million, to $16.9 million from $15.2 million in
1999, and as a result of the continued leverage to our overall
SG&A cost base SG&A as a percentage of net sales
declined to 15.3% in 2000 from 16.4% in 1999. A substantial
portion of the increased SG&A expense related to an increase
in our provision for uncollectable accounts receivable, that was
driven by the bankruptcy filings in 2000 of two on-line
(dot.com) golf equipment distribution customers and one golf
equipment OEM. As a result of the substantial gains in both
sales and profitability during 2000, the Company also recorded
an increase in certain employee compensation programs.

As described above, we completed the termination
of one of our defined benefit plans. After satisfying all
liabilities of the terminated plan and reverting the remaining
assets back to the Company, we recorded during the fourth
quarter of 2000 a net settlement/ curtailment gain of $0.7
million, of which $0.3 million was recorded as a reduction of
SG&A.

Operating
Incomefor 2000 increased $6.9
million, or 39.3%, to $24.6 million from $17.7 million in 1999.
Operating income as a percentage of net sales increased to 22.2%
in 2000 from 19.1% in 1999. In addition to the impact on
operating income from the gross profit and SG&A items
discussed above, the 1999 operating income was negatively
impacted by restructuring costs of $0.6 million related to the
consolidation of our composite manufacturing operations, and the
2000 operating income was negatively impacted by the recognition
of a $1.1 million charge on impairment of long-lived assets, as
more fully described in the footnotes to the financial
statements.

Excluding the impact of the restructuring costs
and impairment charge, as well as the ratification bonus, the
1999 non-cash curtailment gain and the 2000 net curtailment/
settlement gain related to the termination/ reversion of the
defined benefit plan, as described above, operating income would
have increased approximately $6.6 million, or 35.7%, to $24.9
million in 2000 from $18.4 million in 1999, and operating income
as a percentage of net sales would have increased to 22.5% from
19.9%.

Interest
Expensefor 2000 decreased to
$13.7 million from $14.3 million in 1999. This decrease is the
result of the continued reduction of our outstanding bank debt
offset in part by higher weighted average interest rates on our
variable rate debt during 2000, which was caused by a general
rise in interest rates in the U.S. economy.

Income Taxesfor 2000 increased to $5.2 million from $2.3 million in 1999.
The effective tax rate during these periods differs from a
federal statutory rate of 34% due primarily to the add back of
the non-deductible portion of goodwill amortization to pretax
income to arrive at taxable income for the Company and the
incremental tax rate for state and foreign income tax purposes.

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Net Incomefor 2000 increased approximately $4.6 million, to $5.6 million
in 2000 from $1.0 million in 1999. This increase is reflective
of the profit impact from the items described above.

Excluding the impact of the 1999 restructuring
costs, ratification bonus and curtailment gain, and the 2000
impairment loss and termination/reversion of the defined benefit
plan, as described above, operating income would have increased
approximately $4.4 million, to $5.8 million in 2000 from $1.5
million in 1999.

EBITDA and Adjusted
EBITDAare measurements used by some
to gauge our operating performance. EBITDA represents operating
income plus depreciation and amortization of goodwill. Adjusted
EBITDA represents EBITDA plus restructuring costs, management
service fees, the union ratification bonus and the impairment
charge on long-lived assets, less the non-cash curtailment gain.

EBITDA and Adjusted EBITDA for the years ended
December 31, 2000 and 1999 are calculated as follows:

|                 |                                        |      |        |       |  |   |        |       |  
|---------------- | -------------------------------------- | ---- | ------ | ----- |  | - | ------ | ----- | -
|                 |                                        | 2000 |        | 1999 
|                 |                                        |      |        |      
|Operating income |                                        | $    | 24,594 |       |  | $ | 17,652 |      
|Plus:            |                                        |      |        |       |  |   |        |      
|                 | Depreciation                           |      |        | 3,535 |  |   |        | 3,504 |  
|                 | Amortization of goodwill               |      |        | 2,701 |  |   |        | 2,701 |  
|                 |                                        |      |        |       |  |   |        |      
|EBITDA           |                                        |      | 30,830 |       |  |   | 23,857 |      
|Plus:            |                                        |      |        |       |  |   |        |      
|                 | Restructuring costs                    |      |        | 7     |  |   |        | 622   |  
|                 | Management services fee                |      |        | 500   |  |   |        | 500   |  
|                 | Ratification bonus                     |      |        |      |  |   |        | 400   |  
|                 | Impairment charge on long-lived assets |      |        | 1,053 |  |   |        |      |  
|Less:            |                                        |      |        |       |  |   |        |      
|                 | Non-cash curtailment gain              |      |        |      |  |   |        | (292  | )
|                 |                                        |      |        |       |  |   |        |      
|Adjusted EBITDA  |                                        | $    | 32,390 |       |  | $ | 25,087 |      
|                 |                                        |      |        |       |  |   |        |      

The increase in Adjusted EBITDA of $7.3 million,
or 29.1%, is reflective of the profit impact of the operating
income items described above, as well as the impact of the items
identified in the preceding table.

Liquidity & Capital Resources

General

We have a senior credit facility which includes a
$20.0 million non-amortizing revolving credit facility, a
$10.0 million term A loan due 2004, and a
$27.5 million term B loan due 2005. Amounts under the
revolving credit facility are available on a revolving basis
through September 30, 2004.

In addition, we issued $100.0 million in
10 7/8% Senior Subordinated Notes Due 2008 (the
Notes). The Notes require cash interest payments
each June 1 and December 1, beginning June 1, 1999.
The Notes are redeemable by the Company, under certain
circumstances and at certain redemption prices, beginning
December 1, 2003.

Both the senior credit facility and the Notes
contain covenants and events of default, including substantial
restrictions and provisions which, among other things, limit our
ability to incur additional indebtedness, make acquisitions and
capital expenditures, sell assets, create liens or other
encumbrances, make certain payments and dividends, or merge or
consolidate. The senior credit facility also requires us to
maintain certain specified financial ratios and tests including
minimum EBITDA levels, minimum interest coverage and fixed
charge coverage ratios, and maximum leverage ratios. At
December 31, 2001 we were in compliance with all of the
covenants in both the senior credit facility and the Notes.
Furthermore, the senior credit facility requires certain
mandatory prepayments including payments from the net proceeds
of certain asset sales and a portion of our excess cash flow.

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Year
Ended December 31, 2001

The cash provided by operating activities
decreased to $12.2 million in 2001 from $20.6 million in 2000.
This decline was driven by an increase in cash required for
working capital needs, specifically trade accounts receivable
and accounts payable.

We used $2.3 million in 2001 for investing
activities, of which $2.0 million was used for the purchase
of property plant and equipment and $0.3 million was used
to purchase the production assets and intellectual property
rights from Advanced Materials Engineering (AME).
AME is a designer and manufacturer of composite carbon fiber
bicycle forks for use in high-end road bikes under the Alpha Q
brand name. The 2001 investment in property, plant and equipment
declined by $1.3 million compared to the $3.5 million we
spent in 2000 when we purchased the machinery and equipment from
one of our former competitors in the golf shaft industry.

In 2001 we repaid $1.9 million of the principal
of our senior credit facility compared to the $18.0 million that
we repaid in 2000, which included a $2.4 million mandatory
prepayment of principal as required by the terms of our senior
credit facility, $1.4 million of scheduled principal payments,
and $14.2 million in voluntary prepayments. The mandatory
prepayment is based upon the excess cash flow generated in the
prior calendar year, as defined in the credit agreement. Due to
the voluntary prepayments of $14.2 million made during 2000, no
mandatory prepayment was required in 2001. Based upon the
companys financial performance in 2001, the Company will
be required to make a mandatory principal prepayment of $2.4
million in the second quarter of 2002.

In 2000 the Company began making dividend
payments to its parent company, True Temper Corporation
(TTC). In 2001 the Company continued this practice
and paid four quarterly dividends to TTC totaling $3.6 million
for 2001.

In the fourth quarter of 2001 we reached an
agreement with the lenders to our senior credit facility and
amended the loan provisions to allow True Temper to repurchase
up to $20.0 million of Notes in an open market repurchase
program. Under terms of the amendment, the Company can use cash
generated from operations, plus up to $10.0 million of its $20.0
million revolving credit facility, for the purpose of buying the
Notes in a non-redemptive repurchase program.

The Company currently plans to use its existing
cash and cash provided from future operations, if any, as
allowed within the covenants of our existing credit facility (as
amended) and our Notes, to:



| |   |                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Repay our senior credit facility, and/or                                                                                                              
|
| |  | Repurchase Notes from existing Note holders in a
	non-redemptive open market repurchase program, and/or                                               
|
| |  | Issue quarterly cash dividends to our parent
	company, True Temper Corporation, for its use to pay cash
	interest on its Senior Discount Notes, and/or
|
| |  | To make additional investments in the business
	for growth, which may include, among other things, capital
	expenditures and/or business acquisitions.

In addition to the debt service obligations for
principal and interest payments created by the senior credit
facility and the Notes described above, our liquidity needs
largely relate to working capital requirements and capital
expenditures for machinery and equipment. We intend to fund our
current and long term working capital, capital expenditure and
debt service requirements through cash flow generated from
operations. However, since there can be no assurance of future
performance, as of December 31, 2001 we have the
$20.0 million revolving credit facility available for
future cash requirements. The maximum amount the Company may use
of the $20.0 million revolving credit facility is limited
by the financial covenants contained within the Bank Credit
Facility. See footnote 8 in the 2001 financial statements
for further discussion of the Bank Credit Facility.

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The following table reflects the Companys
contractual cash obligations for long-term debt and capital and
operating leases as of December 31, 2001.

|                                  |  |       |       |      |  |         |     |         |  |            |     |  |  |   |     |  |  |   |       | 
|--------------------------------- |  | ----- | ----- | ---- |  | ------- | --- | ------- |  | ---------- | --- |  |  | - | --- |  |  | - | ----- | 
|                                  |  |       |       |      |  | 2003    |     | 2005    |  |           
|                                  |  |       |       |      |  | through |     | through |  |           
|                                  |  | Total |       | 2002 |  | 2004    |     | 2006    |  | Thereafter
|                                  |  |       |       |      |  |         |     |         |  |           
|Long-Term Debt and Capital Leases |  | $     | 116.5 |      |  | $       | 4.7 |         |  | $          | 6.9 |  |  | $ | 4.9 |  |  | $ | 100.0 | 
|Operating Leases                  |  |       | 2.4   |      |  |         | 0.9 |         |  |            | 1.2 |  |  |   | 0.3 |  |  |   |      | 
|                                  |  |       |       |      |  |         |     |         |  |            |     |  |  |   |     |  |  |   |       | 
|Total                             |  | $     | 118.9 |      |  | $       | 5.6 |         |  | $          | 8.1 |  |  | $ | 5.2 |  |  | $ | 100.0 | 
|                                  |  |       |       |      |  |         |     |         |  |            |     |  |  |   |     |  |  |   |       | 

Depending on the size, any future acquisitions,
joint ventures, capital expenditures or similar transactions may
require significant capital resources in excess of cash provided
from operations, and potentially in excess of cash available
under the revolving credit facility. There can be no assurance
that the Company will be able to obtain the necessary capital
under acceptable terms, from creditors or other sources that
will be sufficient to execute any such business investment or
capital expenditure.

Seasonality

In general, the component supplier sales to golf
equipment companies and distributors are seasonal, and tend to
precede the warm weather golf season. However, there are
exceptions, especially for those suppliers that sell to the high
volume opening price point golf club manufacturers who sell
their product through mass market retail channels and generate
strong volumes during the holiday gift-giving season. Our
business does experience some seasonal fluctuations, based on a
5 year average, approximately 58% of our net sales are generated
in the first half of the year, and the remaining 42% of net
sales are generated in the second half.

Inflation

As a general rule we do not believe inflation has
had a material impact on our historical results of operations,
as we experience inflation trends that are consistent with the
national averages and probably similar to other domestic
manufacturers.

Nonetheless, as noted in our earlier disclosure
regarding the changes in gross profit between 2000 and 2001, we
experienced an unusually large increase in the cost of natural
gas we use for our steel plant operations in Amory, Mississippi.
In 2001 the average cost of natural gas delivered to our Amory
plant increased by over 50% compared to the average price we
paid for delivered gas in 2000. Based upon current market prices
and purchases of natural gas contracts for 2002, the Company
expects its natural gas cost to decrease in 2002.

In addition, during the second half of 2001, True
Temper recognized a significant increase in insurance premiums
for our employee health benefits coverage. Beginning in July
2001, the health insurance premiums for one of our plans,
covering a majority of our employees, increased significantly
compared to the national average. The Company expects its
increases in health benefit costs will exceed the national
average in 2002.

Deferred Tax Assets

In conjunction with the leveraged
recapitalization and the issuance of the Senior Subordinated
Notes, we recognized an increase in our deferred tax assets,
since the recapitalization was treated as a taxable business
combination for federal and state income tax purposes. This
resulted in a step-up in our tax basis. This step-up in tax
basis will provide approximately $185.6 million in future tax
deductions and a reduction of approximately $52.9 million in
future tax payments over the 15 year period beginning with
1998, net of a valuation reserve of approximately $17.6 million
that was established in 1998 when the Recapitalization occurred.
We elected to make a Section 338(h)(10) election under the
Internal Revenue Code resulting in an anticipated annualized
cash tax benefit of approximately $4.7 million, if fully
utilized.

In the fourth quarter of 2001, after considering
the Companys historical financial performance for the
preceding three years, and other available evidence, the Company
determined that it was more likely than not the Company will
realize the tax benefit of all of its deferred tax assets. As a
result the Companys

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valuation allowance on its deferred tax assets
was eliminated with the change in the valuation allowance
recorded as a deferred tax benefit.


See footnote 9 to the financial statements,
included elsewhere in this filing, for a more complete
discussion of the Companys deferred tax asset.

Critical Accounting Policies and
Estimates

The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States of America (GAAP) requires the
appropriate application of certain accounting policies, many of
which require Company management to make estimates and
assumptions about future events and their impact on amounts
reported in the financial statements and accompanying notes.
Since future events and their impact cannot be determined with
absolute certainty, the actual results will inevitably differ
from managements estimates. Such differences may be
material to the financial statements.

The Company believes its application of
accounting policies, and the estimates inherently required
therein, are reasonable under the circumstances. These
accounting policies and estimates are constantly reevaluated,
and adjustments are made when facts and circumstances dictate a
change. Historically, the Company has found its application of
accounting policies to be appropriate, and actual results have
not differed materially from those determined using necessary
estimates.

The Companys accounting policies are more
fully described in footnote 2 to the financial statements,
located elsewhere in this annual filing. The Company has
identified certain critical accounting policies which are
described below.

Revenue Recognition.The Company derives substantially
all of its revenue from the sales of golf shafts and performance
tubing products. Revenue is recognized when all of the following
conditions exist: (i) persuasive evidence of an arrangement
exists, (ii) delivery has occurred, (iii) the revenue
amount is determinable and (iv) collection is reasonably
assured. Liabilities are established for estimated returns,
allowances, and discounts at the time revenue is recognized.

Valuation of Long-Lived and Intangible
Assets Including Goodwill.The
Company assesses the valuation of identifiable long-lived
assets, intangible assets and goodwill whenever events or
changes in circumstances indicate that the carrying amount of
the particular asset may not be recoverable. In connection with
the adoption of FASB Statement 142, Goodwill and
Other Intangible Assets, which the Company has adopted
effective January 1, 2002, the valuation of goodwill will
be performed annually at a minimum.

There are many factors that may trigger a review
for recoverability; some of which are:



| |    |                                                                                                                                                                                                             
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1) | a known, significant decrease in the market value
	of an asset;                                                                                                                                             
|
| | 2) | a significant change in the extent or manner in
	which an asset is used or intended to be used;                                                                                                             
|
| | 3) | a significant physical change in the asset;                                                                                                                                                                 
|
| | 4) | a significant adverse change in legal factors or
	in the business climate or an adverse action or assessment by a
	regulator;                                                                               
|
| | 5) | an accumulation of costs significantly in excess
	of the amount originally expected to acquire or construct an
	asset; or                                                                                   
|
| | 6) | a historical operating or cash flow loss,
	combined with a projection or forecast that demonstrates
	continuing losses associated with an asset or business unit used
	for the purpose of producing revenue.

See the section below, Impact of Recently Issued
Accounting Standards, for further description of the accounting
procedures for the valuation of long-lived and intangible assets
including goodwill.

Accounting for Income Taxes.The Companys financial
statements include an estimate of income taxes assessed in each
legal jurisdiction in which the Company operates. These income
taxes include both a current

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payable amount, as well as a deferred portion
which results from a variety of temporary book versus tax
treatment differences. These differences result in deferred tax
assets and liabilities, which are included in the Companys
balance sheet. Once established, any deferred tax asset must be
evaluated to determine the likelihood that we will generate
sufficient future taxable income to utilize the full amount.
When facts and circumstances warrant, the Company establishes,
increases or reduces valuation allowances associated with
deferred tax assets in order to reflect which assets meet the
more likely than not realizability test.


As more fully described in footnote 9 to the
financial statements, located elsewhere in this annual filing,
the Company eliminated its deferred tax asset valuation
allowance in the fourth quarter of 2001.

Impact of Recently Issued Accounting
Standards

In July 2001, the Financial Accounting
Standard Board (FASB) issued Statement No. 141,
Business Combinations, and Statement No. 142,
Goodwill and Other Intangible Assets. Statement 141
requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001 as well
as all purchase method business combinations completed after
June 30, 2001. Statement 141 also specifies criteria
that intangible assets acquired in a purchase method business
combination must meet to be recognized and reported apart from
goodwill, noting that any purchase price allocable to an
assembled workforce may not be accounted for separately.
Statement 142 will require that goodwill and intangible
assets with indefinite useful lives no longer be amortized, but
instead tested for impairment at least annually in accordance
with the provisions of Statement 142. Statement 142
will also require that intangible assets with estimable useful
lives be amortized over the respective estimated useful lives to
their estimated residual values, and reviewed for impairment in
accordance with FAS Statement No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-lived Assets to
Be Disposed Of.

The Company is required to adopt the provisions
of Statement 141 immediately and Statement 142
effective January 1, 2002. Furthermore, goodwill and
intangible assets determined to have an indefinite useful life
acquired in a purchase business combination complete after
June 30, 2001 but before Statement 142 is adopted in
full will not be amortized, but will continue to be evaluated
for impairment in accordance with the appropriate
pre-Statement 142 accounting literature. Goodwill and
intangible assets acquired in business combinations completed
before July 1, 2001 will continue to be amortized and
tested for impairment in accordance with the appropriate
pre-Statement 142 accounting requirements prior to the
adoption of Statement 142.

Statement 141 will require upon adoption of
Statement 142, that the Company evaluate its existing
intangible assets and goodwill that were acquired in a prior
purchase business combination, and to make any necessary
reclassifications in order to conform with the new criteria in
Statement 141 for recognition apart from goodwill. Upon adoption
of Statement 142, the Company will be required to reassess
the useful lives and residual values of all intangible assets
acquired, and make any necessary amortization period adjustments
by the end of the first interim period after adoption. In
addition, to the extent an intangible asset is identified as
having an indefinite useful life, the Company will be required
to test the intangible assets for impairment in accordance with
the provision of Statement 142 within the first interim
period. Any impairment loss will be measured as of the date of
adoption and recognized as the cumulative effect of a change in
accounting principle in the first interim period.

In connection with the Statement 142
transitional goodwill impairment evaluation, the Company will
perform an assessment of whether goodwill and equity-method
goodwill is impaired as of the date of adoption. To accomplish
this, the Company must identify its reporting units and
determine the carrying value of each reported unit by assigning
the assets and liabilities, including the exiting goodwill and
intangible assets, to those reporting units as of the date of
adoption. The Company will then have up to six months from the
date of adoption to determine the fair value of each reporting
unit and compare it to the reporting units carrying
amount. To the extent a reporting units carrying amount
exceeds its fair value, an indication exists that the reporting
units goodwill may be impaired and the Company must
perform the second step of the transitional impairment test. In
the second step, the Company must compare the implied fair value
of the reporting units goodwill, determined by allocating
the reporting units fair value to all of its assets
(recognized and

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##### Table of Contents



unrecognized) and carrying amount, both of which
would be measured as of the date of adoption. This second step
is required to be completed as soon as possible, but no later
than the end of the year of adoption. Any transitional
impairment loss will be recognized as the cumulative effect of a
change in accounting principle in the Companys statement
of operations.


As of the date of adoption, the Company expects
to have unamortized goodwill in the amount of approximately
$71.5 million, all of which will be subject to the transition
provisions of Statements 141 and 142. Amortization expense
related to goodwill was approximately $2.7 million for the years
ended December 31, 2000 and 2001.

Because of the extensive effort needed to comply
with adopting Statements 141 and 142, we have not
determined the impact of adopting these Statements on the
Companys financial statements at the date of this report,
including whether any transitional impairment losses will be
required to be recognized as the cumulative effect of a change
in accounting principle.

In July 2001, the FASB issued Statement
No. 143, Accounting for Asset Retirement Obligation,
which requires entities to record the fair value of a liability
for an asset retirement obligation in the period in which it is
incurred. When the liability is initially recorded, the entity
will capitalize a cost by increasing the carrying amount of the
related long-lived asset. Over time, the liability is accreted
to its present value each period, and the capitalized cost is
depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the
obligation for its recorded amount or incurs a gain or loss upon
settlement. The standard is effective for fiscal years beginning
after June 15, 2002 with earlier adoption permitted. The
Company has not yet determined the impact, if any, of adopting
this standard.

In August 2001, the Financial Accounting
Standards Board issued FASB Statement No. 144,
Accounting for the Impairment or Disposal of Long-Lived
Assets (Statement 144), which supersedes both FASB
Statement No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of (Statement 121) and the accounting and reporting
provisions of APB Opinion No. 30, Reporting the Results
of Operations  Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions
(Opinion 30), for the disposal of a segment of a business
(as previously defined in that Opinion). Statement 144
retains the fundamental provisions in Statement 121 for
recognizing and measuring impairment losses on long-lived assets
held for use and long-lived assets to be disposed of by sale,
while also resolving significant implementation issues
associated with Statement 121. For example,
Statement 141 provides guidance on how a long-lived asset
that is used as part of a group should be evaluated for
impairment, establishes criteria for when a long-lived asset is
held for sale, and prescribes the accounting for a long-lived
asset that will be disposed of other than by sale.
Statement 144 retains the basic provisions of
Opinion 30 on how to present discontinued operations in the
income statement but broadens that presentation to include a
component of an entity (rather than a segment of a business).
Unlike Statement 121, an impairment assessment under
Statement 144 will never result in a write-down of
goodwill. Rather, goodwill is evaluated for impairment under
Statement No. 142, Goodwill and Other Intangible
Assets.

The Company is required to adopt
Statement 144 no later than the year beginning after
December 15, 2001, and plans to adopt its provisions for
the quarter ending March 31, 2002. Management does not
expect the adoption of Statement 144 for long-lived assets
held for use to have a material impact on the Companys
financial statements because the impairment assessment under
Statement 144 is largely unchanged from Statement 121.
The provisions of the Statement for assets held for sale or
other disposal generally are required to be applied
prospectively after the adoption date to newly initiated
disposal activities. Therefore, management cannot determine the
potential effects that adoption of Statement 144 will have
on the Companys financial statements.

Risks Associated with Forward Looking
Statements

The Private Securities Litigation Act of 1995
(the Act) provides a safe harbor for forward-looking
statements made by our Company. This document contains
forward-looking statements, including but not

25



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##### Table of Contents



limited to, Item 1 of Part I, Business,
and Item 7 of Part II, Managements Discussion
and Analysis of Financial Condition and Results of Operations.
All statements which address operating performance, events or
developments that we expect, plan, believe, hope, wish,
forecast, predict, intend, or anticipate will occur in the
future are forward looking statements within the meaning of the
Act.


The forward-looking statements are based on
managements current views and assumptions regarding future
events and operating performance. However there are many risk
factors, including but not limited to, the general state of the
economy, the Companys ability to execute its plans,
competitive factors, and other risks that could cause the actual
results to differ materially from the estimates or predictions
contained in our Companys forward-looking statements.
Additional information concerning the Companys risk
factors is contained from time to time in the Companys
public filings with the SEC; and most recently in the Business
Risk section of Item 1 of Part 1 of this Annual Report
on Form 10-K.

The Companys views, estimates, plans and
outlook as described within this document may change subsequent
to the release of this statement. The Company is under no
obligation to modify or update any or all of the statements it
has made herein despite any subsequent changes the Company may
make in its views, estimates, plans or outlook for the future.

Item 7A.  Quantitative and
Qualitative Disclosures about Market Risk

Interest Rate Sensitivity

The table below provides information about our
debt obligations as of December 31, 2001 that are sensitive
to changes in interest rates. The table presents cash flows and
related weighted average interest rates by expected maturity
dates (dollars in millions).

|                                             |                          |                        |     |        |  |      |     |      |  |      |     |       |  |       |     |       |  |  |   |  |  |   |       |       |   |   |       |       |   |   |       |  | 
|-------------------------------------------- | ------------------------ | ---------------------- | --- | ------ |  | ---- | --- | ---- |  | ---- | --- | ----- |  | ----- | --- | ----- |  |  | - |  |  | - | ----- | ----- | - | - | ----- | ----- | - | - | ----- |  | 
|                                             |                          |                        |     |        |  |     
|                                             |                          | Expected Maturity Date |     |        |  |     
|                                             |                          |                        |     |        |  |     
|                                             |                          |                        |     | There- |  |      |     | Fair
|                                             |                          | 2002                   |     | 2003   |  | 2004 |     | 2005 |  | 2006 |     | after |  | Total |     | Value
|                                             |                          |                        |     |        |  |      |     |      |  |      |     |       |  |       |     |      
|LONG-TERM DEBT                               |                          |                        |     |        |  |      |     |      |  |      |     |       |  |       |     |       |  |  |   |  |  |   |       |       |   |   |       |       |   |   |       | 
|Fixed Rate 10.875% Senior Subordinated Notes |                          | $                      |    |        |  | $    |    |      |  | $    |    |       |  | $     |    |       |  |  |  |  |  | $ | 100.0 |       |   | $ | 100.0 |       |   | $ | 101.3 | 
|                                             | Average Interest Rate    |                        |     |        |  |      |     |      |  |      |     |       |  |       |     |       |  |  |   |  |  |   |       | 10.88 | % |   |       | 10.88 | % |   |       |  | 
|Variable Rate Bank Credit Facility           |                          | $                      | 4.7 |        |  | $    | 0.3 |      |  | $    | 6.7 |       |  | $     | 4.9 |       |  |  |  |  |  | $ |      |       |   | $ | 16.5  |       |   | $ | 16.5  | 
|                                             | Average Interest Rate(a) |                        |     |        |  |      |     |      |  |      |     |       |  |       |     |       |  |  |   |  |  |   |       |       |   |   |       |       |   |   |       |  | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Variable rate long-term debt is comprised of both
	term A and term B loans under the Bank Credit
	Facility. The Bank Credit Facility provides for interest at our
	option, at (1) the base rate of the bank acting as
	administrative agent plus a margin adder of 0.50% to 0.75% on
	term A, depending on our leverage ratio, and 1.75% on
	term B, or (2) under a LIBOR option with borrowing
	spreads of LIBOR plus 1.50% to LIBOR plus 2.00% on term A,
	depending on our leverage ratio, and LIBOR plus 3.00% on
	term B.

Exchange Rate Sensitivity

We enter into forward-exchange contracts
primarily to reduce the impact on earnings and cash flow from
non-functional currency-denominated third-party receivables.
Gains and losses resulting from hedging instruments offset the
losses and gains on the underlying receivable being hedged. Our
forward-exchange contracts generally have maturity dates of 90
to 120 days, and a high correlation is maintained between
the hedges and the underlying receivable. In most cases, both
the exposed transactions and the hedging contracts are marked to
market monthly with gains and losses included in earnings for
the period.

Assuming a hypothetical 10% adverse change in all
foreign currencies, with the resulting functional currency gains
and losses translated into U.S. dollars at the spot rate, the
loss in fair value of exchange contracts held on
December 31, 2001, would be $0.3 million. Those losses
would be offset by gains on the

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underlying receivables being hedged. See
footnote 2(i) to the financial statements for further
discussion of hedging activities.


Commodity Risk

We have some exposure to risks associated with
fluctuations in prices for commodities used to manufacture our
products, primarily for nickel, which is used in the plating of
steel golf shafts. In addition we have some exposure to the
price of natural gas which is used as an energy source primarily
in our steel manufacturing operations. In some cases we will
purchase contracts to lock in prices for both nickel and natural
gas to be delivered anywhere from one to twenty-four months from
the date the contract is consummated. As of December 31,
2001 we held approximately 50% of our expected 2002 usage of
natural gas under contract, and 100% of our expected 2002 usage
of nickel.

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##### Table of Contents



Item 8.  Financial Statements and
Supplementary Data

INDEPENDENT AUDITORS REPORT

The Board of Directors

True Temper Sports, Inc.


We have audited the accompanying balance sheets
of True Temper Sports, Inc. as of December 31, 2001 and
2000 and the related statements of operations, changes in
stockholders equity, and cash flows for each of the years
in the three-year period ended December 31, 2001. In
connection with our audit of the financial statements, we also
audited the accompanying financial statement schedule. These
financial statements and the financial statement schedule are
the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial
statements and the financial statement schedule based on our
audits.

We conducted our audits in accordance with
auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial
position of True Temper Sports, Inc. as of December 31,
2001 and 2000 and the results of its operations and its cash
flows for each of the years in the three-year period ended
December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America. Also in our
opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken
as a whole, presents fairly, in all material respects, the
information set forth therein.



| |         
| | --------
| | KPMG LLP

Memphis, Tennessee

March 4, 2002


28



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TRUE TEMPER SPORTS, INC.

(A wholly-owned subsidiary of True Temper
Corporation)


STATEMENTS OF OPERATIONS

(Dollars in thousands)


|                                             |                            |                                  |         |        |  |      |         |        |  |   |        |        | 
|-------------------------------------------- | -------------------------- | -------------------------------- | ------- | ------ |  | ---- | ------- | ------ |  | - | ------ | ------ | 
|                                             |                            |                                 
|                                             |                            | For the Years Ended December 31,
|                                             |                            |                                 
|                                             |                            | 2001                             |         | 2000   |  | 1999
|                                             |                            |                                  |         |        |  |     
|NET SALES                                    |                            | $                                | 111,083 |        |  | $    | 110,636 |        |  | $ | 92,215 |       
|Cost of sales                                |                            |                                  | 67,735  |        |  |      | 65,382  |        |  |   | 56,084 |       
|                                             |                            |                                  |         |        |  |      |         |        |  |   |        |       
|                                             | GROSS PROFIT               |                                  |         | 43,348 |  |      |         | 45,254 |  |   |        | 36,131 | 
|Selling, general and administrative expenses |                            |                                  | 14,963  |        |  |      | 16,899  |        |  |   | 15,156 |       
|Amortization of goodwill                     |                            |                                  | 2,695   |        |  |      | 2,701   |        |  |   | 2,701  |       
|Impairment of long-lived assets              |                            |                                  |        |        |  |      | 1,053   |        |  |   |       |       
|Restructuring costs                          |                            |                                  |        |        |  |      | 7       |        |  |   | 622    |       
|                                             |                            |                                  |         |        |  |      |         |        |  |   |        |       
|                                             | OPERATING INCOME           |                                  |         | 25,690 |  |      |         | 24,594 |  |   |        | 17,652 | 
|Interest expense, net of interest income     |                            |                                  | 12,660  |        |  |      | 13,693  |        |  |   | 14,341 |       
|Other expenses, net                          |                            |                                  | (2      | )      |  |      | 56      |        |  |   | (9     | )     
|                                             |                            |                                  |         |        |  |      |         |        |  |   |        |       
|                                             | INCOME BEFORE INCOME TAXES |                                  |         | 13,032 |  |      |         | 10,845 |  |   |        | 3,320  | 
|Income taxes                                 |                            |                                  | (11,539 | )      |  |      | 5,218   |        |  |   | 2,318  |       
|                                             |                            |                                  |         |        |  |      |         |        |  |   |        |       
|                                             | NET INCOME                 |                                  | $       | 24,571 |  |      | $       | 5,627  |  |   | $      | 1,002  | 
|                                             |                            |                                  |         |        |  |      |         |        |  |   |        |       

See accompanying notes to financial statements.

29



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TRUE TEMPER SPORTS, INC.

(A wholly-owned subsidiary of True Temper
Corporation)


BALANCE SHEETS

(Dollars in thousands)


|                                                                                                      |                                            |                                            |         |        |         |  |         |        |         | 
|----------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------------------------------------------ | ------- | ------ | ------- |  | ------- | ------ | ------- | 
|                                                                                                      |                                            |                                           
|                                                                                                      |                                            | December 31,                              
|                                                                                                      |                                            |                                           
|                                                                                                      |                                            | 2001                                       |         | 2000  
|                                                                                                      |                                            |                                            |         |       
|ASSETS                                                                                               
|CURRENT ASSETS                                                                                        |                                            |                                            |         |        |         |  |         |       
|                                                                                                      | Cash and cash equivalents                  |                                            | $       | 8,177  |         |  | $       | 4,168  |        
|                                                                                                      | Receivables, net                           |                                            |         | 13,459 |         |  |         | 9,948  |        
|                                                                                                      | Inventories                                |                                            |         | 13,441 |         |  |         | 14,408 |        
|                                                                                                      | Deferred financing costs                   |                                            |         | 671    |         |  |         | 618    |        
|                                                                                                      | Prepaid expenses and other assets          |                                            |         | 1,078  |         |  |         | 1,744  |        
|                                                                                                      |                                            |                                            |         |        |         |  |         |       
|                                                                                                      |                                            | Total current assets                       |         |        | 36,826  |  |         |        | 30,886  | 
|Property, plant and equipment, net                                                                    |                                            |                                            | 16,729  |        |         |  | 18,078  |       
|Goodwill, net                                                                                         |                                            |                                            | 71,506  |        |         |  | 74,114  |       
|Deferred tax assets, net                                                                              |                                            |                                            | 60,356  |        |         |  | 48,586  |       
|Deferred financing costs, net                                                                         |                                            |                                            | 3,300   |        |         |  | 3,803   |       
|Other assets                                                                                          |                                            |                                            | 613     |        |         |  | 421     |       
|                                                                                                      |                                            |                                            |         |        |         |  |         |       
|                                                                                                      |                                            | Total assets                               |         | $      | 189,330 |  |         | $      | 175,888 | 
|                                                                                                      |                                            |                                            |         |        |         |  |         |       
|LIABILITIES & STOCKHOLDERS
	EQUITY                                                                  
|CURRENT LIABILITIES                                                                                   |                                            |                                            |         |        |         |  |         |       
|                                                                                                      | Current portion of long-term debt          |                                            | $       | 4,675  |         |  | $       | 1,900  |        
|                                                                                                      | Current portion of capital lease liability |                                            |         | 18     |         |  |         | 19     |        
|                                                                                                      | Accounts payable                           |                                            |         | 4,390  |         |  |         | 7,492  |        
|                                                                                                      | Accrued expenses and other liabilities     |                                            |         | 4,818  |         |  |         | 7,426  |        
|                                                                                                      |                                            |                                            |         |        |         |  |         |       
|                                                                                                      |                                            | Total current liabilities                  |         |        | 13,901  |  |         |        | 16,837  | 
|Long-term debt, net of current portion                                                                |                                            |                                            | 111,829 |        |         |  | 116,505 |       
|Capital lease liability, net of current portion                                                       |                                            |                                            |        |        |         |  | 24      |       
|Post-retirement medical obligation                                                                    |                                            |                                            | 2,297   |        |         |  | 2,202   |       
|                                                                                                      |                                            |                                            |         |        |         |  |         |       
|                                                                                                      |                                            | Total liabilities                          |         |        | 128,027 |  |         |        | 135,568 | 
|STOCKHOLDERS EQUITY                                                                                  |                                            |                                            |         |        |         |  |         |       
|Common stock  par value $0.01 per
	share; authorized 1,000 shares; issued and outstanding 100 shares |                                            |                                            |        |        |         |  |        |       
|Additional paid-in capital                                                                            |                                            |                                            | 40,326  |        |         |  | 40,326  |       
|Retained earnings (Accumulated deficit)                                                               |                                            |                                            | 20,977  |        |         |  | (6      | )     
|                                                                                                      |                                            |                                            |         |        |         |  |         |       
|                                                                                                      |                                            | Total stockholders equity                 |         |        | 61,303  |  |         |        | 40,320  | 
|                                                                                                      |                                            |                                            |         |        |         |  |         |       
|                                                                                                      |                                            | Total liabilities and stockholders equity |         | $      | 189,330 |  |         | $      | 175,888 | 
|                                                                                                      |                                            |                                            |         |        |         |  |         |       

See accompanying notes to financial statements.

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TRUE TEMPER SPORTS, INC.

(A wholly-owned subsidiary of True Temper
Corporation)


STATEMENTS OF CHANGES IN STOCKHOLDERS
EQUITY

(Dollars in thousands)


|                             |                                  |              |     |            |  |              |   |          |  |       |        |   |  |   |        |        |   |   |        |        |  
|---------------------------- | -------------------------------- | ------------ | --- | ---------- |  | ------------ | - | -------- |  | ----- | ------ | - |  | - | ------ | ------ | - | - | ------ | ------ | -
|                             |                                  |              |     |            |  | Retained     |   |         
|                             |                                  | Common Stock |     | Additional |  | Earnings/    |   |         
|                             |                                  |              |     | Paid-In    |  | (Accumulated |   |         
|                             |                                  | Shares       |     | Par Value  |  | Capital      |   | Deficit) |  | Total
|                             |                                  |              |     |            |  |              |   |          |  |      
|Balance at December 31, 1998 |                                  |              | 100 |            |  | $            |  |          |  | $     | 40,326 |   |  | $ | (5,447 | )      |   | $ | 34,879 |       
|                             | Net income                       |              |     |           |  |              |   |         |  |       |        |  |  |   |        | 1,002  |   |   |        | 1,002  |  
|                             |                                  |              |     |            |  |              |   |          |  |       |        |   |  |   |        |        |   |   |        |       
|Balance at December 31, 1999 |                                  |              | 100 |            |  |              |  |          |  |       | 40,326 |   |  |   | (4,445 | )      |   |   | 35,881 |       
|                             | Net income                       |              |     |           |  |              |   |         |  |       |        |  |  |   |        | 5,627  |   |   |        | 5,627  |  
|                             | Dividends paid to parent company |              |     |           |  |              |   |         |  |       |        |  |  |   |        | (1,188 | ) |   |        | (1,188 | )
|                             |                                  |              |     |            |  |              |   |          |  |       |        |   |  |   |        |        |   |   |        |       
|Balance at December 31, 2000 |                                  |              | 100 |            |  |              |  |          |  |       | 40,326 |   |  |   | (6     | )      |   |   | 40,320 |       
|                             | Net income                       |              |     |           |  |              |   |         |  |       |        |  |  |   |        | 24,571 |   |   |        | 24,571 |  
|                             | Dividends paid to parent company |              |     |           |  |              |   |         |  |       |        |  |  |   |        | (3,588 | ) |   |        | (3,588 | )
|                             |                                  |              |     |            |  |              |   |          |  |       |        |   |  |   |        |        |   |   |        |       
|Balance at December 31, 2001 |                                  |              | 100 |            |  | $            |  |          |  | $     | 40,326 |   |  | $ | 20,977 |        |   | $ | 61,303 |       
|                             |                                  |              |     |            |  |              |   |          |  |       |        |   |  |   |        |        |   |   |        |       

See accompanying notes to financial statements.

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TRUE TEMPER SPORTS, INC.

(A wholly-owned subsidiary of True Temper
Corporation)


STATEMENTS OF CASH FLOWS

(Dollars in thousands)


|                                |                                                                                    |                                                           |                                           |        |         |        |        |         |       |         |       |        |       |        |  
|------------------------------- | ---------------------------------------------------------------------------------- | --------------------------------------------------------- | ----------------------------------------- | ------ | ------- | ------ | ------ | ------- | ----- | ------- | ----- | ------ | ----- | ------ | -
|                                |                                                                                    |                                                          
|                                |                                                                                    | For the Years Ended December 31,                         
|                                |                                                                                    |                                                          
|                                |                                                                                    | 2001                                                      |                                           | 2000   |         | 1999  
|                                |                                                                                    |                                                           |                                           |        |         |       
|OPERATING ACTIVITIES            |                                                                                    |                                                           |                                           |        |         |        |        |         |       |         |       |       
|                                | Net income                                                                         |                                                           | $                                         | 24,571 |         |        | $      | 5,627   |       |         | $     | 1,002  |      
|                                | Adjustments to reconcile net income to net
	cash provided by operating activities: |                                                           |                                           |        |         |        |        |         |       |         |       |        |      
|                                |                                                                                    | Depreciation and amortization                             |                                           |        | 6,208   |        |        |         | 6,236 |         |       |        | 6,205 |       
|                                |                                                                                    | Amortization of deferred financing costs                  |                                           |        | 652     |        |        |         | 628   |         |       |        | 592   |       
|                                |                                                                                    | Loss (gain) on disposal of property, plant and
	equipment |                                           |        |        |        |        |         | 96    |         |       |        | (9    | )     
|                                |                                                                                    | Impairment charge on long-lived assets and
	inventory     |                                           |        |        |        |        |         | 1,053 |         |       |        |      |       
|                                |                                                                                    | Deferred taxes                                            |                                           |        | (11,770 | )      |        |         | 5,040 |         |       |        | 2,196 |       
|                                |                                                                                    | Other noncash activities                                  |                                           |        |        |        |        |         | 75    |         |       |        |      |       
|                                |                                                                                    | Changes in assets and liabilities, net of
	acquisitions:  |                                           |        |         |        |        |         |       |         |       |        |       |       
|                                |                                                                                    |                                                           | Receivables, net                          |        |         | (3,511 | )      |         |       | 3,138   |       |        |       | (495   | )
|                                |                                                                                    |                                                           | Inventories                               |        |         | 967    |        |         |       | (3,037  | )     |        |       | (385   | )
|                                |                                                                                    |                                                           | Prepaid expenses and other assets         |        |         | 660    |        |         |       | (1,084  | )     |        |       | 365    |  
|                                |                                                                                    |                                                           | Accounts payable                          |        |         | (3,102 | )      |         |       | 2,212   |       |        |       | (2,460 | )
|                                |                                                                                    |                                                           | Accrued interest                          |        |         | 48     |        |         |       | (174    | )     |        |       | (360   | )
|                                |                                                                                    |                                                           | Other liabilities                         |        |         | (2,561 | )      |         |       | 797     |       |        |       | 968    |  
|                                |                                                                                    |                                                           |                                           |        |         |        |        |         |       |         |       |       
|                                |                                                                                    |                                                           | Net cash provided by operating activities |        |         | 12,162 |        |         |       | 20,607  |       |        |       | 7,619  |  
|INVESTING ACTIVITIES            |                                                                                    |                                                           |                                           |        |         |        |        |         |       |         |       |       
|                                | Purchase of property, plant and equipment                                          |                                                           |                                           | (2,001 | )       |        |        | (3,621  | )     |         |       | (1,620 | )    
|                                | Proceeds from the sales of property, plant and
	equipment                          |                                                           |                                           | 37     |         |        |        | 22      |       |         |       | 48     |      
|                                | Purchase of AME                                                                    |                                                           |                                           | (327   | )       |        |        |        |       |         |       |       |      
|                                | Other investing activities                                                         |                                                           |                                           |       |         |        |        | 56      |       |         |       |       |      
|                                |                                                                                    |                                                           |                                           |        |         |        |        |         |       |         |       |       
|                                |                                                                                    |                                                           | Net cash used in investing activities     |        |         | (2,291 | )      |         |       | (3,543  | )     |        |       | (1,572 | )
|FINANCING ACTIVITIES            |                                                                                    |                                                           |                                           |        |         |        |        |         |       |         |       |       
|                                | Principal payments on bank debt                                                    |                                                           |                                           | (1,901 | )       |        |        | (18,000 | )     |         |       | (900   | )    
|                                | Principal payments on capital leases                                               |                                                           |                                           | (25    | )       |        |        | (74     | )     |         |       | (122   | )    
|                                | Payment of debt issuance costs                                                     |                                                           |                                           | (202   | )       |        |        | (64     | )     |         |       | (472   | )    
|                                | Dividends paid                                                                     |                                                           |                                           | (3,588 | )       |        |        | (1,188  | )     |         |       |       |      
|                                | Other financing activity                                                           |                                                           |                                           | (146   | )       |        |        | 3       |       |         |       | (391   | )    
|                                |                                                                                    |                                                           |                                           |        |         |        |        |         |       |         |       |       
|                                |                                                                                    |                                                           | Net cash used in financing activities     |        |         | (5,862 | )      |         |       | (19,323 | )     |        |       | (1,885 | )
|Net increase (decrease) in cash |                                                                                    |                                                           | 4,009                                     |        |         |        | (2,259 | )       |       |         | 4,162 |       
|Cash at beginning of year       |                                                                                    |                                                           | 4,168                                     |        |         |        | 6,427  |         |       |         | 2,265 |       
|                                |                                                                                    |                                                           |                                           |        |         |        |        |         |       |         |       |       
|Cash at end of year             |                                                                                    | $                                                         | 8,177                                     |        |         | $      | 4,168  |         |       | $       | 6,427 |       
|                                |                                                                                    |                                                           |                                           |        |         |        |        |         |       |         |       |       

See accompanying notes to financial statements.

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TRUE TEMPER SPORTS, INC.

(A wholly-owned subsidiary of True Temper
Corporation)


NOTES TO FINANCIAL STATEMENTS

(Dollars in thousands unless otherwise
indicated)


(1)            DESCRIPTION
OF BUSINESS



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | True Temper Sports, Inc. (True Temper
	or the Company) is primarily engaged in the design,
	manufacture and sale of steel and composite golf club shafts as
	well as a variety of other high strength, high tolerance tubular
	components for the bicycle, automotive and recreational sports
	markets. True Tempers manufacturing plants and related
	facilities are located in Memphis, Tennessee, Amory and Olive
	Branch, Mississippi and El Cajon, California. The majority of
	True Tempers sales are to golf club manufacturers and
	distributors primarily located in the United States, Europe,
	Japan, Australia and Southeast Asia. True Temper operates as a
	wholly-owned operating subsidiary of True Temper Corporation.

(2)            SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES

(a)     Revenue
Recognition



| |                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Revenue is generally recognized when persuasive
	evidence of an arrangement exists, delivery has occurred, the
	revenue amount is determinable and collection is reasonably
	assured. Liabilities are established for estimated returns,
	allowances and discounts at the time revenue is recognized.

(b)     Use
of Estimates



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The preparation of financial statements requires
	management to make estimates and assumptions that affect the
	amounts reported in the financial statements and accompanying
	notes. Actual results inevitably will differ from those
	estimates, and such differences may be material to the financial
	statements. The accounting judgments and estimations used in
	preparation of the financial statements are based on assumptions
	that True Temper management believes are reasonable under the
	circumstances.

(c)     Trade
Accounts Receivable



| |                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------
| | Trade receivables are net of allowance for
	doubtful accounts of $539 and $1,433 as of December 31,
	2001 and 2000, respectively.

(d)     Inventories



| |                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------
| | Inventories are stated at the lower of cost or
	market. Cost is determined using the first-in, first-out
	(FIFO) method.

(e)     Deferred
Financing Costs



| |                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Costs associated with the issuance of debt are
	initially deferred and amortized as a component of interest
	expense over the life of the related debt, using a method that
	approximates the interest method.

(f)     Property,
Plant and Equipment



| |                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Property, plant and equipment is stated on a
	historical cost basis, net of accumulated depreciation.
	Depreciation is provided over the estimated useful life of each
	asset using the

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| |                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | straight-line method. Leasehold improvements are
	amortized over the shorter of the useful life or the applicable
	lease term. In general the estimated useful lives are as follows:

|                                                         |  |      |             | 
|-------------------------------------------------------- |  | ---- | ----------- | 
|Asset Category                                           |  | Life
|                                                         |  |     
|Buildings                                                |  |      | 15-40 years | 
|Furniture and office equipment                           |  |      | 10-15 years | 
|Machinery and equipment                                  |  |      | 8-15 years  | 
|Computers and related equipment                          |  |      | 2-4 years   | 
|Leasehold improvements                                   |  |      | 6-15 years  | 
|Assets held for use  not currently
	used for production |  |      | 8 years     | 

(g)     Goodwill



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company assesses the recoverability of
	goodwill by determining whether the amortization of the goodwill
	balance over its remaining life can be recovered through
	discounted future cash flows of the businesses to which goodwill
	relates.                                                                                                                                                                                                             
|
| | ACQUISITION OF TRUE TEMPER SPORTS, INC. BY
	BLACK & DECKER: The excess of the purchase price of
	True Temper by Black & Decker over the fair value of
	the net assets acquired was recorded as goodwill. Amortization
	of goodwill is recorded on the straight-line method over a
	period of 40 years. Accumulated amortization was
	approximately $43,000 and $40,500 at December 31, 2001 and
	2000, respectively.                                           
|
| | ACQUISITION OF GRAFALLOY CORPORATION BY TRUE
	TEMPER SPORTS, INC.: The excess of the purchase price of
	Grafalloy over the fair value of the net assets acquired was
	recorded as goodwill. Amortization of goodwill is recorded on
	the straight-line method over a period of 20 years.
	Goodwill related to the Grafalloy acquisition was $3,883 and
	$4,114, net of accumulated amortization of $744 and $513, at
	December 31, 2001 and 2000, respectively.
|
| | ACQUISITION OF AMERICAN MATERIALS ENGINEERING BY
	TRUE TEMPER SPORTS, INC.: The excess of the purchase price of
	AME over the fair value of the net assets acquired was recorded
	as goodwill. In accordance with FASB 142, Goodwill and
	Other Intangible Assets, goodwill was not amortized as the
	acquisition was completed after July 1, 2001.                                                                                                            

(h)     Derivative
Instruments



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In June 2000, FASB Statement 138,
	Accounting for Derivative Instruments and Hedging
	Activity  Deferral of the Effective Date of FASB
	Statement 133, was issued. This statement shall be
	effective for all fiscal quarters of all fiscal years beginning
	after January 1, 2001. This statement requires recognition
	of the fair value of all derivative instruments, including
	certain derivative instruments embedded in other contracts, on
	the balance sheet and establishes new accounting rules for
	hedging activities. The Company uses derivative financial
	instruments for purposes other than trading to reduce its
	exposure to fluctuations in foreign currencies. The
	Companys derivative instruments have not been designated
	nor do they qualify as hedging instruments under the provisions
	of Statements 133 and 138 and the Company recognizes any changes
	in the derivative financial instruments fair value in
	earnings.

(i)     Foreign
Currencies



| |                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Transaction gains and losses that arise from
	exchange rate changes on transactions denominated in a currency
	other than the U.S. Dollar are included currently in the
	results of operations as a component of cost of sales. The loss
	on foreign currency in the years ended

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| |                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | December 31, 2001, 2000 and 1999 was $407,
	$496 and $326, respectively. True Temper hedges its foreign
	currency transaction exposure through the use of forward
	exchange contracts. Gains and losses on foreign currency
	transaction hedges are recognized in income and offset the
	foreign exchange gains and losses on the underlying transaction.
|
| | The following table summarizes the contractual
	notional amounts of True Tempers forward exchange
	contracts as of December 31, 2001 and 2000:                                                                                                                                                                                                          

|                  |       |      |       |       |  |   |       |       | 
|----------------- | ----- | ---- | ----- | ----- |  | - | ----- | ----- | 
|                  |       | 2001 |       | 2000 
|                  |       |      |       |      
|Pound Sterling    |       | $    | 1,110 |       |  | $ | 1,533 |      
|Yen               |       |      | 1,115 |       |  |   | 947   |      
|Australian dollar |       |      | 942   |       |  |   | 943   |      
|                  |       |      |       |       |  |   |       |      
|                  | Total |      | $     | 3,167 |  |   | $     | 3,423 | 
|                  |       |      |       |       |  |   |       |      

(j)     Impairment
of Long-Lived Assets



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company accounts for long-lived assets in
	accordance with the provisions of SFAS No. 121,
	Accounting for the Impairment of Long-Lived Assets and for
	Long-Lived Assets to Be Disposed Of. This Statement
	requires that long-lived assets and certain identifiable
	intangibles be reviewed for impairment whenever events or
	changes in circumstances indicate that the carrying amount of an
	asset may not be recoverable. Recoverability of assets to be
	held and used is measured by a comparison of the carrying amount
	of an asset to future net cash flows expected to be generated by
	the asset. If such assets are considered to be impaired, the
	impairment to be recognized is measured by the amount by which
	the carrying amount of the assets exceeds the fair value of the
	assets. Assets to be disposed of are reported at the lower of
	the carrying amount or fair value less costs to sell.

(k)     Advertising
and Promotional Costs



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Advertising and promotional costs are accounted
	for in accordance with Statement of Position 93-7
	Reporting on Advertising Costs, which requires that
	the cost of producing advertisements be expensed at the time of
	the first showing of the advertisement or as incurred. True
	Tempers policy is to expense costs associated with the
	production of advertising at the time of first showing of the
	advertisement. Advertising and promotional costs primarily
	consist of trade show costs, media spots including print, radio
	and television, advertising production and agency fees,
	sponsorships, and product and promotional samples. Advertising
	and promotional expense for 2001, 2000 and 1999 were $5,007,
	$4,633 and $4,568, respectively. Certain of the Companys
	customers participate in a cooperative advertising program where
	the Company agrees to reimburse these customers for a portion of
	their advertising costs that feature the Companys product.
	Cooperative advertising costs are included in selling, general
	and administrative expenses.

(l)     Research
and Development Costs



| |                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Costs associated with the development of new
	products and changes to existing products are expensed as
	incurred and are included in selling, general, and
	administrative expenses. Research and development costs for the
	2001, 2000 and 1999 were $1,587, $1,614 and $1,757, respectively.

(m)     Post-Retirement
Benefits



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | True Tempers hourly union employees at our
	Amory, Mississippi plant are covered by a non-contributory
	defined benefit plan. The defined benefit plan is funded in
	conformity with funding requirements of applicable government
	regulations. Benefits are based on a negotiated, fixed amount
	multiplied by the employees length of service. In addition
	to the defined benefit plan, these same employees receive
	certain post-retirement medical, dental and life insurance
	benefits.

35



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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In 2000 the Company completed the termination of
	the True Temper Sports Inc. salaried pension plan (see
	footnote 10 for further discussion.) It was replaced by a
	non-contributory defined contribution plan. Company
	contributions to this plan are based on the employees age
	and are calculated as a percentage of compensation. This plan is
	funded on a current basis. In addition to the non-contributory
	defined contribution plan, certain post-retirement medical,
	dental and life insurance benefits are provided to those
	salaried employees who were employed by the Company prior to the
	termination of the salaried pension plan.
|
| | All employees of True Temper are eligible to
	participate in a company sponsored 401(k) plan. The
	Companys contribution to this plan is calculated as a
	percentage of the employees compensation and the
	employees contribution. All Company contributions to this
	plan are paid in cash.                                                                                                                                                                                                                                                                                                                                                          

(n)     Income
Taxes



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Income taxes are accounted for under the asset
	and liability method. Deferred tax assets and liabilities are
	recognized for the future tax consequences attributable to
	differences between the financial statement carrying amounts of
	existing assets and liabilities and their respective tax bases
	and operating loss and tax credit carryforwards. Deferred tax
	assets and liabilities are measured using enacted tax rates
	expected to apply to taxable income in the years in which those
	temporary differences are expected to be recovered or settled.
	The effect on deferred tax assets and liabilities of a change in
	tax rates is recognized in income in the period that includes
	the enactment date.
|
| | In the fourth quarter of 2001, after considering
	the Companys historical financial performance for the
	preceding three years, and other available evidence, Company
	management determined that it was more likely than not the
	Company will realize the tax benefit of all of its deferred tax
	assets. As a result the Companys valuation allowance on
	its deferred tax assets was eliminated with the change in the
	valuation allowance recorded as a deferred tax benefit. See
	footnote 9, Income Taxes, for further explanation.                                                                                                                                                                                

(o)     Fair
Value of Financial Instruments



| |                                                                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The fair value of financial instruments
	represents the amount at which the instrument could be exchanged
	in a current transaction between willing parties, other than a
	forced sale or liquidation. Significant differences can arise
	between the fair value and carrying amount of financial
	instruments that are recognized at historical cost amounts.                                
|
| | The following methods and assumptions were used
	by True Temper in estimating fair value disclosures for
	financial instruments:                                                                                                                                                                                                                                                              
|
| | Cash, Trade Receivables and
	Payables The amounts
	reported in the balance sheets approximate fair value.                                                                                                                                                                                                                                                                                    
|
| | Long-Term Debt The carrying values of the
	Companys variable rate debt approximates fair value. The
	estimated fair value of the Companys fixed rate debt is
	based upon interest rates available for the issuance of debt
	with similar terms and remaining maturities. As of
	December 31, 2001, the Companys Senior Subordinated
	Notes have an estimated fair value of $101.3 million.
|
| | Foreign Currency Contracts The fair value of forward exchange
	contracts is estimated using prices established by financial
	institutions for comparable instruments and approximates
	carrying value, which was approximately zero.                                                                                                                                                         
|
| | The fair value estimates presented herein are
	based on information available to management as of
	December 31, 2001. Although management is not aware of any
	factors that would significantly affect the estimated fair value
	amounts, such amounts have not been compre-                                                                                                                  

36



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| |                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | hensively revalued for purposes of these
	financial statements since that date and current estimates of
	fair value may differ significantly from the amounts presented
	herein.

(p)     Recent
Accounting Pronouncements



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In July 2001, the Financial Accounting
	Standard Board (FASB) issued Statement No. 141,
	Business Combinations, and Statement No. 142,
	Goodwill and Other Intangible Assets. Statement 141
	requires that the purchase method of accounting be used for all
	business combinations initiated after June 30, 2001 as well
	as all purchase method business combinations completed after
	June 30, 2001. Statement 141 also specifies criteria
	that intangible assets acquired in a purchase method business
	combination must meet to be recognized and reported apart from
	goodwill, noting that any purchase price allocable to an
	assembled workforce may not be accounted for separately.
	Statement 142 will require that goodwill and intangible
	assets with indefinite useful lives no longer be amortized, but
	instead tested for impairment at least annually in accordance
	with the provisions of Statement 142. Statement 142
	will also require that intangible assets with estimable useful
	lives be amortized over the respective estimated useful lives to
	their estimated residual values, and reviewed for impairment in
	accordance with FAS Statement No. 121, Accounting for
	the Impairment of Long-Lived Assets and for Long-lived Assets to
	Be Disposed Of.
|
| | The Company is required to adopt the provisions
	of Statement 141 immediately and Statement 142
	effective January 1, 2002. Furthermore, goodwill and
	intangible assets determined to have an indefinite useful life
	acquired in a purchase business combination complete after
	June 30, 2001 but before Statement 142 is adopted in
	full will not be amortized, but will continue to be evaluated
	for impairment in accordance with the appropriate
	pre-Statement 142 accounting literature. Goodwill and
	intangible assets acquired in business combinations completed
	before July 1, 2001 will continue to be amortized and
	tested for impairment in accordance with the appropriate
	pre-Statement 142 accounting requirements prior to the
	adoption of Statement 142.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | Statement 141 will require upon adoption of
	Statement 142, that the Company evaluate its existing
	intangible assets and goodwill that were acquired in a prior
	purchase business combination, and to make any necessary
	reclassifications in order to conform with the new criteria in
	Statement 141 for recognition apart from goodwill. Upon adoption
	of Statement 142, the Company will be required to reassess
	the useful lives and residual values of all intangible assets
	acquired, and make any necessary amortization period adjustments
	by the end of the first interim period after adoption. In
	addition, to the extent an intangible asset is identified as
	having an indefinite useful life, the Company will be required
	to test the intangible assets for impairment in accordance with
	the provision of Statement 142 within the first interim
	period. Any impairment loss will be measured as of the date of
	adoption and recognized as the cumulative effect of a change in
	accounting principle in the first interim period.                                                                                                                                                                                                                             
|
| | In connection with the Statement 142
	transitional goodwill impairment evaluation, the Company will
	perform an assessment of whether goodwill and equity-method
	goodwill is impaired as of the date of adoption. To accomplish
	this, the Company must identify its reporting units and
	determine the carrying value of each reported unit by assigning
	the assets and liabilities, including the exiting goodwill and
	intangible assets, to those reporting units as of the date of
	adoption. The Company will then have up to six months from the
	date of adoption to determine the fair value of each reporting
	unit and compare it to the reporting units carrying
	amount. To the extent a reporting units carrying amount
	exceeds its fair value, an indication exists that the reporting
	units goodwill may be impaired and the Company must
	perform the second step of the transitional impairment test. In
	the second step, the Company must compare the implied fair value
	of the reporting units goodwill, determined by allocating
	the reporting units fair value to all of its assets
	(recognized and                                                                                                                                                       

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| |                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | unrecognized) and carrying amount, both of which
	would be measured as of the date of adoption. This second step
	is required to be completed as soon as possible, but no later
	than the end of the year of adoption. Any transitional
	impairment loss will be recognized as the cumulative effect of a
	change in accounting principle in the Companys statement
	of operations.     
|
| | As of the date of adoption, the Company expects
	to have unamortized goodwill in the amount of approximately
	$71.5 million, all of which will be subject to the transition
	provisions of Statements 141 and 142. Amortization expense
	related to goodwill was approximately $2.7 million for the years
	ended December 31, 2001 and 2000.                                             
|
| | Because of the extensive effort needed to comply
	with adopting Statements 141 and 142, management has not
	determined the impact of adopting these Statements on the
	Companys financial statements at the date of this report,
	including whether any transitional impairment losses will be
	required to be recognized as the cumulative effect of a change
	in accounting principle.

(q)     Supplemental
Disclosures of Cash Flow Information



| |                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------
| | Cash payments for income taxes and interest for
	the years ended December 31, 2001, 2000 and 1999, are as
	follows:

|             |  |      |        |      |  |      |        |  |  |   |        | 
|------------ |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|             |  | 2001 |        | 2000 |  | 1999
|             |  |      |        |      |  |     
|Income taxes |  | $    | 280    |      |  | $    | 124    |  |  |   |       | 
|Interest     |  | $    | 12,299 |      |  | $    | 13,560 |  |  | $ | 14,334 | 

(r)     Reclassifications



| |                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------
| | Certain prior year amounts have been reclassified
	to conform with the 2001 Financial Statements. The
	reclassifications had no effect on net income.



|    |             
|--- | ------------
|(3) | ACQUISITIONS



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In the fourth quarter of 1998, True Temper
	acquired substantially all of the assets, and assumed certain
	liabilities, of Grafalloy Corporation (Grafalloy), a
	wholly-owned subsidiary of The American Materials &
	Technologies Corporation. In conjunction with this acquisition
	the Company recorded a liability of $500 primarily to cover
	severance costs for certain Grafalloy employees. As of
	December 31, 2000 and 1999, cumulative charges to this
	accrual totaled $339 and $289, respectively. The $161 unused
	portion of the $500 liability along with the purchase price
	adjustment of $57 were recorded as a reduction to goodwill
	during 2000.
|
| | In the third quarter of 2001, True Temper
	acquired substantially all the capital assets and intellectual
	property rights from Advanced Materials Engineering
	(AME) for $327 resulting in the recording of
	goodwill of $88. The transition of these assets to our El Cajon
	facility was completed by December 31, 2001.                                                                                                                                                                                                                                                                                                                                           



|    |                                   
|--- | ----------------------------------
|(4) | RESTRUCTURING AND ASSET IMPAIRMENT



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As described in note 3 above, the Company
	acquired substantially all of the assets of Grafalloy in the
	fourth quarter of 1998. At that time, the Company announced a
	restructuring program, the principal component of which was the
	consolidation of the Companys Olive Branch, Mississippi
	composite manufacturing operations into the El Cajon, California
	facility. The restructuring program was substantially completed
	in 1999. The Company recorded restructuring expenses as incurred
	of $7 and $622 during 2000 and 1999, respectively, related to
	compensation, moving and other integration costs incurred as a
	result of the transition of manufacturing operations from the
	Olive Branch facility to the El Cajon facility.

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In the fourth quarter of 2000 the Company
	recognized a non-cash pretax charge of $1,053 associated with
	the impairment of a roller hearth oven located in its Amory,
	Mississippi steel manufacturing plant. The impairment loss was
	recognized when it became clear that the roller hearth oven,
	which had been idle and awaiting installation, was not the most
	cost effective nor an operationally sound alternative to the
	Companys production needs; and as a result the
	undiscounted future net cash flows expected to be generated by
	this asset were less than its carrying value. The Company
	calculated the impairment loss by comparing the carrying value
	of the asset to its estimated fair market value, which was
	determined based on the Companys internal expertise and
	discussions with the original manufacturer of the oven. While
	the Company feels the most likely disposition of this oven will
	be a sale to a third party, as of December 31, 2001 a
	formal plan of sale had not been sufficiently detailed to
	warrant classification as held for sale.
	Accordingly, the Company will continue to depreciate the revised
	carrying value.

(5)            INVENTORIES



| |                                                                                 
| | --------------------------------------------------------------------------------
| | Inventories, as of December 31 of the year
	indicated, consist of the following:

|                |       |      |       |        |  |   |        |        | 
|--------------- | ----- | ---- | ----- | ------ |  | - | ------ | ------ | 
|                |       | 2001 |       | 2000  
|                |       |      |       |       
|Raw materials   |       | $    | 1,558 |        |  | $ | 1,303  |       
|Work in process |       |      | 2,124 |        |  |   | 2,772  |       
|Finished goods  |       |      | 9,759 |        |  |   | 10,333 |       
|                |       |      |       |        |  |   |        |       
|                | Total |      |       | 13,441 |  |   | $      | 14,408 | 
|                |       |      |       |        |  |   |        |       



|    |                              
|--- | -----------------------------
|(6) | PROPERTY, PLANT AND EQUIPMENT



| |                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------
| | Major classes of property, plant and equipment,
	as of December 31 of the year indicated, are summarized as
	follows:

|                                                        |  |      |        |      |  |   |        | 
|------------------------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|                                                        |  | 2001 |        | 2000
|                                                        |  |      |        |     
|Land improvements                                       |  | $    | 342    |      |  | $ | 332    | 
|Buildings                                               |  |      | 6,907  |      |  |   | 6,903  | 
|Furniture and office equipment                          |  |      | 803    |      |  |   | 803    | 
|Machinery and equipment                                 |  |      | 41,385 |      |  |   | 39,772 | 
|Computer equipment and capitalized software             |  |      | 2,447  |      |  |   | 2,236  | 
|Leasehold improvements                                  |  |      | 1,698  |      |  |   | 1,624  | 
|Assets held for use  not currently
	used in production |  |      | 1,854  |      |  |   | 1,884  | 
|Construction in progress                                |  |      | 363    |      |  |   | 1,014  | 
|                                                        |  |      |        |      |  |   |        | 
|                                                        |  |      | 55,799 |      |  |   | 54,568 | 
|Less accumulated depreciation                           |  |      | 39,070 |      |  |   | 36,490 | 
|                                                        |  |      |        |      |  |   |        | 
|Net property, plant and equipment                       |  | $    | 16,729 |      |  | $ | 18,078 | 
|                                                        |  |      |        |      |  |   |        | 



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Depreciation expense for the years ended
	December 31, 2001, 2000 and 1999, was $3,513, $3,535, and
	$3,504, respectively. Total cost of property obtained under
	capital leases was $996 at both December 31, 2001 and 2000,
	respectively. Accumulated depreciation on assets obtained under
	capital leases was $996 and $960 at December 31, 2001 and
	2000, respectively. Amortization of assets acquired under
	capital leases is included in depreciation expense in all years
	presented.

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(7)            OTHER
CURRENT LIABILITIES



| |                                                                                               
| | ----------------------------------------------------------------------------------------------
| | Other current liabilities, as of December 31
	of the year indicated, consist of the following:

|                                                          |       |      |       |       |  |   |       |       | 
|--------------------------------------------------------- | ----- | ---- | ----- | ----- |  | - | ----- | ----- | 
|                                                          |       | 2001 |       | 2000 
|                                                          |       |      |       |      
|Accrued compensation, benefits and related
	payroll taxes |       |      | 2,433 |       |  | $ | 3,835 |      
|Accrued interest                                          |       |      | 964   |       |  |   | 916   |      
|Other                                                     |       |      | 1,421 |       |  |   | 2,675 |      
|                                                          |       |      |       |       |  |   |       |      
|                                                          | Total |      | $     | 4,818 |  |   | $     | 7,426 | 
|                                                          |       |      |       |       |  |   |       |      

(8)            BORROWINGS

(a)     Long-Term
Debt



| |                                                                          
| | -------------------------------------------------------------------------
| | Long-term debt at December 31, 2001 and 2000
	consisted of the following:

|                                                                                  |  |      |         |      |  |   |         | 
|--------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | 
|                                                                                  |  | 2001 |         | 2000
|                                                                                  |  |      |         |     
|10.875% Senior Subordinated Notes due 2008                                        |  | $    | 100,000 |      |  | $ | 100,000 | 
|Bank Credit Facility with an average interest
	rate of 4.71% at December 31, 2001 |  |      | 16,504  |      |  |   | 18,405  | 
|                                                                                  |  |      |         |      |  |   |         | 
|Total debt                                                                        |  |      | 116,504 |      |  |   | 118,405 | 
|Less current maturities                                                           |  |      | 4,675   |      |  |   | 1,900   | 
|                                                                                  |  |      |         |      |  |   |         | 
|Long-term debt                                                                    |  | $    | 111,829 |      |  | $ | 116,505 | 
|                                                                                  |  |      |         |      |  |   |         | 



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The 10.875% Senior Subordinated Notes due 2008
	(the Notes) provide for semi-annual interest
	payments, in arrears, commencing on June 1, 1999. At the
	option of the Company, up to 35% of the Notes are redeemable
	prior to December 1, 2001, at 110.875%, with the net cash
	proceeds of one or more public equity offerings. From
	December 1, 2001 to November 30, 2003 the Notes may be
	redeemed, at the option of the Company, in whole or in part, at
	a premium, upon the occurrence of a change of control.
	Subsequent to November 30, 2003 the Notes may be redeemed,
	at the option of the Company, in whole or in part, at a
	redemption price of 105.438% beginning December 1, 2003 and
	declining ratably thereafter to 100.0% on December 1, 2006.
|
| | The loans outstanding under the Bank Credit
	Facility (the Credit Agreement) are comprised of
	$2,400 of Term A and $14,104 of Term B. The Credit Agreement
	provides for interest, at the Companys option, at
	(i) the base rate of the bank acting as administrative
	agent plus a margin adder of 0.50% to 0.75% on Term A,
	depending on the Companys leverage ratio (as defined in
	the Credit Agreement), and 1.75% on Term B, or
	(ii) under a LIBOR option with borrowing spreads of LIBOR
	plus 1.50% to LIBOR plus 2.00% on Term A, depending on the
	Companys leverage ratio (as defined in the Credit
	Agreement), and LIBOR plus 3.00% for Term B.                                                                                                    
|
| | Scheduled minimum principal payments, amounts of
	which vary over the term of the Credit Agreement, are due
	quarterly and end September 30, 2005. The Credit Agreement
	also requires annual mandatory prepayments of principal, in an
	amount equal to 50% of Excess Cash Flow, as defined in the
	Credit Agreement. Interest is payable, at a minimum, on a
	quarterly basis, based on terms set forth in the Credit
	Agreement.                                                                                                                                                                                                                                                                                                                                     
|
| | At December 31, 2001 the current maturities
	of $4,675 included $2,400 of mandatory principal prepayments as
	stipulated under the Excess Cash Flow provision. No such annual
	mandatory prepayment of principal was required at
	December 31, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The loans under the Credit Agreement are senior
	to the Notes, and are secured by substantially all of the
	Companys assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | The Credit Agreement and the Notes contain
	provisions which, among other things, limit the Companys
	ability to (i) incur additional indebtedness,
	(ii) make acquisitions and capital expenditures,
	(iii) sell assets, (iv) create liens or other
	encumbrances, (v) make certain payments and dividends, or
	(vi) merge or consolidate. The Bank Credit Facility also
	requires the Company to maintain certain specified financial
	ratios and tests including, (i) minimum EBITDA levels,
	(ii) minimum interest coverage and fixed charge coverage
	ratios, and (iii) maximum leverage ratios. At
	December 31, 2001 the Company was in compliance with all of
	the covenants in both the Credit Agreement and the Notes.
|
| | At December 31, 2001, future minimum
	principal payments on long-term debt were as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

|           |       |   |         |         | 
|---------- | ----- | - | ------- | ------- | 
|2002       |       | $ | 4,675   |        
|2003       |       |   | 275     |        
|2004       |       |   | 6,669   |        
|2005       |       |   | 4,885   |        
|2006       |       |   |        |        
|Thereafter |       |   | 100,000 |        
|           |       |   |         |        
|           | Total |   | $       | 116,504 | 
|           |       |   |         |        

(b)     Line
of Credit



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company may borrow, through
	September 30, 2004, up to $20,000 under a revolving credit
	agreement included in the Bank Credit Facility. Borrowings under
	the agreement are subject to the same provisions described in
	the long-term debt section of this footnote. Interest rates are
	floating, but in no event will be greater than prime plus 0.75%
	or LIBOR plus 2.00%. The Company has no outstanding borrowings
	under this line of credit at December 31, 2001.

(9)          INCOME
TAXES



| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | The current and deferred provision for income
	taxes, for the years ended December 31, 2001, 2000 and
	1999, is as follows:

|          |                               |                |   |         |         |      |   |       |       |  |   |       |       | 
|--------- | ----------------------------- | -------------- | - | ------- | ------- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|          |                               | 2001           |   | 2000    |         | 1999
|          |                               |                |   |         |         |     
|Current:  |                               |                |   |         |         |      |   |       |       |  |   |      
|          | Federal                       |                | $ |        |         |      | $ | 48    |       |  | $ |      |      
|          | State                         |                |   | 40      |         |      |   |      |       |  |   |      |      
|          | Foreign                       |                |   | 191     |         |      |   | 129   |       |  |   | 122   |      
|          |                               |                |   |         |         |      |   |       |       |  |   |      
|          |                               | Total current  |   |         | 231     |      |   |       | 177   |  |   |       | 122   | 
|Deferred: |                               |                |   |         |         |      |   |       |       |  |   |      
|          | Federal                       |                |   | 4,946   |         |      |   | 4,238 |       |  |   | 1,849 |      
|          | State                         |                |   | 929     |         |      |   | 802   |       |  |   | 347   |      
|          | Change in valuation allowance |                |   | (17,644 | )       |      |   |      |       |  |   |      |      
|          |                               |                |   |         |         |      |   |       |       |  |   |      
|          |                               | Total deferred |   |         | (11,770 | )    |   |       | 5,040 |  |   |       | 2,196 | 
|          |                               |                |   |         |         |      |   |       |       |  |   |      
|          |                               | Total          |   | $       | (11,539 | )    |   | $     | 5,218 |  |   | $     | 2,318 | 
|          |                               |                |   |         |         |      |   |       |       |  |   |      

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| |                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The actual income tax expense differs from the
	amounts computed by applying the U.S. federal tax rate of 34% to
	the pretax earnings as a result of the following:

|                                  |  |      |         |      |  |      |       |  |  |   |       | 
|--------------------------------- |  | ---- | ------- | ---- |  | ---- | ----- |  |  | - | ----- | 
|                                  |  | 2001 |         | 2000 |  | 1999
|                                  |  |      |         |      |  |     
|Computed expected tax expense   |  | $    | 4,431   |      |  | $    | 3,687 |  |  | $ | 1,129 | 
|State tax, net of federal benefit |  |      | 640     |      |  |      | 529   |  |  |   | 229   | 
|Amortization of goodwill          |  |      | 838     |      |  |      | 838   |  |  |   | 838   | 
|Foreign taxes                     |  |      | 191     |      |  |      | 129   |  |  |   | 122   | 
|Change in valuation allowance     |  |      | (17,644 | )    |  |      |      |  |  |   |      | 
|Other                             |  |      | 5       |      |  |      | 35    |  |  |   |      | 
|                                  |  |      |         |      |  |      |       |  |  |   |       | 
|Actual income tax expense         |  | $    | (11,539 | )    |  | $    | 5,218 |  |  | $ | 2,318 | 
|                                  |  |      |         |      |  |      |       |  |  |   |       | 



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On June 29, 1998, Black & Decker
	Corporation, along with its True Temper Sports Division, and
	True Temper Sports LLC (an affiliate of Cornerstone Equity
	Investors, LLC), entered into an agreement pursuant to which
	True Temper Sports LLC acquired, effective September 30,
	1998, an 89% equity interest in True Temper Corporation
	(TTC) (collectively referred to as the
	Recapitalization). True Temper Sports, Inc. was
	formed as the operating subsidiary of True Temper Corporation.
	The Recapitalization of TTC was accounted for as a leveraged
	recapitalization, such that the Companys assets and
	liabilities remain at their historical bases for financial
	reporting purposes, however, for income tax purposes, the
	transaction is treated as a taxable business combination, which
	creates a step-up in its tax basis financial
	statements.                                                                                  
|
| | For federal and state income tax purposes, the
	Recapitalization is a taxable business combination and is a
	qualified stock purchase. The buyer and the seller elected
	jointly to treat the Recapitalization as an asset acquisition
	under section 338(h)(10) of the Internal Revenue Code of
	1986, as amended. An allocation of the purchase price to the tax
	basis of assets and liabilities based on their respective
	estimated fair values at September 30, 1998 was made for
	income tax purposes. In connection with the Recapitalization,
	the Company recorded a deferred tax asset of approximately
	$52,895, net of a valuation allowance of $17,644, at
	September 30, 1998 related to future tax deductions of the
	net excess of the tax bases of the assets and liabilities over
	the financial statement carrying amounts with a corresponding
	credit to additional paid-in capital.                                                         
|
| | In assessing the realizability of deferred tax
	assets, Company management considers whether it is more likely
	than not that a portion or all of its deferred tax assets will
	be realized. The Company evaluates a variety of available
	evidence in determining the amount of the deferred tax assets to
	be realized including the Companys earnings history, the
	number of years the Companys operating losses can be
	carried forward and projections of future taxable income. Based
	on the available evidence described above, including the
	Companys historical financial performance for the past
	three years since the Recapitalization, the Company determined
	in the fourth quarter of 2001 that it was more likely than not
	the Company will realize the tax benefit of all of its deferred
	tax assets. As a result the valuation allowance was eliminated
	with the change in the valuation allowance recorded as a
	deferred tax benefit.
|
| | The Companys ability to realize some or all
	of the benefit from the deferred tax asset is dependent upon the
	Company generating taxable book income in the future. Although
	there can be no assurance of future events, management must
	periodically reevaluate its forecast of the Companys
	future operating results. In the event management determines
	that sufficient future taxable income may not be generated to
	fully realize the deferred tax asset, the Company would record a
	valuation allowance by a charge to income tax expense in the
	period of such determination.                                                                                                                                                                                                                                                                                                                                                                     

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| |                                                                                                     
| | ----------------------------------------------------------------------------------------------------
| | The components of deferred tax assets and
	liabilities at December 31, 2001 and 2000 are as follows:

|                          |                                  |                                                 |   |        |        |   |   |         |        |  
|------------------------- | -------------------------------- | ----------------------------------------------- | - | ------ | ------ | - | - | ------- | ------ | -
|                          |                                  | 2001                                            |   | 2000  
|                          |                                  |                                                 |   |       
|Deferred tax assets:      |                                  |                                                 |   |        |        |   |   |        
|                          | Acquisition costs                |                                                 | $ | 557    |        |   | $ | 874     |       
|                          | Goodwill                         |                                                 |   | 55,090 |        |   |   | 59,817  |       
|                          | Accrued liabilities              |                                                 |   | 774    |        |   |   | 1,186   |       
|                          | Asset impairment                 |                                                 |   | 704    |        |   |   | 704     |       
|                          | Net operating loss carryforwards |                                                 |   | 3,584  |        |   |   | 3,863   |       
|                          | Uniform capitalization           |                                                 |   | 161    |        |   |   |        |       
|                          | Other                            |                                                 |   | 9      |        |   |   |        |       
|                          |                                  |                                                 |   |        |        |   |   |        
|                          |                                  | Gross deferred tax assets                       |   |        | 60,879 |   |   |         | 66,444 |  
|                          | Less valuation allowance         |                                                 |   |       |        |   |   | (17,644 | )     
|                          |                                  |                                                 |   |        |        |   |   |        
|                          |                                  | Deferred tax assets, net of valuation allowance |   |        | 60,879 |   |   |         | 48,800 |  
|                          |                                  |                                                 |   |        |        |   |   |        
|Deferred tax liabilities: |                                  |                                                 |   |        |        |   |   |        
|                          | Property, plant and equipment    |                                                 |   | (523   | )      |   |   | (189    | )     
|                          | Other                            |                                                 |   |       |        |   |   | (25     | )     
|                          |                                  |                                                 |   |        |        |   |   |        
|                          |                                  | Gross deferred liabilities                      |   |        | (523   | ) |   |         | (252   | )
|                          |                                  | Net deferred tax asset                          |   | $      | 60,356 |   |   | $       | 48,586 |  
|                          |                                  |                                                 |   |        |        |   |   |        



| |                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | At December 31, 2001, the Company had net
	operating loss carryforwards for federal and state income tax
	purposes of approximately $9,200 which expire between 2018 and
	2021 and $50 alternative minimum tax credit carry forward which
	is carried forward indefinitely.

(10)     EMPLOYEE
BENEFIT PLANS



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | True Temper Sports, Inc. has a qualified pension
	plan and a postretirement benefit plan for the hourly union
	employees at its Amory, Mississippi plant. During 2000 the True
	Temper Sports, Inc. Pension Plan, which covered the majority of
	salaried employees, was terminated and all plan assets were
	distributed. The following tables provide a reconciliation of
	the changes in the plans benefit obligation and fair value
	of asset for the years ended December 31, 2001 and 2000,
	and a statement of the plans funded status as of
	December 31 for each year:

|                                        |                                   |      |       |        |  |   |        |       | 
|--------------------------------------- | --------------------------------- | ---- | ----- | ------ |  | - | ------ | ----- | 
|                                        |                                   | 2001 |       | 2000  
|                                        |                                   |      |       |       
|Reconciliation of benefit obligation:   |                                   |      |       |        |  |   |        |      
|Benefit obligation at beginning of year |                                   | $    | 9,360 |        |  | $ | 12,387 |      
|Service cost                            |                                   |      | 348   |        |  |   | 317    |      
|Interest cost                           |                                   |      | 694   |        |  |   | 851    |      
|Actuarial losses (gains)                |                                   |      | 236   |        |  |   | 1,204  |      
|Benefit payments                        |                                   |      | (123  | )      |  |   | (188   | )    
|Curtailments                            |                                   |      |      |        |  |   | (897   | )    
|Settlements                             |                                   |      |      |        |  |   | (4,314 | )    
|                                        |                                   |      |       |        |  |   |        |      
|                                        | Benefit obligation at end of year |      | $     | 10,515 |  |   | $      | 9,360 | 
|                                        |                                   |      |       |        |  |   |        |      

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|                                             |                                                |                                          |   |        |        |  |   |        |        |  
|-------------------------------------------- | ---------------------------------------------- | ---------------------------------------- | - | ------ | ------ |  | - | ------ | ------ | -
|                                             |                                                | 2001                                     |   | 2000  
|                                             |                                                |                                          |   |       
|Reconciliation of fair value of plan assets: |                                                |                                          |   |        |        |  |   |       
|                                             | Fair value of plan assets at beginning of year |                                          | $ | 13,311 |        |  | $ | 15,249 |       
|                                             | Actual return on plan assets                   |                                          |   | (112   | )      |  |   | 3,387  |       
|                                             | Employer contributions                         |                                          |   |       |        |  |   | 46     |       
|                                             | Benefit payments                               |                                          |   | (123   | )      |  |   | (188   | )     
|                                             | Asset reversion                                |                                          |   |       |        |  |   | (869   | )     
|                                             | Settlements                                    |                                          |   |       |        |  |   | (4,314 | )     
|                                             |                                                |                                          |   |        |        |  |   |       
|                                             |                                                | Fair value of plan assets at end of year |   | $      | 13,076 |  |   | $      | 13,311 |  
|                                             |                                                |                                          |   |        |        |  |   |       
|Funded status:                               |                                                |                                          |   |        |        |  |   |       
|                                             | Funded status at December 31                   |                                          | $ | 2,561  |        |  | $ | 3,951  |       
|                                             | Unrecognized net actuarial gain                |                                          |   | (2,376 | )      |  |   | (4,137 | )     
|                                             |                                                |                                          |   |        |        |  |   |       
|                                             |                                                | Net asset (liability) recognized         |   | $      | 185    |  |   | $      | (186   | )
|                                             |                                                |                                          |   |        |        |  |   |       



| |                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------
| | Pension plan assets exceeded the accumulated
	benefit obligation at December 31, 2001 and
	December 31, 2000.                                    
|
| | The following table provides the components of
	net periodic benefit cost for the defined benefit pension plans
	for the years ended December 31:

|                                                |                |                                |        |      |      |   |        |   |      |  
|----------------------------------------------- | -------------- | ------------------------------ | ------ | ---- | ---- | - | ------ | - | ---- | -
|                                                |                | 2001                           |        | 2000
|                                                |                |                                |        |     
|Service cost of benefits earned during the year |                | $                              | 348    |      |      | $ | 317    |  
|Interest cost on projected benefit obligation   |                |                                | 694    |      |      |   | 851    |  
|Expected return on plan assets                  |                |                                | (1,123 | )    |      |   | (1,134 | )
|Recognized net gains                            |                |                                | (288   | )    |      |   | (168   | )
|Recognized curtailment gain                     |                |                                |       |      |      |   | (897   | )
|Recognized settlement loss                      |                |                                |       |      |      |   | 970    |  
|                                                |                |                                |        |      |      |   |        |  
|                                                |                | Net periodic pension income    |        | $    | (369 | ) |        | $ | (61  | )
|                                                |                |                                |        |      |      |   |        |  
|Weighted average assumptions:                   |                |                                |        |      |      |   |        |  
|                                                | Discount rate: |                                |        |      |      |   |        |   |     
|                                                |                | Benefit obligation             |        |      | 7.25 | % |        |   | 7.50 | %
|                                                |                | Expected return on plan assets |        |      | 8.50 | % |        |   | 8.50 | %
|                                                |                | Rate of compensation increase  |        |      | 5.00 | % |        |   | 5.00 | %



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | During 2000 True Temper completed the termination
	of its pension plan for salaried employees. As of
	December 31, 2000 all liabilities of the plan were
	satisfied, and the cash remaining in the plan reverted to the
	Company. As a result, the Company recognized a net
	curtailment/settlement gain of $666, net of excise taxes
	totaling $130. Of the total gain approximately $406 was
	recognized in cost of sales and $260 in selling, general and
	administrative expenses.
|
| | Assets of the defined benefit plan for hourly
	union employees consist primarily of investments in equity
	securities, debt securities, and cash equivalents.                                                                                                                                                                                                                                                                                                                         
|
| | In addition to the defined benefit pension plan
	for hourly employees, the Company also maintains a defined
	contribution plan which covers substantially all employees.
	Expenses for defined contribution plans amounted to $720, $709
	and $247 in 2001, 2000 and 1999, respectively.                                                                                                                                                                                              
|
| | The Company also participates in certain unfunded
	health care plans that provide post-retirement medical, dental,
	and life insurance to hourly union employees at its Amory,
	Mississippi plant. The                                                                                                                                                                                                                                                                                

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| |                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------
| | post-retirement plans are contributory, and
	include certain cost-sharing features, such as deductibles and
	co-payments.
|
| | The following table sets forth the benefit
	obligation of the unfunded post-retirement health plans as of
	December 31:  

|                                      |                                         |      |   |       |   |  |   |       |  
|------------------------------------- | --------------------------------------- | ---- | - | ----- | - |  | - | ----- | -
|                                      |                                         | 2001 |   | 2000 
|                                      |                                         |      |   |      
|Reconciliation of benefit obligation: |                                         |      |   |       |   |  |   |      
|                                      | Benefit obligation at beginning of year |      | $ | 1,976 |   |  | $ | 2,020 |  
|                                      | Service cost                            |      |   | 63    |   |  |   | 37    |  
|                                      | Interest cost                           |      |   | 173   |   |  |   | 137   |  
|                                      | Participant contributions               |      |   | 25    |   |  |   |      |  
|                                      | Plan amendments                         |      |   | (370  | ) |  |   |      |  
|                                      | Actuarial gains                         |      |   | 977   |   |  |   | (91   | )
|                                      | Benefits paid                           |      |   | (151  | ) |  |   | (75   | )
|                                      | Curtailments                            |      |   |      |   |  |   | (52   | )
|                                      |                                         |      |   |       |   |  |   |      
|                                      | Benefit obligation at end of year       |      |   | 2,693 |   |  |   | 1,976 |  
|                                      | Unrecognized prior service cost         |      |   | 332   |   |  |   |      |  
|                                      | Unrecognized net actuarial (loss) gain  |      |   | (726  | ) |  |   | 226   |  
|                                      |                                         |      |   |       |   |  |   |      
|                                      | Accrued benefit costs                   |      | $ | 2,299 |   |  | $ | 2,202 |  
|                                      |                                         |      |   |       |   |  |   |      



| |                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The following table provides the components of
	net periodic benefit expense for the unfunded post retirement
	health plans for the years ended December 31:

|                                    |                    |      |     |      |   |   |     |      |  
|----------------------------------- | ------------------ | ---- | --- | ---- | - | - | --- | ---- | -
|                                    |                    | 2001 |     | 2000
|                                    |                    |      |     |     
|Service cost                        |                    | $    | 63  |      |   | $ | 37  |     
|Interest cost                       |                    |      | 173 |      |   |   | 137 |     
|Amortization of prior service costs |                    |      | (38 | )    |   |   | (7  | )   
|Recognized net losses               |                    |      | 27  |      |   |   |    |     
|Recognized curtailment gain         |                    |      |    |      |   |   | (52 | )   
|                                    |                    |      |     |      |   |   |     |     
|                                    | Net periodic cost  |      | $   | 225  |   |   | $   | 115  |  
|                                    |                    |      |     |      |   |   |     |     
|Discount Rate:                      |                    |      |     |      |   |   |     |     
|                                    | Benefit obligation |      |     | 7.25 | % |   |     | 7.50 | %



| |                                                                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The healthcare cost trend rate used to determine
	the post-retirement benefit obligation was 10.0% for 2001. This
	rate decreases gradually to an ultimate rate of 5.0% in 2013,
	and remains at that level thereafter. The trend rate is a
	significant factor in determining the amounts reported. The
	following table sets forth the impact of a 1.00% change in the
	trend rate:

|                                           |                                    |  |   |      |  
|------------------------------------------ | ---------------------------------- |  | - | ---- | -
|Effect of 1.00% increase in trend rate on: |                                    |  |   |     
|                                           | Net periodic cost                  |  | $ | 13   |  
|                                           | Post-retirement benefit obligation |  | $ | 127  |  
|Effect of 1.00% decrease in trend rate on: |                                    |  |   |     
|                                           | Net periodic cost                  |  | $ | (13  | )
|                                           | Post-retirement benefit obligation |  | $ | (131 | )

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(11)     COMMITMENTS
AND CONTINGENCIES

(a)     Lease
Obligation



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company is obligated under various
	non-cancelable leases for office facilities and equipment. These
	leases generally provide for renewal options and, in the case of
	facilities leases, for periodic rate increases based upon
	economic factors. All non-cancelable leases with an initial term
	greater than one year have been categorized as either capital or
	operating leases in conformity with FASB Statement No. 13,
	Accounting for Leases.
|
| | Future minimum payments under non-cancelable
	operating and capital leases with initial terms of one year or
	more as of December 31, 2001 are as follows:                                                                                                                                                                                                                                                                                                     

|                                                                |                                                                 |         |    |           |  |   |     |       | 
|--------------------------------------------------------------- | --------------------------------------------------------------- | ------- | -- | --------- |  | - | --- | ----- | 
|                                                                |                                                                 | Capital |    | Operating
|                                                                |                                                                 | Leases  |    | Leases   
|                                                                |                                                                 |         |    |          
|2002                                                            |                                                                 | $       | 21 |           |  | $ | 856 |      
|2003                                                            |                                                                 |         |   |           |  |   | 753 |      
|2004                                                            |                                                                 |         |   |           |  |   | 434 |      
|2005                                                            |                                                                 |         |   |           |  |   | 304 |      
|2006                                                            |                                                                 |         |   |           |  |   | 2   |      
|                                                                |                                                                 |         |    |           |  |   |     |      
|                                                                | Total minimum lease payments                                    |         |    | 21        |  |   | $   | 2,349 | 
|                                                                |                                                                 |         |    |           |  |   |     |      
|Less: amount representing interest                              |                                                                 |         | (3 | )         |  |   |     |      
|                                                                |                                                                 |         |    |           |  |   |     |      
|                                                                | Present value of net minimum capital lease
	payments            |         |    | 18        |  |   |     |       | 
|Less: current installments of obligations under
	capital leases |                                                                 | $       | 18 |           |  |   |     |      
|                                                                |                                                                 |         |    |           |  |   |     |      
|                                                                | Obligation under capital leases excluding current
	installments |         |    |          |  |   |     |       | 
|                                                                |                                                                 |         |    |           |  |   |     |      



| |                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------
| | Rental expense on operating leases, excluding
	sublease rent received, was $948, $962, and $845 for 2001, 2000
	and 1999, respectively.

(b)     Legal
Proceedings



| |                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The company has certain contingent liabilities
	resulting from litigation and claims incident to the ordinary
	course of business. Management believes that the probable
	resolution of such contingencies will not materially affect the
	financial position or results of operations of the Company.

(12)     RELATED
PARTY TRANSACTIONS



| |                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In 1998, True Temper entered into a management
	services agreement with Cornerstone Equity Investors, LLC
	(Cornerstone). Cornerstone is a related party
	through its indirect management and ownership interest in True
	Temper Corporation.

In accordance with this agreement, Cornerstone
has agreed to provide:



| |     |                                                                                                
| | --- | -----------------------------------------------------------------------------------------------
| | (1) | general management services;                                                                   
|
| | (2) | assistance with the identification, negotiation
	and analysis of acquisitions and dispositions;
|
| | (3) | assistance with the negotiation and analysis of
	financial alternatives; and                   
|
| | (4) | other services agreed upon by True Temper and
	Cornerstone.                                    



| |                                                                     
| | --------------------------------------------------------------------
| | In exchange for such services, Cornerstone or its
	nominee receives:



| |     |                                                                                                   
| | --- | --------------------------------------------------------------------------------------------------
| | (1) | an annual advisory fee of $0.5 million payable
	quarterly, plus reasonable out-of-pocket expenses;

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| |     |                                                                                                                                                                                                                                     
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | a transaction fee in an amount equal to 1.0% of
	the aggregate transaction value in connection with the
	consummation of any material acquisition, divestiture, financing
	or refinancing by True Temper or any of its subsidiaries.



| |                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The management services agreement has an initial
	term of five years, subject to automatic one-year extensions
	unless we or Cornerstone provide written notice of termination.
	The annual advisory fee of $0.5 million is an obligation of ours
	and is also contractually subordinated to the Notes and the Bank
	Credit facilities.

(13)     SEGMENT AND
OTHER RELATED DISCLOSURES

(a)     Segment
Reporting



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company operates in two reportable business
	segments: golf shafts and performance tubing. The Companys
	reportable segments are based on the type of product
	manufactured and the application of that product in the
	marketplace. The golf shaft segment manufactures and sells steel
	and composite golf club shafts for use exclusively in the golf
	industry. The performance tubing segment manufactures and sells
	high strength, high tolerance tubular components for bicycle,
	automotive and recreational sport markets. The accounting
	policies for these segments are the same as those described in
	the summary of significant accounting policies. The Company
	evaluates the performance of these segments based on segment
	sales and gross profit. The Company has no inter-segment sales.
	General corporate assets, that are not allocated down to
	segments, include: cash, non-trade receivables, deferred tax
	assets, deferred financing costs and goodwill created during the
	acquisition of the Company by Black & Decker.

|              |                     |                               |   |         |         |      |   |         |         |  |   |        |        | 
|------------- | ------------------- | ----------------------------- | - | ------- | ------- | ---- | - | ------- | ------- |  | - | ------ | ------ | 
|              |                     |                              
|              |                     | As of and for the Years Ended
|              |                     | December 31,                 
|              |                     |                              
|              |                     | 2001                          |   | 2000    |         | 1999
|              |                     |                               |   |         |         |     
|Net sales:    |                     |                               |   |         |         |      |   |         |         |  |   |       
|              | Golf shafts         |                               | $ | 106,313 |         |      | $ | 106,530 |         |  | $ | 88,204 |       
|              | Performance tubing  |                               |   | 4,770   |         |      |   | 4,106   |         |  |   | 4,011  |       
|              |                     |                               |   |         |         |      |   |         |         |  |   |       
|              |                     | Total                         |   | $       | 111,083 |      |   | $       | 110,636 |  |   | $      | 92,215 | 
|              |                     |                               |   |         |         |      |   |         |         |  |   |       
|Gross profit: |                     |                               |   |         |         |      |   |         |         |  |   |       
|              | Golf shafts         |                               | $ | 41,726  |         |      | $ | 44,140  |         |  | $ | 35,213 |       
|              | Performance tubing  |                               |   | 1,622   |         |      |   | 1,114   |         |  |   | 918    |       
|              |                     |                               |   |         |         |      |   |         |         |  |   |       
|              |                     | Total                         |   | $       | 43,348  |      |   | $       | 45,254  |  |   | $      | 36,131 | 
|              |                     |                               |   |         |         |      |   |         |         |  |   |       
|Total assets: |                     |                               |   |         |         |      |   |         |         |  |   |       
|              | Jointly used assets |                               | $ | 1,586   |         |      | $ | 2,560   |         |  |   |        |       
|              | Golf shafts         |                               |   | 45,599  |         |      |   | 40,073  |         |  |   |        |       
|              | Performance tubing  |                               |   | 2,767   |         |      |   | 1,652   |         |  |   |        |       
|              |                     |                               |   |         |         |      |   |         |         |  |   |       
|              |                     | Total                         |   | $       | 49,952  |      |   | $       | 44,285  |  |   |        |        | 
|              |                     |                               |   |         |         |      |   |         |         |  |   |       



| |                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Revenues from one customer of True Tempers
	golf shafts segment represent approximately $12,000 of the
	Companys consolidated 1999 revenues. No single customer
	had revenues greater than 10% of the total Company consolidated
	revenues for 2001 and 2000.

47



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| |                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Following are reconciliations of total reportable
	segment assets to total Company assets, and total reportable
	segment gross profit to total Company income before income taxes:

|              |                                |                    |   |         |         |  |   |         |         | 
|------------- | ------------------------------ | ------------------ | - | ------- | ------- |  | - | ------- | ------- | 
|              |                                |                   
|              |                                | As of December 31,
|              |                                |                   
|              |                                | 2001               |   | 2000   
|              |                                |                    |   |        
|Total assets: |                                |                    |   |         |         |  |   |        
|              | Total from reportable segments |                    | $ | 49,952  |         |  | $ | 44,285  |        
|              | General corporate              |                    |   | 139,378 |         |  |   | 131,603 |        
|              |                                |                    |   |         |         |  |   |        
|              |                                | Total              |   | $       | 189,330 |  |   | $       | 175,888 | 
|              |                                |                    |   |         |         |  |   |        

|                                         |                                              |                                  |        |        |   |      |        |        |  |   |        |        |  
|---------------------------------------- | -------------------------------------------- | -------------------------------- | ------ | ------ | - | ---- | ------ | ------ |  | - | ------ | ------ | -
|                                         |                                              |                                 
|                                         |                                              | For the Years Ended December 31,
|                                         |                                              |                                 
|                                         |                                              | 2001                             |        | 2000   |   | 1999
|                                         |                                              |                                  |        |        |   |     
|Total reportable segment gross profit    |                                              | $                                | 43,348 |        |   | $    | 45,254 |        |  | $ | 36,131 |       
|Less:                                    |                                              |                                  |        |        |   |      |        |        |  |   |        |       
|                                         | Selling, general and administrative expenses |                                  |        | 14,963 |   |      |        | 16,899 |  |   |        | 15,156 |  
|                                         | Amortization of goodwill                     |                                  |        | 2,695  |   |      |        | 2,701  |  |   |        | 2,701  |  
|                                         | Impairment charge on long-lived assets       |                                  |        |       |   |      |        | 1,053  |  |   |        |       |  
|                                         | Restructuring costs                          |                                  |        |       |   |      |        | 7      |  |   |        | 622    |  
|                                         | Interest expense                             |                                  |        | 12,660 |   |      |        | 13,693 |  |   |        | 14,341 |  
|                                         | Other expense (income), net                  |                                  |        | (2     | ) |      |        | 56     |  |   |        | (9     | )
|                                         |                                              |                                  |        |        |   |      |        |        |  |   |        |       
|Total Company income before income taxes |                                              | $                                | 13,032 |        |   | $    | 10,845 |        |  | $ | 3,320  |       
|                                         |                                              |                                  |        |        |   |      |        |        |  |   |        |       

(b)     Sales
by Geographic Region



| |                                                                                                            
| | -----------------------------------------------------------------------------------------------------------
| | The geographic distribution of the Companys
	net sales, by location of customer, is summarized as follows:

|              |       |                                  |        |         |  |      |        |         |  |   |        |        | 
|------------- | ----- | -------------------------------- | ------ | ------- |  | ---- | ------ | ------- |  | - | ------ | ------ | 
|              |       |                                 
|              |       | For the Years Ended December 31,
|              |       |                                 
|              |       | 2001                             |        | 2000    |  | 1999
|              |       |                                  |        |         |  |     
|U.S.          |       | $                                | 87,647 |         |  | $    | 90,407 |         |  | $ | 77,984 |       
|International |       |                                  | 23,436 |         |  |      | 20,229 |         |  |   | 14,231 |       
|              |       |                                  |        |         |  |      |        |         |  |   |        |       
|              | Total |                                  | $      | 111,083 |  |      | $      | 110,636 |  |   | $      | 92,215 | 
|              |       |                                  |        |         |  |      |        |         |  |   |        |       



| |                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | No individual country or geographic area outside
	the U.S. accounts for 10% or more of total sales. Assets by
	location are not disclosed, as assets located outside the U.S.
	are immaterial.

(14)     SELECTED
QUARTERLY FINANCIAL DATA (UNAUDITED)



| |                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------
| | The following is a summary of unaudited quarterly
	results of operations for the years ended December 31, 2001
	and 2000.

|             |  |         |        |         |  |         |        |         |  |   |        |  |  |   |        | 
|------------ |  | ------- | ------ | ------- |  | ------- | ------ | ------- |  | - | ------ |  |  | - | ------ | 
|             |  | First   |        | Second  |  | Third   |        | Fourth 
|             |  | Quarter |        | Quarter |  | Quarter |        | Quarter
|             |  |         |        |         |  |         |        |        
|2001         |  |         |        |         |  |         |        |         |  |   |        |  |  |   |        | 
|Net sales    |  | $       | 34,392 |         |  | $       | 34,552 |         |  | $ | 20,012 |  |  | $ | 22,127 | 
|Gross profit |  |         | 12,998 |         |  |         | 14,242 |         |  |   | 7,763  |  |  |   | 8,345  | 
|Net income   |  |         | 2,322  |         |  |         | 3,420  |         |  |   | 281    |  |  |   | 18,548 | 
|2000         |  |         |        |         |  |         |        |         |  |   |        |  |  |   |        | 
|Net sales    |  | $       | 28,611 |         |  | $       | 34,141 |         |  | $ | 24,829 |  |  | $ | 23,055 | 
|Gross profit |  |         | 10,958 |         |  |         | 14,372 |         |  |   | 10,405 |  |  |   | 9,519  | 
|Net income   |  |         | 1,415  |         |  |         | 3,032  |         |  |   | 1,092  |  |  |   | 88     | 



| |                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In the fourth quarter of 2001, the Company
	eliminated the $17,644 valuation allowance on its deferred tax
	asset and recorded the change as an income tax benefit. See
	footnote 9, Income Taxes, for further discussion.

48



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|        |                                                                                        
|------- | ---------------------------------------------------------------------------------------
|Item 9. | Changes In and Disagreements with
	Accountants on Accounting and Financial
	Disclosures

None

PART III

Item 10.  Directors and Executive
Officers of the Registrant

The directors and executive officers of True
Temper as of December 31, 2001 are as follows:

|                    |  |     |    |          |  |                                                       
|------------------- |  | --- | -- | -------- |  | ------------------------------------------------------
|Name                |  | Age |    | Position
|                    |  |     |    |         
|Scott C. Hennessy   |  |     | 42 |          |  | Chief Executive Officer, President and Director       
|Fred H. Geyer       |  |     | 41 |          |  | Vice President, Chief Financial Officer and
	Treasurer
|David N. Hallford   |  |     | 48 |          |  | Vice President of Sales/Golf Products                 
|Graeme Horwood      |  |     | 57 |          |  | Vice President Engineering, Research and
	Development 
|Adrian H. McCall    |  |     | 43 |          |  | Vice President of International Sales and
	Marketing  
|Gene Pierce         |  |     | 35 |          |  | Vice President of Manufacturing                       
|William R. Beatty   |  |     | 41 |          |  | Director of Marketing                                 
|Stephen M. Brown    |  |     | 36 |          |  | Director of Human Resources                           
|Andrew W. York      |  |     | 37 |          |  | Director and General Manager of Performance Tubing    
|Mark Rossi          |  |     | 45 |          |  | Director                                              
|Robert A. Knox      |  |     | 50 |          |  | Director                                              
|Raymond A. DeVita   |  |     | 65 |          |  | Director                                              
|Patrick N.W. Turner |  |     | 42 |          |  | Director                                              

Scott C. Hennessy has been President of True
Temper since 1996, and Chief Executive Officer and Director
since October 1998. Mr. Hennessy joined True Temper in 1994
as Vice President-Sales and Marketing. From 1980 to 1994,
Mr. Hennessy held various management positions at Black
& Decker in sales, marketing and product development.
Mr. Hennessy sits on the Board of Governors of the National
Golf Foundation. Mr. Hennessy graduated magna cum laude
with a B.S. from the University of Delaware.

Fred H. Geyer has been Chief Financial Officer of
True Temper since February 1998. From 1985 to 1998,
Mr. Geyer held various positions at Emerson Electric
Company, including Vice President-Finance in the Air Moving
Motor Division. Prior to that, Mr. Geyer worked at Arthur
Andersen LLP as a Senior Auditor. Mr. Geyer is a
Certified Public Accountant and is a member of the American
Institute of Certified Public Accountants. Mr. Geyer
graduated magna cum laude with a B.S. from the University of
Missouri at St. Louis.

David N. Hallford has been Vice President Sales/
Golf Products of True Temper since 1989. From August 1985
to January 1989, Mr. Hallford held various positions
in sales and customer service at Plough Corporation.
Mr. Hallford has worked as an on-course golf professional
responsible for management and retail sales. Mr. Hallford
graduated magna cum laude with a B.S. from the University of
Memphis.

Graeme Horwood has been the Vice President of
Engineering, Research and Development since June 2001. From
April 2000 to May 2001 Mr. Horwood served as the
Companys Senior Manager Technical Services. From 1986 to
2000, Mr. Horwood held various management positions at
Apollo Sports Technologies. Mr. Horwood is a Chartered
Engineer as well as a member of the Institute of Mechanical
Engineers both in the United Kingdom. Mr. Horwood graduated
first class honors with a B.S. from Coventry University.

Adrian H. McCall has been Vice President of
International Sales and Marketing since March 1999. From
September 1995 to March 1999 Mr. McCall served as
Director of International Sales and Marketing for the Company.
From May 1992 to September 1995, Mr. McCall served as
Director of International Operations

49



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##### Table of Contents



of The Upper Deck Company, a manufacturer and
distributor of baseball cards. Mr. McCall graduated cum
laude with a B.S. from the University of Hartford.


Gene Pierce has been Vice President of
Manufacturing since June 2001. From January 1999 to June 2001
Mr. Pierce served as Director of Steel Operations and Plant
Manager of our steel facility. From May 1997 to January 1999
Mr. Pierce served as Business Operations Manager at
Metalloy Corporation. Mr. Pierce received both a B.S. and
M.B.A. from Mississippi State University.

William R. Beatty has been Director of Marketing
since 1996. From December 1993 to March 1996,
Mr. Beatty was Group Product Manager and Manager of
International Sales and Marketing for Rubbermaid.
Mr. Beatty received a B.S. from Ohio State University and
an M.B.A. from Pepperdine University.

Stephen R. Brown has been the Director of Human
Resources since 1997. From September 1996 to
December 1997, Mr. Brown served as Manager-Human
Resources. Prior to that, since 1992, Mr. Brown served in
various Human Resource management positions with Emerson
Electric Company. Mr. Brown received a B.A. from the
University of South Carolina.

Andrew W. York has been the Director and General
Manager of Performance Tubing since May 1999. From
June 1996 to May 1999 Mr. York was Vice President
of Marketing at Nicklaus Golf Equipment Company. Prior to that
he was Brand Manager-Instant Cameras at Polaroid Corporation.
Mr. York received a B.S. and an M.B.A. from Babson College
in Wellesley, Massachusetts.

Mark Rossi became a director of True Temper in
October 1998. Mr. Rossi has served as Senior Managing
Director of Cornerstone Equity Investors L.L.C. since
December 1996. From 1983 to 1996, Mr. Rossi was
affiliated with the general partners of various private equity
funds managed by Prudential. Mr. Rossi is also a director
of Maxwell Technologies, Inc., Novatel Wireless, Inc. and
several private companies. Mr. Rossi received a B.A. from
Saint Vincent College and an M.B.A. from Northwestern University.

Robert A. Knox became a director of True Temper
in October 1998. Mr. Knox has served as Senior Managing
Director of Cornerstone Equity Investors, L.L.C. since
December 1996. From 1983 to 1996, Mr. Knox was
affiliated with the general partners of various private equity
funds managed by Prudential. Mr. Knox is also a director of
Health Management Associates, Lechters, Inc. and several private
companies. Mr. Knox received a B.A. and an M.B.A. from
Boston University.

Raymond A. DeVita became a director of True
Temper in October 1998. Mr. DeVita served as President of
True Temper from 1994 to 1996 and Executive Vice President of
Black & Decker from 1989 to 1996. Mr. DeVita retired in
1996. Prior to 1989, Mr. DeVita was Executive Vice
President of Emhart. Mr. DeVita is also a director of Black
& Decker Health Care Management Corp. Mr. DeVita
received a B.S. and M.S. from Tufts University.

Patrick N.W. Turner became a director of True
Temper in April, 2000 in connection with the refinancing of True
Temper Corporation Notes. Mr. Turner is co-managing partner
of Canterbury Mezzanine Capital I and II where he has been
since July 1996. Mr. Turner was a director at Barclays
Mezzanine Group a part of Barclays Bank PLC from 1989 to 1995.
Currently, Mr. Turner is a director of one other private
company. Mr. Turner received an M.A. from Oxford University
in England and an M.B.A. from New York University.

Item 11.  Executive
Compensation

The following table sets forth information
concerning the annual and long-term compensation for services in
all capacities to True Temper for 2001 and 2000 of those persons
who served as (1) the Chief Executive

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Officer during 2001 and (2) the other four
most highly compensated executive officers of True Temper for
2001 (the Named Executive Officers):


Summary Compensation Table

|                            |                                 |      |      |                     |  |        |         |                 |  |                 |         |         |     |   |        |         |     |   |       |       | 
|--------------------------- | ------------------------------- | ---- | ---- | ------------------- |  | ------ | ------- | --------------- |  | --------------- | ------- | ------- | --- | - | ------ | ------- | --- | - | ----- | ----- | 
|                            |                                 |      |      |                     |  |       
|                            |                                 |      |      | Annual Compensation |  |       
|                            |                                 |      |      |                     |  |       
|                            |                                 |      |      |                     |  | Bonus  |         | Other Annual    |  | All Other      
|Name and Principal Position |                                 | Year |      | Salary              |  | Earned |         | Compensation(1) |  | Compensation(2)
|                            |                                 |      |      |                     |  |        |         |                 |  |                
|Scott C. Hennessy           |                                 |      | 2001 |                     |  | $      | 297,917 |                 |  | $               | 225,000 |         |     | $ | 27,762 |         |     | $ | 8,500 |      
|                            | Chief Executive Officer,        |      |      | 2000                |  |        | $       | 273,958         |  |                 | $       | 683,000 | (3) |   | $      | 101,236 | (4) |   | $     | 8,500 | 
|                            | President and Director          |      |      | 1999                |  |        | $       | 261,458         |  |                 | $       | 358,000 | (3) |   | $      | 27,995  |     |   | $     | 6,109 | 
|Fred H. Geyer               |                                 |      | 2001 |                     |  | $      | 151,167 |                 |  | $               | 75,000  |         |     | $ | 167    |         |     | $ | 8,500 |      
|                            | Vice President, Chief Financial |      |      | 2000                |  |        | $       | 141,167         |  |                 | $       | 165,000 |     |   | $      | 151     |     |   | $     | 8,500 | 
|                            | Officer and Treasurer           |      |      | 1999                |  |        | $       | 131,000         |  |                 | $       | 55,000  |     |   | $      | 136     |     |   | $     | 4,268 | 
|Adrian H. McCall            |                                 |      | 2001 |                     |  | $      | 140,583 |                 |  | $               | 50,000  |         |     | $ | 2,989  |         |     | $ | 8,500 |      
|                            | Vice President of International |      |      | 2000                |  |        | $       | 135,542         |  |                 | $       | 75,000  |     |   | $      | 143     |     |   | $     | 8,500 | 
|                            | Sales and Marketing             |      |      | 1999                |  |        | $       | 129,958         |  |                 | $       | 38,000  |     |   | $      | 182     |     |   | $     | 4,248 | 
|Gene Pierce                 |                                 |      | 2001 |                     |  | $      | 132,250 |                 |  | $               | 40,000  |         |     | $ | 899    |         |     | $ | 8,500 |      
|                            | Vice President of Operations    |      |      | 2000                |  |        | $       | 114,586         |  |                 | $       | 70,000  |     |   | $      | 689     |     |   | $     | 7,029 | 
|                            |                                 |      | 1999 |                     |  | $      | 93,907  |                 |  | $               | 26,000  |         |     | $ | 570    |         |     | $ | 1,500 |      
|Andrew W. York              |                                 |      | 2001 |                     |  | $      | 131,417 |                 |  | $               | 33,000  |         |     | $ | 123    |         |     | $ | 8,500 |      
|                            | Director and General Manager    |      |      | 2000                |  |        | $       | 124,583         |  |                 | $       | 50,000  |     |   | $      | 114     |     |   | $     | 7,129 | 
|                            | of Performance Tubing           |      |      | 1999                |  |        | $       | 75,000          |  |                 | $       | 18,000  |     |   | $      | 37,933  | (5) |   | $     | 900   | 




|    |                                                                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes certain life insurance benefits; and
	where applicable, country club dues and use of company car.                                                                                                                                                                                                                                                          
|   
|(2) | Includes company contributions under our 401(k)
	plan.                                                                                                                                                                                                                                                                                                              
|   
|(3) | Amount includes a $500,000 and $175,000
	performance bonus for 2000 and 1999 respectively and a service
	payment of $183,000 for each year. The two service payments for
	2000 and 1999 were issued pursuant to an agreement that was made
	with Mr. Hennessy in conjunction with the Recapitalization
	agreement between Black & Decker and True Temper Sports LLC.
|   
|(4) | Includes the dollar value of the difference
	between the price paid for common stock of True Temper
	Corporation and the fair market value of such stock at the time
	of purchase.                                                                                                                                                                                  
|   
|(5) | Amount includes moving and relocation benefits.                                                                                                                                                                                                                                                                                                                     

Pension Plan

True Temper Sports, Inc. sponsors a tax qualified
defined benefit pension plan. Only the hourly employees at the
Amory, Mississippi manufacturing plant, who are part of the
collective bargaining unit, are eligible to participate in the
plan. Benefits are calculated based primarily on years of
service, among other factors. As of December 31, 2001 none
of True Temper Corporations named executive officers were
eligible to participate in the plan.

Stock Option Plan

The Board of Directors has adopted a stock option
plan which provides for the grant to certain key employees
and/or directors of True Temper of stock options in True Temper
Corporation that are non-qualified options for federal income
tax purposes. The stock option plan will be administered by the
Compensation Committee of the Board of Directors. The
Compensation Committee will have broad powers under the stock
option plan, including exclusive authority to determine:



| |     |                                    
| | --- | -----------------------------------
| | (1) | who will receive awards;           
|
| | (2) | the type, size and terms of awards;

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| |     |                                          
| | --- | -----------------------------------------
| | (3) | the time when awards will be granted; and
|
| | (4) | vesting criteria, if any, of the awards. 

Option/ SAR Grants in Last Fiscal
Year

There were no options granted to Named Executive
Officers during 2001.

Compensation of Directors

True Temper will reimburse directors for any
out-of-pocket expenses incurred by them in connection with
services provided in such capacity. In addition, we may
compensate directors for services provided in such capacity.

Compensation Committee Report on Executive
Compensation

As members of the Compensation Committee it is
our duty to monitor the performance and compensation of
executive officers and other key employees, and to make
appropriate recommendations and reports to the Board of
Directors concerning matters of executive compensation.

The Company maintains a compensation program
designed to motivate, retain and attract management, with
incentives linked to financial performance and enhanced
shareholder value. The fundamental philosophy is to relate the
amount of compensation for an executive directly to his or her
contribution to the Companys success in achieving superior
performance objectives.

The Companys executive compensation program
consists of three components: 1) base salary;
2) potential for annual incentive compensation based on
Company performance; and, 3) the opportunity to earn
long-term stock-based incentives which are intended to encourage
achievement of superior long-term results and to align executive
officer interests with those of the shareholders. The base
salary element is developed based on the performance of the
individual executives with reference to industry, peer group and
national surveys, with the objective of having the
Companys executive officers receive a level of base salary
similar to the average base salary of individuals at similarly
sized companies, performing comparable duties.

The annual incentive compensation element is
based on the Companys attainment of certain levels of
profitability. The long-term stock-based element is developed by
reference to competitive practices and trends of other companies
which use stock options as a component of executive
compensation. Long-term stock-based incentives are to
incentivize executive officers to increase shareholder value.
Accordingly, the Committee has taken into account the amount and
value of options held by each of the executive officers when
considering new grants to assure that deserving executives have
an equity participation in the Company. In determining the stock
option grants for fiscal 2001, the Committee considered the
current stock holdings of each individual, their
responsibilities and historical and anticipated future
contributions to True Tempers performance.

Because of the scope of his responsibilities as
Chief Executive Officer and President, and given the equity
stake he has in the Company, the Compensation Committee
separately considers the compensation of Mr. Hennessy. His
salary, like that of the other officers, is determined by
reference to published compensation surveys, and his salary
level is in line with such published salary levels for
comparable positions of responsibility. The Committee believes a
portion of the total annual compensation of Mr. Hennessy
should be directly tied to the Companys performance.
Accordingly, Mr. Hennessy also earns a cash bonus based on
the True Tempers operating performance during the current
fiscal year.

The Compensation Committee is of the opinion that
the compensation levels for the Named Executive Officers are
reasonable when compared to similar positions of responsibility
and scope in similar industries and

52



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that an appropriate amount of total compensation
is based on the performance of the Company, and therefore
provides sufficient incentive for these individuals to attain
improved results in the future.




| |                       
| | ----------------------
| | COMPENSATION COMMITTEE
|
| | Raymond A. DeVita     
| | Scott C. Hennessy     
| | Robert A. Knox        

Item 12.  Security Ownership of
Certain Beneficial Owners and Management

All of the outstanding shares of our capital
stock are owned by True Temper Corporation. The following table
sets forth information with respect to the beneficial ownership
of True Temper Corporations capital stock as of
April 1, 2002 by:



| |     |                                                                                                           
| | --- | ----------------------------------------------------------------------------------------------------------
| | (1) | all stockholders of True Temper Corporation that
	own more than 5% of any class of such voting securities,
|
| | (2) | each director and named executive officer, and                                                            
|
| | (3) | all directors and executive officers as a group.                                                          

|                                                                |                                                                                                  |           |            |           |  |                 |           |               |  |                |       |   |  |  |      |   |  |  |      |   | 
|--------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | --------- | ---------- | --------- |  | --------------- | --------- | ------------- |  | -------------- | ----- | - |  |  | ---- | - |  |  | ---- | - | 
|                                                                |                                                                                                  |           |            |           |  |                 |           | Percentage of |  |               
|                                                                |                                                                                                  | Number of |            | Number of |  | Percentage of   |           | Outstanding   |  | Percentage of 
|                                                                |                                                                                                  | Preferred |            | Common    |  | Outstanding     |           | Common        |  | Voting Capital
|Name of Beneficial Owner(1)                                     |                                                                                                  | Shares    |            | Shares    |  | Preferred Stock |           | Stock         |  | Stock         
|                                                                |                                                                                                  |           |            |           |  |                 |           |               |  |               
|True Temper Sports LLC(2)                                       |                                                                                                  |           | 11,750,000 |           |  |                 | 8,192,163 |               |  |                | 100.0 | % |  |  | 83.4 | % |  |  | 83.4 | %
|                                                                | c/o Cornerstone Equity Investors, L.L.C.
	717 Fifth Avenue  Suite 1100
	New York, New York 10022 |           |            |           |  |                 |           |               |  |                |       |   |  |  |      |   |  |  |      |   | 
|Scott C. Hennessy                                               |                                                                                                  |           |           |           |  |                 | 823,005   |               |  |                |      |   |  |  | 8.4  | % |  |  | 8.4  | %
|Fred H. Geyer                                                   |                                                                                                  |           |           |           |  |                 | 87,657    |               |  |                |      |   |  |  | *    |   |  |  | *    |  
|Adrian H. McCall                                                |                                                                                                  |           |           |           |  |                 | 62,538    |               |  |                |      |   |  |  | *    |   |  |  | *    |  
|Gene Pierce                                                     |                                                                                                  |           |           |           |  |                 | 13,125    |               |  |                |      |   |  |  | *    |   |  |  | *    |  
|Andrew W. York                                                  |                                                                                                  |           |           |           |  |                 | 14,375    |               |  |                |      |   |  |  | *    |   |  |  | *    |  
|Raymond A. DeVita                                               |                                                                                                  |           |           |           |  |                 | 10,542    |               |  |                |      |   |  |  | *    |   |  |  | *    |  
|All directors and executive officers as a group
	(9 persons)(3) |                                                                                                  |           |           |           |  |                 | 1,098,175 |               |  |                |      |   |  |  | 11.2 | % |  |  | 11.2 | %




|  |              
|- | -------------
|* | Less than 1%.



|    |                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Except as otherwise indicated, the address for
	all persons shown on this table is c/o True Temper Sports, Inc.,
	8275 Tournament Drive, Suite 200, Memphis, TN 38125.                                                                                       
|   
|(2) | Membership interests in True Temper Sports, LLC
	are held by Cornerstone Equity Investors IV, L.P. (73.9%), GS
	Private Equity Partners, L.P. (17.2%), GS Private Equity
	Partners Offshore, L.P. (8.3%) and other investors (0.5%).                         
|   
|(3) | Includes issuance of management incentive shares.
	Excludes stock held by True Temper Sports LLC, an affiliate of
	Cornerstone Equity Investors IV, LP, for which the individual
	directors who are affiliates of Cornerstone disclaim beneficial
	ownership.

Item 13.  Certain Relationships
and Related Transactions

Recapitalization Agreement

In accordance with the terms of the
recapitalization agreement, Black & Decker has indemnified
True Temper Sports, LLC, the equity investor, against any and
all damages resulting from any misrepresentation or

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breach of warranty of Black & Decker or of
True Temper Corporation contained in the recapitalization
agreement, a claim which is typically made the earlier of
18 months following the closing date or the date on which
audited financial statements for the 1999 calendar year are
delivered. The indemnification obligations of Black & Decker
under the recapitalization agreement are generally subject to a
$5.0 million basket amount and limited to an aggregate payment
of no more than 25% of the adjusted purchase price received by
Black & Decker pursuant to the recapitalization. Black &
Decker will indemnify True Temper for 50% of all environmental
liability up to an aggregate amount of $10.0 million and 80% of
any environmental liability in excess of $10.0 million.


In addition, Black & Decker has agreed for a
period of five years after the closing date not to compete with
True Temper in the business of the company as conducted as of
the closing date.

As provided in the recapitalization agreement,
True Temper Corporation may pay contingent amounts to Black
& Decker. The amount of such payments, if any, will be equal
to 25% of the EBIT contribution derived from True Temper
Corporations sales to Thiokol. These sales will be in
accordance with the Thiokol contract which is defined in the
recapitalization agreement. Such payments will be made annually
during the initial term of the Thiokol contract based on the
EBIT contribution derived in each such year.

Stockholders Agreement

Upon the consummation of the recapitalization,
True Temper Corporation and all of its stockholders, including
True Temper Sports, LLC and Black & Decker, entered into a
stockholders agreement. The stockholders agreement:



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | requires that each of the parties vote all of
	their voting securities of True Temper Corporation and take all
	other necessary or desirable actions to cause the size of the
	board of directors of True Temper Corporation to be established
	at the number of members determined by True Temper Sports, LLC
	and to cause designees of True Temper Sports, LLC representing a
	majority of the board of directors to be elected to the board of
	directors of True Temper Corporation;
|
| | (2) | grants True Temper Corporation and True Temper
	Sports, LLC a right of first refusal on any proposed transfer of
	shares of capital stock of True Temper Corporation held by Black
	& Decker and any of the other stockholders;                                                                                                                                                                                                                                                          
|
| | (3) | grants tag-along rights on certain transfers of
	shares of capital stock of True Temper Corporation;                                                                                                                                                                                                                                                                                                                                                                                     
|
| | (4) | requires the stockholders to consent to a sale of
	True Temper Corporation to an independent third party if such
	sale is approved by certain holders of the then outstanding
	shares of the companys voting common stock; and                                                                                                                                                                                                                                                          
|
| | (5) | except in certain instances, prohibits Black
	& Decker from transferring any shares of capital stock of
	True Temper Corporation for certain periods following the
	consummation of the recapitalization. Certain of the foregoing
	provisions of the stockholders agreement will terminate upon the
	consummation of an initial public offering, a qualified public
	offering or an approved sale.                                                                                      

Equity Registration Rights Agreement

Upon the consummation of the recapitalization,
True Temper Corporation and all of its stockholders, including
True Temper Sports, LLC and Black & Decker, entered into the
equity registration rights agreement. Under the equity
registration rights agreement, the holders of a majority of the
True Temper Corporation registrable securities and/or its
affiliates have the right to require True Temper Corporation to
register any or all of their shares of common stock of True
Temper Corporation under the Securities Act at the
companys expense. In addition, all holders of registrable
securities are entitled to request the inclusion of any shares
of common stock of True Temper Corporation subject to the equity
registration rights agreement in any registration statement
filed by True Temper Corporation at its expense whenever the
company proposes to register any of its common stock under the
Securities Act. In connection with all such registrations, True

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Temper Corporation has agreed to indemnify all
holders of registrable securities against those liabilities
described in the stockholders agreement, including liabilities
under the Securities Act.


Management Services Agreement

In connection with the recapitalization, True
Temper entered into a management services agreement with
Cornerstone. In accordance with this agreement, Cornerstone has
agreed to provide:



| |     |                                                                                                
| | --- | -----------------------------------------------------------------------------------------------
| | (1) | general management services;                                                                   
|
| | (2) | assistance with the identification, negotiation
	and analysis of acquisitions and dispositions;
|
| | (3) | assistance with the negotiation and analysis of
	financial alternatives; and                   
|
| | (4) | other services agreed upon by True Temper and
	Cornerstone.                                    

In exchange for such services, Cornerstone or its
nominee receives:



| |     |                                                                                                                                                                                                                                         
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | an annual advisory fee of $0.5 million payable
	quarterly, plus reasonable out-of-pocket expenses;                                                                                                                                      
|
| | (2) | a transaction fee in an amount equal to 1.0% of
	the aggregate transaction value in connection with the
	consummation of any material acquisition, divestiture, financing
	or refinancing by True Temper or any of its subsidiaries; and
|
| | (3) | a one-time transaction fee of $3.0 million upon
	the consummation of the recapitalization.                                                                                                                                              

The management services agreement has an initial
term of five years, subject to automatic one-year extensions
unless we or Cornerstone provide written notice of termination.
The annual advisory fee of $0.5 million is an obligation of ours
and is also contractually subordinated to the Notes and the
senior credit facilities.

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##### Table of Contents



PART IV

Item 14.  Exhibits, Financial
Statements Schedule, and Reports on Form 8-K

(a) Documents filed as part of this report:



| |                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. Financial Statements. The
	following financial statements of True Temper Sports, Inc. have
	been included in part II, item 8 of this report on
	Form 10-K.

Independent
Auditors Report

Statements
of Operations for the three years ended December 31, 2001


Balance
Sheets at December 31, 2001 and 2000


Statements
of Changes in Stockholders Equity for the three years
ended December 31, 2001


Statements
of Cash Flows for the three years ended December 31, 2001


Notes
to Financial Statements




| |                                 
| | --------------------------------
| | 2. Financial Statement Schedule.

SCHEDULE II  VALUATION AND
QUALIFYING ACCOUNTS

|                                |                              |                      |  |            |  |            |  |               |  |            |  |   |  |  |  |      |      |  |  |       | 
|------------------------------- | ---------------------------- | -------------------- |  | ---------- |  | ---------- |  | ------------- |  | ---------- |  | - |  |  |  | ---- | ---- |  |  | ----- | 
|                                |                              |                      |  |            |  |            |  |              
|                                |                              |                      |  | Additions  |  |            |  |              
|                                |                              |                      |  |            |  |            |  |              
|                                |                              | Balance at           |  | Charged to |  | Charged to |  |               |  | Balance at
|                                |                              | Beginning            |  | Costs and  |  | Other      |  |               |  | Ended     
|Description                     |                              | of Period            |  | Expenses   |  | Accounts   |  | Deductions(1) |  | of Period 
|                                |                              |                      |  |            |  |            |  |               |  |           
|                                |                              |                     
|                                |                              | Dollars in thousands
|                                |                              | (debit)/credit      
|ALLOWANCE FOR DOUBTFUL ACCOUNTS |                              |                      |  |            |  |            |  |               |  |            |  |  
|                                | Year Ended December 31, 1999 |                      |  | 592        |  |            |  | 173           |  |            |  |  |  |  |  | (266 | )    |  |  | 499   | 
|                                | Year Ended December 31, 2000 |                      |  | 499        |  |            |  | 1,124         |  |            |  |  |  |  |  | (190 | )    |  |  | 1,433 | 
|                                | Year Ended December 31, 2001 |                      |  | 1,433      |  |            |  | 87            |  |            |  |  |  |  |  | (981 | )    |  |  | 539   | 
|RESTRUCTURING RESERVES          |                              |                      |  |            |  |            |  |               |  |            |  |   |  |  |  |      |      |  |  |      
|                                | Year Ended December 31, 1999 |                      |  | 538        |  |            |  |              |  |            |  |  |  |  |  | (378 | )    |  |  | 160   | 
|                                | Year Ended December 31, 2000 |                      |  | 160        |  |            |  |              |  |            |  |  |  |  |  | (160 | )(2) |  |  |      | 
|                                | Year Ended December 31, 2001 |                      |  |           |  |            |  |              |  |            |  |  |  |  |  |     |      |  |  |      | 




| |     |                                                                                                                                                                                                                        
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Deductions represent (i) uncollectible
	accounts charged against the allowance for doubtful accounts and
	(ii) actual costs incurred for restructuring activities.                                                     
|
| | (2) | Represents (i) $42 of actual costs incurred
	for restructuring activities and (ii) the remaining balance
	of the Seneca plant restructuring reserve of $118 was netted
	against impairment charge on long-lived assets.

All other schedules are omitted because they are
not applicable or the required information is shown in the
financial statements or notes thereto.



| |             
| | ------------
| | 3. Exhibits.

See the Index to Exhibits.

(b) Reports on Form 8-K.



| |                                                                               
| | ------------------------------------------------------------------------------
| | No reports on Form 8-K were filed during the
	quarter ended December 31, 2001.

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##### Table of Contents



SIGNATURES

Pursuant to the requirements of section 13
or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Dated: April 1, 2002



| |                         
| | ------------------------
| | True Temper Sports, Inc.



| |     |                      
| | --- | ---------------------
| | By: | /s/ SCOTT C. HENNESSY

| |                        
| | -----------------------
| |                        
| | Name: Scott C. Hennessy

| |        |                                         
| | ------ | ----------------------------------------
| | Title: | President and 
	 Chief Executive Officer



| |     |                  
| | --- | -----------------
| | By: | /s/ FRED H. GEYER

| |                    
| | -------------------
| |                    
| | Name: Fred H. Geyer

| |        |                                                            
| | ------ | -----------------------------------------------------------
| | Title: | Vice President, 
	 Chief Financial Officer 
	 and Treasurer

Pursuant to the requirements of section 13
or 15(d) of the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the
registrant and in the capacities indicated, on April 1,
2002.



| |     |                   
| | --- | ------------------
| | By: | /s/ ROBERT A. KNOX

| |                     
| | --------------------
| |                     
| | Name: Robert A. Knox
| | Title:   Director   



| |     |               
| | --- | --------------
| | By: | /s/ MARK ROSSI

| |                  
| | -----------------
| |                  
| | Name: Mark Rossi 
| | Title:   Director



| |     |                        
| | --- | -----------------------
| | By: | /s/ PATRICK N.W. TURNER

| |                          
| | -------------------------
| |                          
| | Name: Patrick N.W. Turner
| | Title:   Director        



| |     |                      
| | --- | ---------------------
| | By: | /s/ RAYMOND A. DEVITA

| |                        
| | -----------------------
| |                        
| | Name: Raymond A. DeVita
| | Title:   Director      

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##### Table of Contents



INDEX TO EXHIBITS

|        |       |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | ----- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       | 
|        |       | 
|        | 2.1   |  |  | Reorganization, Recapitalization and Stock
	Purchase Agreement dated as of June 29, 1998 by and between
	The Black & Decker Corporation, True Temper Sports, Inc. and
	TTSI LLC (Recapitalization Agreement) (filed as
	exhibit 2.1 to the Companys Registration Statement on
	Form S-4 (No. 333-72343), as filed with the Securities
	and Exchange Commission (the SEC) on
	February 12, 1999 (the Form S-4).*
|        | 2.2   |  |  | Amendment No. 1 to Recapitalization
	Agreement dated August 1, 1998 (filed as exhibit 2.2 to
	Form S-4).*                                                                                                                                                                                                                                                                                                             
|        | 2.3   |  |  | Amendment No. 2 to Recapitalization
	Agreement dated September 30, 1998 (filed as exhibit 2.3 to
	Form S-4).*                                                                                                                                                                                                                                                                                                         
|        | 2.4   |  |  | Assignment and Assumption Agreement by and
	between True Temper Corporation (TTC) and the
	Company dated September 30, 1998 (filed as exhibit 2.4 to
	Form S-4).*                                                                                                                                                                                                                                                   
|        | 3.1   |  |  | Amended and Restated Certificate of Incorporation
	of the Company, dated September 29, 1988 (filed as
	Exhibit 3.1 to Form S-4).*                                                                                                                                                                                                                                                                                     
|        | 3.2   |  |  | By-laws of the Company (filed as Exhibit 3.2
	to Form S-4).*                                                                                                                                                                                                                                                                                                                                                          
|        | 4.1   |  |  | Indenture dated November 23, 1998 between
	the Company United States Trust of New York (filed as
	Exhibit 4.1 to Form S-4).*                                                                                                                                                                                                                                                                                          
|        | 4.2   |  |  | Purchase Agreement dated November 18, 1998
	between the Company and Donaldson, Lufkin and Jenrette (filed as
	Exhibit 4.2 to Form S-4).*                                                                                                                                                                                                                                                                              
|        | 4.3   |  |  | Registration Rights Agreement dated as of
	November 23, 1998 between the Company and Donaldson, Lufkin
	and Jenrette (filed as Exhibit 4.3 to Form S-4).*                                                                                                                                                                                                                                                             
|        | 10.1  |  |  | Management Services Agreement dated as of
	September 30, 1998 between the Company and Cornerstone
	Equity Investors, LLC (Management Services
	Agreement) (filed as Exhibit 10.1 to Form S-4).*                                                                                                                                                                                                                     
|        | 10.2  |  |  | Amendment to Management Services Agreement dated
	November 23, 1998 (filed as Exhibit 10.2 to
	Form S-4).*                                                                                                                                                                                                                                                                                                            
|        | 10.3  |  |  | Credit Agreement dated as of September 30,
	1998 among the Company, various financial institutions, DLJ
	Capital Funding, Inc. and The First National Bank of Chicago
	(filed as Exhibit 10.3 to Form S-4).*                                                                                                                                                                                                          
|        | 10.4  |  |  | Securities Purchase Agreement dated as of
	September 30, 1998 among TTC and the Purchase Party thereto
	(filed as Exhibit 10.4 to Form S-4).*                                                                                                                                                                                                                                                                         
|        | 10.5  |  |  | Amendment No. 1 to Credit Agreement dated
	June 11, 1999 (filed as Exhibit 10.5 to the
	Companys 1999 Annual Report on Form 10-K, as filed
	with the SEC on March 30, 2000).*                                                                                                                                                                                                                                        
|        | 10.6  |  |  | True Temper Corporation 1998 Stock Option Plan
	(filed as Exhibit 10.6 to the Companys 1999 Annual
	Report on Form 10-K, as filed with the SEC on
	March 30, 2000).*                                                                                                                                                                                                                                                 
|        | 10.7  |  |  | Shareholders Agreement dated as of
	September 30, 1998 (filed as Exhibit 10.7 to the
	Companys 1999 Annual Report on Form 10-K, as filed
	with the SEC on March 30, 2000).*                                                                                                                                                                                                                                         
|        | 10.8  |  |  | Amended and Restated Management Services
	Agreement dated March 27, 2000 (filed as Exhibit 10.8
	to the Companys Quarterly Report on Form 10-Q for the
	quarterly period ended April 2, 2000, as filed with the SEC
	on May 16, 2000).*                                                                                                                                                                              
|        | 10.9  |  |  | Amendment No. 2 to Credit Agreement dated
	November 17, 2000 (filed as Exhibit 10.9 to the
	Companys Annual Report on Form 10-K, as filed with
	the SEC on March 28, 2001).*                                                                                                                                                                                                                                         
|        | 10.10 |  |  | Amendment No. 3 to Credit Agreement dated
	December 4, 2001.                                                                                                                                                                                                                                                                                                                                                          
|        | 12.1  |  |  | Computation of Ratio of Earnings To Fixed Charges.                                                                                                                                                                                                                                                                                                                                                                    




|  |                          
|- | -------------------------
|* | Incorporated by reference

58