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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM 10-K

ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Commission file number 333-72343




TRUE TEMPER SPORTS, INC.(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

52-2112620(I.R.S. Employer
Identification Number)8275 Tournament Drive Suite 200
Memphis, Tennessee(Address of Principal Executive Offices)

38125(Zip Code)


Telephone: (901) 746-2000(Registrant's telephone number, including area code)



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 if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
o Yes    ý No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
ý Yes    o No

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 ý    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and
post such files).    Yes ý    No o

Indicate by check mark if disclosure of 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.    ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o

Accelerated filer o

Non-accelerated filer ý (Do not check if a smaller reporting company)

Smaller reporting company o


Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
o Yes    ý No

As of June 27, 2008 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 June 27, 2008.

Documents Incorporated by Reference

None.



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TRUE TEMPER SPORTS, INC.        ANNUAL REPORT ON FORM 10-K        For the Fiscal Year Ended December 31, 2008    
   INDEX



PagePART IItem 1

Business

3Item 1A

Risk Factors

11Item 1B

Unresolved Staff Comments

19Item 2

Properties

19Item 3

Legal Proceedings

19Item 4

Submission of Matters to a Vote of Security Holders

19PART IIItem 5

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

20Item 6

Selected Financial Data

21Item 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

23Item 7A

Quantitative and Qualitative Disclosures About Market Risk

37Item 8

Consolidated Financial Statements and Supplementary Data

40Item 9

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

70Item 9A

Controls and Procedures

70Item 9B

Other Information

71PART IIIItem 10

Directors, Executive Officers and Corporate Governance

72Item 11

Executive Compensation

75Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

82Item 13

Certain Relationships and Related Transactions and Director Independence

82Item 14

Principal Accountants Fees and Services

84PART IVItem 15

Exhibits and Financial Statements Schedule

85SIGNATURES

86INDEX TO EXHIBITS

88


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PART I

Item 1.Business

Purchase Agreement for True Temper Corporation

On January 30, 2004, TTS Holdings LLC, a new company formed by Gilbert Global Equity Partners, L.P. and its
affiliated funds ("Gilbert Global"), entered into a stock purchase agreement with True Temper Sports, Inc.'s ("True Temper" or the "Company") direct parent company, True Temper Corporation
("TTC"), pursuant to which TTS Holdings LLC and certain of the Company's senior management purchased all of the outstanding shares of TTC ("Gilbert Global Acquisition"). The Gilbert Global
Acquisition was finalized and closed on March 15, 2004.

General

We are the world's leading designer, manufacturer and marketer of golf shafts. Since the 1930s, we have manufactured golf shafts under
the widely recognizedTrue Temperbrand. In 2008, approximately 70% of our revenue was generated through the sale of steel golf shafts. We believe that
our share of the worldwide steel golf shaft market was approximately 70% to 80% in 2008 and that our share is several times greater than that of the next largest market participant. We are a leading
supplier of premium steel shafts to the top golf club original equipment manufacturers and distributors, including Adams, Callaway, Cleveland, Golfsmith, Golf Works, Mizuno, Nike, Ping, TaylorMade,
Titleist and Wilson. From 1988 to 2008, our steel shafts were played by all of the winners of the PGA's 84 major championships. We are also one of the world's largest manufacturers of premium graphite
(carbon fiber based composites) golf shafts, with an estimated share of approximately 10% of this highly fragmented market. In addition to golf shafts, through our Performance Sports business, we also
design, manufacture and market products such as steel and titanium alloy bicycle frames, composite bicycle components, such as forks and handlebars, and graphite hockey sticks.

Our
golf shaft products include numerous proprietary models (with our customers' brand name, label or trademark affixed to the shaft) as well as a number of branded models (with the True Temper, Royal Precision,
Project XorGrafalloybrand name, label or trademark affixed to
the shaft), including a full range of premium and commercial grade steel and graphite shafts. We design, manufacture and market a number of steel shaft product lines,
including:



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We
also design, manufacture and market several lines of premium graphite shafts under theGrafalloybrand name. Our graphite shafts have a
strong presence at the professional level and have been played by winners on each of the professional tours, including the PGA, EPGA, LPGA, Champions and Nationwide Tours. Our most popular
graphite shaft brands include:



We
believe that we are the only golf shaft company in the world which is capable, within its own facilities, of manufacturing both steel and graphite golf shafts in large volumes. This
unique competitive advantage allowed us to design, develop, manufacture and sell the first commercially viable multi-material golf shaft combining both steel and graphite into one shaft. Our BiMatrx RXiandBiMatrx Rocketshafts utilize a patented multi-material technology to combine the
torsional stability and consistent performance benefits of steel with the light-weight flexible benefits of graphite into one shaft.

In
addition, this expertise in various materials was instrumental in our ability to develop the next generation of golf shafts using patented Nanofuse® material. The first
brand launch using this revolutionary material is theGrafalloy Epicshaft which has been proven to not only improve distance but also to significantly
reduce dispersion.

Through
our Performance Sports business, we have utilized the capabilities developed in our golf shaft business to pursue other branded recreational sports equipment markets that have
similar competitive dynamics, manufacturing requirements, and raw material applications. We focus on the premium segment of the bicycle market where innovation, quality and branding are highly valued
by the consumer, and products are often customized to suit the individual consumer's specific requirements. Our value-added premium bicycle component products generally have higher margins than
component parts made for bicycles sold in mass channel retail stores. In the hockey components market, we focus on composite shafts and full sticks used in a variety of original equipment
manufacturers' one-piece and composite sticks.

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The Golf Club Shaft Industry

The golf market for hard goods is estimated to be a $5.0 to $7.0 billion industry, with golf clubs making up the largest portion
at over 50%. Spending in the golf equipment industry is highly concentrated among avid golfers (golfers that play more than 25 rounds of golf per year) who account for nearly 60% of the total spending
on golf equipment despite only accounting for approximately one quarter of the golfing population.

There
are three basic components needed to manufacture a golf club: the shaft, the club head and the grip. The shaft is critical to the performance of a golf club as it is vital in
controlling the consistency and distance of a golf shot. While branded premium shafts are important to the performance and marketing of golf clubs, these shafts represent a relatively small portion of
the overall cost of a golf club, typically under 10% of the retail sales price.

The
golf shaft market is comprised primarily of steel and graphite shafts. We believe that in 2008, the two largest participants in the worldwide steel shaft market comprised an
aggregate market share of approximately 90%. We believe that this concentration in the steel shaft market is due to the high barriers to entry created by the technical expertise and capital investment
necessary to participate in the market as well as the customized manufacturing process required for the production of premium steel shafts. The production of graphite shafts is less capital intensive
and requires less investment than steel shaft manufacturing. The graphite shaft industry is fragmented, with the top six market participants representing at least 70% of the worldwide market in 2008.
We believe that the relatively lower barriers to entry account for this fragmentation.

We
believe that from 1991 to 1995, graphite shafts gained share in the overall shaft market due to the light-weight, vibration-damping characteristics of graphite shafts, particularly
for longer-shafted, larger-headed woods. Since 1995, however, the development of vibration damping materials for steel shafts such as ourSensiCoreinsert, along with the introduction of lighter weight steel alloys in products such as ourDynamic Gold SLand GS75shafts, have resulted in steel shafts
that have the vibration damping and light-weight characteristics of graphite shafts together with the
consistent performance and distance control qualities of steel shafts. We believe that these design improvements contributed to the growth in share of steel shafts in the overall shaft market from
approximately 50% in 1995 to approximately 55% to 60% in 2008.

Products

We design, manufacture and market steel and graphite golf shafts, as well as a variety of high strength, tight tolerance components for
the hockey, bicycle and other recreational
sports markets. Our proprietary golf shafts, which accounted for approximately 25% of our net sales in 2008, are custom designed, and frequently co-branded in partnership with our
customers, to accommodate specific golf club head designs. As an example, our proprietary models include co-branded products such as Callaway's Uniflex, Nike'sSpeedstepand Ping'sAWT. Our branded
products with theTrue Temper, Royal Precision, Project XorGrafalloynames and designs are
typically sold to golf club original equipment 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 Shafts.We manufacture a wide range of steel golf shaft lines with unique design features and performance
characteristics. Our steel golf
shafts can be divided into the following two major product categories:



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Premium
steel shafts, such as ourDynamic Gold, Rifle, Project X, Dynamic Gold SLandGS75product lines, are high performance products with tighter design tolerances and quality specifications that sell for higher average selling prices and generate higher profit margins than commercial
grade steel shafts. Our commercial grade steel shafts are manufactured to a different specification and sell for a lower average selling price to original equipment manufacturers who produce and sell
opening price point golf club sets, typically to entry-level players who purchase their products through mass channel retail stores.

Graphite Golf Shafts.We manufacture a wide range of graphite golf shaft lines, which are offered in a variety of weights,
torques and flexes. Our
graphite golf shafts are currently being played by numerous touring professionals on the PGA, EPGA, LPGA, Champions and Nationwide Tours. Our graphite shafts are sold under the Grafalloybrand
name. Similar to steel, graphite shafts can be placed in several categories of performance, quality and price. Historically, most of the
graphite golf shafts that we produced were higher quality and higher priced premium grade shafts that are sold to golf
equipment distributors, and to original equipment manufacturers for their custom product offerings. Beginning in 2004, with the establishment of our lower cost China manufacturing facility, we also
began producing and selling certain lower price point graphite shafts. These products are currently used primarily as stock offerings in original equipment manufacturer iron programs.

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

We
used similar patented technology to introduce theTrue Temperbranded product known as BiMatrxin January 2001. TheBiMatrxshaft consists of a graphite shaft with a steel tip section that
was designed for use in driver and fairway wood applications.

Golf Shafts with New Materials.In early 2007, we introduced driver and fairway wood shafts constructed of patented
Nanofuse® material,
which utilizes today's most advanced nanotechnology to produce a stronger, lighter shaft which incorporates the benefits of both graphite and steel.

Performance Sports Products.We also manufacture and sell a wide variety of high performance components for the bicycle, hockey
and other
recreational sports markets. In 2008, we sold our performance sports products to a broad range of original equipment manufacturers and distributors.

For
financial information related to each of our business segments, see Note 14 to the consolidated financial statements located elsewhere in this annual report.

Customers

We maintain long-standing relationships with a highly diversified customer base. We are a leading supplier of shafts to the
top golf club original equipment manufacturers and distributors, including Adams, Callaway, Cleveland, Golfsmith, Golf Works, Mizuno, Nike, Ping, TaylorMade, Titleist and Wilson. In addition, we are
partnered with several of the leading
component suppliers in the hockey market, such as Reebok, Balistik and Sherwood. In 2008, we had in excess of 500 customers, including over 400 manufacturers/retailers and over 50 distributors.

For
many years, we have maintained a broad and diversified customer base in the golf equipment market. In 2008, our top ten customers represented between 70% to 75% of our net sales, and
our top customer accounted for approximately 18% of our net sales.

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 in truly partnering with our customer base. We have developed and co-branded

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many
proprietary shafts with our customers. As an example, we produce proprietary customized steel shafts for Callaway, under theUniflexbrand; for
Ping, under theAWTbrand; and for Nike, using theSpeedstepbrand.

Competition

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



We
believe that our share of the worldwide steel golf shaft market was approximately 70% to 80% in 2008 and that our share is several times greater than the share of the next largest
market participant. We believe that we compete primarily with three other steel golf shaft manufacturers: Far East Machinery Co., Ltd., located in Taiwan which produces primarily
commercial grade golf shafts, Nippon Shaft Co., Ltd., a Japanese manufacturer of primarily premium golf shafts, and Summit Sports World Wide Co., Ltd. which produces
limited volumes of commercial grade golf shafts.

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 in excess of 25
graphite shaft manufacturers worldwide. A few of these companies reside in North America and many are located in Asia. We do not believe that there are any graphite suppliers currently with a market
share in graphite that is comparable to the market share we have in steel. We believe we are one of the six largest producers of branded premium grade graphite shafts in the world and we estimate that
our market share is approximately 10%. Our major competitors in the premium grade branded graphite shaft market include Aldila, Inc., United Sports Technologies, Inc., Graphite Design
International, Fujikura Composites and Mitsubishi.

We
believe that we are the only golf shaft company in the world which is capable, within its own facilities, of manufacturing both steel and graphite golf shafts in large volumes.

Design & Development

We design and develop products for both proprietary/co-branded market applications and for theTrue
Temper,Royal Precision, Project XandGrafalloybranded product range.

The
larger golf club manufacturers often request exclusively designed proprietary or co-branded steel and graphite golf shafts for their club systems, which require golf
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 direct result of our efforts combined with those of our customers to develop an exclusive shaft specifically designed for that customer's
clubs. We use a computer aided design analysis system 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.

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In
addition to our proprietary/co-branded products, we are very active in designing and developing new products under our various 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, advanced composites of graphite and glass fibers with thermosetting epoxy
resin systems, and today's most advanced nano materials.

Using
state of the art technology, we generate a design which is then analyzed by computer for stiffness and strength properties. Our research and development efforts focus on innovative
technology and new materials as an essential precursor to successful new product development. Our design research focuses on improvements in shaft aesthetics since cosmetic appearance has become
increasingly important to customers. To supplement our design and development we employ extensive testing that includes laboratory durability tests, robotic performance testing involving extensive
ball flight/trajectory analysis and individual player evaluation.

In
2003, we opened a 14 acre test facility that enables us to better evaluate our products. We have our own private driving range where we perform qualitative player testing and
quantitative mechanical testing with a Miya 5 swing robot. Our facility utilizes the newest, state of the art, TrackMan doppler radar system to track all aspects of ball flight and trajectory. We
believe that we are the only shaft manufacturer with our own driving range that is capable of this type of product testing.

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, 2008, 2007 and 2006 were approximately $2.1 million, $1.8 million and $1.9 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 manufacture products both on-demand as well as for inventory stocking programs. We believe that our investment in capital equipment and
personnel training has helped 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 golf 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. Some of the shafts are straightened by machines designed and built by us. 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.

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 technique. The flag-wrapping method 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

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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 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 a number of
vendors, nickel
crowns and plating chemicals, Sensicore inserts and various sundry supplies, boxes and labels. Graphite shafts are produced with a variety of graphite fiber materials that we source from several
different vendors. In addition, graphite shafts are finished with a wide variety of paints, inks and heat transfer labels. 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.

In
addition to the raw materials discussed above, we also use a substantial amount of natural gas and electricity in our manufacturing processes. Suppliers for these types of energy
sources are limited, and prices are subject to general market and industry conditions.

Marketing and 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 from original equipment manufacturers 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 custom shop on wheels, visiting numerous professional tour events during 2008. Typically, the van is located near the practice tee and lends technical support to the tour professionals
while simultaneously promoting theTrue Temper, Royal Precision, Project XandGrafalloybrands
to representatives of original equipment manufacturers. In addition, we provide technical support to the players on the Champions, Nationwide and LPGA Tours as well as the European and Japanese
PGA Tours.

Although
we do not pay any professional golfer to endorse or play our shafts, 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. Due to our strong reputation and service, we estimate that over 90% of professional golfers around the world use our products in
competition. We clearly recognize the influence that a professional golfer, or very low handicap golfer, can have on consumer preferences, so we also engage in special promotional efforts with local
club and teaching professionals, and we contribute shafts to college athletic programs, to encourage the use of our product so they provide
positive feedback on theTrue Temper, Royal Precision, Project XandGrafalloybrands to their
constituents.

Much
of our advertising and promotional spending is dedicated to print and television advertising, including cooperative advertising with our customers. Additional advertising and
promotional spending is allocated to promotional events such as trade shows, consumer golf shows, PGA Tour activities and retail golf shop advertising displays.

Advertising
and promotional costs for the years ended December 31, 2008, 2007 and 2006 were approximately $2.5 million, $3.2 million and $3.7 million,
respectively.

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Distribution & Sales

We primarily sell our shafts to original equipment manufacturers, retailers and distributors. Typically, distributors resell our
products to custom club assemblers, pro shops and individuals. Sales to golf club manufacturers/retailers accounted for approximately 85% of our net golf shaft sales in 2008, and sales to distributors
represented approximately 15% of our 2008 net golf shaft sales.

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/logistics group and a team of design professionals that provides field support to our sales representatives. We believe that our international market presence, which
comprised approximately 41% of our total 2008 net sales, provides an opportunity for future growth. We market our products in Japan, Europe, and Asia and maintain a distribution operation in each
region. Financial information by geographic segment is contained in Note 14 to the consolidated financial statements located elsewhere in this annual report.

Employees

As of December 31, 2008, we had 692 full-time employees, including 15 in sales and marketing, 35 in research,
development and manufacturing engineering, approximately 600 in production and the balance in administrative and support roles. In addition, we had approximately 256 manufacturing workers
contracted through temporary service firms.

The
hourly employees at our steel plant in Amory, Mississippi are represented by the United Steel Workers of America. In August 2007, 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 August 2007 and expiring on June 30, 2011. We believe that our
relationships with the union and our employees are good.

Intellectual Property

As of December 31, 2008, we held 51 patents worldwide relating to various products and proprietary technologies, including the SensiCoretechnology, and had four patent applications pending. We also hold numerous trademarks related to, among other things, our True Temper, Grafalloy, Royal Precision, Project XandAlpha Qbranded products. 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. In December
2003, a review was conducted by independent environmental consultants and, based upon such report, 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 currently in material compliance with, our environmental obligations. Despite such efforts, the
possibility exists that

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instances
of noncompliance could occur or be identified, 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 Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA"), commonly known as Superfund, 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. To our knowledge, no notices involving any material liability 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.

Item 1A.Risk Factors

We incur environmental compliance costs, including capital, maintenance and operating costs, with respect to pollution control facilities, the cost of ongoing monitoring
programs, the cost of reclamation and remediation efforts and other similar costs and liabilities relating to our compliance with Environmental Laws, and we expect these costs and liabilities to
continue to increase, including possible new costs, taxes and limitations on operations.

The
rate of change of Environmental Laws has been rapid over the last decade, and compliance can require significant expenditures. We believe that our expenditure requirements for future
environmental compliance will continue to increase as operational and reporting standards increase. Discovery of currently unknown conditions and unforeseen liabilities could require additional
expenditures.

The
potential regulation of greenhouse gas emissions remains an issue for the Company and other similar manufacturing companies. Although no restrictions have yet been imposed under U.S.
federal laws, new legislation mandating specific near-term and long-range reductions in greenhouse gas emissions is almost certain to be adopted as part of the U.S. climate
change policy. The consequences of greenhouse gas emission reduction measures are potentially significant, as the production of carbon dioxide, which is a greenhouse gas, is inherent in the
manufacture of steel golf shafts. There is no assurance that a change in the law or regulations will not be adopted, such as the imposition of a carbon tax, a cap and trade program requiring the
Company to purchase carbon credits, or measures that would require reductions in emissions, raw materials, fuel use or production rates, that would have a material adverse effect on the Company's
financial condition, results of operations, cash flows and competitive position.

We
intend to comply with all Environmental Laws. Because many of the requirements are subjective and therefore not quantifiable or presently determinable, or may be affected by
additional legislation and rulemaking, it is not possible to accurately predict the aggregate future costs and liabilities of environmental compliance and their effect on our financial condition,
results of operations, cash flows and competitive position.

Our substantial indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations.

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



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To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control.

We may not 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.

Our
business may not generate sufficient cash flow from operations, and future borrowings may not 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.

On
March 16, 2009, the Company did not make the principal payment then due on its revolving credit loans, in an aggregate amount equal to $20.0 million (including $17.0
million in borrowings and $3.0 million in outstanding letters of credit), due to the lenders under the 2006 Restated Credit Facility. The Company's failure to make the scheduled principal payment on
the revolving credit loans is an Event of
Default under the 2006 Restated Credit Facility, which entitles the lenders to immediately accelerate the repayment of all other amounts borrowed under the 2006 Restated Credit Facility together with
accrued and unpaid interest thereon.

Also
on March 16, 2009, the Company did not pay interest then due to the holders of its 83/8% Notes. The failure to pay interest, if continued for 30 days,
will constitute an Event of Default under the Indenture, which will give the holders of the 83/8% Notes the right to accelerate the payment of the principal together with accrued and
unpaid interest thereon. The non-payment of principal then due under the 2006 Restated Credit Facility described above also constitutes an Event of Default under the Indenture, giving the
holders of the 83/8% Notes the right to immediately accelerate the repayment of the principal of the 83/8% Notes together with accrued and unpaid interest thereon.

The
non-payment of interest under the Indenture, if continued for 30 days, will constitute an Event of Default under the Second Lien, giving the lenders the right to
accelerate the repayment of amounts borrowed under the Second Lien together with accrued and unpaid interest thereon. The non-payment of principal under the 2006 Restated Credit Facility,
if continued for 90 days after notice or if the maturity of principal of the 2006 Restated Credit Facility is accelerated, will constitute an Event of Default under the Second Lien, giving the
lenders the right to accelerate the repayment of amounts borrowed under the Second Lien together with accrued and unpaid interest thereon. Substantially all of the Company's assets are pledged as
collateral under the 2006 Restated Credit Facility and the Second Lien.

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Due
to the events of default described above, all of the Company's debt has been classified as a current liability on its 2008 consolidated balance sheet.

The
Company has retained the investment banking firm Lazard Middle Market to assist it in exploring alternatives to enhance the Company's capital structure. The Company is currently in
ongoing discussions with lenders under its most senior credit facility, the 2006 Restated Credit Facility, to, among other things, extend the maturity of the facility. The results of these discussions
could result in a significant restructuring or refinancing of the Company's debt. In addition to addressing the Company's capital structure, management has also enacted restructuring plans to address
operating costs by reducing headcount by 45% in its U.S. facilities and 35% on a global basis, significantly reducing fixed costs at the Company's manufacturing facilities, renegotiating lease terms
and rental rates for certain of the Company's facilities, and decreasing discretionary spending on items such as travel, entertainment, advertising and promotion.

There
can be no guarantee that any restructuring or refinancing plan will be successfully implemented. Failure to successfully implement a restructuring or refinancing plan or otherwise
address compliance issues under the 2006 Restated Credit Facility, the Second Lien, or the 83/8% Notes within the time frame permitted may have a material adverse effect on the
Company's business, results of operations, and financial position, and may materially impact the Company's ability to continue as a going concern.

None
of the lenders under the 2006 Restated Credit Facility or the Second Lien, nor any holders of 83/8% Notes have accelerated the payment of principal or interest under
any of the applicable agreements as of the time of filing of this Annual Report on Form 10-K.

Our success depends on the continued popularity of golf and the growth of the market for golf clubs.

We generate a substantial portion of our net sales from the sale of golf shafts. The demand for our golf shafts is directly related to
the popularity of golf, the number of golf participants and the number of rounds of golf being played by these participants. If golf participation decreases, sales of our products would be adversely
affected. In addition, the popularity of golf organizations, such as the PGA, also affects the sales of our golf shafts. We depend on the exposure of our brands to increase brand recognition and
reinforce the quality of our products. Any significant reduction in television coverage of PGA or other golf tournaments, or any other significant decreases in either attendance at golf tournaments or
viewership of golf tournaments, will reduce the visibility of our brand and could adversely affect our sales.

A reduction in discretionary consumer spending could reduce sales of our products.

Sales of golf clubs are dependent on discretionary consumer spending which may be affected by general economic conditions and could
result 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 consumer concerns over international and military conflicts around the world, 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 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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Our new product development efforts may not be successful.

We may not be able to 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 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, or USGA, and the Royal and Ancient Golf Club of St. Andrews, or R&A. Although the golf equipment standards established by the USGA and R&A
generally apply to competitive events sanctioned by those organizations, we believe that it is critical for our future success that our new shafts comply with USGA and R&A standards. New products that
we introduce may not receive USGA or R&A approval. In addition, existing USGA and R&A standards may be changed in ways that adversely affect the sales of our current or future products.

We are subject to work stoppages at our steel manufacturing facility, which could impact the overall profitability of our business.

If any labor disruption or work stoppages affect our employees, the results of our operation could be adversely affected. At
December 31, 2008, we employed 692 full-time individuals. Of these, 297 hourly employees at our Amory, Mississippi facility are represented by the United Steel Workers of
America. Our collective bargaining agreement with the United Steel Workers of America will expire on June 30, 2011. We may not be able to reach an agreement on a new collective bargaining
agreement. If a work stoppage or other labor disruption were to occur, our results of operations may be materially adversely affected.

We face intense competition with other golf shaft designers and manufacturers, and our inability to compete effectively for any reason could adversely affect our business.

We operate in a highly competitive environment and compete against a number of established golf shaft designers, manufacturers and
distributors. Unlike the steel shaft industry, the graphite shaft industry is highly fragmented. As a result, we compete with many competitors involved in the design and manufacture of graphite
shafts. While we have had long-established relationships with most of our customers, we are not the exclusive supplier to most of them, and consistent with the industry practice, generally
do not have long-term, multi-year contracts with our customers. Although we believe that our relationships with our customers are good, the loss of a significant customer or a substantial
decrease in sales to a significant customer could have a material adverse affect on our business and operating results. See "BusinessCompetition" for a description of the bases on which
we compete and the number of competitors in our industry. These factors, as well as demographic trends and economic conditions, could result in increased competition and could have a material adverse
effect on our results of operations.

Our profitability would be adversely affected if the operation of our Amory manufacturing plant were interrupted or shut down.

We operate a majority of our manufacturing processes at our facility in Amory, Mississippi. Any natural disaster or other serious
disruption to this facility due to fire, tornado, flood or any other cause would substantially disrupt our sales and would damage a portion of our inventory, impairing our ability to adequately supply
our customers. In addition, we could incur significantly higher costs and longer lead times associated with fulfilling our direct-to-consumer orders and distributing our
products to our customers during the time it takes for us to reopen or replace our Amory facility. As a result, disruption at our Amory facility would adversely affect our profitability.

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Risks related to our operating facility in China could adversely affect our business.

In 2003, we opened a graphite manufacturing facility in Guangzhou, China in order to be able to produce our graphite shafts at a lower
cost. We have since transitioned the majority of our composite manufacturing capacity from the United States to China. In addition, in 2007 we acquired CN Precision, a start-up steel golf shaft
manufacturing plant in Suzhou, China in order to produce a portion of our steel golf shafts overseas. As a result, we will be subject to potential political instability in China and trade conflict
between the United States and China.

Consolidation of our customer base could adversely affect our business.

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 was 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 our customer it could represent an increased credit risk due to its size in relation to our total accounts receivable.

Fluctuations in the cost and availability of raw materials could adversely affect our business.

Since we are dependent upon certain suppliers for steel, nickel, composite graphite material and other materials, we are subject to
price increases and delays in receiving such 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 shafts and to delays in receiving these materials. As key components to the
manufacture of golf 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 the cost and availability of energy sources could adversely affect our business.

Our graphite shaft manufacturing operations in the United States and China are dependent upon a consistent and affordable supply of
electricity. If there is a prolonged shortage of electrical supply to these facilities and/or a significant increase in the cost of electrical power, we may need to temporarily or permanently close
our graphite shaft operations, which could materially adversely affect our results of operations. In addition, our steel shaft manufacturing plant located in Mississippi relies upon a consistent and
affordable supply of natural gas in order to conduct normal operations. If our Mississippi facility should experience a shortage in supply or a significant increase in cost for natural gas, it could
have a material adverse affect on our results of operations.

Fluctuations in the availability of energy sources to our customers could adversely affect our business.

There are a significant number of golf equipment original equipment manufacturers and assemblers that are headquartered and conduct
manufacturing operations in Southern California and Southern China. In the aggregate, these companies account for a significant share of the golf equipment market and also account for a considerable
portion of our net sales. With the disruption of electrical power to these areas in recent years there is a risk that our customers' manufacturing operations may be adversely affected by power
shortages. If this were to occur they may reduce their purchases of shafts from us causing a significant adverse impact to our revenues and results of operations.

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Fluctuations in cost of health insurance could adversely affect our business.

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 plan to continue to provide health benefits to our employees, the rising costs could have a material adverse affect on the results of our operations.
We currently have contractual caps on the maximum
increase in premium cost for our U.S. healthcare coverage that extend into 2010; however, beyond this date we are subject to overall market forces that drive healthcare expenses.

If we are unable to protect our intellectual property rights, our business and prospects may be harmed.

The patents we hold relating to certain of our products and technologies may not offer complete protection against infringement of our
proprietary rights by others. As of December 31, 2008, we held 51 patents worldwide relating to various products and proprietary technologies, and had four patent applications pending. Patents
may not be issued for the pending patent applications. Moreover, these patents may have limited commercial value or may not adequately 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. We may infringe on others' intellectual property rights. One or more adverse
judgments with respect to these intellectual property rights could negatively impact our ability to compete and could adversely affect our business.

We are subject to various environmental, health and safety laws and regulations that govern, and impose liability, for our activities and operations. If we do not comply
with these laws and regulations, our business could be materially and adversely affected.

We are subject to federal, state, and local environmental and workplace health and safety laws, regulations and requirements in both
the United States and China, which, if contravened, could result in significant costs to us. 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. The penalties or corrective action costs associated with noncompliance could be material. In addition, we may receive notices of potential
liability for cleanup costs associated with waste recycling or disposal facilities at which wastes associated with our operations have allegedly come to be located.

Fluctuations in certain general economic conditions could increase our minimum pension liability under our defined benefit pension plan.

We maintain an employer sponsored defined benefit pension plan for the hourly employees at our Amory, Mississippi steel golf shaft
plant. We are subject to Financial Accounting Standards Board guidelines and subject to ERISA regulations with regard to our cash funding of the plan. As a result, certain U.S. economic conditions
involving weak equity market performance and low general interest rates can both reduce the total value of the assets of the plan as
well as increase our benefit obligation under the plan. If these economic conditions are severe enough they could have a significant adverse effect on the funding status of our plan and our overall
results of operations.

In
addition, as new pension laws are enacted they can have an adverse effect on our pension liability and/or cash funding requirements, and as a result our overall business.

If we do not retain our key personnel and attract and retain other highly skilled employees our business will suffer.

If we fail to recruit and retain the necessary personnel, our business and our ability to obtain new customers, develop new products
and provide acceptable levels of customer service could suffer. The success of our business is heavily dependent on the leadership of our key management personnel. If

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any
of these persons were to leave our company it could be difficult to replace them, and our business would be harmed. See "Management."

We are subject to risks relating to our international operations.

We are subject to risks customarily associated with foreign operations, including:



These
risks could have a material adverse effect on our business, prospects, results of operations and financial condition.

We are subject to product liability claims and other litigation.

From time to time, we are subject to product liability claims involving personal injuries allegedly relating to our products. While we
carry product liability insurance, currently
pending claims and any future claims are subject to the general uncertainties related to litigation, and the ultimate outcome of any such proceedings or claims cannot be predicted.

We may not be able to identify suitable acquisition candidates, and even if we do, we may not be able to acquire those candidates or successfully integrate their operations
with ours.

We continuously review acquisition prospects that would complement our current product offerings, increase our size and geographic
scope of operations or otherwise offer growth and operating efficiency opportunities. Any future acquisition may not be successfully completed or, if completed, any such acquisition may not be
effectively integrated into our business. Acquisitions may entail numerous risks and impose costs on us, including, among others, difficulties associated with assimilating acquired manufacturing
operations or products, diversion of management's attention and adverse effects on existing business relationships with suppliers and customers. In addition, any future acquisitions could result in
the incurrence of debt or contingent liabilities, which could have a material adverse effect on our business, financial condition or results of operations.

We may not be able to achieve necessary output, efficiency and productivity levels in our manufacturing facilities.

During 2006 and 2007, due to a number of factors including the acquisition of new products and manufacturing processes from Royal
Precision, the efficiency and productivity in our Amory, Mississippi steel product manufacturing facility deteriorated. We regained a portion of these efficiencies in 2008, and expect to make further
efficiencies in the future, but if we are not able to do so, or if efficiencies deteriorate further, it could have a material adverse effect on our business.

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We may not be able to adequately ramp up production in our new steel golf shaft facility in Suzhou, China, or the start-up process may be delayed or require more
investments than we originally anticipated.

In 2007, we acquired a start-up steel golf shaft manufacturing facility in Suzhou, China. We have made investments in this
facility in the form of buildings, equipment, and personnel, and we began to produce a portion of our products in this facility during 2008. Any delay in the start-up of this facility, or
any increased investment requirements above those originally budgeted, could have an adverse effect on our overall business.

Terrorist attacks, such as the attacks that occurred on September 11, 2001, and other acts of violence or war, including the military action in Iraq, could negatively
impact the U.S. and foreign economies, the financial markets, the industries in which we operate, our operations and our profitability.

Terrorist attacks may negatively affect our operations. There can be no assurance that there will not be further terrorist attacks
worldwide. These attacks have contributed to economic instability in the United States and elsewhere, and further acts of terrorism, violence or war could further affect the industries in which we
operate, our business and our results of operations. In addition, terrorist attacks or hostilities may directly impact our physical facilities or those of our suppliers or customers and could impact
our sales, our supply chain, our production capability and our ability to deliver our products and services to our customers. The consequences of any terrorist attacks or hostilities are
unpredictable, and we may not be able to foresee events that could have an adverse effect on our operations.

Changes in the global credit and capital markets could have adverse affects on our capital structure and underlying business.

As a result of the unprecedented volatility and uncertainty in the global credit and capital markets, as well as the apparent slowdown
in the economies of the United States and other golfing regions of the world, certain risks that we normally face may increase. These include:



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 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 include words such as expect, plan, believe, hope, wish, forecast, predict, intend, or anticipate and similar statements of a
future or forward-looking nature identify 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 Item 1A of Part I of this Annual Report on Form 10-K.

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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 1B.Unresolved Staff Comments

None.

Item 2.Properties

Our administrative offices and manufacturing facilities currently occupy approximately 560,000 square feet. Our shafts are
manufactured at separate facilities, including steel shaft facilities located in Amory, Mississippi and Suzhou, China, and a composite graphite shaft facility located in Guangzhou, China. Our
executive offices are located in a leased facility in Memphis, Tennessee. We believe that our current properties are suitable for our purposes, provide adequate capacity, and are currently not fully
utilized. The following table sets forth certain information regarding significant facilities operated by us as of December 31, 2008:

Facility

Location

Approx.
Sq. Ft.

Owned/
Leased

Lease
Expiration
DateCorporate Offices

Memphis, Tennessee


15,241

Leased

February 2014Steel Shaft/Tubing Mfg.

Amory, Mississippi


335,000

Leased

January 2063(1)Composite Shaft Mfg.

Guangzhou, China


99,298

Leased

March 2013Steel Shaft Mfg

Suzhou, China


83,000

OwnedSteel Shaft Plating

Suzhou, China


10,995

Leased

June 2012Composite R&D, Distribution

San Diego, California


17,885

Leased

December 2011Steel R&D

Olive Branch, Mississippi


5,000

Leased

MonthlyTest Facility

Robinsonville, Mississippi


1,000
(2)
Leased

Monthly


---

In
addition, we promote our products in international markets through sales and distribution offices in Japan and the United Kingdom, and we also distribute our product in Southeast Asia
from our distribution warehouse in Hong Kong. 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 2008.

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PART II

Item 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

There is no public market for the Company's equity securities. As of December 31, 2008, all of the Company's capital stock was
owned by True Temper Corporation.

In
January 2008, the Company paid dividends of $0.5 million to True Temper Corporation. The Company paid no dividends on its shares of common stock in 2007. The Company does not
pay dividends with any specific frequency and does not expect to pay comparable cash dividends in the near future.

The
Company's various debt instruments impose restrictions on the payment of dividends by means of covenants. The Company was not in compliance with certain covenants in its various debt
agreements as of December 31, 2008. For a more complete discussion of the Company's debt agreements, see Note 8 to the financial statements included elsewhere in this annual report.

There
were no purchases of the Company's equity securities by or on behalf of the Company or any affiliated purchaser during the fourth quarter of 2008.

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Table of Contents

Item 6.Selected Financial Data

Set forth below are our selected historical financial data for each of the five years ended December 31, 2008. The historical
financial data were derived from our audited consolidated financial statements and the notes thereto (except the ratio of earnings to fixed charges data), for which the December 31, 2008, 2007
and 2006 audited consolidated financial statements are included herein. As more fully described in note 4 of this table, the Company went through a business combination on March 15,
2004. Accordingly, the following selected financial data for 2004 is presented for both the predecessor and successor companies.

Successor Company



Predecessor
CompanyYears EndedPeriod from
March 15 to
December 31,
2004



Period from
January 1 to
March 14,
2004December 31,
2008

December 31,
2007

December 31,
2006

December 31,
2005(Dollars in thousands)STATEMENT OF OPERATIONS DATA:Net sales

$
123,653

$
116,273

$
108,005

$
117,594

$
78,120



$
20,247Gross profit


40,508


33,906


34,811


47,232


18,016




8,376Selling, general and administrative expenses


14,490


14,725


14,226


14,660


9,520




3,635Amortization of intangible assets(1)


14,956


14,941


14,343


13,840


10,984




Restructuring, business development, start-up and transition costs(2)


2,131


2,012


2,688


208


738




100Impairment charge on long-lived assets(3)











357







Transaction and reorganization expenses(4)














25




5,381Loss on early extinguishment of debt(5)





755













9,217Goodwill impairment charge(6)


156,036
















Operating income (loss)


(147,105
)

1,473


3,554


18,167


(3,251
)



(9,957
)Interest expense, net


23,023


24,921


20,525


18,631


13,491




2,498Income tax (benefit) expense(7)


84


9,991


(6,279
)

33


(6,350
)



(2,845
)Net income (loss)


(170,395
)

(33,471
)

(10,767
)

(466
)

(10,464
)



(9,608
)BALANCE SHEET DATA (AT END OF PERIOD):Working capital(8)

$
(237,091
)
$
31,630

$
26,281

$
27,403

$
25,324



$
14,551Total assets


198,877


359,850


353,699


349,836


360,825




178,057Current portion of long-term debt(9)


271,733


987


1,257


245


545




Long-term debt, net of current portion





259,733


239,149


220,480


232,180




106,030Total stockholder's equity (deficit)


(115,291
)

58,001


90,282


99,764


101,330




39,064OTHER FINANCIAL DATA:Cash provided by (used in) operating activities

$
(1,259
)
$
(9,939
)
$
941

$
15,936

$
6,702



$
2,982Cash used in investing activities


(3,087
)

(12,780
)

(20,464
)

(2,031
)

(1,182
)



(330
)Cash provided by (used in) financing activities


14,343


24,386


17,845


(12,509
)

(5,019
)



(8,205
)Depreciation


3,240


3,028


2,616


2,725


2,420




671Capital expenditures(10)


3,087


3,170


4,888


2,612


1,232




330Ratio of earnings to fixed charges(11)






















---

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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. (the "Company") is a wholly owned subsidiary of True Temper Corporation ("TTC") and a leading designer,
manufacturer and marketer of both steel
and composite graphite golf shafts for original equipment manufacturers and distributors in the golf equipment industry. In addition, the Company produces and sells a variety of performance sports
products that offer high strength and tight tolerance components produced with steel alloys and composite carbon fiber graphite materials for the bicycle, hockey and other recreational sports markets.
In 2008, golf shaft net sales represented 86% of total net sales, and performance sports net sales represented 14%.

Purchase Agreement for True Temper Corporation

On January 30, 2004, TTS Holdings LLC, a new company formed by Gilbert Global Equity Partners, L.P. and its
affiliated funds ("Gilbert Global"), entered into a stock purchase agreement with the Company's direct parent company, TTC, pursuant to which TTS Holdings LLC and certain of the Company's
senior management purchased all of the outstanding shares of TTC ("Gilbert Global Acquisition"). The Gilbert Global Acquisition was finalized and closed on March 15, 2004.

Year in Review2008

The past year can be divided, into two separate periods. The first half of the year was marked by significant revenue growth and
business expansion for True Temper. Net sales for the first and second quarters hit new record levels, and even during the early part of the global economic crisis that began in August, the Company
still managed to hold revenue flat during the third quarter compared to the prior year. By the end of September, sales for the trailing 12 month period had reached a new record high of over
$127 million, and year-to-date sales were up nearly 13% from the first nine months of 2007.

Profitability
was also on the rise, as the Company's pricing and cost control initiatives began to impact the bottom line. Gross profit through September was up over 35% compared to the
first nine months of 2007; nearly tripling the sales increase percentage over the same period. In addition to a global price increase enacted in late 2007, the Company also improved operational
efficiency in its manufacturing plants, saw a significant decrease in medical costs by implementing a new fully insured benefit plan, and reaped the benefit of lower global commodity prices. In
addition, furthering the Company's global manufacturing strategy, it doubled the capacity of its new steel golf shaft manufacturing facility in China, providing both cost reductions and improved
service levels for its global customer base.

The
Company's business diversification strategy also progressed significantly during 2008, as net sales from its performance sports business increased over 30% compared to 2007.
Continued expansion and market share gains in the hockey industry drove a large part of the growth, but the Company also
invested in design and manufacturing technology in order to expand into new sporting goods categories such as lacrosse and baseball/softball bats in the future.

The
global economic downturn worsened during the fourth quarter, and True Temper was not immune to its effects. Net sales for the fourth quarter were down 12.3% from the fourth quarter
of 2007; however, through aggressive cost control and restructuring efforts the impact to gross profit was somewhat mitigated. During the fourth quarter the Company also delivered the lowest quarterly
selling, general, and administrative expenses ("SG&A") in over 10 years, resulting in operating profit during the fourth quarter that declined only 12.0% from the fourth quarter of 2007
(excluding restructuring

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costs,
non-cash amortization of intangible assets, the loss on early extinguishment of long-term debt, and impairment of goodwill).

Despite
the overall economic headwinds, the Company's actual operating results for full year 2008 showed improvement. Net sales increased 6.3% to a new annual record, gross profit
increased 19.5%, and operating profit was up over six times compared to 2007.

Outlook2009

The visibility into future demand for discretionary consumer goods, and the general retail outlook for the golf market, has never been
more uncertain in the short term. It is unclear as to what the year ahead will bring in terms of market demand and overall consumer behavior. Accordingly, True Temper has taken aggressive steps to
address its cost structure to ensure that underlying business operations are as favorable as possible, and to attempt to maximize cash flow during this challenging time. The Company has redoubled its
sales and marketing efforts to make certain that no share loss occurs in its core businesses; and restructuring plans have been enacted to reduce headcount and fixed costs in its manufacturing
facilities by $8.0 million and at least $2.0 million in its SG&A.

In
addition, given the current economic backdrop and its impact on revenue going forward, it is clear that the Company must address its capital structure in order to reduce current cash
interest expense and provide a firm foundation to weather the effects of this global recession. The Company's focus will be working with its various lenders to ensure that the appropriate debt and
equity structure is put in place, and the long-term viability of the Company is solidified. As discussed in more detail under Liquidity and Capital Resources, the Company is currently in
default under its various credit agreements and has retained an investment banking firm to assist it in exploring alternatives to enhance the Company's capital structure.

Results of Operations

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

Year Ended
December 31,
2008

Year Ended
December 31,
2007

Year Ended
December 31,
2006Net sales


100.0
%

100.0
%

100.0
%Cost of sales


67.2


70.8


67.8Gross profit


32.8


29.2


32.2Selling, general and administrative expenses


11.7


12.7


13.2Amortization of intangible assets


12.1


12.8


13.3Restructuring, business development, start-up and transition costs


1.7


1.7


2.5Loss on early extinguishment of debt





0.6


Goodwill impairment charge


126.2





Operating (loss) income


(119.0
)

1.3


3.3Interest expense, net


18.6


21.4


19.0Other expenses, net


0.1





0.1Loss before income taxes


(137.7
)

(20.2
)

(15.8
)Income tax expense (benefit)


0.1


8.6


(5.8
)Net loss


(137.8
)%

(28.8
)%

(10.0
)%


Year Ended December 31, 2008 Compared to the Year Ended December 31, 2007

Net Salesfor 2008 increased approximately $7.4 million, or 6.3%, to
$123.7 million from $116.3 million in 2007. Golf shaft sales increased approximately $3.1 million, or 3.0%, to $106.0 million compared to the $102.9 million realized
in 2007. This improvement related in part to an increase in the unit volume of premium steel golf shaft sales coinciding with the late 2007 and 2008 new product launches in irons and putters from a
number of the Company's key original equipment manufacturer

24

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partners.
In addition, the Company's golf shaft price increase implemented in the fourth quarter of 2007 also served to increase net sales in 2008.

Performance
sports sales increased approximately $4.3 million, or 32.0%, to $17.7 million from $13.4 million in 2007, as the Company continued its diversification
strategy in this segment of its business. During 2008 the primary driver of the sales improvement related to increased unit volume of hockey sticks associated with new products launched in late 2007
and in 2008. The Company continues to gain market share and execute on its performance sports growth strategy by developing new customer relationships and products in a variety of diversified sports
categories.

Net
sales to international customers increased approximately $8.8 million, or 21.3%, to $50.0 million in 2008 from $41.2 million in 2007. This increase related
primarily to revenue growth in the Japanese golf market, which is a targeted international growth region for the Company, and the routine shifting of product assembly into China by the major golf
original equipment manufacturers. The Company also experienced favorable foreign currency translation gains between the U.S. Dollar, Japanese Yen and British Pound.

Gross Profitfor 2008 increased $6.6 million, or 19.5%, to $40.5 million from $33.9 million in 2007. Gross profit as
a percentage of net sales increased to 32.8% in 2008 from 29.2% in 2007. The increase in gross profit as a percentage of net sales was driven by several factors, including (i) the mix of golf
products sold being more heavily weighted toward premium steel golf shafts which have higher margins, (ii) a significant modification to the Company's medical plan to reduce costs,
(iii) programs designed to improve the operational efficiency of the Company's production facilities, (iv) a global price increase effective October 1, 2007, (v) lower
costs for nickel offset somewhat by increased utility and natural gas costs, and (vi) fixed costs being spread over increased unit volumes in both the golf and performance sports segments.

Selling, General and Administrative Expensesfor 2008 decreased approximately $0.2 million, or 1.6%, to $14.5 million from
$14.7 million in 2007. SG&A as a percentage of net sales decreased to 11.7% from 12.7% in 2007. The decrease in SG&A spending was associated primarily with aggressive cost reduction programs
enacted in direct response to the weakening global economy and golf market. These restructuring programs impacted nearly every area within SG&A, and were designed to eliminate approximately
$2.5 million in annual costs, or between 15% to 20% of total SG&A. These programs were implemented, in large part, during the fourth quarter of 2008, and their impact on full year results was
also somewhat offset by an increase in the Company's provision for doubtful accounts during the second quarter of 2008, and an increase in legal expenses related to the successful termination of
certain consent decrees that had been in place for approximately 50 years.

Amortization of Intangible Assetswas relatively stable at approximately $15.0 million during both 2008 and 2007. Intangible assets
were acquired in connection with (i) the Gilbert Global Acquisition in 2004, (ii) the acquisition of certain assets from Royal Precision in 2006, and (iii) the acquisition of CN
Precision in 2007. Intangible assets with definitive lives are being amortized using the straight-line method over periods from 2 to 59 years.

Restructuring, Business Development, Start-Up and Transition Costswas relatively stable at approximately $2.0 million
during both 2008 and 2007. However, the composition of these costs changed somewhat between 2007 and 2008. The majority of costs incurred during 2007, and approximately $1.0 million of the 2008
costs, relate primarily to expenses associated with the acquisition and ramp-up of CN Precision, a steel golf shaft manufacturing facility located in Suzhou, China. These costs include certain
start-up related costs to commission this new facility and the related production equipment. The Company expects to continue to ramp-up production of steel golf shafts in this
new facility during 2009 and 2010. See Note 3 to the consolidated financial statements included elsewhere in this annual report for a further discussion of this acquisition. The remaining
$1.0 million of expense in 2008 relates to cost reduction and restructuring efforts enacted in direct response to the weakening global economy and golf market. These costs include severance
payments for terminated employees,

25

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medical
and other benefit continuation during severance periods, and outplacement assistance for terminated senior level management employees.

Loss On Early Extinguishment of Long-Term Debtfor 2007 totaled $0.8 million. As a result of paying down
$24.7 million of the borrowings under the 2006 Restated Credit Facility, the Company recognized a loss on early extinguishment of long-term debt, comprised of the
write-off of certain deferred financing costs related to the 2006 Restated Credit Facility and third party costs incurred in conjunction with the Second Amendment to the same facility. No
such loss on early extinguishment of long-term debt was recognized in 2008.

Goodwill Impairment Chargefor 2008 represents a $156.0 million impairment charge in the fourth quarter of 2008 to impair all
recorded goodwill in conjunction with the annual goodwill impairment review. The original goodwill balance was associated, primarily, with the 2004 Gilbert Global Acquisition. No goodwill impairment
charges were recorded in 2007.

Operating (Loss) Incomefor 2008 decreased approximately $148.6 million, to an operating loss of $147.1 million from
operating income of $1.5 million in 2007. This decrease reflects the impact from gross profit, SG&A, restructuring, business development, start-up and transition costs, loss on
early extinguishment of long-term debt, and impairment of goodwill, described above.

Interest Expense, Netfor 2008 decreased approximately $1.9 million, or 7.6%, to $23.0 million from $24.9 million in
2007. This decrease was due primarily to a decrease in interest rates on the Company's variable rate debt, as overall interest rates experienced a decline during 2008. As a result of the interest rate
swaps executed in the second quarter of 2008, the Company has fixed the LIBOR borrowing base rate on $100.0 million of its variable rate debt at approximately 3.20% for a period of
approximately 24 months. This decline in the Company's variable interest rate was partially offset by an increase in the outstanding principal balance of variable rate debt due to the issuance
of the $45.0 million Second Lien credit facility during the first quarter of 2007, and an increase in the weighted average interest rate for
the Company's variable rate debt resulting from the higher LIBOR margin adder on the Second Lien credit facility.

Income Tax Expensedecreased in 2008 to income tax expense of approximately $0.1 million, compared to income tax expense of
$10.0 million in 2007. This decrease in income tax expense was due primarily to the deferred tax asset valuation allowance established in the third quarter of 2007. The effective tax rate
during these periods differs from a federal statutory rate of 34% due primarily to the incremental tax rate for state and foreign income tax purposes and the provision of the valuation allowance
referred to above.

Net Lossfor 2008 was $170.4 million as compared to a net loss of $33.5 million in the 2007. This change reflects the impact
from gross profit, SG&A, restructuring, business development, start-up and transition costs, loss on early extinguishment of long-term debt, impairment of goodwill, interest
expense, and income tax benefit described above.

Year Ended December 31, 2007 Compared to the Year Ended December 31, 2006

Net Salesfor 2007 increased approximately $8.3 million, or 7.7%, to
$116.3 million from $108.0 million in 2006. Golf shaft sales increased approximately $3.8 million, or 3.8%, to $102.9 million compared to the $99.1 million realized
in 2006. This improvement related primarily to an increase in premium steel golf shaft sales resulting from the 2006 acquisition of certain assets from Royal Precision, including brands, patents and
trademarks; and was offset by a small decrease in graphite golf shaft sales related primarily to a decline in the unit sales of stock original equipment manufacturer graphite shafts associated with
the timing of certain original equipment manufacturer iron launches using the Company's proprietary graphite iron shafts. This decline in graphite golf shaft sales was heavily weighted toward the
first half of 2007, and during the second half of 2007, graphite golf shaft sales improved by a double digit percentage compared to the second half of 2006, as the Company was

26

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selected
to be the stock graphite shaft supplier for a number of new original equipment manufacturer product launches.

Performance
sports sales increased approximately $4.5 million, or 50.7%, to $13.4 million from $8.9 million in 2006. Revenue momentum in the performance sports
category continued to improve as 2007 progressed. Sales improvement in the first half of 2007 was 34.0%, compared to the first half of 2006, while second half sales were up 66.3% compared to the
second half of 2006. This increase was the direct result of the Company's diversification strategy into the cycling and hockey markets, and
relates primarily to new products launched in 2007, as well as new customer relationships developed in these same areas as the Company continues to gain marketshare and execute on its performance
sports growth strategy.

Net
sales to international customers increased approximately $2.9 million, or 7.6%, to $41.2 million in 2007 from $38.3 million in 2006. This increase relates
primarily to revenue growth in the Japanese golf market, which is a targeted growth region for the Company, as well as the routine shifting of product assembly into China by the major golf original
equipment manufacturers.

Gross Profitfor 2007 decreased $0.9 million, or 2.6%, to $33.9 million from $34.8 million in 2006. Gross profit as a
percentage of net sales decreased to 29.2% in 2007 from 32.2% in 2006. The decrease in gross profit as a percentage of net sales was driven by several factors, including (i) an increase in the
cost of nickel, which is a raw material used in the manufacture of steel golf shafts, (ii) an increase in the cost of medical benefits provided to employees, and (iii) certain
inefficiencies experienced in the Company's Amory, Mississippi production facility related to, among other things, its continued integration of Royal Precision production processes. These unfavorable
factors were partially offset by an increase in profit margins due to the mix of products sold being more heavily weighted toward premium steel golf shafts, and price increases on the Company's
products that went into effect at various times during 2007.

During
the second half of 2007, the Company implemented several key initiatives to counteract the negative impact of the cost factors described above. These initiatives included, among
other things, (i) a global price increase effective October 1, 2007, (ii) a significant modification to the Company's medical plan to reduce costs, and (iii) programs
designed to stabilize and improve the operational efficiency of the Amory, Mississippi facility. During the fourth quarter of 2007, these initiatives provided the catalyst for improvement in gross
profit as a percentage of net sales to 31.8%, as compared to 23.2% in the fourth quarter of 2006 and 28.3% in the first nine months of 2007.

Selling, General and Administrative Expenses ("SG&A")for 2007 increased approximately $0.5 million, or 3.5%, to
$14.7 million from $14.2 million in 2006. SG&A as a percentage of net sales decreased to 12.7% from 13.2% in 2006. There was a reduction in SG&A expenses related primarily to a variety
of cost containment programs implemented in response to the gross profit pressures described above. These cost controls encompass a variety of functional areas within the organization, and are
representative of both permanent cost savings as well as the delay of certain non-essential business activities. The cost reduction actions were offset by (i) additional sales and
marketing efforts intended to improve the Company's net sales during 2007, (ii) an increase of $0.2 million related to the Company's initial Sarbanes-Oxley compliance program, and
(iii) the recognition of approximately $0.5 million in expenses related to the elimination of certain operational positions, including the position of chief operating officer.

Amortization of Intangible Assetsincreased during 2007 to $14.9 million from the $14.3 million recorded during 2006.
Intangible assets were acquired in connection with (i) the Gilbert Global Acquisition in 2004, (ii) the acquisition of certain assets from Royal Precision in 2006, and (iii) the
acquisition of CN
Precision in 2007. Intangible assets with definitive lives are being amortized using a straight-line method over periods from 2 to 59 years.

Restructuring, Business Development, Start-Up and Transition Costsfor 2007 decreased to $2.0 million from
$2.7 million in 2006. The costs incurred during 2006 relate primarily to the acquisition of certain

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assets
from a former competitor in the steel golf shaft industry, Royal Precision. These costs include acquisition related fees and expenses, as well as transportation and integration expenses
associated with the transfer of production equipment and inventory to True Temper facilities. The costs incurred during 2007 relate primarily to expenses associated with the acquisition of CN
Precision, a steel golf shaft manufacturing facility located in Suzhou, China. These costs include certain start-up related costs to begin the commissioning of this new facility and the
related production equipment. The Company expects to ramp-up production of steel golf shafts in this new facility during 2008. See Note 3 to the consolidated financial statements
included elsewhere in this annual report for a further discussion of this acquisition.

Loss On Early Extinguishment of Debtfor 2007 totaled $0.8 million. As a result of paying down $24.7 million of the
borrowings under the 2006 Restated Credit Facility, the Company recognized a loss on early extinguishment of long-term debt, comprised of the write-off of certain deferred financing costs
related to the 2006 Restated Credit Facility and third party costs incurred in conjunction with the Second Amendment to the same facility. No such loss on early extinguishment of long-term
debt was recognized in 2006.

Operating Incomefor 2007 decreased approximately $2.1 million, to $1.5 million from $3.6 million in 2006. This
decrease reflects the impact from gross profit, SG&A, business development, start-up and transition costs, and loss on early extinguishment of long-term debt described above.

Interest Expense, Netfor 2007 increased approximately $4.4 million, or 21.4%, to $24.9 million from $20.5 million in
2006. This increase was due primarily to (i) an increase in short-term interest rates experienced in the overall economy, (ii) an increase in the outstanding principal
balance of variable rate debt due to the issuance of the $45.0 million second lien credit facility, and (iii) an increase in the weighted average interest rate for the Company's variable
rate debt resulting from the higher LIBOR margin adder on the Second Lien credit facility.

Income Tax Expense (Benefit)increased in 2007 to an income tax expense of $10.0 million compared to an income tax benefit of
$6.3 million in 2006. This increase was due primarily to a charge establishing a valuation allowance against deferred tax assets. See Note 9 to the consolidated financial statements included
elsewhere in this annual report for a further discussion of this charge. The effective tax rate
during these periods differs from a federal statutory rate of 34% due primarily to the incremental tax rate for state and foreign income tax purposes and the provision of the valuation allowance
referred to above.

Net Lossfor 2007 decreased to a net loss of $33.5 million as compared to a net loss of $10.8 million in 2006. This decrease
reflects the impact from gross profit, SG&A, business development, start-up and transition costs, loss on early extinguishment of long-term debt, interest expense, and income
tax expense (benefit) described above.

Liquidity and Capital Resources

The following table shows cash flow activity by source. Discussion of cash flow activity is noted below.

2008

2007Net cash used in operating activities

$
(1,259
)
$
(9,939
)Net cash used in investing activities

$
(3,087
)
$
(12,780
)Net cash provided by financing activities

$
14,343

$
24,386


General

On March 15, 2004, as part of the Gilbert Global Acquisition, the Company entered into a new senior credit facility (the "2004
Senior Credit Facility") which included a $20.0 million non-amortizing revolving credit facility and a $110.0 million Term B loan (as amended from time to time). The term

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loan
required cash interest payments and quarterly principal payments beginning June 30, 2004 and continuing through March 15, 2011.

Also
in conjunction with the Gilbert Global Acquisition, the Company issued new 83/8% Senior Subordinated Notes due 2011 (the "83/8% Notes"). The
83/8% Notes require cash interest payments each March 15th and September 15th commencing on September 15, 2004. The 83/8% Notes are
redeemable at the Company's option, under certain circumstances and at certain redemption prices, beginning March 15, 2008.

The
Company used the proceeds from the 2004 Senior Credit Facility and the 83/8% Notes to pay off the existing debt that was outstanding at closing on March 15,
2004, and to make a distribution of the net remaining equity to the selling shareholders.

On
March 27, 2006, the Company amended and restated its 2004 Senior Credit Facility (the "2006 Restated Credit Facility"). The 2006 Restated Credit Facility included additional
term loans under the Company's existing Senior Secured Credit Facilities of approximately $18.0 million, amendments that enable the Company to pursue future acquisitions, and the flexibility to
enable the Company to execute on its global strategic and operational initiatives.

On
January 22, 2007, the Company executed an amendment to its 2006 Restated Credit Facility (the "Second Amendment"). The Second Amendment was made effective as of
December 20, 2006. The Second Amendment was executed in conjunction with a second lien financing effort, described more fully below, and related acquisition, both described more fully in
Notes 3 and 8 to the consolidated financial statements located elsewhere in this annual report. In addition to allowing the flexibility for such second lien financing, the Second Amendment also
provided adjustments to certain specified financial ratios and tests included in the 2006 Restated Credit Facility. As part of the Second Amendment, the margin adder on LIBOR based loans was increased
to between 3.00% and 3.25%, depending on financial ratios, beginning January 22, 2007.

On
January 22, 2007, the Company executed a Second Lien Credit Agreement (the "Second Lien"). The Second Lien includes additional term loans of approximately $45.0 million,
with $24.7 million of the proceeds being used to pay down the debt under the 2006 Restated Credit Facility. The margin adder under the Second Lien is 4.5% or 5.5%, depending on the type of
borrowing. The maturity date of the Second Lien is June 30, 2011. The Second Lien does not amortize.

As
a result of paying down $24.7 million of the borrowings under the 2006 Restated Credit Facility, the Company recognized a loss on early extinguishment of debt of
$0.8 million. This loss is comprised of the write off of certain deferred financing costs related to the 2006 Restated Credit Facility and third party costs incurred in conjunction with the
Second Amendment.

During
the second quarter of 2008, the Company entered into interest rate swap agreements to fix the underlying LIBOR borrowing base rate on $100.0 million of its variable rate
debt at approximately 3.20% for a period of approximately 24 months. The Company has designated the interest rate swaps as cash flow hedges for accounting purposes.

The
2006 Restated Credit Facility, the Second Lien, and the 83/8% Notes contain covenants and events of default, including substantial restrictions and provisions which,
among other things, limit the Company's 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. Furthermore, the 2006 Restated Credit Facility and the Second Lien require certain mandatory prepayments including payments from the net proceeds of certain asset
sales and a portion of the Company's excess cash flows as defined within each credit agreement. The 2006 Restated Credit Facility and the Second Lien also require the Company to maintain certain
specified financial ratios and tests including minimum interest coverage and fixed charge coverage ratios, and maximum leverage ratios. As of December 31, 2008, the Company was not in
compliance with the maximum leverage ratio.

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During the third quarter of 2008 and the third quarter of 2007, TTS Holdings LLC made capital investments in the Company's parent, True Temper Corporation,
totaling $4.5 million and $6.7 million, respectively. These funds were then contributed by True Temper Corporation to the Company in order to maintain compliance with the third quarter
2008 and the second and third quarter 2007 financial covenants in the Company's 2006 Restated Credit Facility and the Second Lien Credit Agreement.

Due
to the current global economic and retail market conditions, and the resulting impact on the overall golf industry, the Company was in noncompliance of certain financial covenants
under its 2006 Restated Credit Facility and Second Lien Credit Agreement as of December 31, 2008; and as of March 16, 2009 the Company was in default on these credit agreements and its
83/8% Notes (as more fully described below). The Company has negotiated the terms of a 90 day forbearance with all of the lenders in the Company's revolving credit facility, and
a majority of the lenders in the Company's 2006 Restated Credit Facility. Under the terms of the forbearance, the lenders in the Company's revolving credit facility and 2006 Restated Credit Facility
have agreed not to exercise their rights as a result of this default through June 16, 2009, provided the Company adheres to the requirements of the forbearance terms. Upon expiration of the
forbearance period, the forbearance shall be immediately and automatically terminated and be of no further force or effect. The Company's non-compliance with the aforementioned covenants,
decreasing revenues resulting from the current global economic downturn, and substantial annual cash interest payment requirements raise substantial doubt about its ability to continue as a going
concern under its existing capital structure.

On
March 16, 2009, the Company did not make the principal payment then due on its revolving credit loans, in an aggregate amount equal to $20.0 million (including
$17.0 million in borrowings and $3.0 million in outstanding letters of credit), due to the lenders under the 2006 Restated Credit Facility. The Company's failure to make the scheduled
principal payment on the revolving credit loans is an Event of Default under the 2006 Restated Credit Facility, which entitles the lenders to immediately accelerate the repayment of all other amounts
borrowed under the 2006 Restated Credit Facility together with accrued and unpaid interest thereon.

Also
on March 16, 2009, the Company did not pay interest then due to the holders of its 83/8% Notes. The failure to pay interest, if continued for 30 days,
will constitute an Event of Default under the Indenture, which will give the holders of the 83/8% Notes the right to accelerate the payment of the principal together with accrued and
unpaid interest thereon. The non-payment of principal then due under the 2006 Restated Credit Facility described above also constitutes an Event of Default under the Indenture, giving the
holders of the 83/8% Notes the right to immediately accelerate the repayment of the principal of the 83/8% Notes together with accrued and unpaid interest thereon.

The
non-payment of interest under the Indenture, if continued for 30 days, will constitute an Event of Default under the Second Lien, giving the lenders the right to
accelerate the repayment of amounts borrowed under the Second Lien together with accrued and unpaid interest thereon. The non-payment of principal under the 2006 Restated Credit Facility,
if continued for 90 days after notice or if the maturity of principal of the 2006 Restated Credit Facility is accelerated, will constitute an Event of Default under the Second Lien, giving the
lenders the right to accelerate the repayment of amounts borrowed under the Second Lien together with accrued and unpaid interest thereon. Substantially all of the Company's assets are pledged as
collateral under the 2006 Restated Credit Facility and the Second Lien.

Due
to the events of default described above, all of the Company's debt has been classified as a current liability on its 2008 consolidated balance sheet.

The
Company has retained the investment banking firm Lazard Middle Market to assist it in exploring alternatives to enhance the Company's capital structure. The Company is currently in
ongoing discussions with lenders under its most senior credit facility, the 2006 Restated Credit Facility, to, among other things, extend the maturity of the facility. The results of these discussions
could result in a significant restructuring or refinancing of the Company's debt. In addition to addressing the Company's

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capital
structure, management has also enacted restructuring plans to address operating costs by reducing headcount by 45% in its U.S. facilities and 35% on a global basis, significantly reducing
fixed costs at the Company's manufacturing facilities, renegotiating lease terms and rental rates for certain of the Company's facilities, and decreasing discretionary spending on items such as
travel, entertainment, advertising and promotion.

There
can be no guarantee that any restructuring or refinancing plan will be successfully implemented. Failure to successfully implement a restructuring or refinancing plan or otherwise
address compliance issues under the 2006 Restated Credit Facility, the Second Lien, or the 83/8% Notes within the time frame permitted may have a material adverse effect on the
Company's business, results of operations, and financial position, and may materially impact the Company's ability to continue as a going concern.

None
of the lenders under the 2006 Restated Credit Facility or the Second Lien, nor any holders of 83/8% Notes have accelerated the payment of principal or interest under
any of the applicable agreements as of the time of filing of this Annual Report on Form 10-K.

Discussion of Cash Flows for Year Ended December 31, 2008

Cash Flows from Operating Activities

Net cash used in operations in 2008 improved by approximately $8.6 million, to a use of cash totaling $1.3 million as
compared to net cash used in operations of $9.9 million in 2007.

The
use of cash from operating activities of $1.3 million during 2008 was primarily the result of $6.0 million in cash generated from sales activities, offset by a use of
cash in working capital of $7.2 million. The use of cash for working capital purposes related primarily to (1) a decrease in accruals for pension costs of $1.9 million related to
the timing of required cash deposits into the pension plan; (2) a decrease in trade accounts payable of $2.4 million related primarily to the general decline in the golf industry; and
(3) an increase in inventories of $3.4 million, which relates to (i) an increase in the inventory build programs with our key global golf original equipment manufacturers;
(ii) an increase in the carrying level of finished goods associated with a more rapid business expansion outside the United States, and the corresponding global inventory requirements; and
(iii) the commissioning and expansion of the Company's new manufacturing facility in Suzhou, China providing dual steel golf shaft manufacturing capability.

Cash Flows from Investing Activities

Cash flows from investing activities were a use of cash totaling $3.1 million during 2008. The use of cash in investing
activities during 2008 related primarily to routine capital expenditures for machinery and equipment, along with approximately $1.0 million in new equipment purchases required to increase the
Company's production in its China steel golf shaft manufacturing plant, which came on-line in 2008.

Cash Flows from Financing Activities

Cash flows from financing activities were a source of cash totaling $14.3 million during 2008.

During
the third quarter of 2008, TTC, the Company's parent, made equity investments in True Temper Sports, Inc. totaling $4.5 million. The equity investments were from the
proceeds of Series A Senior Preferred Shares ("Senior Preferred Shares") issued by the Company's parent. While the Senior Preferred Shares contain customary mandatory redemption features that
are binding on the Company's parent, the Company has no legal obligation to redeem the Senior Preferred Shares in the future, nor has the Company guaranteed or pledged its assets in regard to them.
TTC is a holding company whose primary operations are through its investment in the Company.

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During
the fourth quarter of 2008, the Company borrowed $12.0 million in available funds under the revolving credit facility of its 2006 Restated Credit Facility. Combined with
the $4.5 million equity investment described above, these two items accounted for the majority of the cash flows from financing activities during 2008.

Discussion of Cash Flows for Years Ended December 31, 2007 and 2006

Cash Flows from Operating Activities

Cash flows from operating activities were a use of cash totaling $9.9 million during 2007, and a source of cash totaling
$0.9 million during 2006.

The
use of cash in operating activities of $9.9 million in 2007 was primarily the result of $3.4 million in cash used by normal operations as well as a use of cash to
invest in working capital of $6.6 million. The use of cash in normal operations was driven primarily by cash interest expense of $22.4 million during 2007. The change in working capital
consisted primarily of (1) an increase in accounts receivable of $4.4 million, which was an expected increase related to the higher net sales in the fourth quarter of 2007 compared to
the fourth quarter of 2006, and (2) an increase in inventories of $5.2 million, which relates to several factors, including (i) an increase in the cost of nickel, a raw material
used in the manufacture of steel golf shafts, (ii) an increase in the number of inventory build programs with key global golf original equipment manufacturers, and (iii) an increase in
the Company's finished goods levels in anticipation of continued revenue gains in future periods.

The
source of cash from operating activities of $0.9 million during 2006 was primarily the result of $1.1 million in cash generated from normal operations offset by a
slight use of cash in working capital.

Cash Flows from Investing Activities

Cash flows from investing activities were a use of cash totaling $12.8 million during 2007, and a use of cash totaling
$20.5 million during 2006. The cash used in investing activities during 2007 relates primarily to the acquisition of CN Precision, as described more fully in Note 3 to the consolidated
financial statements located elsewhere in this annual report. The cash used in investing activities during 2006 relates primarily to the acquisition of certain assets from Royal Precision, as
described more fully in Note 3 to the consolidated financial statements located elsewhere in this annual report.

Cash Flows from Financing Activities

Cash flows from financing activities were a source of cash totaling $24.4 million during 2007, and a source of cash totaling
$17.8 million in 2006.

The
cash provided by financing activities in 2007 relates primarily to the events surrounding the acquisition of CN Precision, as well as a general refinancing of term debt, and includes
(i) new borrowings of second lien term debt totaling $45.0 million, (ii) the repayment of $24.7 million in first lien term debt, and (iii) the payment of
$2.4 million in debt issuance costs related to the additional 2007 borrowings.

The
cash provided by financing activities in 2006 relates primarily to the events surrounding the acquisition of certain assets from Royal Precision, and includes (i) new
borrowings of first lien term debt totaling $18.0 million, (ii) the repayment of $3.3 million in first lien term debt, and (iii) the payment of $1.3 million in debt
issuance costs related to the additional 2006 borrowings.

In
addition, as described above, during the third quarter of 2007, TTC made equity investments in True Temper Sports, Inc. totaling $6.7 million. The equity investments
were from the proceeds of Senior Preferred Shares issued by the Company's parent. While the Senior Preferred Shares contain customary redemption features that are binding on the Company's parent, the
Company has no legal obligation to redeem the Senior Preferred Shares in the future, nor has the Company guaranteed or pledged its assets in regard to them.

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Existing Contractual Cash Obligations

The following table reflects the Company's contractual cash obligations for principal and interest payments on long-term
debt, operating leases and purchase commitments as of December 31, 2008 (dollars in millions). Amounts reflected as Long-Term Debt are based on the original, contractual payment
dates under the Company's various debt agreements. As described more fully in Note 8 to the financial statements included elsewhere in this annual report, due to non-compliance with
various covenants
in the 2006 Restated Credit Facility and Second Lien, and the failure to make required principal and interest payments under the 2006 Restated Credit Facility and the 83/8% Notes,
respectively, the lenders in each of these debt agreements have the right to accelerate the contractual repayment of amounts borrowed into calendar 2009. As a result, the Company's debt has been
classified as current on its 2008 consolidated balance sheet.

Total

2009

2010
through
2011

2012
through
2013

ThereafterLong-Term Debt(1 and 2)

$
327.5

$
41.3

$
286.2

$


$
Operating Leases


4.8


1.2


2.3


1.3


Purchase Commitments(3)


1.9


1.9








Total(4)

$
334.2

$
44.4

$
288.5

$
1.3

$



---

Future Cash Generation and Use

Currently the Company's intention is to use existing cash and cash provided from future operations, if any, as allowed within the
covenants of the 2006 Restated Credit Facility, the Second Lien and the 83/8% Notes, to:



As
illustrated above, the Company has considerable, contractual obligations related to principal and interest payments on its debt obligations. Given the current global economic
downturn, and its impact on the golf industry and True Temper specifically, it is unlikely that the Company can meet the current obligations under all of its debt instruments. As more fully described
elsewhere in this annual report, and in Note 8 to the consolidated financial statements included herein, the Company is engaged in a review of its capital structure. The Company expects that
ongoing discussions with its financial

33

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advisors
and lenders will result in a plan that the Company can use to meet its future principal and interest obligations, under a modified capital structure.

In
addition to the debt service obligations for principal and interest payments, the Company's liquidity needs largely relate to working capital requirements and capital expenditures for
machinery and equipment. The Company intends to fund its current and long-term working capital and capital expenditure requirements through cash flow generated from operations.

The
Company also has a management services agreement with an affiliate of Gilbert Global, which requires the payment of an annual management services fee of $0.5 million, as well
as a transaction based advisory fee associated with any significant merger, acquisition or financing transaction entered into by the Company. A fee of $0.6 million was paid associated with the
2007 CN Precision acquisition and related financing activities and a fee of $0.8 million was paid associated with the 2006 acquisition of certain assets from Royal Precision and the related
financing activities, both as more fully explained in Notes 3 and 8 to the consolidated financial statements located elsewhere in this annual report. Fees associated with the management services
agreement may be prohibited if the Company is in default on any of its debt instruments.

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 products through mass channel
retail stores and generate strong volumes during the holiday gift-giving season in the fourth quarter. Our business does experience some seasonal fluctuations, based on a five year average
from 2004 through 2008, approximately 57% of our net sales are generated in the first half of the year, and the remaining 43% of our net sales are generated in the second half.

Inflation

With the exception of natural gas, steel, nickel, carbon fiber composite graphite material, and medical costs, the Company's historical
financial results have not been significantly impacted by inflationary pressures. The key cost elements outlined above have impacted financial results, or are expected to impact future results, and
are described in more detail below.

The
Company uses natural gas as an energy source in its steel product manufacturing plant in Amory, Mississippi. During 2006 and 2007, overall natural gas prices were relatively stable.
During 2008, the Company experienced relatively high inflation in the cost for natural gas. Based upon current market conditions and existing purchase contracts for natural gas, the Company expects
overall natural gas costs to be lower during 2009. The Company believes its natural gas price inflation has been and will continue to be consistent with that experienced by others using this same
energy source.

During
2006 and 2007, the Company experienced routine annual price increases for steel. During 2008 the overall market for steel saw considerable price inflation, and the Company's costs
for steel increased accordingly. In late 2008 and early 2009 the overall market for steel declined from the high reached in mid-2008. Based upon current market conditions and steel contracts for 2009,
the Company expects overall steel costs for 2009 to be higher than 2008, but not materially.

During
2006 and 2007, the Company experienced an increase in costs for nickel, which is used in the manufacture of steel golf shafts. In 2008 the nickel market declined, and the Company
regained a portion of the cost increase experienced in the two preceding years. Based upon current market

34

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conditions
and nickel contracts for 2009, the Company expects overall nickel costs for 2009 to be lower again, in approximately the same magnitude as the 2008 decline. The Company believes its nickel
price inflation has been and will continue to be consistent with that experienced by others using this same raw material.

During
2006, the Company experienced a significant increase in costs for carbon fiber prepreg material which is used in the manufacture of graphite golf shafts, hockey sticks and bicycle
components. During 2007, the Company experienced relatively stable costs for carbon fiber prepreg material, and in 2008 prices dropped slightly for this material. Based upon current market conditions
and purchase price agreements for 2009, the Company expects overall carbon fiber prepreg costs to be down slightly during 2009. The Company believes its carbon fiber prepreg price inflation has been
and will continue to be consistent with that experienced by others using this same raw material.

During
2006 and 2007, the Company experienced significant increases in the cost of medical benefits provided to employees in the United States. In October 2007, the Company implemented a
new fully insured, more affordable medical plan, and as a result the overall costs for 2008 declined. Based upon current market conditions and projected medical inflation trends, as well as the
Company's guaranteed medical premiums that run through September 2009, the Company expects overall medical costs to be lower in 2009 than experienced in 2008. The Company believes its medical cost
inflation has been and will continue to be consistent with that experienced by other U.S. based companies providing employer sponsored medical benefits to their employees.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("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
consolidated 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 consolidated financial statements.

The
Company believes that 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 Note 2 to its consolidated financial statements located elsewhere in this annual report. Certain critical accounting
policies and estimates are described below.

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

Pension and Other Postretirement Obligations.Pension and other postretirement benefits costs and obligations are dependent on
assumptions used in
calculating such amounts. These assumptions include discount rates, expected return on plan assets, rates of salary increase, health care cost trend rates, mortality rates, retirement rates, and other
factors. These assumptions are updated on an annual basis, and where appropriate, the Company consults with its actuaries to provide input and guidance for certain estimates and assumptions. The
Company considers current market conditions, including

35

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interest
rates, in making these assumptions. The Company develops the discount rates by considering the yields available on high-quality fixed income investments with maturities
corresponding to the related benefit obligation. The Company's discount rate for both its defined benefit pension plan and its unfunded post-retirement health plan was 6.25% and 6.45% at
December 31, 2008 and 2007, respectively. As discussed further in Note 10 to the consolidated financial statements, located elsewhere in this annual report, the Company develops the
expected return on pension plan assets by considering various factors, which include its targeted asset allocation percentages, historic returns, and expected future returns. The Company's expected
long-term rate of return assumption for assets in its defined benefit plan was 8.00% for both 2008 and 2007. The Company estimated its long-term healthcare cost trend rate to be 8.0% for
2008, decreasing by 0.5% per year to 5.0% by 2014 and remaining at that level thereafter.

The
Company believes that the assumptions used are appropriate; however, differences in actual experience or changes in the assumptions may materially affect the Company's financial
position or results of operations. In accordance with GAAP, actual results that differ from the actuarial assumptions are accumulated and, if in excess of a specified corridor, amortized over future
periods
and, therefore, generally affect recognized expense and the recorded obligation in future periods. Also, gains and losses resulting from changes in assumptions are amortized over the expected
remaining service period of active plan participants or, for retired participants, the average remaining life expectancy, to the extent that such amounts exceed 10% of the greater of the
market-related value of plan assets or the projected benefit obligation at the beginning of the year. The Company expects that its pension and other postretirement benefit costs in 2009 will be
relatively consistent with those recognized in 2008. In addition, the Company recorded a curtailment loss of $0.2 million due to the termination of a significant number of employees covered by
the Company's pension plan in 2008.

In
September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 158,Employers' Accounting for
Defined Benefit Pension and Other Postretirement Plansan Amendment of FASB Statements No. 87, 88, 106, and 132(R)("SFAS 158"). SFAS 158,
which was applicable for the Company beginning on January 1, 2007, requires the recognition of the overfunded or underfunded status of a defined benefit postretirement plan as an asset or a
liability in the balance sheet, with changes in the funded status recorded through other comprehensive income in the year in which those changes occur. The impact of the Company's adoption of
SFAS 158 is more fully described in Note 10 to the consolidated financial statements located elsewhere in this annual report.

Impairment of Long-Lived Assets, Including Goodwill.The Company accounts for long-lived assets in accordance with the
provisions of SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets(SFAS 144) and evaluates goodwill and
other identifiable intangibles with indefinite lives for impairment under SFAS No. 142,Goodwill and Other Intangible Assets(SFAS 142). The
Company employs a discounted cash flow model to evaluate goodwill for impairment on an annual basis, and periodically evaluates long-lived assets, including goodwill, for indicators that
would suggest that the carrying amount of the assets may not be recoverable. The judgments regarding the existence of such indicators are based on factors such as operating performance, market
conditions, and legal factors. The valuation of long-lived assets, including goodwill, requires the use of judgment in evaluating these indicators.

Goodwill
and intangible assets not subject to amortization are tested annually for impairment, and are tested for impairment more frequently if events and circumstances indicate that the
asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset's fair value.

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In the fourth quarter of 2008, in conjunction with the annual goodwill impairment review, the Company recorded a $156.0 million impairment charge to impair
all of its goodwill.

In
accordance with SFAS No. 144, long-lived assets, such as property, plant, and equipment, and purchased intangibles subject to amortization, are 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 estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an
impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet
and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held for sale would be
presented separately in the appropriate asset and liability sections of the balance sheet.

Inventory Valuation.Inventories are stated at the lower of cost or market, cost being determined on the first-in, first-out
method. The Company assesses the valuation of its inventories and reduces the carrying value of those inventories that are obsolete, or in excess of the Company's forecasted usage, to their estimated
net realizable value. The Company estimates the net realizable value of such inventories based on analyses and assumptions including, but not limited to,
historical usage, future demand and market requirements. Reductions to the carrying value of inventories are recorded in cost of goods sold. If the future demand for the Company's products is less
favorable than the Company's forecasts, then the value of the inventories may be required to be reduced, which could result in material additional expense to the Company.

Valuation for Deferred Income Taxes.The Company's consolidated financial statements include an estimate of income taxes
assessed in each legal
jurisdiction in which it operates. These income taxes include both a current amount, as well as a deferred portion which results from a variety of temporary book versus tax treatment differences,
including tax-basis net operating loss carryforwards. These differences result in deferred tax assets and liabilities, which are included in the consolidated balance sheet. Once
established, any deferred tax asset must be evaluated to determine whether it is more likely than not that the future tax benefits will be realized, including the likelihood that the Company will
generate sufficient future taxable income to utilize the full amount. When facts and circumstances warrant, as they did during the third quarter of 2007, the Company will establish, increase or reduce
valuation allowances associated with deferred tax assets in order to reflect which assets meet the more likely than not realizability test. The valuation allowance is more fully described in
Note 9 to the consolidated financial statements.

Impact of Recently Issued Accounting Standards

Information regarding recent accounting pronouncements is contained in Note 2 to the consolidated financial statements, which is
incorporated herein by this reference.

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, 2008 that are sensitive to changes in
interest rates. The table presents cash flows and related weighted average interest rates at December 31, 2008 by expected maturity dates (dollars in millions). Expected maturity dates are
based on the original, contractual payment dates under the Company's various debt agreements. As described more fully in Note 8 to the financial statements included elsewhere in this annual
report, due to non-compliance with various covenants in the 2006 Restated Credit Facility and Second Lien, and the failure to make required principal and interest payments under the 2006
Restated

37

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Credit
Facility and the 83/8% Notes, respectively, the lenders in each of these debt agreements have the right to accelerate the contractual repayment of amounts borrowed into calendar
2009. As a result, the Company's debt has been classified as current on its 2008 consolidated balance sheet.

Expected Maturity DateThere-
afterLONG TERM DEBT

2009

2010

2011

2012

2013

TotalFixed Rate 83/8% Senior Subordinated Notes

$


$


$
125.0

$


$


$


$
125.0Average Interest Rate(a)




















8.38
%2006 Restated Credit Facility


18.0


71.1


12.6










$
101.7Average Interest Rate(b)(d)




















5.49
%Second Lien








45.0










$
45.0Average Interest Rate(c)(d)




















9.33
%


---

As
a result of recent market conditions and the events of default described above, there is limited or no observable market data available regarding the fair value of the Company's
variable rate debt; thus determination of estimated fair value of such debt is not practicable. These fair value measurements are based primarily upon our own estimates and are often calculated based
on the current economic and competitive environment, the characteristics of the instrument, credit, interest, and currency rate risks, and other such factors. Therefore, the results cannot be
determined with precision, cannot be substantiated by comparison to quoted prices in active markets, and may not be realized in a current sale or immediate settlement of the liability. Additionally,
there are inherent uncertainties in any fair value measurement technique, and changes in the underlying assumptions used, including discount rates, liquidity risks, and estimates of future cash flows,
could significantly affect the fair value measurement amounts. Based on the Company's estimates, the fair value of the Company's variable rate debt is less than its carrying value at
December 31, 2008. 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, 2008, the Company's Senior Subordinated Notes had an estimated fair value of $40.0 million.

Exchange Rate Sensitivity

We use forward foreign exchange contracts ("Instruments" or "Derivative Instruments") in our management of foreign currency exchange
rate exposures. We are exposed to exchange rate fluctuations in the British Pound and Japanese Yen due to sales in those currencies and to the Chinese Yuan due

38

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to
operating costs for our facilities in China. Instruments used as hedges must be effective at reducing the risks associated with the underlying exposure and must be designated as a hedge at the
inception of the contract. Accordingly, changes in the market value of the Instruments must have a high degree of inverse correlation with changes in the market value or cash flows of the underlying
hedged item.

We
use Derivative Instruments to hedge several components of our revenue and cash collection stream, including, (i) anticipated foreign currency sales, (ii) accounts
receivable denominated in foreign currencies, and (iii) cash balances maintained in foreign currencies.

The
changes in the market value of Derivative Instruments hedging anticipated foreign currency sales are recognized in the consolidated balance sheets as a component of accumulated other
comprehensive income (loss) in stockholder's equity. To the extent an instrument is no longer effective as a hedge due to a change in the underlying exposure, gains and losses are recognized currently
in the consolidated statements of operations as a component of cost of sales.

The
changes in the market value of Derivative Instruments hedging accounts receivable or cash denominated in foreign currency are recognized as a component of operating income during the
period of the change, as they are marked to market on a monthly basis. The estimated fair value of the foreign currency hedges was a liability of $1.1 million at December 31, 2008.

The
following table summarizes the contractual notional amounts of True Temper's forward foreign exchange contracts as of December 31, 2008 (in U.S. dollars):

2008Pound Sterling

$
1,284Yen


9,497Total

$
10,781


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, 2008, would be $2.4 million. Those losses would be offset, in part, by gains on the underlying receivables and cash being hedged.
See Note 2(i) to our consolidated financial statements located elsewhere in this annual report for further discussion of foreign currencies.

Commodity Risk

We have some exposure to risks associated with fluctuations in prices for commodities such as nickel and natural gas which are used to
manufacture our products. Nickel is used in the plating of steel golf shafts, and natural gas 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, 2008, we held either under contract or have purchased approximately 40% of our expected 2009 usage of nickel, and 50% of our expected 2009 usage of natural gas. The notional
amounts of the contracts to purchase nickel and natural gas at December 31, 2008 is not material.

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Item 8.Consolidated Financial Statements and Supplementary Data

INDEX



Consolidated Financial Statements

Page(s)The following consolidated financial statements of True Temper Sports, Inc. and subsidiaries
are submitted in response to Part II, Item 8:Report of Independent Registered Public Accounting Firm


41Consolidated Statements of Operationsfor each of the years ended December 31,
2008, 2007 and 2006


42Consolidated Balance SheetsDecember 31, 2008 and 2007


43Consolidated Statements of Stockholder's Equity and Comprehensive Income
(Loss)for each of the years ended December 31, 2008, 2007 and 2006


44Consolidated Statements of Cash Flowsfor each of the years ended December 31,
2008, 2007 and 2006


45Notes to Consolidated Financial Statements


46


40

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Table of Contents

Report of Independent Registered Public Accounting Firm

The
Board of Directors
True Temper Sports, Inc.:

We
have audited the accompanying consolidated balance sheets of True Temper Sports, Inc. and subsidiaries (the Company) as of December 31, 2008 and 2007, and the related
consolidated statements of operations, stockholder's equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2008.
In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule, Schedule IIValuation and Qualifying Accounts. These
consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of True Temper Sports, Inc. and
subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31,
2008, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 8 to the consolidated
financial statements, the Company was in noncompliance with certain financial covenants in its various credit agreements as of December 31, 2008 and is in payment default of certain principal
and interest payments required under those credit agreements. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note 8. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As
discussed in Note 2 to the consolidated financial statements, effective January 1, 2007, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxesan Interpretation of FASB
Statement No. 109.Also, as discussed in Notes 2 and 10
to the consolidated financial statements, the Company adopted the recognition and disclosure provisions of Statement of Financial Accounting Standards No. 158, Employers' Accounting for Defined Benefit Pension and Other
Postretirement Plansan amendment of FASB Statements No. 87, 88, 106, and
132(R), as of December 31, 2007.

/s/
KPMG LLP
Memphis, Tennessee
March 31, 2009

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TRUE TEMPER SPORTS, INC. AND SUBSIDIARIES
(A wholly-owned subsidiary of True Temper Corporation)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands)

Years endedDecember 31,
2008

December 31,
2007

December 31,
2006NET SALES

$
123,653

$
116,273

$
108,005Cost of sales


83,145


82,367


73,194GROSS PROFIT


40,508


33,906


34,811Selling, general and administrative expenses


14,490


14,725


14,226Amortization of intangible assets


14,956


14,941


14,343Restructuring, business development, start-up and transition costs


2,131


2,012


2,688Loss on early extinguishment of debt





755


Goodwill impairment charge


156,036





OPERATING (LOSS) INCOME


(147,105
)

1,473


3,554Interest expense, net


23,023


24,921


20,525Other expenses, net


183


32


75LOSS BEFORE INCOME TAXES


(170,311
)

(23,480
)

(17,046
)Income tax expense (benefit)


84


9,991


(6,279
)NET LOSS

$
(170,395
)
$
(33,471
)
$
(10,767
)


See
accompanying notes to consolidated financial statements.

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TRUE TEMPER SPORTS, INC. AND SUBSIDIARIES
(A wholly-owned subsidiary of True Temper Corporation)

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

December 31,
2008

December 31,
2007ASSETSCURRENT ASSETSCash and cash equivalents

$
14,719

$
4,722Receivables, net


18,616


21,185Inventories


31,850


28,418Prepaid expenses and other current assets


2,349


1,803Deferred tax assets


1,237


1,242Total current assets


68,771


57,370Property, plant and equipment, net


18,696


18,902Goodwill





156,070Intangible assets, net


104,431


119,396Deferred financing costs


4,508


6,360Other assets


2,471


1,752Total assets

$
198,877

$
359,850LIABILITIES AND STOCKHOLDER'S EQUITYCURRENT LIABILITIESCurrent portion of long-term debt

$
271,733

$
987Accounts payable


5,543


7,979Accrued expenses and other current liabilities


13,867


12,052Total current liabilities


291,143


21,018Deferred tax liabilities


10,134


10,139Long-term debt, net of current portion





259,733Pension and post-retirement obligations


12,891


10,959Total liabilities


314,168


301,849STOCKHOLDER'S EQUITYCommon stockpar value $0.01 per share; authorized 1,000 shares; issued and outstanding 100 shares





Additional paid-in capital


122,673


118,648Accumulated deficit


(225,563
)

(55,168
)Accumulated other comprehensive income (loss)


(12,401
)

(5,479
)Total stockholder's equity (deficit)


(115,291
)

58,001Commitments and contingent liabilities (See Note 12)





Total liabilities and stockholder's equity

$
198,877

$
359,850


See
accompanying notes to consolidated financial statements.

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TRUE TEMPER SPORTS, INC. AND SUBSIDIARIES

(A wholly-owned subsidiary of True Temper Corporation)

CONSOLIDATED STATEMENTS OF
STOCKHOLDER'S EQUITY AND COMPREHENSIVE INCOME (LOSS)

(Dollars in thousands)

Common Stock





Accumulated
Other
Comprehensive
Income (Loss)Additional
Paid-In
Capital

Accumulated
DeficitShares

Par Value

TotalBalance at December 31, 2005


100

$


$
111,943

$
(10,930
)
$
(1,249
)
$
99,764Net loss











(10,767
)




(10,767
)Minimum pension liability, net of taxes














1,211


1,211Mark to market adjustment on derivative instruments, net of taxes














74


74Comprehensive loss, net of taxes

















(9,482
)Balance at December 31, 2006


100





111,943


(21,697
)

36


90,282Net loss











(33,471
)




(33,471
)Minimum pension liability, net of taxes














(1,286
)

(1,286
)Mark to market adjustment on derivative instruments, net of taxes














(64
)

(64
)Comprehensive loss, net of taxes

















(34,821
)Adoption of SFAS 158 (Note 10)














(4,165
)

(4,165
)Capital contribution from True Temper Corporation








6,705








6,705Balance at December 31, 2007


100





118,648


(55,168
)

(5,479
)

58,001Net loss











(170,395
)




(170,395
)Adjustment to pension and post-retirement obligations, net of taxes














(3,743
)

(3,743
)Mark to market adjustment on derivative instruments, net of taxes














(3,179
)

(3,179
)Comprehensive loss, net of taxes

















(177,317
)Dividends paid to True Temper Corporation








(475
)







(475
)Capital contribution from True Temper Corporation








4,500








4,500Balance at December 31, 2008


100

$


$
122,673

$
(225,563
)
$
(12,401
)
$
(115,291
)


See
accompanying notes to consolidated financial statements.

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TRUE TEMPER SPORTS, INC. AND SUBSIDIARIES
(A wholly-owned subsidiary of True Temper Corporation)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

Years ended December 31,2008

2007

2006OPERATING ACTIVITIESNet loss

$
(170,395
)
$
(33,471
)
$
(10,767
)Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Depreciation


3,240


3,028


2,616Amortization of deferred financing costs


1,852


1,690


1,387Amortization of intangible assets


14,956


14,941


14,343Loss on disposal of property, plant and equipment


87


15


Loss on early extinguishment of long-term debt





755


Goodwill impairment charge


156,036





Deferred income taxes





9,690


(6,492
)Changes in operating assets and liabilities, net of acquisitions:Receivables, net


2,569


(4,366
)

1,130Inventories


(3,432
)

(5,210
)

(2,975
)Prepaid expenses and other assets


(546
)

928


(140
)Accounts payable


(2,436
)

707


2,287Accrued expenses and other current liabilities


1,815


2,130


8Other assets and liabilities


(5,005
)

(776
)

(456
)Net cash provided by (used in) operating activities


(1,259
)

(9,939
)

941INVESTING ACTIVITIESPurchases of property, plant and equipment


(3,087
)

(3,170
)

(4,888
)Acquisition of business, net of cash acquired





(9,513
)

Purchase of other assets








(15,450
)Other investing activity





(97
)

(126
)Net cash used in investing activities


(3,087
)

(12,780
)

(20,464
)FINANCING ACTIVITIESProceeds from issuance of bank debt





45,000


23,000Net borrowings on revolving line of credit


12,000





Capital contributions from True Temper Corporation


4,500


6,705


Principal payments on bank debt


(987
)

(24,686
)

(3,319
)Payment of debt issuance costs





(2,438
)

(1,250
)Dividends paid to True Temper Corporation


(475
)




Other financing activity


(695
)

(195
)

(586
)Net cash provided by financing activities


14,343


24,386


17,845Net increase (decrease) in cash and cash equivalents


9,997


1,667


(1,678
)Cash and cash equivalents at beginning of year


4,722


3,055


4,733Cash and cash equivalents at end of year

$
14,719

$
4,722

$
3,055


See
accompanying notes to consolidated financial statements.

45

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TRUE TEMPER SPORTS, INC. AND SUBSIDIARIES
(A wholly-owned subsidiary of True Temper Corporation)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands unless otherwise indicated)

(1)   DESCRIPTION OF BUSINESS

True Temper Sports, Inc. and subsidiaries ("True Temper" or the "Company") is primarily engaged in the design, manufacture and sale of steel and composite
golf shafts as well as a variety of other high strength, tight tolerance tubular components for the bicycle, hockey and other recreational sports markets. True Temper's manufacturing plants and
related facilities are located in Memphis, Tennessee; Amory and Olive Branch, Mississippi; San Diego, California; and Suzhou and Guangzhou, China. 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 ("TTC").

The
consolidated financial statements include the financial statements of True Temper and its wholly owned subsidiaries. All significant intercompany balances and transactions have been
eliminated in consolidation.

On
January 30, 2004, TTS Holdings LLC, a new company formed by Gilbert Global Equity Partners, L.P. and its affiliated funds ("Gilbert Global"), entered into a stock
purchase agreement with the Company's direct parent company, True Temper Corporation, pursuant to which TTS Holdings LLC and certain of the Company's senior management purchased all of the
outstanding shares of TTC ("Gilbert Global Acquisition"). The Gilbert Global Acquisition was finalized and closed on March 15, 2004.

As
more fully described in the heading "Liquidity and Substantial Doubt About the Company's Ability to Continue as a Going Concern" in Note 8, on March 16, 2009 the Company
did not make certain principal and interest payments required under the 2006 Restated Credit Facility and 83/8% Notes and is in default under these agreements.

(2)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



46

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Asset Category

LifeBuildings

15-40 yearsFurniture and office equipment

10-15 yearsMachinery and equipment

8-15 yearsComputers and capitalized software

2-4 yearsLeasehold improvements

6-15 years




47

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48

---



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2008

2007Pound Sterling

$
1,284

$
7,059Yen


9,497


2,849Total

$
10,781

$
9,908




Balance at December 31, 2007

$
Liabilities accrued for severance benefits during the year


1,121Severance benefits paid during the year


(556
)Balance at December 31, 2008

$
565


49

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50

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51

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---



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True Temper Fair Value Measurements at Reporting Date

Description

December 31,
2008

Level 1

Level 2

Level 3Derivatives (foreign exchange forward contracts)

$
1,055

$


$
1,055

$
Derivatives (interest rate swaps)

$
2,230

$


$


$
2,230




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Years Ended
December 31,2008

2007

2006Income taxes

$
307

$
135

$
213Interest


21,757


22,355


19,391




Pension and Post-
Retirement ObligationsDerivative
Instruments
Mark to Market
Adjustment

Minimum
Pension
Liability
Adjustments

Accumulated
Other
Comprehensive
Income (Loss)Prior
Service Cost

Accumulated
LossDecember 31, 2006

$
74

$
(38
)
$


$


$
36Period change


(64
)

(1,286
)







(1,350
)Adoption of SFAS 158





1,324


(785
)

(4,704
)

(4,165
)December 31, 2007


10





(785
)

(4,704
)

(5,479
)Period change


(3,179
)




241


(3,984
)

(6,922
)December 31, 2008

$
(3,169
)
$


$
(544
)
$
(8,688
)
$
(12,401
)




(3)   ACQUISITIONS



On June 8, 2006, the Company acquired certain business assets of the former golf shaft manufacturer Royal Precision, Inc.
("Royal Precision") for approximately $17.9 million. The assets acquired included intangible assets of $14.9 million comprised of patents, trademarks, brand names and design technologies
and other intangible assets including customer relationships, $0.6 million in inventory, and $2.4 million in certain steel golf shaft manufacturing equipment.

The
Company has completed the integration of the machinery and equipment into its existing steel golf shaft facility in Amory, Mississippi, and is currently producing and distributing
the branded products formerly sold by Royal Precision.

Machinery
and equipment acquired are being depreciated over their estimated remaining useful lives, between five and ten years. Intangible assets acquired with determinable useful lives
are being amortized over periods ranging from eight to ten years.

54

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Certain expenses were incurred to acquire the assets and transition them to the Company's existing manufacturing sites. Of these costs approximately
$2.1 million for the year ended December 31, 2006 were recorded in the Company's consolidated statement of operations as business development, start-up and transition costs.
These costs include acquisition-related fees and expenses, as well as transportation and integration expenses associated with the transfer of production equipment and inventory to the Company's
facilities.



On February 25, 2007, the Company acquired 100% of the shares of Supertop Enterprises Limited, the sole shareholder of CN
Precision Co., Ltd ("CN Precision"), a wholly foreign-owned enterprise in Suzhou, China for approximately $9.5 million. Approximately $0.7 million of the purchase price was
contingent upon the successful completion of certain contractual obligations by the seller. As of September 30, 2007, all of the contractual obligations had been fulfilled by the seller, and
the entire $0.7 million contingent purchase price had been paid.

CN
Precision is a startup steel golf shaft manufacturing facility. The Company is continuing the process of commissioning all of the machinery and equipment necessary to ramp-up
production of steel golf
shafts at CN Precision and expects to further increase production of steel golf shaft manufacturing in this facility during 2009 and beyond.

The
purchase price as stipulated in the February 25, 2007 purchase agreement totaled $9.5 million, plus direct acquisition costs and certain working capital adjustments of
$0.2 million. The total consideration paid was allocated as follows:

Cash

$
150Current assets


30Identifiable intangible assets


987Property, plant and equipment


4,276Goodwill


5,187Current liabilities


(585
)Deferred tax liability


(382
)Total

$
9,663


This
transaction was accounted for using the purchase method of accounting. In connection with the acquisition, the Company conducted an assessment and valuation of all tangible and
intangible assets acquired. The results of this exercise are reflected in the allocation table above.

The
establishment of the intangible assets results in certain non-cash amortization expense beginning in 2007, as these intangible assets are amortized over their expected
economic life of 50 years.

The
financial position of CN Precision as of December 31, 2008 and the results of operations of CN Precision from February 25, 2007 through December 31, 2008 have
been included in these consolidated financial statements. Because CN Precision is a start-up operation and did not become operational until 2008, the Company's consolidated results of
operations would not have been significantly different than reported results had the acquisition occurred at the beginning of 2007 or 2006.

55

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Table of Contents

(4)   INTANGIBLE ASSETS

The following table sets forth the gross value and accumulated amortization for intangible assets at December 31, 2008 and 2007.

December 31, 2008

December 31, 2007Weighted
Average
Amortization
PeriodGross
Value

Accumulated
Amortization

Net Book
Value

Gross
Value

Accumulated
Amortization

Net Book
ValueTrade name



$
22,430

$


$
22,430

$
22,430

$


$
22,430Patented technology

8 yrs


13,011


(7,414
)

5,597


13,011


(5,794
)

7,217Customer-related intangible assets

10 yrs


132,478


(61,015
)

71,463


132,478


(47,767
)

84,711Lease contract

59 yrs


4,323


(350
)

3,973


4,323


(277
)

4,046Land use rights

50 yrs


987


(19
)

968


987





987Other

2 yrs


262


(262
)




275


(270
)

5Total intangible assets



$
173,491

$
(69,060
)
$
104,431

$
173,504

$
(54,108
)
$
119,396


The
following table sets forth the estimated aggregate future amortization expense for these intangible assets at December 31, 2008:

2009

$
14,9612010


14,9612011


14,9612012


13,7972013


13,500


(5)   INVENTORIES

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

2008

2007Raw materials

$
5,995

$
5,017Work in process


2,598


4,156Finished goods


23,257


19,245Total

$
31,850

$
28,418


(6)   PROPERTY, PLANT AND EQUIPMENT

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

2008

2007Land improvements

$
121

$
121Buildings


5,471


5,440Furniture and office equipment


1,164


1,017Machinery and equipment


21,201


19,501Computer equipment and capitalized software


1,062


950Leasehold improvements


2,209


2,149Construction in progress


1,812


98433,040


30,162Less accumulated depreciation


(14,344
)

(11,260
)Net property, plant and equipment

$
18,696

$
18,902


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Table of Contents

(7)   ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities, as of December 31 of the year indicated, consist of the following:

2008

2007Accrued compensation, benefits and related payroll taxes

$
3,431

$
3,926Accrued interest


4,338


4,871Other


6,098


3,255Total

$
13,867

$
12,052


(8)   BORROWINGS



2008

200783/8% Senior Subordinated Notes due 2011

$
125,000

$
125,0002006 Restated Credit Facility


101,733


90,720Second Lien


45,000


45,000Total debt


271,733


260,720Less current portion


271,733


987Long-term debt, net of current portion

$


$
259,733




57

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2009

$
17,9872010


71,1272011


182,619Total

$
271,733




The Company may borrow, through March 15, 2009, up to $20.0 million under a revolving credit agreement included in the
2006 Restated Credit Facility. The Company pays an annual commitment fee

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of
0.5% on the unused portion of the revolving credit agreement. Borrowings under the agreement are subject to the same provisions described in the long-term debt section of this Note. The
Company had $17.0 million in outstanding borrowings and approximately $3.0 million in outstanding standby letters of credit under this line of credit as of December 31, 2008,
which is included in the preceding table in this Note.

(9)   INCOME TAXES

Total income taxes for the periods indicated were allocated as follows:

Years EndedDecember 31 2008

December 31, 2007

December 31, 2006Income (loss) from continuing operations

$
84

$
9,991

$
(6,279
)Stockholder's equity (deficit):Minimum pension liability








741Mark to market adjustment on derivative instruments








45Total income taxes

$
84

$
9,991

$
(5,493
)


The
income tax expense (benefit) attributable to loss from continuing operations, for the periods indicated, is as follows:

Years EndedDecember 31, 2008

December 31, 2007

December 31, 2006Current:Federal

$


$


$
State








40Foreign


84


262


173Total current


84


262


213Deferred:Federal





8,714


(5,473
)State





1,015


(1,019
)Total deferred





9,729


(6,492
)Total

$
84

$
9,991

$
(6,279
)


The
actual income tax expense (benefit) attributable to loss from continuing operations differs from the amounts computed by applying the U.S. federal tax rate of 34% to the pretax loss
as a result of the following:

Years EndedDecember 31, 2008

December 31, 2007

December 31, 2006Computed "expected" tax benefit

$
(57,906
)
$
(7,983
)
$
(5,796
)State tax, net of federal benefit


(6,744
)

(930
)

(646
)Foreign taxes


84


262


173Goodwill impairment charge


59,231





Valuation allowance and other


5,419


18,642


(10
)Actual income tax expense (benefit)

$
84

$
9,991

$
(6,279
)


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The
components of deferred tax assets and liabilities at December 31, 2008 and 2007 are as follows:

2008

2007Deferred tax assets:Goodwill

$
22,878

$
27,693Accrued liabilities


565


802Asset impairment


445


445Net operating loss carryforwards


31,599


19,974Facility start-up costs


305


454Pension and post-retirement benefit obligations


4,635


3,868Inventories


1,196


1,018Deferred financing costs


161


222Other


761


Gross deferred tax assets

$
62,545

$
54,476Valuation allowance


(34,127
)

(20,765
)Net deferred tax assets

$
28,418

$
33,711Deferred tax liabilities:Identifiable intangible assets

$
(34,972
)
$
(40,247
)Property, plant and equipment


(2,126
)

(2,126
)Other


(217
)

(235
)Net deferred tax liability

$
(8,897
)
$
(8,897
)


At
December 31, 2008, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $83,200 which expire between 2019 and 2028.

During
2007, the Company recorded income tax expense of $9,991, primarily related to providing a valuation allowance against its deferred tax assets which were, at December 31,
2007, in excess of its deferred tax liabilities amortizing or reversing over similar time periods. The remaining net deferred tax liability of $8,897 on the Company's consolidated balance sheet as of
December 31, 2008 related entirely to intangible assets with indefinite lives or in different tax jurisdictions.

In
accordance with SFAS No. 109,Accounting for Income Taxes("SFAS 109"), the Company evaluates its deferred income taxes
to determine if a valuation allowance is required. SFAS 109 requires that companies assess whether valuation allowances should be established against their deferred tax assets based on the
consideration of all available evidence using a "more likely than not" standard. In making such judgments, companies must give more weight to evidence that can be objectively verified, and less weight
to evidence that is more subjective in nature. Accordingly, when the Company evaluates the need for a valuation allowance it normally relies more heavily on recent financial performance than on
projections of future taxable income.

The
Company believes that a valuation allowance is required due to the Company's recent financial performance through 2008. In conducting the analysis in 2008, the Company utilized a
consistent approach which relies heavily on reviewing the three year cumulative pretax income or loss for financial reporting purposes, as adjusted for any items that are unusual or infrequent in
nature. In addition, all available positive and negative evidence was assessed, including future expected taxable income. In concluding that a full valuation allowance was required, the Company
determined that the historical cumulative loss information outweighed other positive evidence available.

(10)    EMPLOYEE BENEFIT PLANS

True Temper has a qualified pension plan for the hourly unionized employees at its Amory, Mississippi plant. The following tables
provide a reconciliation of the changes in the plan's benefit

61

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obligation,
fair value of plan assets and a statement of the plan's funded status for the years ended December 31, 2008 and 2007. During 2007, the Company adopted SFAS No. 158, as more
fully described in Note 2(n). As a result of adopting SFAS No. 158, the Company recorded an adjustment of approximately $4.2 million in 2007 to accumulated other comprehensive
income (loss) to reflect the funded status of its pension and post-retirement plans on its consolidated balance sheet. The Company's measurement date for its pension plan is December 31. The
following tables present information about the plan in accordance with the recognition provisions of SFAS No. 158.

Years Ended December 31,2008

2007Reconciliation of benefit obligation:Benefit obligation at beginning of year

$
20,757

$
18,037Service cost


574


547Interest cost


1,233


1,155Amendments





817Curtailments


(283
)

Actuarial (gains) losses


(844
)

870Benefit payments


(737
)

(669
)Benefit obligation at end of year

$
20,700

$
20,757Reconciliation of fair value of plan assets:Fair value of plan assets at beginning of year

$
14,116

$
13,760Actual return on plan assets


(4,004
)

709Employer contributions


2,673


316Benefit payments


(737
)

(669
)Fair value of plan assets at end of year

$
12,048

$
14,116Funded Status:Benefit obligation in excess of plan assets

$
(8,652
)
$
(6,641
)Net amount recognized in the consolidated balance sheets

$
(8,652
)
$
(6,641
)Amounts recognized in the consolidated balance sheets consist of:Noncurrent liabilities

$
(8,652
)
$
(6,641
)Amount not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income (loss):Prior service cost

$
(544
)
$
(785
)Accumulated loss


(5,693
)

(1,637
)Accumulated other comprehensive income (loss) ("AOCI"):

$
(6,237
)
$
(2,422
)


The estimated amount that will be amortized from AOCI into net periodic pension expense in 2009 is $440, of which $78 represents prior service
cost and $362 represents accumulated loss.

The
Company expects to make total contributions of $1,029 to the pension plan in 2009. The following table sets forth the estimated benefit payments, which reflect expected future
service, as appropriate, expected to be paid in the periods indicated.

2009

$
8052010

$
8652011

$
9632012

$
1,0542013

$
1,14620142018

$
7,112


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The
following table provides the components of net periodic pension expense for the defined benefit pension plan for the years ended December 31, 2008, 2007 and 2006:

2008

2007

2006Service cost

$
574

$
547

$
571Interest cost


1,233


1,155


1,001Expected return on plan assets


(1,178
)

(1,080
)

(1,092
)Amortization of prior service cost


78


32


Curtailment loss


163





Net periodic pension expense

$
870

$
654

$
480Weighted average assumptions:Discount rate


6.25
%

6.45
%

6.00
%Expected return on plan assets


8.00
%

8.00
%

8.50
%Rate of compensation increase


3.00
%

3.00
%

3.00
%


The Company recorded a curtailment loss of $163 due to the termination of a significant number of employees covered by the Company's pension plan in 2008.

The following table provides information related to the Company's pension plan in which the accumulated benefit obligation exceeded the fair value of plan
assets as of the applicable year end:

December 31,2008

2007Projected benefit obligation

$
20,700

$
20,757Accumulated benefit obligation

$
20,410

$
20,444Fair value of assets

$
12,048

$
14,116


Assets of the pension plan consist primarily of investments in equity securities, debt securities, and cash equivalents. The weighted-average asset
allocations as of December 31, 2008 and 2007 are as follows:

December 31,2008

2007

TargetEquity securities


56.0
%

66.0
%

50-70
%Debt securities


39.0


30.0


30-50Cash equivalents


5.0


4.0


0Total


100.0
%

100.0
%

100.0
%


Certain actuarial assumptions, such as the assumed discount rate and long-term rate of return on plan assets, have an effect on the amounts reported for
net periodic pension expense as well as the respective benefit obligation amounts. The assumed discount rates represent long-term high quality corporate bond rates reasonably commensurate with
liability durations of the pension plan. The estimated long-term rate of return on plan assets used by the Company takes into account historical investment experience over a multi-year period, as well
as a number of other factors, including the mix of plan asset investment types, current market conditions, investment practices of the pension plan's fiduciaries within the Company, and advice from
its investment professionals and actuaries.

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In addition to the pension plan, the Company also maintains a defined contribution plan which covers substantially all United States based employees. Expenses for
defined contribution plans amounted to $694, $745 and $695 for the years ended December 31, 2008, 2007 and 2006.

The
Company also participates in certain unfunded health care plans that provide post-retirement medical, dental, and life insurance benefits to hourly union employees at its
Amory, Mississippi plant and to salaried employees hired prior to January 1, 2000. The post-retirement plans are contributory, and include certain cost-sharing features,
such as deductibles and co-payments.

The
following tables set forth the benefit obligation and funded status of the unfunded post-retirement health plans for the years ended December 31, 2008 and 2007.
During 2007 the Company adopted SFAS 158, as more fully described in Note 2(n). The Company's measurement date for its post-retirement plan is December 31. The following tables
present information about the plans in accordance with the recognition provisions of SFAS 158.

Years Ended
December 31,2008

2007Reconciliation of benefit obligation:Benefit obligation at beginning of year

$
4,691

$
4,593Service cost


127


127Interest cost


290


282Participant contributions


236


249Actuarial loss


156


920Benefits paid


(799
)

(1,480
)Benefit obligation at end of year

$
4,701

$
4,691Amounts recognized in the consolidated balance sheets consist of:Current liabilities

$
(479
)
$
(393
)Noncurrent liabilities


(4,222
)

(4,298
)Net amount recognized in the consolidated balance sheets

$
(4,701
)
$
(4,691
)Amount not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income (loss):Accumulated loss

$
(2,995
)
$
(3,067
)Accumulated other comprehensive income (loss) ("AOCI")

$
(2,995
)
$
(3,067
)


The
estimated amount that will be amortized from AOCI into net periodic post-retirement expense in 2009 is $233 and represents accumulated loss.

The
following table provides the components of net periodic expense for the unfunded post- retirement health plans for the years ended December 31, 2008, 2007 and
2006:

2008

2007

2006Service cost

$
127

$
127

$
136Interest cost


290


282


256Recognized net losses


228


183


94Net periodic post-retirement expense

$
645

$
592

$
486Discount rate


6.25
%

6.45
%

6.00
%


The
healthcare cost trend rate used to determine the post-retirement benefit obligation as of December 31, 2008 was 7.50% which is the estimated healthcare cost trend
rate for 2009. This rate decreases by 0.5% per year to an ultimate rate of 5.00% in 2014, and remains at that level thereafter.

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While
the trend rate can be a significant factor in determining the amounts reported, for the year ended December 31, 2008 a one-percentage-point increase or decrease in the trend
rate will have only minimal impact due to the claims costs being close to the employer imposed cap.

The
following table sets forth the estimated health care benefit payments expected to be paid in the periods indicated.

2009

$
4792010

$
5032011

$
4932012

$
5132013

$
50620142018

$
2,310


Certain
actuarial assumptions, such as the assumed discount rate and the health care cost trend rates have an effect on the amounts reported for net periodic post-retirement expense as
well as the respective benefit obligation amounts. The assumed discount rates represent long-term high quality corporate bond rates reasonably commensurate with liability durations of the
post-retirement healthcare plan. The Company reviews external data provided by its healthcare benefit providers and actuaries, and its own historical trends for health care costs, to determine the
healthcare cost trend rates for the post-retirement medical benefit plan.

(11) STOCK OPTIONS

In 2004, the Company's parent, True Temper Corporation adopted an equity incentive plan (the "2004 Plan") pursuant to which TTC's board
of directors may grant equity incentive awards to officers and key employees of the Company. The 2004 Plan authorizes grants of options to purchase and grants of restricted shares, in total, up to
1,008,051 shares of authorized but unissued common stock. Stock options are granted with an exercise price equal to the stock's fair market value at the date of grant. All stock options have
10 year terms and vest and become fully exercisable at differing time periods up to four years from the date of grant.

On
August 10, 2005, TTC issued, to certain employees in return for service, a total of 525,400 stock options and stock appreciation rights ("Equity Incentive Awards") to purchase
common stock of TTC for $13.56 per share. The Equity Incentive Awards have a term of ten years, and vest and become exercisable at various times and under various conditions through August 10,
2012; with certain acceleration features based on performance criteria.

On
April 1, 2008 TTC issued, to certain employees of the Company in return for service, a total of 60,000 Equity Incentive Awards in the form of stock options to purchase common
stock of TTC for $13.56 per share. These options have a term of ten years, and vest and become exercisable at various times and under various conditions through March 15, 2012; with certain
acceleration features based on change of control provisions. The Company assessed the fair value of the Equity Incentive Awards granted by TTC on April 1, 2008 and determined that the
compensation expense related to these awards was immaterial to its consolidated financial statements for any period presented.

At
December 31, 2008, there were 191,051 shares available for grant under the 2004 Plan. There were no grants of equity incentive awards during 2006 or 2007.

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Stock
option activity during 2006, 2007 and 2008 was as follows:

Number of Shares

Wtd. Avg. Exercise PriceBalance at December 31, 2005


525,400

$
13.56Granted





Exercised





Forfeited





Balance at December 31, 2006


525,400

$
13.56Granted





Exercised





Forfeited


122,400

$
13.56Balance at December 31, 2007


403,000

$
13.56Granted


60,000


13.56Exercised





Forfeited





Balance at December 31, 2008


463,000

$
13.56


At
December 31, 2008, the weighted average remaining contractual life of outstanding options was 6.6 years. At December 31, 2008, there were 145,166
options exercisable.

In
addition, TTC has 354,000 equity awards, issued on March 15, 2004, which vest only upon a sale of TTC and achivement of certain other terms as described in the awards. As of
December 31, 2008, the events required for vesting of these awards are not expected to occur in the near term.

(12) COMMITMENTS AND CONTINGENCIES



Operating
Leases2009

$
1,1892010


1,1382011


1,1342012


8262013


453Thereafter


53Total minimum lease payments

$
4,793




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Balance at December 31, 2005

$
309Liabilities accrued for warranties issued during the year


1,033Warranty claims paid during the year


(1,016
)Balance at December 31, 2006

$
326Liabilities accrued for warranties issued during the year


1,691Warranty claims paid during the year


(1,570
)Balance at December 31, 2007

$
447Liabilities accrued for warranties issued during the year


1,237Warranty claims paid during the year


(1,366
)Balance at December 31, 2008

$
318




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

(13) RELATED PARTY TRANSACTIONS

On March 15, 2004, True Temper entered into a management services agreement with an entity affiliated with Gilbert Global, which
is a related party through its indirect management and ownership interest in True Temper Corporation.

In
accordance with this agreement, Gilbert Global has agreed to provide:



In
exchange for such services, Gilbert Global or its nominee receives:



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

During
2007 and 2006, in addition to annual advisory fees of $0.5 million, the Company paid $0.4 million and $1.0 million, respectively to Gilbert Global for fees
associated with financing and acquisition transactions.

The
future payment of advisory fees to Gilbert Global is prohibited by the events of default on the Company's debt as described in Note 8.

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(14) SEGMENT AND OTHER RELATED DISCLOSURES



Years Ended December 31,2008

2007

2006Net sales:Golf shafts

$
105,938

$
102,856

$
99,103Performance sports


17,715


13,417


8,902Total

$
123,653

$
116,273

$
108,005Gross profit:Golf shafts

$
37,308

$
31,220

$
33,958Performance sports


3,200


2,686


853Total

$
40,508

$
33,906

$
34,811Depreciation expense:Golf shafts

$
2,682

$
2,492

$
2,050Performance sports


558


536


566Total

$
3,240

$
3,028

$
2,616Capital expenditures:Jointly used assets

$
318

$
310

$
125Golf shafts


2,361


2,523


4,264Performance sports


408


337


499Total

$
3,087

$
3,170

$
4,888Total assets:Jointly used assets

$
4,654

$
4,108

$
4,392Golf shafts


58,417


57,414


44,102Performance sports


4,843


5,624


4,560Total

$
67,914

$
67,146

$
53,054




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2008

2007Total assets:Total from reportable segments

$
67,914

$
67,146General corporate and other unallocated assets


130,963


292,704Total

$
198,877

$
359,850




Years Ended December 31,2008

2007

2006Total reportable segment gross profit

$
40,508

$
33,906

$
34,811Less:Selling, general and administrative expenses


14,490


14,725


14,226Amortization of intangible assets


14,956


14,941


14,343Restructuring, business development, start-up and transition costs


2,131


2,012


2,688Loss on early extinguishment of debt





755


Goodwill impairment charge


156,036





Interest expense


23,023


24,921


20,525Other expense, net


183


32


75Total Company loss before income taxes

$
(170,311
)
$
(23,480
)
$
(17,046
)




Years Ended December 31,2008

2007

2006U.S.

$
73,622

$
75,025

$
69,664International


50,031


41,248


38,341Total

$
123,653

$
116,273

$
108,005


Revenues
generated from sales into China accounted for approximately $29,600 or 23.9%, $22,400 or 19.3% and $19,300 or 17.9% of True Temper's total sales for the years
ended December 31, 2008, 2007 and 2006, respectively. The sales into China are due primarily to the Company's major U.S. based original equipment manufacturers shifting a portion of their
assembly operations to that region. Assets by location are not disclosed, as assets located outside the U.S. are immaterial.

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(15) SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a summary of unaudited quarterly results of operations for the years ended December 31, 2008 and 2007.

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter2008Net sales

$
35,827

$
37,734

$
24,203

$
25,889Gross profit


12,498


13,971


6,668


7,371Net loss


(1,599
)

(94
)

(6,595
)

(162,107
)2007Net sales

$
29,579

$
33,037

$
24,140

$
29,517Gross profit


10,017


10,428


4,067


9,394Net loss


(3,061
)

(2,301
)

(22,777
)

(5,332
)


(16) SUBSEQUENT EVENTS

As more fully described in the heading "Liquidity and Substantial Doubt About the Company's Ability to Continue as a Going Concern" in
Note 8, on March 16, 2009 the Company did not make certain principal and interest payments required under the 2006 Restated Credit Facility and 83/8% Notes and is in
default under these agreements.

Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A.Controls and Procedures

Not applicable.

Item 9A(T).Controls and Procedures



Evaluations
required by Rule 13a-15 of the Securities Exchange Act of 1934 of the effectiveness of the Company's disclosure controls and procedures (as defined in
Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this Report have been carried out under the supervision and with the participation
of the Company's management, including its Chief Executive Officer and Chief Financial Officer. Based upon such evaluations, the Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures were effective.



Management
is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Our internal
control system is designed to provide reasonable assurance that externally published financial statements can be relied upon and have been prepared in accordance with U.S. generally accepted
accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the
supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an assessment of the effectiveness of our internal control
over financial reporting based on the framework inInternal Control  Integrated Frameworkissued by the Committee of Sponsoring
Organization of the Treadway Commission. Based on our assessment under the framework inInternal

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Control  Integrated Framework, management concluded that our internal control over financial reporting was effective as of December 31, 2008.

This
annual report does not include an attestation report of the Company's independent registered public accounting firm regarding internal control over financial reporting. Management's
report was not subject to attestation by the Company's registered independent public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to
provide only management's report in this annual report.



There
have been no changes in the Company's internal control over financial reporting during the period covered by this Report that were identified in connection with the assessment
referred to above that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting.

Item 9B.Other Information

None.

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PART III

Item 10.Directors, Executive Officers and Corporate Governance

The directors and executive officers of True Temper as of December 31, 2008 are as follows:

Name

Age

PositionScott C. Hennessy


50

Chief Executive Officer, President and DirectorStephen M. Brown


43

Vice President of Human ResourcesJeremy Erspamer


34

Senior Director of Customer Planning and Supply ChainGraeme Horwood


64

Vice President Engineering, Research and DevelopmentJason A. Jenne


39

Vice President, Chief Financial Officer and TreasurerRaeford P. Lucas


43

Vice President, Sales and MarketingAdrian H. McCall


51

Senior Vice President and General Manager of Performance SportsSteven J. Gilbert


61

Director and Co-ChairmanSteven Kotler


61

Director and Co-ChairmanRichard W. Gaenzle, Jr.


44

DirectorJeffery W. Johnson


40

DirectorWilliam P. Lauder


48

Director


Scott C. Hennessyhas been the President since 1996, and the Chief Executive Officer and Director since October 1998. Mr. Hennessy
joined us 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.

Stephen M. Brownhas been the Vice President of Human Resources since August 2002. From January 1998 to July 2002, Mr. Brown has
served as our Director of Human Resources. From September 1996 to December 1997, Mr. Brown served as the 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.

Jeremy Erspamerhas been the Senior Director of Customer Planning and Supply Chain since November 2007. From September 2005 to October
2007, Mr. Erspamer served as our Director of Global Sales and Logistics. From April 2003 to August 2005, Mr. Erspamer served as the Senior ManagerGlobal Sales &
Logistics. From February 2000 to March 2003, Mr. Erspamer served in expanding roles within the supply chain and finance organizations. Prior to that Mr. Erspamer served in a Restructure
Analyst position with Thomas & Betts Corporation. Mr. Erspamer graduated summa cum laude with a B.S. from the University of Tennessee.

Graeme Horwoodhas been the Vice President of Engineering, Research and Development since June 2001. From April 2000 to May 2001,
Mr. Horwood served as our 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.

Jason Jennehas been the Chief Financial Officer and Treasurer since January 2005 and Vice President since August 2003. From September
2002 to August 2003, Mr. Jenne served as the Director of Corporate Finance. From September 1998 to September 2002, Mr. Jenne served as the Corporate Controller. From 1993 to 1998,
Mr. Jenne served in various Finance and Accounting positions at Emerson Electric Company. Mr. Jenne graduated magna cum laude with a B.S. from Southern Illinois University.

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Raeford P. Lucashas been the Vice President, Sales and Marketing since November 2008. From November 2007 to November 2008,
Mr. Lucas served as our Vice President, Global Golf Sales. From November 2006 to November 2007, Mr. Lucas served as our Vice President of Sales. From June 2006 to October 2006,
Mr. Lucas served as our Vice President and General Manager of Royal Precision and Precision Brands. From 2000 to June 2006, Mr. Lucas held various management positions at Royal
Precision Inc., including Executive Vice President of Sales and Marketing. Prior to that, Mr. Lucas
worked at Outdoor Technologies Group as the General Manager of the Fenwick Golf division. Mr. Lucas received a B.S. from North Carolina State University.

Adrian H. McCallhas been the Senior Vice President and General Manager of Performance Sports since November 2008. From
November 2007 to November 2008, Mr. McCall served as our Senior Vice President of Global Distribution and Sales. From August 2002 to November 2007, Mr. McCall served as our
Senior Vice President of Global Distribution and Sales. From March 1999 to July 2002, Mr. Mc Call served as our Vice President of International Sales and Marketing since March 1999. From
September 1995 to March 1999, Mr. McCall served as our Director of International Sales and Marketing. From May 1992 to September 1995, Mr. McCall served as Director of International
Operations 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.

Steven J. Gilbertbecame a member of and Co-Chairman of the board of directors upon consummation of the Gilbert Global
Acquisition. He is a founder and has served as Chairman of the Board of Gilbert Global Equity Partners, L.P. since 1997. From 1992 to 1997, he was the founder and Managing General Partner of
Soros Capital L.P., the principal venture capital and leveraged transaction entity of Quantum Group of Funds, and a principal Advisor to Quantum Industrial Holdings Ltd. From 1988
through 1992, he was the Managing Director of Commonwealth Capital Partners, L.P., a private equity investment firm. From 1984 to 1988, Mr. Gilbert was the Managing General Partner of
Chemical Venture Partners (now J.P. Morgan Partners), which he founded. Mr. Gilbert is a Director of CPM Holdings, Inc., the Asian Infrastructure Fund and J O Hambro Investment
Management, Ltd. Previously, Mr. Gilbert has been a director of numerous public and private companies. Mr Gilbert received a B.S. from the Wharton School at the University of
Pennsylvania, an M.B.A. from the Harvard Graduate School of Business Administration, and a J.D. from Harvard Law School.

Steven Kotlerbecame a member of and Co-Chairman of the board of directors upon consummation of the Gilbert Global
Acquisition. He has served as Vice Chairman of Gilbert Global Equity Partners, L.P. since 2000. Prior to joining Gilbert Global in 2000, Mr. Kotler, for 27 years, was with
Schroder & Co. and its predecessor firm, Wertheim & Co., where he served as its Chief Executive Officer and President. Mr. Kotler is a Director of CPM Holdings and
The Archstone Partnerships. Previously, Mr. Kotler has served as a Governor of the American Stock Exchange and a director of numerous public and private companies. Mr. Kotler is a
graduate of City College of New York.

Richard W. Gaenzle, Jr.became a member of the board of directors upon consummation of the Gilbert Global Acquisition. He is a founder
and has served
as Managing Director of Gilbert Global Equity Partners, L.P. since 1997. From 1992 to 1997, he was a principal of Soros Capital L.P., the principal venture capital and leveraged
transaction entity of Quantum Group of Funds, and a principal Advisor to Quantum Industrial Holdings Ltd. Prior to joining Soros Capital, Mr. Gaenzle held various positions in the
investment banking industry. Mr. Gaenzle is a Director of CPM Holdings, Inc. Mr. Gaenzle received a B.A. from Hartwick College and an M.B.A. from Fordham University.

Jeffrey W. Johnsonbecame a member of the board of directors upon consummation of the Gilbert Global Acquisition. He is a founder and has
served as Managing Director of Gilbert Global Equity Partners, L.P. since 1997. Mr. Johnson was previously with Goldman, Sachs & Co. in its mergers and acquisitions
department, Hallmark Cards, Inc. and Russell Investment Group. He is a director of CPM Holdings, Inc. Mr. Johnson received a B.A. from Claremont McKenna College and an M.B.A. from
the Harvard Graduate School of Business Administration.

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William P. Lauderbecame a member of the board of directors in 2004. In July 2004, Mr. Lauder was named the President and Chief
Executive Officer of Estee Lauder Companies, Inc. He joined Estee Lauder Companies in 1986 and held numerous positions of increasing responsibility. Mr. Lauder received a B.A. and an
M.B.A. from the Wharton School at the University of Pennsylvania.

Board of Directors and Committees

The Board of Directors held four meetings during 2008 and took action by written consent on one occasion. During 2008, a quorum was
achieved at each of the scheduled meetings of the Board of Directors. The standing committees of the Board of Directors include the Audit Committee and the Compensation Committee.



Steven Kotler, Jeffrey W. Johnson and Richard W. Gaenzle, Jr. are members of the Audit Committee, and Mr. Kotler chairs this
committee. The Audit Committee is empowered to: (i) appoint, fix the compensation of, and oversee the work of the Company's independent registered public accounting firm (including the power to
resolve any disagreements between management and the independent registered public accounting firm), with the independent registered public accounting firm reporting directly to the Audit Committee;
(ii) pre-approve all audit services and permissible non-audit services; and (iii) engage and determine funding for independent counsel and other advisors as it
may relate to certain financial or administrative matters of the Company. The Compay is not a "listed company" under SEC rules and is therefore not required to have an audit committee comprised of
independent directors. The Board of Directors has determined that, with the exception of the independence
requirement, Mr. Kotler would be an "audit committee financial expert" within the meaning of the rules of the Securities and Exchange Commission.



Steven J. Gilbert, Steven Kotler and Jeffrey W. Johnson are members of the Compensation Committee, and Mr. Gilbert chairs this
committee. The Compensation Committee is responsible for monitoring the Company's adherence with its compensation philosophy, including ensuring that the compensation paid to its executive officers is
fair, reasonable and competitive. The Compensation Committee's responsibilities, as discussed further in the "Compensation Discussion and Analysis" in Item 11 of this Part III, include,
among other duties, the responsibility to establish the base salary, incentive compensation and any other compensation for the Company's Chief Executive Officer and review and approve the Chief
Executive Officer's recommendations for the compensation of certain executive officers reporting to him. The Compensation Committee also has the full power and authority to interpret the provisions
and supervise the administration of the True Temper Corporation 2004 Equity Incentive Plan, including the determination and/or approval of awards to be granted thereunder, and any and all other power
and authority to review, interpret and/or administer compensation and benefit programs as may be delegated by the Company's board of directors to the Compensation Committee from time to time.

Code of Ethics

The Audit Committee has adopted a Code of Ethics for the Chief Executive Officer, Chief Financial Officer, and other senior financial
personnel. A copy of the Code of Ethics is available on the Company's website at www.truetemper.com. The Company will disclose any amendments or waivers to the Code of Ethics on the same website.

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Item 11.Executive Compensation



The Compensation Committee of the Board of Directors of True Temper Corporation, the Company's parent company, has furnished the
following report for inclusion in this Annual Report on Form 10-K:



Respectfully submitted,
The Compensation Committee of the
Board of Directors
Steven J. Gilbert, Chairman
Steven Kotler
Jeffrey W. Johnson


No
portion of this report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as
amended, (collectively, the "Acts") through any general statement incorporating by reference the Annual Report on Form 10-K in which this report appears in its entirety, except to
the extent that the company specifically incorporates this report or a portion of this report by reference. In addition, this report shall not otherwise be deemed to be "soliciting material" or to be
"filed" under either of such Acts.

Compensation Discussion and Analysis

Compensation Philosophy and Objectives.The Compensation Committee believes an effective compensation program should be one that
is designed to:
attract and retain the best possible executive talent; tie annual and long-term cash and equity incentives to the achievement of measurable corporate and individual performance objectives;
and align executives' incentives with overall value creation within the organization. To achieve these objectives, the Compensation Committee implements, maintains and monitors compensation plans
which tie a portion of the Executives' overall compensation to the achievement of established objective goals, including profitability and the efficient use of capital. When establishing these
objectives and goals, the Compensation Committee considers those established by companies of similar size, while taking into account the strategic goals and relative performance of True Temper
Sports, Inc.

Role of Executive Officers in Compensation Decisions.The Compensation Committee makes all compensation decisions for the Chief
Executive Officer,
and all decisions relating to equity based compensation awards. The Compensation Committee, together with recommendations and input from the Chief Executive Officer, makes equity and
non-equity compensation decisions with respect to the other Executives.

On
at least an annual basis, the Compensation Committee reviews the performance of the Chief Executive Officer as compared with the achievement of the Company's objective goals and any
individual goals. The Compensation Committee, together with the Chief Executive Officer, annually

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reviews
the performance of each individual Executive as compared with the achievement of Company goals, as the case may be, together with each Executive's individual goals. The Compensation Committee
can then exercise its discretion in modifying any recommended adjustments or awards to the Executives.

Setting Executive Compensation.Based on the above objectives and philosophies, the Compensation Committee has established
annual and
long-term cash and equity compensation
components to motivate the Executives to achieve, and hopefully exceed, the business goals established by the Company and to fairly reward such executives for achieving such goals. The Compensation
Committee has not retained a compensation consultant to review its policies and procedures with respect to executive compensation. The Compensation Committee periodically conducts an internal
benchmark review of the aggregate level and mix of our Executive compensation against companies in our same industry (both public and privately held).

2008 Executive Compensation Components

For the year ended December 31, 2008, the principal components of compensation for the Company's Executives are described below:

Base Salary.The Company provides Executives and other employees with base salary to compensate them for services rendered
during the fiscal year.
Base salaries are set to recognize the experience, skills, knowledge and responsibilities required of the Executives in their respective roles. Base salaries are reviewed annually, and will be
adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, performance and experience. Base salaries are established for a given position
taking into consideration the factors discussed above together with available market or comparable salary data. In 2008, the Compensation Committee approved salary increases for our named executive
officers ranging from approximately 4% to 11%. The increases were based on each named executive officer's individual services rendered, level and scope of responsibility and experience, comparisons to
various market pay practices, and the operating performance of the Company during calendar year 2007. The increase range was 4% to 6% for all of the Executives with the exception of three individuals
who received 8% to 11% increases related to additional job responsibilities. The Compensation Committee determined that the overall increases were warranted.

Performance-Based Executive Incentive Compensation Plan.The Company maintains a performance based Executive incentive
compensation plan (the
"EICP"). The EICP establishes objectives for the calculation of annual cash bonuses for each Executive, subject to Compensation Committee oversight and modification. The EICP provides for annual
incentive bonuses which are intended to compensate Executives for achieving or exceeding Company financial goals and for achieving individual annual performance goals. The EICP uses a sliding scale
applied to financial performance targets with corresponding achievement levels. No bonus is earned unless a minimum target is achieved. Additional bonus may be earned should the targets be exceeded.
In 2008, the Company's operating performance fell below the minimum target established for payment of cash bonuses under the EICP, which was $32.0 million in Adjusted EBITDA. Accordingly, no
cash bonuses were paid to the Executives for calendar year 2008. For 2009, the EICP objectives will again be primarily based on profitability.

Incentives
under the EICP are paid in cash and are typically paid in a single installment in the first quarter following the completion of a given fiscal year. The Compensation Committee
has reserved the right under the EICP to also pay "discretionary" bonuses. Such discretionary bonuses are paid if the Compensation Committee determines that a particular Executive has exceeded the
objectives and/or goals established for such Executive or made a unique contribution to the Company during the year.

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Equity Program; Stock Options and Restricted Stock.Under the True Temper Corporation 2004 Equity Incentive Plan (the "Plan"),
the Compensation
Committee may make various types of awards with respect to True Temper Corporation common stock. True Temper Corporation is a privately held company and its common stock, including any stock issued or
obtained pursuant to the Plan, has transfer restrictions. The maximum amount of common stock that can be issued (or in respect of which awards can be issued) under the Plan is limited to approximately
1.0 million shares. Among other things, the Compensation Committee decides which of the Executives or senior managers shall receive awards under the Plan and the type of award made. In the case
of stock options granted under the Plan, the Compensation Committee determines strike price, vesting terms, and such other terms or conditions as the Compensation Committee may determine, in their
sole discretion, provided it is allowed under the Plan. The Plan has two types of options, service based options and performance based options. Service based options vest on a pro-rata
basis over a period less than five years, have a term of ten years from the date of grant, and expire if not exercised. Performance based options vest upon the satisfactory achievement of certain
specified profitability targets, have a term of ten years from the date of grant, and expire if not exercised. In the event of a change of control, as defined in the Plan, all of the outstanding but
unvested stock options become vested and exercisable.

The
Plan also has certain restricted shares available for grant. Restrictions are lifted in the event of a change of control, and provided that a certain specified stock price is
achieved during such transaction.

Approximately
95% of the awards granted to management under the Plan were granted between March 15, 2004 and August 10, 2005. During 2008 approximately 5% of total awards
were granted to employees who had been hired after August 10, 2005, or who had recently taken on additional responsibilities.

There
is no program, plan or practice in place for selecting grant dates for awards under the Plan in coordination with the release of material non-public information. The
exercise price for the option awards is the fair market value of the stock of True Temper Corporation on the date of grant. The fair market value is determined by the Compensation Committee and the
Board of Directors of True Temper Corporation using a variety of analytical tools. The Compensation Committee is not prohibited from granting options at times when they are in possession of material
non-public information. However, no inside information was taken into account in determining the number of options previously awarded or the exercise price for those awards, and the
Compensation Committee did not "time" the release of any material non-public information to affect the value of those awards.

The
Compensation Committee believes that the granting of such awards promotes, on a short term and long term basis, an enhanced personal interest and alignment of those Executives
receiving equity awards with the goals and strategies of the Company. The Compensation Committee also believes that the equity grants provide not only financial rewards to such Executives for
achieving Company goals but also provide additional incentives for Executives to remain with the Company.

401(k) Plan.The Company's Executives are eligible to participate in its company-wide 401k plan for salaried employees. The
Company
matches, at a 50% rate, the first 6% of the employee's contributions. The Company match was suspended effective March 1, 2009.

Perquisites and Other Personal Benefits.The Company provides the Executives, including other employees generally, with
perquisites and other
personal benefits that the Company and the Compensation Committee believe are reasonable, competitive and which are consistent with the overall compensation program to enable the Company to attract
and retain qualified employees for key positions. The Compensation Committee periodically reviews the perquisites and other benefits provided to the Executives, as well as the other employees.

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Tax Treatment.The Company's Board of Directors considers the anticipated tax treatment of its executive compensation program
when setting levels and
types of compensation. Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public companies for compensation paid to a company's chief executive officer or any of
its other four most highly compensated executive officers in excess of $1 million in any year, with certain performance-based compensation being specifically exempt from this deduction limit.
Compensation received under the EICP is performance-based, and therefore qualifies for the exemption from the deduction limit. During 2008, none of the Company's employees subject to this limit
received Section 162(m) compensation in excess of $1 million. Consequently, the requirements of Section 162(m) should not affect the tax deductions available to the Company in
connection with its senior executive compensation program for 2008.

Conclusion.The Company's compensation policies are designed to reasonably and fairly motivate, retain and reward its Executives
for achieving the
Company's objectives and goals.

Compensation Tables



The table below summarizes the total compensation paid or earned by each of the Named Executive Officers for the years ended
December 31, 2008 and 2007.

Name and Principal
Position

Fiscal
Year

Salary
$

Bonus
$

All Other
Compensation
$(1)

Total
$Scott C. Hennessy Chief Executive Officer, President and Director


2008
2007


475,000
455,000






42,390
41,550


517,390
496,550Adrian H. McCall Senior Vice President of Global Marketing and Product Development


2008
2007


220,000
202,500






31,588
28,261


251,588
230,761Jason A. Jenne Vice President, Chief Financial Officer and Treasurer


2008
2007


195,000
176,250






23,279
22,902


218,279
199,152Stephen M. Brown Vice President of Human Resources


2008
2007


162,500
152,500



25,000


21,882
14,413


184,382
191,913Graeme Horwood Vice President Engineering, Research and Development


2008
2007


158,000
150,500






33,195
33,474


191,195
183,974


---



Management Agreements with True Temper Sports, Inc.

Mr. Scott C. Hennessy, Chief Executive Officer, has an employment agreement with True Temper Sports, Inc.

Mr. Hennessy's Employment Agreement.Under his employment agreement, Mr. Hennessy serves as the Company's president and chief
executive
officer. The initial term of the agreement was from March 15, 2004 through December 31, 2005, and is automatically renewed for successive one-year periods unless
60 days' prior notice is given by either party. In addition, Mr. Hennessy is a member of the Company's board of directors. He receives an annual base salary of at least $400,000, and is
eligible

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to
receive an annual performance bonus of 100% of his base salary if the Company achieves specified performance objectives. In addition, under the employment agreement, Mr. Hennessy is provided
certain employee benefits consistent with other employees of the Company. Upon Mr. Hennessy's termination of employment by the Company without "cause" or by Mr. Hennessy for "good
reason" (each as defined in the employment agreement) or upon the Company's election not to renew his employment, Mr. Hennessy will be entitled to receive the following severance payments and
benefits: any accrued but unpaid salary as of the date of the termination, any annual bonus earned but unpaid for the most recently completed fiscal year, reimbursement of any outstanding business
expenses, and the continuation of his base salary for a period of 12 months. Additionally, Mr. Hennessy will be subject to certain restrictions on his ability to compete with the Company
or solicit any customers or employees for two years after his termination. Mr. Hennessy's employment agreement may also be terminated for "cause" (as defined in the employment agreement).

Bonus Plan

See "Compensation Discussion and Analysis" for a discussion of the Company's EICP.

2004 Equity Incentive Plan

See "Compensation Discussion and Analysis" as well as Notes 2 and 11 to the Company's audited consolidated financial statements,
located elsewhere in this annual report, for a discussion of the 2004 Equity Incentive Plan.



Option Awards(1)

Stock Awards(1)Name

Number of
Securities
Underlying
Unexercised
Options -
Exercisable

Number of
Securities
Underlying
Unexercised
Options -
Unexercisable

Option
Exercise
Price
$

Option
Expiration
Date

Number of
Shares or
Units of
Stock That
Have Not
Vested

Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
$(2)Scott C. Hennessy


72,000


36,000


13.56


8/10/2015


192,000


2,603,520Adrian H. McCall


25,200


12,400


13.56


8/10/2015


60,000


813,600Jason A. Jenne


18,000


9,000


13.56


8/10/2015


36,000


488,160Stephen Brown


14,400


7,200


13.56


8/10/2015


24,000


325,440Graeme Horwood


14,400


7,200


13.56


8/10/2015


24,000


325,440


---

Potential Payments Upon Termination or Change of Control

Other than those described above in the sections titled "Equity Program; Stock Options and Restricted
Stock"and"Management Agreements with True Temper Sports, Inc.", the Company has no contractual payments associated with
employment agreements that would be required in the event of a termination or change of control. The Company does maintain a severance policy which is used as a guideline in establishing severance
benefits to any salaried employee that is terminated without cause (the "Severance Policy"). The Severance Policy provides, primarily, for salary continuation for periods

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ranging
from three to twelve months depending on length of service. Generally, one week of severance pay is earned for each year of continuous service, with certain minimum amounts of severance
provided for specific levels of management within the Company.

Following
is a discussion of the potential payments required for each Named Executive Officer; in the case of Mr. Hennessy, payments are governed by his employment agreement, and
in the case of all other Named Executive Officers, payments are governed by the Severance Policy.

Scott C. Hennessy.Under the terms of his employment agreement, Mr. Hennessy is entitled to receive the following severance
payments and
benefits: any accrued but unpaid salary as of the date of the termination, any annual bonus earned but unpaid for the most recently completed fiscal year, reimbursement of any outstanding business
expenses, and the continuation of his base salary for a period of 12 months. As of December 31, 2008, the total amount of such payments would have been approximately $480,000. In
addition, in the event of a change of control, Mr. Hennessy would be entitled to accelerated vesting of all the option awards, and potentially all of the stock awards, identified in the table
above under the heading "Outstanding Equity Awards at Fiscal Year-End". The specific value of such awards would be determined based on the terms and conditions of such change of control,
including the per share price of common stock exchanged in the transaction.

Adrian H. McCall.Under the terms of the Company's Severance Policy, Mr. McCall is entitled to receive the following severance
payments and
benefits: any accrued but unpaid salary as of the date of the termination, reimbursement of any outstanding business expenses, and the continuation of his base salary for a period of at least six
months. As of December 31, 2008, the total amount of such payments would have been approximately $113,000 In addition, in the event of a change of control, Mr. McCall
would be entitled to accelerated vesting of all the option awards, and potentially all of the stock awards, identified in the table above under the heading "Outstanding Equity Awards at Fiscal
Year-End". The specific value of such awards would be determined based on the terms and conditions of such change of control, including the per share price of common stock exchanged in the
transaction.

Jason A. Jenne.Under the terms of the Company's Severance Policy, Mr. Jenne is entitled to receive the following severance
payments and
benefits: any accrued but unpaid salary as of the date of the termination, reimbursement of any outstanding business expenses, and the continuation of his base salary for a period of at least six
months. As of December 31, 2008, the total amount of such payments would have been approximately $100,000. In addition, in the event of a change of control, Mr. Jenne would be entitled
to accelerated vesting of all the option awards, and potentially all of the stock awards, identified in the table above under the heading "Outstanding Equity Awards at Fiscal Year-End".
The specific value of such awards would be determined based on the terms and conditions of such change of control, including the per share price of common stock exchanged in the transaction.

Stephen M. Brown.Under the terms of the Company's Severance Policy, Mr. Brown is entitled to receive the following severance
payments and
benefits: any accrued but unpaid salary as of the date of the termination, reimbursement of any outstanding business expenses, and the continuation of his base salary for a period of at least six
months. As of December 31, 2008, the total amount of such payments would have been approximately $83,000. In addition, in the event of a change of control, Mr. Brown would be entitled to
accelerated vesting of all the option awards, and potentially all of the stock awards, identified in the table above under the heading "Outstanding Equity Awards at Fiscal Year-End". The
specific value of such awards would be determined based on the terms and conditions of such change of control, including the per share price of common stock exchanged in the transaction.

Graeme Horwood.Under the terms of the Company's Severance Policy, Mr. Horwood is entitled to receive the following severance
payments and
benefits: any accrued but unpaid salary as of the date of the termination, reimbursement of any outstanding business expenses, and the continuation of his base salary for a period of at least six
months. As of December 31, 2008, the total amount of such

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payments
would have been approximately $79,000. In addition, in the event of a change of control, Mr. Horwood would be entitled to accelerated vesting of all the option awards, and potentially
all of the stock awards, identified in the table above under the heading "Outstanding Equity Awards at Fiscal Year-End". The specific value of such awards would be determined based on the
terms
and conditions of such change of control, including the per share price of common stock exchanged in the transaction.

No
payments are made if an executive terminates his employment without "good reason" or we terminate his employment for "cause," or if, under a severance agreement, an executive leaves
for other than "good reason" or we terminate their employment for any reason other than without "cause" (including death or disability).

With
respect to the employment and severance agreements:



Director Compensation

The Company does not provide compensation to Directors for their service in such capacity.

Compensation Committee Interlocks and Insider Participation

There are no Compensation Committee interlocks (i.e., no executive officer of the
Company or of True Temper Corporation serves as a member of the board of directors or the compensation committee of another entity that has an executive officer serving on the Company's board of
directors or True Temper Corporation's board of directors).

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Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

All of the outstanding shares of our capital stock are owned by TTC. The following table sets forth information with respect to the
beneficial ownership of TTC's capital stock as of March 1, 2008 by:



Name of Beneficial Owner(1)

Number of
Common
Shares

Percentage of
Outstanding
Common
StockTTS Holdings LLC
c/o Gilbert Global Equity Capital, LLC.
320 Park Avenue
17th Floor
New York, New York 10022


8,778,919

96.8%Scott C. Hennessy


167,021

1.8%Adrian H. McCall


29,509

*Stephen Brown


7,377

*Jason A. Jenne


3,689

*Graeme Horwood


2,951

*All directors and executive officers as a group (5 persons)


210,547

2.3%






Item 13.Certain Relationships and Related Transactions and Director Independence

Stock Purchase Agreement

In accordance with the terms of the Purchase Agreement by and among TTS Holdings LLC, True Temper Corporation, and True Temper
Sports, LLC and others dated January 30, 2004 (the "Stock Purchase Agreement"), Sellers, as defined in the Stock Purchase Agreement, have indemnified TTS Holdings, LLC, the
purchaser, against any and all damages resulting from any misrepresentation or breach of warranty of Sellers contained in the Stock Purchase Agreement, for claims made within 18 months
following the closing date, except that claims involving environmental matters, tax matters, or employee benefit matters shall survive for a period of 36 months following the closing date. The
indemnification obligations of the Sellers under the Stock Purchase Agreement are generally subject to a $10.0 million basket amount and are limited to an aggregate payment of no more than the
total amount held in escrow.

Stockholders Agreement

Upon the consummation of the Stock Purchase Agreement, TTC and all of its stockholders, including TTS Holdings, LLC, entered
into a stockholders agreement. The stockholders agreement:



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Management Services Agreement

In connection with the stock purchase agreement, True Temper entered into a management services agreement with Gilbert Global. In
accordance with this agreement, Gilbert Global has agreed to provide:



In
exchange for such services, Gilbert Global or its nominee receives:





During
2008 and 2007, in addition to annual advisory fees of $0.5 million, the Company paid $0.0 million and $0.4 million, respectively to Gilbert Global for fees
associated with financing and acquisition transactions.

Director Independence

As a debt-only filer, the Company is not required to have a majority of its Board consist of independent directors.

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Table of Contents

Item 14.Principal Accountants Fees and Services

The following table represents aggregate fees billed to the Company for fiscal years ended December 31 by KPMG LLP, the
Company's independent registered public accounting firm.

Fiscal Years Ended2008

2007Audit fees

$
237,250

$
232,000Tax fees(1)


54,000


86,000Total fees(2)

$
291,250

$
318,000






The
Audit Committee has considered whether performance of services other than audit services is compatible with maintaining the independence of KPMG LLP.

Auditor Fees Pre-approval Policy

In 2003, the Audit Committee adopted a policy concerning approval of audit and non-audit services to be provided by the
independent registered public accounting firm to the Company. The policy requires that all services KPMG LLP, the Company's independent registered public accounting firm, may provide to the
Company, including audit services and permitted audit-related and non-audit services, excluding certain designated tax services, must be approved by the Audit Committee. The Committee
approved all audit and non-audit services provided by KPMG during 2008.

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PART IV

Item 15.Exhibits and Financial Statements Schedule



SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS

AdditionsBalance at
Beginning
of Period

Charged to
Costs and
Expenses

Charged to
Other
Accounts

Deductions(1)

Balance at
End
of PeriodDollars in thousands
(debit)/creditALLOWANCE FOR DOUBTFUL ACCOUNTSYear ended December 31, 2006

$
411


100





(34
)
$
477Year ended December 31, 2007

$
477


65





(99
)
$
443Year ended December 31, 2008

$
443


587





(782
)
$
248


---

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



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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.

TRUE TEMPER SPORTS, INC.By:

/s/ SCOTT C. HENNESSYName:

Scott C. HennessyTitle:

President and Chief Executive OfficerDate:

March 31, 2009


Pursuant
to the requirements 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 and on
the dates indicated.

By:

/s/ STEVEN J. GILBERTName:

Steven J. GilbertTitle:

Director and Co-ChairmanDate:

March 31, 2009By:

/s/ STEVEN KOTLERName:

Steven KotlerTitle:

Director and Co-ChairmanDate:

March 31, 2009By:

/s/ RICHARD W. GAENZLE, JR.Name:

Richard W. Gaenzle, Jr.Title:

DirectorDate:

March 31, 2009By:

/s/ JEFFREY W. JOHNSONName:

Jeffrey W. JohnsonTitle:

DirectorDate:

March 31, 2009By:

/s/ WILLIAM P. LAUDERName:

William P. LauderTitle:

DirectorDate:

March 31, 2009


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Table of Contents

By:

/s/ SCOTT C. HENNESSYName:

Scott C. HennessyTitle:

President, Chief Executive Officer and DirectorDate:

March 31, 2009By:

/s/ JASON A. JENNEName:

Jason A. JenneTitle:

Vice President, Chief Financial Officer and
Principal Accounting OfficerDate:

March 31, 2009


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INDEX TO EXHIBITS

1.1

Purchase Agreement, dated as of March 3, 2004, among True Temper Sports, Inc., Credit Suisse First Boston LLC and Goldman, Sachs & Co. (filed as Exhibit 1.1 to True Temper
Sports, Inc.'s Registration Statement on Form S-4, as filed with the Securities and Exchange Commission on April 13, 2004).*3.1

Amended and Restated Certificate of Incorporation of True Temper Sports, Inc. (filed as Exhibit 3.1 to True Temper Sports, Inc.'s Registration Statement on Form S-4
(No. 333-72343), as filed with the Securities and Exchange Commission on February 12, 1999).*3.2

By-laws of True Temper Sports, Inc. (filed as Exhibit 3.2 to True Temper Sports, Inc.'s Registration Statement on Form S-4 (No. 333-72343), as filed with the Securities and
Exchange Commission on February 12, 1999).*4.1

Indenture, dated as of March 15, 2004, among True Temper Sports, Inc., the Guarantors identified therein, and The Bank of New York (filed as Exhibit 4.1 to True Temper Sports,
 Inc.'s Registration Statement on Form S-4, as filed with the Securities and Exchange Commission on April 13, 2004).*4.2

Form of Senior Subordinated Note due 2011 (filed as Exhibit 4.2 to True Temper Sports, Inc.'s Registration Statement on Form S-4, as filed with the Securities and Exchange Commission on
April 13, 2004).*4.3

Registration Rights Agreement, dated as of March 15, 2004, among True Temper Sports, Inc., El Cajon Equipment Corporation, True Temper Sports-PRC Holdings, Inc., Credit Suisse First
Boston LLC and Goldman, Sachs & Co (filed as Exhibit 4.3 to True Temper Sports, Inc.'s Registration Statement on Form S-4, as filed with the Securities and Exchange Commission on April 13, 2004).*10.1

Management Services Agreement, dated as of March 15, 2004, between GGEP Management, L.L.C., GGEP Management (Bermuda) Ltd., and True Temper Sports, Inc. (filed as Exhibit 10.1 to
True Temper Sports, Inc.'s Registration Statement on Form S-4, as filed with the Securities and Exchange Commission on April 13, 2004).*10.2

Shareholders Agreement, dated as of March 15, 2004, by and among True Temper Corporation, TTS Holdings LLC and the Other Investors identified therein (filed as Exhibit 10.2 to True
Temper Sports, Inc.'s Registration Statement on Form S-4, as filed with the Securities and Exchange Commission on April 13, 2004).*10.3

True Temper Corporation 2004 Equity Incentive Plan, dated as of March 15, 2004 (filed as Exhibit 10.3 to True Temper Sports, Inc.'s Registration Statement on Form S-4, as filed with
the Securities and Exchange Commission on April 13, 2004).*10.4

Credit Agreement, dated as of March 15, 2004, by and among True Temper Corporation, True Temper Sports, Inc, the Lenders identified therein, Credit Suisse First Boston, Antares Capital Corporation,
 Goldman Sachs Credit Partners L.P. and Merrill Lynch Capital (filed as Exhibit 10.4 to True Temper Sports, Inc.'s Registration Statement on Form S-4, as filed with the Securities and Exchange Commission on April 13,
2004).*10.5

Tax Sharing and Administrative Services Agreement, dated as of March 15, 2004, by and among True Temper Corporation, True Temper Sports, Inc., El Cajon Equipment Corporation and True Temper
Sports-PRC Holdings, Inc. (filed as Exhibit 10.5 to True Temper Sports, Inc.'s Registration Statement on Form S-4, as filed with the Securities and Exchange Commission on April 13, 2004).*


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10.6

Employment Agreement, dated as of January 30, 2004, by and between True Temper Sports, Inc. and Scott C. Hennessy (filed as Exhibit 10.6 to True Temper Sports, Inc.'s Registration
Statement on Form S-4, as filed with the Securities and Exchange Commission on April 13, 2004).*10.7

First Amendment, dated as of September 24, 2004, to the Credit Agreement, dated as of March 15, 2004, by and among True Temper Corporation, True Temper Sports, Inc, the Lenders identified
therein, Credit Suisse First Boston, Antares Capital Corporation, Goldman Sachs Credit Partners L.P. and Merrill Lynch Capital (filed as Exhibit 10.1 to True Temper Sports, Inc.'s report on Form 8-K, as filed with the Securities
and Exchange Commission on September 30, 2004).*10.8

Amended and Restated Credit Agreement dated as of March 27, 2006, (amending and restating the Credit Agreement dated as of March 15, 2004, by and among True Temper Corporation, True Temper
Sports, Inc, the Lenders identified therein, Credit Suisse First Boston, Antares Capital Corporation, Goldman Sachs Credit Partners L.P. and Merrill Lynch Capital) (filed as Exhibit 10.8 to True Temper Sports, Inc.'s report on
Form 10-K, as filed with the Securities and Exchange Commission on March 28, 2006).*10.9

First Amendment dated as of December 20, 2006 to the Amended and Restated Credit Agreement dated as of March 27, 2006 (amending and restating the Credit Agreement dated as of March 15,
2004, by and among True Temper Corporation, True Temper Sports, Inc., the Lenders identified therein, Credit Suisse, Antares Capital Corporation, Goldman Sachs Credit Partners L.P. and Merrill Lynch Capital), (filed as Exhibit 10.2 to
True Temper Sports, Inc.'s report on Form 8-K, as filed with the Securities and Exchange Commission on January 26, 2007).*10.10

Second Lien Credit Agreement dated as of January 22, 2007, by and among True Temper Corporation, True Temper Sports, Inc., the Lenders identified therein, and Credit Suisse, (filed as
Exhibit 10.1 to True Temper Sports, Inc.'s report on Form 8-K, as filed with the Securities and Exchange Commission on January 26, 2007).*10.11

Summary of severance arrangement dated as of February 19, 2007 between True Temper Sports, Inc. and Fred H. Geyer.*12.1

Computation of Ratio of Earnings To Fixed Charges.**31.1

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**31.2

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**32.1

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**32.2

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**


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