UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K


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

TRUE TEMPER SPORTS, INC.

ANNUAL REPORT ON FORM 10-K

For the Fiscal Year Ended December 31, 2008

INDEX

			Page

PART I
	Item 1	Business	3
	Item 1A	Risk Factors	11
	Item 1B	Unresolved Staff Comments	19
	Item 2	Properties	19
	Item 3	Legal Proceedings	19
	Item 4	Submission of Matters to a Vote of Security Holders	19
PART II
	Item 5	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	20
	Item 6	Selected Financial Data	21
	Item 7	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
	Item 7A	Quantitative and Qualitative Disclosures About Market Risk	37
	Item 8	Consolidated Financial Statements and Supplementary Data	40
	Item 9	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	70
	Item 9A	Controls and Procedures	70
	Item 9B	Other Information	71
PART III
	Item 10	Directors, Executive Officers and Corporate Governance	72
	Item 11	Executive Compensation	75
	Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	82
	Item 13	Certain Relationships and Related Transactions and Director Independence	82
	Item 14	Principal Accountants Fees and Services	84
PART IV
	Item 15	Exhibits and Financial Statements Schedule	85
SIGNATURES			86
INDEX TO EXHIBITS			88

Table of Contents

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 recognized True Temper brand. 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 X or Grafalloy brand 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:

•: Dynamic Gold, which has been a leading steel shaft on the PGA Tour for the past 25 years;
•: Dynamic Gold SL, which delivers the playing characteristics of Dynamic Gold with 20% less weight;
•: Dynamic Gold Tour Issue, which has a Tour Only weight tolerance for custom precision fitting and are sold exclusively through our Tour Concept Dealer network.
•: Rifle, providing frequency matched shafts for the ultimate consistency throughout each set of irons;
•: Project X, which features a varying shaft taper rate throughout the set producing a flat, penetrating trajectory;
•: Project X Flighted, which features a variable tip flex design producing high launching long irons and controlled short irons;
•: SensiCore, which is equipped with patented vibration-damping technology that, when inserted into our steel shafts, can eliminate up to 70% of vibration at impact to combine the feel of graphite with the consistency of steel;

Table of Contents

•: Dynalite Gold, which features a light-weight, soft tip design that promotes a higher ball flight to optimize trajectory for low-ball hitters;
•: TX-90, which at only 90 grams, is one of the lightest steel shafts available and was designed for players seeking consistent performance using a lighter alternative to traditional steel shafts;
•: GS75, the lightest steel golf shaft in the world weighing in at only 75 grams;
•: GS95, which is a new lightweight responsive tip design that increases initial launch angles and maximum peak trajectory for greater ball distance.
•: TT Lite, which was designed for the custom club builders and offers a standard weight and mid-flex design which allows for various trimming options for a truly custom fit; and
•: Numerous co-branded and proprietary products.

We also design, manufacture and market several lines of premium graphite shafts under the Grafalloy brand 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:

•: Grafalloy ProLaunch Axis, which combines Smart-Ply design and Micro-Mesh tip technology to achieve maximum distance and clubhead stability. ProLaunch Axis is offered in two models to help players achieve optimal launch conditions; red for low and blue for high launch conditions.
•: Grafalloy ProLaunch Platinum, a graphite shaft combining ProLaunch technology with proprietary Smart-Ply™ design to reduce shaft ovalization in the downswing for maximum distance;
•: Grafalloy ProLaunch Blue, a graphite shaft designed with today's high performance heads and low-spin balls to help players achieve optimal launch conditions to reduce ball spin and maximize distance; and
•: Grafalloy Prolaunch Red, featuring Prolaunch technology in a design specifically engineered to produce a lower, more penetrating trajectory.

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 RXi and BiMatrx Rocket shafts 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 the Grafalloy Epic shaft 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.

Table of Contents

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 our SensiCore insert, along with the introduction of lighter weight steel alloys in products such as our Dynamic Gold SL and GS75 shafts, 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's Speedstep and Ping's AWT. Our branded products with the True Temper, Royal Precision, Project X or Grafalloy names 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:

(1): Premium grade steel shafts; and
(2): Commercial grade steel shafts.

Table of Contents

Premium steel shafts, such as our Dynamic Gold, Rifle, Project X, Dynamic Gold SL and GS75 product 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 Grafalloy brand 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 the True Temper branded product known as BiMatrx in January 2001. The BiMatrx shaft consists of a graphite shaft with a steel tip section that 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

Table of Contents

many proprietary shafts with our customers. As an example, we produce proprietary customized steel shafts for Callaway, under the Uniflex brand; for Ping, under the AWT brand; and for Nike, using the Speedstep brand.

Competition

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

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

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 the True Temper, Royal Precision, Project X and Grafalloy branded 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.

Table of Contents

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

Table of Contents

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 the True Temper, Royal Precision, Project X and Grafalloy brands 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 the True Temper, Royal Precision, Project X and Grafalloy brands 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.

Table of Contents

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 SensiCore technology, and had four patent applications pending. We also hold numerous trademarks related to, among other things, our True Temper, Grafalloy, Royal Precision, Project X and Alpha Q branded 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

Table of Contents

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:

•: make it more difficult for us to satisfy our obligations with respect to our 8³/8% Senior Subordinated Notes due 2011;

Table of Contents

•: increase our vulnerability to increases in interest rates because our secured credit facilities, under which our indebtedness was $146.7 million as of December 31, 2008, are subject to variable interest rates;
•: require a substantial amount of our annual cash flow from operations for debt service, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, research and development efforts, acquisitions and other general corporate purposes;
•: limit our flexibility to plan for, or react to, changes in our business and the industry in which we operate;
•: place us at a competitive disadvantage compared to our competitors that have less debt; and
•: limit our ability to borrow additional funds.

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.

Table of Contents

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.

Table of Contents

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.

Table of Contents

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.

Table of Contents

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

Table of Contents

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:

•: fluctuations in currency exchange rates;
•: import and export license requirements;
•: trade restrictions;
•: changes in tariffs and taxes;
•: restrictions on the transfer of funds into or out of a country;
•: unfamiliarity with foreign laws and regulations;
•: difficulties in staffing and managing international operations;
•: general economic and political conditions; and
•: unexpected changes in regulatory requirements.

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.

Table of Contents

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:

•: Turmoil in the global credit and equity markets may limit our ability to successfully address necessary elements of our capital structure under terms and conditions that are serviceable.
•: Reduced demand for our products, should the current U.S. recessionary pressures and global economic slowdown continue for an extended period of time, could adversely impact our operating results and cash flow metrics.

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.

Table of Contents

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			Owned/ Leased	Lease Expiration Date

Corporate Offices	Memphis, Tennessee	15,241		Leased	February 2014
Steel Shaft/Tubing Mfg.	Amory, Mississippi	335,000		Leased	January 2063(1)
Composite Shaft Mfg.	Guangzhou, China	99,298		Leased	March 2013
Steel Shaft Mfg	Suzhou, China	83,000		Owned
Steel Shaft Plating	Suzhou, China	10,995		Leased	June 2012
Composite R&D, Distribution	San Diego, California	17,885		Leased	December 2011
Steel R&D	Olive Branch, Mississippi	5,000		Leased	Monthly
Test Facility	Robinsonville, Mississippi	1,000	(2)	Leased	Monthly

(1): There are several leases covering the original land as well as the building at our Amory, Mississippi facility. The leases are structured with interim renewal periods of between 5 to 10 years, extending through January 2063. At the end of each of these renewal periods, we have the option to allow a lease to automatically renew or to not renew the lease.
(2): Included with the leased space is 14 acres of land which we use as a driving range to assess various qualitative and quantitative tests on product performance.

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.

Table of Contents

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.

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 Company

		Successor Company
		Years Ended
		Years Ended												Period from March 15 to December 31, 2004			Period from January 1 to March 14, 2004
		December 31, 2008			December 31, 2007			December 31, 2006			December 31, 2005			Period from March 15 to December 31, 2004			Period from January 1 to March 14, 2004
		(Dollars in thousands)
STATEMENT OF OPERATIONS DATA:
	Net sales	$	123,653		$	116,273		$	108,005		$	117,594		$	78,120		$	20,247
	Gross profit		40,508			33,906			34,811			47,232			18,016			8,376
	Selling, general and administrative expenses		14,490			14,725			14,226			14,660			9,520			3,635
	Amortization 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			100
	Impairment charge on long-lived assets(3)		—			—			—			357			—			—
	Transaction and reorganization expenses(4)		—			—			—			—			25			5,381
	Loss on early extinguishment of debt(5)		—			755			—			—			—			9,217
	Goodwill 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			2,498
	Income 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		$	14,551
	Total assets		198,877			359,850			353,699			349,836			360,825			178,057
	Current 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			106,030
	Total stockholder's equity (deficit)		(115,291	)		58,001			90,282			99,764			101,330			39,064
OTHER FINANCIAL DATA:
	Cash provided by (used in) operating activities	$	(1,259	)	$	(9,939	)	$	941		$	15,936		$	6,702		$	2,982
	Cash 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			671
	Capital expenditures(10)		3,087			3,170			4,888			2,612			1,232			330
	Ratio of earnings to fixed charges(11)		—			—			—			—			—			—

(1): As of January 1, 2002 the Company adopted the provisions of SFAS No. 141, Business Combinations. This statement requires the identification and valuation of intangible assets acquired in a business combination. Identifiable intangible assets determined to have definitive lives must be amortized over those expected useful lives. Certain intangible assets with definitive lives were identified, and the amortization expense during the period from

Table of Contents

March 15, 2004 through December 31, 2008 relates to the amortization of these intangibles. See Note 4 to the financial statements included elsewhere in this annual report for further discussion.

(2): Reflects various start-up business expenses related to the opening of the Company's composite manufacturing operation in China, and the related down-sizing costs incurred at the Company's California facility. Also reflects costs associated with the start-up of the Company's steel shaft manufacturing operation in China and costs associated with the acquisition of 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. In 2008 costs also reflect approximately $1,121 for severance and related costs associated with restructuring the Company's U.S. operations in response to the transition of steel shaft manufacturing into China, and the volume decline from the current global recessionary forces. For a more complete discussion of restructuring, business development and start-up costs see Note 2(k) to the financial statements included elsewhere in this annual report.
(3): Impairment charge on long-lived assets reflects the 2005 write-down, and subsequent disposal, of certain manufacturing equipment originally obtained through the acquisition of substantially all of the tangible personal property of Apollo Sports in 2000. Apollo Sports was a steel golf shaft competitor in England that went out of business in 2000. A significant portion of the assets acquired were subsequently transferred to True Temper's Amory, Mississippi facility. This write-off represents the remainder of the assets located in the United Kingdom that were deemed unusable.
(4): 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 ("TTC"), pursuant to which TTS Holdings LLC and certain of the Company's senior management purchased all of the outstanding shares of True Temper Corporation. In connection with this acquisition, and effective on March 15, 2004, the Company repaid all of its outstanding 2002 senior credit facility, redeemed all of its 10⁷/8% senior subordinated notes due 2008, and made certain payments of the net remaining equity of the predecessor company to the selling shareholders. These payments were financed with the net proceeds of a new senior credit facility and new 8³/8% senior subordinated notes due 2011. As a result of this transaction, the Company incurred certain expenses for legal, investment banking and other matters; and also recognized a loss on early extinguishment of its 10⁷/8% senior subordinated notes due 2008.
: The Gilbert Global Acquisition was accounted for by TTC using the purchase method of accounting. As the Company is a wholly owned subsidiary of TTC, the Company has "pushed down" the effect of the purchase method of accounting to its financial statements. The Company's consolidated financial results present the historical cost basis results of the Company as "predecessor company" through March 14, 2004, and results of the Company as "successor company" after that date. Accordingly, certain elements of the successor company presentation are not comparable to the predecessor company presentation due to the different basis of accounting.
(5): On January 22, 2007, the Company executed an amendment to its 2006 Restated Credit Facility and executed a Second Lien Credit Agreement including term loans of $45,000, with approximately $25,000 of the proceeds being used to pay down the debt under the 2006 Restated Credit Facility. In connection with this refinancing, the Company recognized a loss on early extinguishment of a portion of the debt under the 2006 Restated Credit Facility.
(6): 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.
(7): During 2007, the Company established a valuation allowance against its deferred tax assets in excess of its deferred tax liabilities which amortize or reverse over similar periods. For a more complete discussion of the valuation allowance provided against the Company's deferred tax assets, see Note 9 to the financial statements included elsewhere in this annual report.
(8): Working capital includes current assets less current liabilities, excluding cash and cash equivalents. As more fully described in Note 8 to the financial statements included elsewhere in this annual report, the Company is in default under its various debt agreements. Accordingly, at December 31, 2008, all of the Company's debt has been classified as current. Excluding debt from the calculation, working capital at December 31, 2008 would have been $34,642.
(9): As more fully described in Note 8 to the financial statements included elsewhere in this annual report, the Company is in default under its various debt agreements. Accordingly, at December 31, 2008, all of the Company's debt has been classified as current.
(10): Capital expenditures in 2008 include approximately $822 associated with the capacity expansion of the Company's new steel golf shaft manufacturing facility in Suzhou, China. Capital expenditures in 2006 include $2,400 of steel golf manufacturing equipment from Royal Precision.
(11): Earnings in 2008, 2007, 2006, 2005, and 2004 were insufficient to cover fixed charges. The amount of the ratio of earnings to fixed charges deficiency for the years ended December 31, 2008, 2007, 2006, and 2005 was $170,311, $23,480, $17,046, and $433, respectively. The amount of the ratio of earnings to fixed charges deficiency for the period from March 15 to December 31, 2004 was $16,814 and for the period from January 1 to March 14, 2004 was $12,453.

Table of Contents

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

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

Company Overview

True Temper Sports, Inc. (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

Table of Contents

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:



Net sales	100.0	%	100.0	%	100.0	%
Cost of sales	67.2		70.8		67.8

Gross profit	32.8		29.2		32.2
Selling, general and administrative expenses	11.7		12.7		13.2
Amortization of intangible assets	12.1		12.8		13.3
Restructuring, business development, start-up and transition costs	1.7		1.7		2.5
Loss on early extinguishment of debt	—		0.6		—
Goodwill impairment charge	126.2		—		—

Operating (loss) income	(119.0	)	1.3		3.3
Interest expense, net	18.6		21.4		19.0
Other expenses, net	0.1		—		0.1

Loss 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 Sales for 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

Table of Contents

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 Profit for 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 Expenses for 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 Assets was 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 Costs was 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,

Table of Contents

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

Loss On Early Extinguishment of Long-Term Debt for 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 Charge for 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) Income for 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, Net for 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 Expense decreased 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 Loss for 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 Sales for 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

Table of Contents

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 Profit for 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 Assets increased 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 Costs for 2007 decreased to $2.0 million from $2.7 million in 2006. The costs incurred during 2006 relate primarily to the acquisition of certain

Table of Contents

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 Debt for 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 Income for 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, Net for 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 Loss for 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			2007

Net 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

Table of Contents

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.

Table of Contents

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.

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.

Table of Contents

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.

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.

Table of Contents

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.

Table of Contents

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		Thereafter

Long-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	$	—

(1): The Company's long-term debt agreements contain customary change of control provisions that could, under certain circumstances, cause accelerated debt repayment.
(2): The anticipated interest payments on all variable rate debt included in the table above were calculated by using a LIBOR rate of 2.63%, which includes the impact of the interest rate swaps on $100.0 million, with a 5.25% default rate margin adder on the 2006 Restated Credit Facility debt and a default rate margin adder of 7.50% on the Second Lien debt. The anticipated interest payments on the 8³/8% Notes are based on the default rate of 9³/8%.
(3): Amount represents the purchase commitments for nickel and natural gas used in the manufacture of steel golf shafts at the Amory, Mississippi facility. As of December 31, 2008, the Company had approximately $0.7 million in nickel purchase contracts and approximately $1.2 million in natural gas purchase contracts, all for calendar 2009.
(4): This table does not include future obligations related to funding pension benefits.

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:

•: Repay the principal on the 2006 Restated Credit Facility and Second Lien; and/or
•: Make necessary investments to commission machinery and equipment for the CN Precision manufacturing facility in Suzhou, China; and/or
•: Make additional investments in the business for growth, which may include, among other things, capital expenditures, business acquisitions, and/or expenditures for business development and expansion.

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

Table of Contents

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

Table of Contents

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

Table of Contents

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.

Table of Contents

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

Table of Contents

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 Date

		Expected Maturity Date										There- after
LONG TERM DEBT		2009		2010		2011		2012		2013		There- after		Total
Fixed Rate 8³/8% Senior Subordinated Notes		$	—	$	—	$	125.0	$	—	$	—	$	—	$	125.0
	Average Interest Rate(a)														8.38	%
2006 Restated Credit Facility			18.0		71.1		12.6		—		—		—	$	101.7
	Average Interest Rate(b)(d)														5.49	%
Second Lien			—		—		45.0		—		—		—	$	45.0
	Average Interest Rate(c)(d)														9.33	%

(a): Since the Company is in default under the 8³/8% Notes, interest will be at the default rate of 9³/8%.
(b): Term loans under the 2006 Restated Credit Facility provide for interest at the Company's option at (1) the base rate of the bank acting as administrative agent plus 2.00% to 2.25%, or (2) under a LIBOR option with a borrowing rate of LIBOR plus 3.00% to 3.25%. Since the Company is in default under its various debt agreements, interest will be at the base rate plus the applicable base rate margin adder and a 2.00% default margin adder on its variable rate debt. Term loans include $17 million in revolving debt.
(c): The Second Lien is variable rate debt, which provides for interest at the Company's option, at (1) the base rate of the bank acting as administrative agent plus a margin adder of 4.50%, or (2) under a LIBOR option with a borrowing rate of LIBOR plus 5.50%. Since the Company is in default under its various debt agreements, interest will be at the base rate plus the applicable base rate margin adder and a 2.00% default margin adder on its variable rate debt.
(d): 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 estimated fair value of the interest rate swap agreements as of December 31, 2008 was a liability of $2.2 million.

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

Table of Contents

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):

		2008

Pound Sterling		$	1,284
Yen			9,497

	Total	$	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.

Table of Contents

Item 8. Consolidated Financial Statements and Supplementary Data

INDEX

Consolidated Financial Statements


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	41
	Consolidated Statements of Operations—for each of the years ended December 31, 2008, 2007 and 2006	42
	Consolidated Balance Sheets—December 31, 2008 and 2007	43
	Consolidated Statements of Stockholder's Equity and Comprehensive Income (Loss)—for each of the years ended December 31, 2008, 2007 and 2006	44
	Consolidated Statements of Cash Flows—for each of the years ended December 31, 2008, 2007 and 2006	45
	Notes to Consolidated Financial Statements	46

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

Table of Contents

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

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands)

	Years ended

	December 31, 2008			December 31, 2007			December 31, 2006
NET SALES	$	123,653		$	116,273		$	108,005
Cost of sales		83,145			82,367			73,194

GROSS PROFIT		40,508			33,906			34,811
Selling, general and administrative expenses		14,490			14,725			14,226
Amortization of intangible assets		14,956			14,941			14,343
Restructuring, business development, start-up and transition costs		2,131			2,012			2,688
Loss on early extinguishment of debt		—			755			—
Goodwill impairment charge		156,036			—			—

OPERATING (LOSS) INCOME		(147,105	)		1,473			3,554
Interest expense, net		23,023			24,921			20,525
Other expenses, net		183			32			75

LOSS 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.

Table of Contents

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, 2007

ASSETS
CURRENT ASSETS
	Cash and cash equivalents		$	14,719		$	4,722
	Receivables, net			18,616			21,185
	Inventories			31,850			28,418
	Prepaid expenses and other current assets			2,349			1,803
	Deferred tax assets			1,237			1,242

		Total current assets		68,771			57,370
Property, plant and equipment, net				18,696			18,902
Goodwill				—			156,070
Intangible assets, net				104,431			119,396
Deferred financing costs				4,508			6,360
Other assets				2,471			1,752

		Total assets	$	198,877		$	359,850

LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
	Current portion of long-term debt		$	271,733		$	987
	Accounts payable			5,543			7,979
	Accrued expenses and other current liabilities			13,867			12,052

		Total current liabilities		291,143			21,018
Deferred tax liabilities				10,134			10,139
Long-term debt, net of current portion				—			259,733
Pension and post-retirement obligations				12,891			10,959

		Total liabilities		314,168			301,849
STOCKHOLDER'S EQUITY
Common stock—par value $0.01 per share; authorized 1,000 shares; issued and outstanding 100 shares				—			—
Additional paid-in capital				122,673			118,648
Accumulated deficit				(225,563	)		(55,168	)
Accumulated other comprehensive income (loss)				(12,401	)		(5,479	)

		Total stockholder's equity (deficit)		(115,291	)		58,001
Commitments and contingent liabilities (See Note 12)				—			—

		Total liabilities and stockholder's equity	$	198,877		$	359,850

See accompanying notes to consolidated financial statements.

Table of Contents

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)

		Common Stock				Additional Paid-In Capital			Accumulated Deficit
		Shares		Par Value		Additional Paid-In Capital			Accumulated Deficit						Total
Balance at December 31, 2005			100	$	—	$	111,943		$	(10,930	)	$	(1,249	)	$	99,764
	Net loss		—		—		—			(10,767	)		—			(10,767	)
	Minimum pension liability, net of taxes		—		—		—			—			1,211			1,211
	Mark to market adjustment on derivative instruments, net of taxes		—		—		—			—			74			74

	Comprehensive loss, net of taxes															(9,482	)

Balance at December 31, 2006			100		—		111,943			(21,697	)		36			90,282
	Net 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			—			—			6,705

Balance at December 31, 2007			100		—		118,648			(55,168	)		(5,479	)		58,001

	Net 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			—			—			4,500

Balance at December 31, 2008			100	$	—	$	122,673		$	(225,563	)	$	(12,401	)	$	(115,291	)

See accompanying notes to consolidated financial statements.

Table of Contents

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			2006
OPERATING ACTIVITIES
	Net 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			2,616
		Amortization of deferred financing costs			1,852			1,690			1,387
		Amortization of intangible assets			14,956			14,941			14,343
		Loss 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	)		1,130
			Inventories		(3,432	)		(5,210	)		(2,975	)
			Prepaid expenses and other assets		(546	)		928			(140	)
			Accounts payable		(2,436	)		707			2,287
			Accrued expenses and other current liabilities		1,815			2,130			8
			Other assets and liabilities		(5,005	)		(776	)		(456	)

			Net cash provided by (used in) operating activities		(1,259	)		(9,939	)		941
INVESTING ACTIVITIES
	Purchases 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 ACTIVITIES
	Proceeds from issuance of bank debt				—			45,000			23,000
	Net 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			17,845
Net 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			4,733

Cash and cash equivalents at end of year				$	14,719		$	4,722		$	3,055

See accompanying notes to consolidated financial statements.

Table of Contents

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

(a) Revenue Recognition

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

(b) Use of Estimates

The preparation of the consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include the carrying amount of goodwill, intangible assets and property, plant and equipment; valuation allowances for receivables, inventories and deferred tax assets; valuation of derivative instruments; and assets and obligations related to employee benefits. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an on-going basis using historical experience and other factors, including the current economic environment, which

Table of Contents

management believes to be reasonable under the circumstances. Illiquid credit markets, volatile foreign currency and energy markets, and declines in consumer spending have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

(c) Cash Equivalents

Cash in excess of current operating requirements is invested in short-term, interest-bearing instruments with maturities of three months or less at the date of purchase and is stated at cost, which approximates market value.

(d) Trade Accounts Receivable

Trade receivables are net of allowances for doubtful accounts of $248 and $443 as of December 31, 2008 and 2007, respectively.

(e) Inventories

Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method.

(f) Deferred Financing Costs

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

(g) Property, Plant and Equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation. Depreciation is provided over the estimated useful life of each asset using the straight-line method. Leasehold improvements are amortized over the shorter of the related asset's useful life or the applicable lease term including option periods when appropriate. In general, the estimated useful lives are as follows:

Asset Category		Life

Buildings		15-40 years
Furniture and office equipment		10-15 years
Machinery and equipment		8-15 years
Computers and capitalized software		2-4 years
Leasehold improvements		6-15 years

(h) Goodwill and Other Intangible Assets

Goodwill represents the excess of cost over fair value of net assets of businesses acquired. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but are instead tested for impairment at least annually in accordance with the provisions of Statement of Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets. Intangible assets with estimable useful lives are amortized, using the straight-line method, over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 144, Accounting for Impairment or Disposal of Long-Lived Assets.

Table of Contents

The Company employs a discounted cash flow model to evaluate goodwill for impairment on an annual basis. If an indication of impairment exists, the Company compares the carrying amount of the reporting unit to its estimated fair value. If the reporting unit's carrying value exceeds its fair value, the Company allocates the fair value to all of the assets and liabilities of the reporting unit and determines the implied fair value of the goodwill and indefinite-lived intangible assets. An impairment loss would be recognized to the extent that a reporting unit's recorded goodwill or other indefinite-lived intangible assets exceeded the implied fair value. In the fourth quarter of 2008 the Company's discounted cash flow analysis reflected lower estimates of future revenues and cash flows due in part to the current global economic downturn and retail market conditions, and the resulting impact on the overall golf industry, resulting in an estimated enterprise fair value less than the carrying value of the Company's reporting unit as of December 31, 2008. Accordingly, the Company recorded a $156.0 million impairment charge to impair all of its goodwill. No goodwill impairment charges were recorded in 2007 or 2006.

(i) Derivative Instruments and Foreign Currencies

The Company uses forward foreign exchange contracts ("Instruments" or "Derivative Instruments") in its management of foreign currency exchange rate exposures. Instruments that are designated hedges in accordance with SFAS No. 133, Accounting for Derivative Instruments and Certain Hedging Activities, as amended, 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. The Company formally assesses both at inception of the hedge and on an ongoing basis whether each derivative is highly effective in offsetting changes in fair value or cash flows of the hedged item. If it is determined that a derivative is not highly effective, the Company will discontinue hedge accounting prospectively and record any ineffectiveness in earnings.

The Company has used Derivative Instruments to hedge several components of its 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. These contracts typically have maturities of less than one year.

The changes in the market value of Derivative Instruments designated as hedging instruments for anticipated foreign currency sales and the Company's interest rate swaps are recognized in the consolidated balance sheets as a component of accumulated other comprehensive income (loss) in stockholder's equity (deficit). 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 or interest expense for the foreign exchange contracts and interest rate swaps, respectively.

The Company recorded a gain (loss) in operations on foreign currency of $26, $(16) and $50 for the years ended December 31, 2008, 2007 and 2006, respectively.

Table of Contents

The following table summarizes the contractual notional amounts of True Temper's forward foreign exchange contracts as of December 31, 2008 and 2007 (in U.S. dollars):

		2008		2007

Pound Sterling		$	1,284	$	7,059
Yen			9,497		2,849

	Total	$	10,781	$	9,908

(j) Impairment of Long-Lived Assets

SFAS No. 144 provides a single accounting model for long-lived assets held and used and to be disposed of. SFAS No. 144 also changes the criteria for classifying an asset as held for sale; and broadens the scope of businesses to be disposed of that qualify for reporting as discontinued operations and changes the timing of recognizing losses on such operations.

(k) Restructuring, Business Development, Start-up and Transition Costs

During 2006 and 2007, restructuring, business development, start-up and transition costs reflect the costs associated with the acquisition of 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. Restructuring, business development, start-up and transition costs in 2007 and 2008 also include costs related to the start-up of steel golf shaft manufacturing at the Company's recently acquired facility in Suzhou, China. Restructuring, business development, start-up and transition costs in 2008 also reflect 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, medical and other benefit continuation during severance periods, and outplacement assistance for terminated senior level management employees. The costs are expensed as incurred and separately identified in the consolidated statements of operations as a component of operating income (loss).

The following table provides the changes in the Company's accrual for severance benefits related to the restructuring efforts as described above:


Balance at December 31, 2007	$	—
Liabilities accrued for severance benefits during the year		1,121
Severance benefits paid during the year		(556	)

Balance at December 31, 2008	$	565

Table of Contents

(l) Advertising and Promotional Costs

Advertising and promotional costs are accounted for in accordance with Statement of Position 93-7 Reporting on Advertising Costs, which requires that the cost of producing advertisements be expensed at the time of the first showing of the advertisement or as incurred. True Temper's policy is to expense costs associated with the production of advertising at the time of first showing of the advertisement. Advertising and promotional costs primarily consist of trade show costs, media spots including print, radio and television, advertising production and agency fees, sponsorships, and product and promotional samples. Advertising and promotional expense was $2,499, $3,191 and $3,688 for the years ended December 31, 2008, 2007 and 2006, respectively. Certain of the Company's customers participate in a cooperative advertising program where the Company agrees to reimburse these customers for a portion of their advertising costs that feature the Company's product. Cooperative advertising costs are shown as a reduction of net sales.

(m) Research and Development Costs

Costs associated with the development of new products and changes to existing products are expensed as incurred and are included in selling, general, and administrative expenses. Research and development costs were $2,103, $1,787 and $1,905 for the years ended December 31, 2008, 2007 and 2006, respectively.

(n) Retirement Benefits

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

In September 2006, the FASB issued SFAS No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R) which requires an employer to recognize in its statement of financial position the overfunded or underfunded status of a defined benefit pension or other postretirement plan measured as the difference between the fair value of plan assets and the benefit obligation. Employers must also recognize as a component of other comprehensive income, net of tax, the actuarial and experience gains and losses and the prior service costs and credits. The Company adopted the provisions of SFAS No. 158 effective December 31, 2007.

True Temper's U.S. based salaried employees, and certain international employees, are covered by a non-contributory defined contribution plan. Company contributions to this plan are based on the employee's age and are calculated as a percentage of compensation. This plan is funded on a current basis. In addition to the non-contributory defined contribution plan, certain post-retirement medical, dental and life insurance benefits are provided to those salaried employees who were employed by the Company prior to January 1, 2000.

All U.S. based employees, and certain international employees, of True Temper are eligible to participate in a Company-sponsored 401(k) plan. The Company's contribution to this plan is calculated as a percentage of the employee's compensation and the employee's contribution. All Company contributions to this plan are paid in cash.

Table of Contents

(o) Income Taxes

The Company is included in the consolidated U.S. federal income tax return of TTC. Income taxes are determined and presented in the Company's consolidated financial statements using the separate return method, and are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Once established, any deferred tax asset must be evaluated to determine the likelihood, on a "more likely than not" basis, that the future tax benefits will be realized, including whether 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.

In July 2006, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement 109 ("FIN 48"). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. This interpretation prescribes a "more likely than not" recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company adopted FIN 48 effective January 1, 2007. Upon adoption, the Company recorded no liability for unrecognized tax benefits as it believes all of the Company's tax positions are highly certain of being recognized for income tax purposes. Therefore, the adoption of FIN 48 had no impact on the Company's consolidated financial position or its results of operations.

(p) Stock-Based Compensation

On January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment ("SFAS No. 123(R)"). All equity incentive awards issued subsequent to January 1, 2006 will be accounted for using the guidance provided in this statement, which requires the measurement and recognition of compensation expense for all share-based payment awards to employees and directors based on estimated fair values. For equity incentive awards issued prior to January 1, 2006, the Company continues to apply the intrinsic-value method of accounting prescribed by Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations, including Financial Accounting Standards Board Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation, An Interpretation of APB Opinion No. 25, issued in March 2000, to account for its fixed-plan Equity Incentive Awards. Under this method, compensation expense is recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price of the Equity Incentive Award.

(q) Fair Value of Financial Instruments

The fair value of financial instruments represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than a forced sale or

Table of Contents

liquidation. Significant differences can arise between the fair value and carrying amount of financial instruments that are recognized at historical cost amounts.

The following methods and assumptions were used by True Temper in estimating fair value disclosures for financial instruments:

Cash and Cash Equivalents, Trade Receivables and Payables—The amounts reported in the consolidated balance sheets approximate fair value.

Long-Term Debt—As a result of recent market conditions and the events of default as described in Note 8, 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. Fair value measurements for these instruments fall within Level 3 of the fair value hierarchy of FASB Statement No. 157, Fair Value Measurements. 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 the book 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 and 2007, the Company's Senior Subordinated Notes had an estimated fair value of $40.0 million and $108.4 million, respectively.

In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in U.S. generally accepted accounting principles and expands disclosures about fair value measurements. The provisions of SFAS No. 157 related to certain nonfinancial assets and liabilities are effective for financial statements issued for fiscal years beginning after November 15, 2008. The remaining provisions of SFAS No. 157 are effective for financial statements issued for fiscal years beginning after November 15, 2007, and the Company adopted such provisions effective January 1, 2008.

SFAS No. 157 defines the inputs used to measure fair value into the following fair value hierarchy:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs reflecting the reporting entity's own assumptions.

As of December 31, 2008, cash flow hedging derivative assets and liabilities were principally related to the fair value of foreign exchange forward contracts and interest rate swaps. The Company defines the fair value of foreign exchange forward contracts as the amount of the difference between the contracted and current market foreign currency exchange rates at the end of the period. Management estimates the fair value of foreign exchange forward contracts on a quarterly basis by obtaining market quotes for future contracts with similar terms, adjusted where necessary for maturity differences. Management estimates the fair value of its interest rate swaps by obtaining market quotes for future contracts with similar terms, adjusted where necessary for

Table of Contents

maturity differences and credit value adjustments to take into account non-performance risk and credit risk. To further estimate the fair value of the interest rate swaps, the Company uses estimates of future cash flows, which are discounted to a net present value, based on the forward LIBOR curve at the reporting date.

The following table sets forth, by level within the fair value hierarchy, the Company's derivative liabilities recorded at fair value on a recurring basis as of December 31, 2008:

True Temper Fair Value Measurements at Reporting Date

Description	December 31, 2008		Level 1		Level 2		Level 3

Derivatives (foreign exchange forward contracts)	$	1,055	$	—	$	1,055	$	—
Derivatives (interest rate swaps)	$	2,230	$	—	$	—	$	2,230

As more fully described in Note 8, the Company entered into the interest rate swap agreements in 2008. Accordingly, the fair value of $2,230 represents the unrealized loss on the interest rate swaps during 2008 recognized in accumulated other comprehensive loss at December 31, 2008.

The provisions of SFAS No. 157 for all non-financial assets and liabilities apply to fiscal years beginning after November 15, 2008. The Company is currently assessing the impact of SFAS No. 157 for non-financial assets and liabilities on its consolidated statements of financial position and results of operations.

The fair value estimates presented herein are based on information available to management as of December 31, 2008. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein.

(r) Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141 (Revised), Business Combinations. SFAS No. 141R replaces SFAS No. 141 while retaining the fundamental requirements in SFAS No. 141 that the acquisition (purchase) method of accounting be used for all business combinations. SFAS No. 141R retains SFAS No. 141 guidance for identifying and recognizing intangible assets separately from goodwill and makes certain changes to how the acquisition (purchase) method is applied. SFAS No. 141R is effective on a prospective basis for business combinations for which the acquisition date is on or after January 1, 2009. Generally, the effects of SFAS No. 141R will depend on future acquisitions.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51. SFAS No. 160 amends ARB No. 51 to establish accounting and reporting standards for the noncontrolling interest (sometimes called a minority interest) in a subsidiary and for the deconsolidation of a subsidiary and to provide consistency with SFAS No. 141. SFAS No. 160 is effective for financial statements for fiscal years beginning on or after December 15, 2008. The Company has not yet evaluated the impact, if any, of this requirement.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities. SFAS No. 161 is effective for financial statements issued for periods beginning after November 15, 2008, with early application encouraged. This statement amends and expands the disclosure requirements in SFAS No. 133, Accounting for Derivative Instruments and Hedging

Table of Contents

Activities, and other related literature. The Company has not yet evaluated the impact, if any, of this requirement.

(s) Supplemental Disclosures of Cash Flow Information

Cash payments for income taxes and interest are as follows:

	Years Ended December 31,

	2008		2007		2006
Income taxes	$	307	$	135	$	213
Interest		21,757		22,355		19,391

(t) Accumulated Other Comprehensive Income (Loss)

The accumulated balances for each classification within accumulated other comprehensive income (loss) are as follows:

								Pension and Post- Retirement Obligations

		Derivative Instruments Mark to Market Adjustment			Minimum Pension Liability Adjustments			Pension and Post- Retirement Obligations						Accumulated Other Comprehensive Income (Loss)
		Derivative Instruments Mark to Market Adjustment			Minimum Pension Liability Adjustments			Prior Service Cost			Accumulated Loss			Accumulated Other Comprehensive Income (Loss)
December 31, 2006		$	74		$	(38	)	$	—		$	—		$	36
	Period 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	)

(u) Taxes Collected from Customers and Remitted to Governmental Authorities

The Company collects sales and value added taxes from customers and remits them to governmental authorities in certain jurisdictions. These taxes are presented net in the consolidated statements of operations and are not included in net sales.

(3) ACQUISITIONS

Royal Precision Asset Acquisition

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.

Table of Contents

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.

CN Precision Acquisition

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		$	150
Current assets			30
Identifiable intangible assets			987
Property, plant and equipment			4,276
Goodwill			5,187
Current 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.

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, 2007

	Weighted Average Amortization Period	December 31, 2008							December 31, 2007
	Weighted Average Amortization Period	Gross Value		Accumulated Amortization			Net Book Value		Gross Value		Accumulated Amortization			Net Book Value
Trade name	—	$	22,430	$	—		$	22,430	$	22,430	$	—		$	22,430
Patented technology	8 yrs		13,011		(7,414	)		5,597		13,011		(5,794	)		7,217
Customer-related intangible assets	10 yrs		132,478		(61,015	)		71,463		132,478		(47,767	)		84,711
Lease contract	59 yrs		4,323		(350	)		3,973		4,323		(277	)		4,046
Land use rights	50 yrs		987		(19	)		968		987		—			987
Other	2 yrs		262		(262	)		—		275		(270	)		5

Total 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	$	14,961
2010		14,961
2011		14,961
2012		13,797
2013		13,500

(5) INVENTORIES

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

		2008		2007

Raw materials		$	5,995	$	5,017
Work in process			2,598		4,156
Finished goods			23,257		19,245

	Total	$	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			2007

Land improvements	$	121		$	121
Buildings		5,471			5,440
Furniture and office equipment		1,164			1,017
Machinery and equipment		21,201			19,501
Computer equipment and capitalized software		1,062			950
Leasehold improvements		2,209			2,149
Construction in progress		1,812			984

		33,040			30,162
Less accumulated depreciation		(14,344	)		(11,260	)

Net property, plant and equipment	$	18,696		$	18,902

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		2007

Accrued compensation, benefits and related payroll taxes		$	3,431	$	3,926
Accrued interest			4,338		4,871
Other			6,098		3,255

	Total	$	13,867	$	12,052

(8) BORROWINGS

(a) Long-Term Debt

Long-term debt as of December 31, of the year indicated consisted of the following:

	2008		2007

8³/8% Senior Subordinated Notes due 2011	$	125,000	$	125,000
2006 Restated Credit Facility		101,733		90,720
Second Lien		45,000		45,000

Total debt		271,733		260,720
Less current portion		271,733		987

Long-term debt, net of current portion	$	—	$	259,733

The 8³/8% Senior Subordinated Notes due 2011 (the "8³/8% Notes") provide for semi-annual interest payments, in arrears, due on March 15 and September 15. On or after March 15, 2008 the 8³/8% Notes may be redeemed, at the option of the Company, in whole or in part, at a redemption price of 104.188% beginning March 15, 2008 and declining ratably thereafter to 100% on March 15, 2010.

The 2004 Senior Credit Facility had a maturity date of March 15, 2011, and provided for interest on the term loan, at the Company's option, at (i) the base rate of the bank acting as administrative agent plus a margin adder of 2.00% to 2.25%, or (ii) under a LIBOR option with a borrowing spread of LIBOR plus 2.50% to 3.00%, depending on financial ratios.

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 of CN Precision, described more fully in Note 3. 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.

Table of Contents

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.

The Company's weighted average rate at December 31, 2008 was 5.49% on the 2006 Restated Credit Facility and 9.33% on the Second Lien.

As a result of paying down $24.7 million of the borrowings under the 2006 Restated Credit Facility in 2007, 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.

Substantially all of the Company's assets are pledged as collateral under the 2006 Restated Credit Facility and the Second Lien. 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.

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 full 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.

The equity investments were from the proceeds of Series A 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. True Temper Corporation is a holding company whose primary operations are through its investment in the Company.

Liquidity and Substantial Doubt About the Company's Ability to Continue as a Going Concern

Table of Contents

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.

At December 31, 2008, future minimum principal payments on long-term debt, under the original contractual arrangements, were as follows:


2009		$	17,987
2010			71,127
2011			182,619

	Total	$	271,733

(b) Line of Credit

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

Table of Contents

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 Ended

		December 31 2008		December 31, 2007		December 31, 2006
Income (loss) from continuing operations		$	84	$	9,991	$	(6,279	)
Stockholder's equity (deficit):
	Minimum pension liability		—		—		741
	Mark to market adjustment on derivative instruments		—		—		45

Total 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 Ended

			December 31, 2008		December 31, 2007		December 31, 2006
Current:
	Federal		$	—	$	—	$	—
	State			—		—		40
	Foreign			84		262		173

		Total current		84		262		213

Deferred:
	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 Ended

	December 31, 2008			December 31, 2007			December 31, 2006
Computed "expected" tax benefit	$	(57,906	)	$	(7,983	)	$	(5,796	)
State tax, net of federal benefit		(6,744	)		(930	)		(646	)
Foreign taxes		84			262			173
Goodwill impairment charge		59,231			—			—
Valuation allowance and other		5,419			18,642			(10	)

Actual income tax expense (benefit)	$	84		$	9,991		$	(6,279	)

Table of Contents

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

			2008			2007

Deferred tax assets:
	Goodwill		$	22,878		$	27,693
	Accrued liabilities			565			802
	Asset impairment			445			445
	Net operating loss carryforwards			31,599			19,974
	Facility start-up costs			305			454
	Pension and post-retirement benefit obligations			4,635			3,868
	Inventories			1,196			1,018
	Deferred financing costs			161			222
	Other			761			—

		Gross deferred tax assets	$	62,545		$	54,476
		Valuation allowance		(34,127	)		(20,765	)

		Net deferred tax assets	$	28,418		$	33,711

Deferred 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

Table of Contents

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			2007
Reconciliation of benefit obligation:
	Benefit obligation at beginning of year		$	20,757		$	18,037
	Service cost			574			547
	Interest cost			1,233			1,155
	Amendments			—			817
	Curtailments			(283	)		—
	Actuarial (gains) losses			(844	)		870
	Benefit payments			(737	)		(669	)

		Benefit obligation at end of year	$	20,700		$	20,757

Reconciliation of fair value of plan assets:
	Fair value of plan assets at beginning of year		$	14,116		$	13,760
	Actual return on plan assets			(4,004	)		709
	Employer contributions			2,673			316
	Benefit payments			(737	)		(669	)

		Fair value of plan assets at end of year	$	12,048		$	14,116

Funded 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	$	805
2010	$	865
2011	$	963
2012	$	1,054
2013	$	1,146
2014–2018	$	7,112

Table of Contents

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			2006

Service cost			$	574		$	547		$	571
Interest cost				1,233			1,155			1,001
Expected 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		$	480

Weighted 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		2007
Projected benefit obligation	$	20,700	$	20,757
Accumulated benefit obligation	$	20,410	$	20,444
Fair 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			Target
Equity securities		56.0	%		66.0	%		50-70	%
Debt securities		39.0			30.0			30-50
Cash equivalents		5.0			4.0			0

Total		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.

Table of Contents

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			2007
Reconciliation of benefit obligation:
	Benefit obligation at beginning of year	$	4,691		$	4,593
	Service cost		127			127
	Interest cost		290			282
	Participant contributions		236			249
	Actuarial loss		156			920
	Benefits paid		(799	)		(1,480	)

	Benefit obligation at end of year	$	4,701		$	4,691

Amounts 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			2006

Service cost		$	127		$	127		$	136
Interest cost			290			282			256
Recognized net losses			228			183			94

	Net periodic post-retirement expense	$	645		$	592		$	486

	Discount 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.

Table of Contents

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	$	479
2010	$	503
2011	$	493
2012	$	513
2013	$	506
2014–2018	$	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.

Table of Contents

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

		Wtd. Avg. Exercise Price

Balance at December 31, 2005	525,400	$	13.56
Granted	—		—
Exercised	—		—
Forfeited	—		—

Balance at December 31, 2006	525,400	$	13.56
Granted	—		—
Exercised	—		—
Forfeited	122,400	$	13.56

Balance at December 31, 2007	403,000	$	13.56
Granted	60,000		13.56
Exercised	—		—
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

(a) Lease Obligations

The Company is obligated under various non-cancelable leases for office facilities and equipment. These leases generally provide for renewal options and, in the case of facilities leases, for periodic rate increases based upon economic factors. All non-cancelable leases with an initial term greater than one year have been categorized as either capital or operating leases in conformity with SFAS No. 13, Accounting for Leases, and related interpretations.

Future minimum payments under non-cancelable operating leases with initial terms of one year or more as of December 31, 2008 are as follows:

		Operating Leases

2009		$	1,189
2010			1,138
2011			1,134
2012			826
2013			453
Thereafter			53

	Total minimum lease payments	$	4,793

Rental expense on operating leases was $1,322, $1,240 and $1,227 for the years ended December 31, 2008, 2007 and 2006, respectively.

(b) Product Warranties

The Company generally warrants its products against certain manufacturing and other defects. These product warranties are provided for specific periods of time and/or usage of the product depending on the nature of the product, the geographic location of its sale and other factors. The

Table of Contents

accrued product warranty costs are based primarily on historical experience of actual warranty claims as well as current information on product costs.

The following table provides the changes in the Company's accrual for product warranties:


Balance at December 31, 2005		$	309
	Liabilities accrued for warranties issued during the year		1,033
	Warranty claims paid during the year		(1,016	)

Balance at December 31, 2006		$	326
	Liabilities accrued for warranties issued during the year		1,691
	Warranty claims paid during the year		(1,570	)

Balance at December 31, 2007		$	447
	Liabilities accrued for warranties issued during the year		1,237
	Warranty claims paid during the year		(1,366	)

Balance at December 31, 2008		$	318

(c) Legal Proceedings

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:

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

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

(1): an annual advisory fee of $0.5 million payable quarterly, plus reasonable out-of-pocket expenses;
(2): a transaction fee in an amount equal to 1.25% of the aggregate transaction value in connection with the consummation of any material acquisition, divestiture, financing or refinancing by True Temper or any of its subsidiaries.

The management services agreement has an initial term of five years, subject to automatic one-year extensions unless 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.

Table of Contents

(14) SEGMENT AND OTHER RELATED DISCLOSURES

(a) Segment Reporting

The Company operates in two reportable business segments: golf shafts and performance sports. The Company's reportable segments are based on the type of product manufactured and the application of that product in the marketplace. The golf shaft segment manufactures and sells steel and composite golf shafts for use exclusively in the golf industry. The performance sports segment manufactures and sells high strength, tight tolerance tubular components for bicycle, hockey and other recreational sports markets. The accounting policies for these segments are the same as those described in the summary of significant accounting policies. The Company evaluates the performance of these segments based on segment sales and gross profit. The Company has no inter-segment sales. General corporate assets that are not allocated to segments include: cash, non-trade receivables, deferred tax assets and liabilities, deferred financing costs, corporate property, plant and equipment, goodwill and other identifiable intangible assets.

			Years Ended December 31,

			2008		2007		2006
Net sales:
	Golf shafts		$	105,938	$	102,856	$	99,103
	Performance sports			17,715		13,417		8,902

		Total	$	123,653	$	116,273	$	108,005

Gross profit:
	Golf shafts		$	37,308	$	31,220	$	33,958
	Performance sports			3,200		2,686		853

		Total	$	40,508	$	33,906	$	34,811

Depreciation expense:
	Golf shafts		$	2,682	$	2,492	$	2,050
	Performance sports			558		536		566

		Total	$	3,240	$	3,028	$	2,616

Capital expenditures:
	Jointly used assets		$	318	$	310	$	125
	Golf shafts			2,361		2,523		4,264
	Performance sports			408		337		499

		Total	$	3,087	$	3,170	$	4,888

Total assets:
	Jointly used assets		$	4,654	$	4,108	$	4,392
	Golf shafts			58,417		57,414		44,102
	Performance sports			4,843		5,624		4,560

		Total	$	67,914	$	67,146	$	53,054

Revenues from two customers of True Temper's golf shaft segment represented approximately $22,100 or 17.9% and $14,900 or 12.0%, respectively of the Company's 2008 net sales. Revenues from one customer of True Temper's golf shafts segment represented approximately $17,900 or 15.4% of the Company's 2007 net sales; and revenues from two customers of True Temper's golf shaft segment represented approximately $13,800 or 12.8% and $12,900 or 11.9%, respectively, of the Company's 2006 net sales.

Table of Contents

Following are reconciliations of total reportable segment assets to total Company assets, as of December 31, and total reportable segment gross profit to total Company loss before income taxes for the periods indicated:

			2008		2007

Total assets:
	Total from reportable segments		$	67,914	$	67,146
	General corporate and other unallocated assets			130,963		292,704

		Total	$	198,877	$	359,850

		Years Ended December 31,

		2008			2007			2006
Total reportable segment gross profit		$	40,508		$	33,906		$	34,811
Less:
	Selling, general and administrative expenses		14,490			14,725			14,226
	Amortization of intangible assets		14,956			14,941			14,343
	Restructuring, business development, start-up and transition costs		2,131			2,012			2,688
	Loss on early extinguishment of debt		—			755			—
	Goodwill impairment charge		156,036			—			—
	Interest expense		23,023			24,921			20,525
	Other expense, net		183			32			75

Total Company loss before income taxes		$	(170,311	)	$	(23,480	)	$	(17,046	)

(b) Sales by Geographic Region

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

		Years Ended December 31,

		2008		2007		2006
U.S.		$	73,622	$	75,025	$	69,664
International			50,031		41,248		38,341

	Total	$	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.

Table of Contents

(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 Quarter

2008
Net sales	$	35,827		$	37,734		$	24,203		$	25,889
Gross profit		12,498			13,971			6,668			7,371
Net loss		(1,599	)		(94	)		(6,595	)		(162,107	)
2007
Net sales	$	29,579		$	33,037		$	24,140		$	29,517
Gross profit		10,017			10,428			4,067			9,394
Net loss		(3,061	)		(2,301	)		(22,777	)		(5,332	)

(16) SUBSEQUENT EVENTS

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

(a): Evaluation of Disclosure 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.

(b): Management's Annual Report on Internal Control Over Financial Reporting

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 in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organization of the Treadway Commission. Based on our assessment under the framework in Internal

Table of Contents

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.

(c): Changes in Internal Control Over Financial Reporting

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.

Table of Contents

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		Position

Scott C. Hennessy	50	Chief Executive Officer, President and Director
Stephen M. Brown	43	Vice President of Human Resources
Jeremy Erspamer	34	Senior Director of Customer Planning and Supply Chain
Graeme Horwood	64	Vice President Engineering, Research and Development
Jason A. Jenne	39	Vice President, Chief Financial Officer and Treasurer
Raeford P. Lucas	43	Vice President, Sales and Marketing
Adrian H. McCall	51	Senior Vice President and General Manager of Performance Sports
Steven J. Gilbert	61	Director and Co-Chairman
Steven Kotler	61	Director and Co-Chairman
Richard W. Gaenzle, Jr.	44	Director
Jeffery W. Johnson	40	Director
William P. Lauder	48	Director

Scott C. Hennessy has 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. Brown has 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 Erspamer has 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 Horwood has 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 Jenne has 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.

Table of Contents

Raeford P. Lucas has 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. McCall has 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. Gilbert became 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 Kotler became 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. Johnson 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. 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.

Table of Contents

William P. Lauder became 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.

Audit 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.

Compensation Committee

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.

Table of Contents

Item 11. Executive Compensation

Report on 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:

The Compensation Committee is responsible for administering the Company's executive compensation program. Among other things, we review general compensation issues and determine the compensation of the Company's CEO and all other senior executives and key employees (hereafter collectively referred to as the "Executives"), and make determinations regarding, and administer, all of our employee compensation plans that provide benefits to the Executives.

We have reviewed the Compensation Discussion and Analysis included in this Annual Report on Form 10-K, and discussed the contents hereof with the Company's management. Based upon our review and discussions with management, we recommended to its Board of Directors the inclusion of the Compensation Discussion and Analysis appearing 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

Table of Contents

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.

Table of Contents

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.

Table of Contents

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

Summary Compensation Table

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

Scott C. Hennessy Chief Executive Officer, President and Director	2008 2007	475,000 455,000	— —	42,390 41,550	517,390 496,550
Adrian H. McCall Senior Vice President of Global Marketing and Product Development	2008 2007	220,000 202,500	— —	31,588 28,261	251,588 230,761
Jason A. Jenne Vice President, Chief Financial Officer and Treasurer	2008 2007	195,000 176,250	— —	23,279 22,902	218,279 199,152
Stephen M. Brown Vice President of Human Resources	2008 2007	162,500 152,500	— 25,000	21,882 14,413	184,382 191,913
Graeme Horwood Vice President Engineering, Research and Development	2008 2007	158,000 150,500	— —	33,195 33,474	191,195 183,974

(1): Includes company contributions under the Company's 401(k) plan, certain life insurance benefits; and where applicable, country club dues and car allowance.

None of the amounts attributable to each perquisite or benefit exceeds the greater of $25,000 or 10% of the total amount of perquisites for each named executive officer.

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

Table of Contents

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.

Outstanding Equity Awards at Fiscal Year-End

	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		2,603,520
Adrian H. McCall		25,200		12,400		13.56		8/10/2015		60,000		813,600
Jason A. Jenne		18,000		9,000		13.56		8/10/2015		36,000		488,160
Stephen Brown		14,400		7,200		13.56		8/10/2015		24,000		325,440
Graeme Horwood		14,400		7,200		13.56		8/10/2015		24,000		325,440

(1): See Note 11 to the Company's audited consolidated financial statements, located elsewhere in this annual report, for a description of TTC's share option and restricted stock plans, including vesting schedule.
(2): As the common stock of TTC is held by TTS Holdings, LLC and members of management, there is no established trading market for the common stock and it is not traded on any stock exchange. Since there is not a closing market price at which to establish the market value of the awards reported in column (g), the $13.56 per share exercise price of stock options has been used.

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

Table of Contents

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

Table of Contents

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:

•: "cause" generally means (i) the commission of a felony or a crime of moral turpitude; (ii) a willful and material act of dishonesty involving the Company; (iii) a material non-curable breach of the executive's obligations under the agreement; (iv) material breaches of Company policies or procedures; (v) any other willful misconduct which causes material harm to the Company or its business reputation; (vi) a failure to cure a material breach of the executive's obligations under any agreements with the Company, including certain agreements related to the executive's equity participation in the Company, within 30 days after written notice of such breach; or (vii) breaches of any of the executive's representations contained in agreements with the Company; and
•: "good reason" generally means (i) a reduction in the executive's annual base salary or bonus potential (but not including any diminution related to a broader compensation reduction that is not limited to any particular employee or executive); (ii) a material diminution of the executive's responsibilities; (iii) relocation of the executive's primary work place, as assigned to him by the Company, beyond a fifty mile radius; or (iv) a material breach by the Company of any written agreement.

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).

Table of Contents

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:

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

Name of Beneficial Owner(1)		Percentage of Outstanding Common Stock

TTS Holdings LLC c/o Gilbert Global Equity Capital, LLC. 320 Park Avenue 17^th 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%

*: Less than 1%.
(1): Except as otherwise indicated, the address for all persons shown on this table is c/o True Temper Sports, Inc., 8275 Tournament Drive, Suite 200, Memphis, TN 38125.

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:

(1): requires that each of the parties vote all of their voting securities of TTC and take all other necessary or desirable actions to cause the size of the board of directors of TTC to be established at the number of members determined by TTS Holdings, LLC and to cause

Table of Contents

designees of TTS Holdings, LLC representing a majority of the board of directors to be elected to the board of directors of TTC;

(2): grants TTC and TTS Holdings, LLC a right of first refusal on any proposed transfer of shares of capital stock of TTC held by any of the stockholders;
(3): grants tag-along rights on certain transfers of shares of capital stock of TTC;
(4): requires the stockholders to consent to a sale of TTC to an independent third party if such sale is approved by certain holders of the then outstanding shares of the company's voting common stock; and

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:

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

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

(1): an annual advisory fee of $0.5 million payable quarterly, plus reasonable out-of-pocket expenses;
(2): a transaction fee in an amount equal to 1.25% of the aggregate transaction value in connection with the consummation of any material acquisition, divestiture, financing or refinancing by True Temper or any of its subsidiaries; and
(3): a one-time transaction fee of $2.5 million upon the consummation of the recapitalization.

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

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.

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 Ended

		2008		2007
Audit fees		$	237,250	$	232,000
Tax fees(1)			54,000		86,000

	Total fees(2)	$	291,250	$	318,000

(1): Primarily tax returns, advice and planning
(2): All fees have been approved by the Audit Committee

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.

Table of Contents

PART IV

Item 15. Exhibits and Financial Statements Schedule

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

Report of Independent Registered Public Accounting Firm

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

Consolidated Balance Sheets at December 31, 2008 and 2007

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

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

Notes to the Consolidated Financial Statements

2.: Financial Statement Schedule.

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

				Additions

		Balance at Beginning of Period		Charged to Costs and Expenses		Charged to Other Accounts		Deductions(1)			Balance at End of Period
		Dollars in thousands (debit)/credit
ALLOWANCE FOR DOUBTFUL ACCOUNTS
	Year ended December 31, 2006	$	411		100		—		(34	)	$	477
	Year ended December 31, 2007	$	477		65		—		(99	)	$	443
	Year ended December 31, 2008	$	443		587		—		(782	)	$	248

(1): Deductions represent uncollectible accounts charged against the allowance for doubtful accounts.

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

3.: Exhibits.

See the Index to Exhibits.

Table of Contents

SIGNATURES

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


		TRUE TEMPER SPORTS, INC.
		By:		/s/ SCOTT C. HENNESSY
		Name:		Scott C. Hennessy
		Title:		President and Chief Executive Officer
		Date:		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. GILBERT
		Name:		Steven J. Gilbert
		Title:		Director and Co-Chairman
		Date:		March 31, 2009
		By:		/s/ STEVEN KOTLER
		Name:		Steven Kotler
		Title:		Director and Co-Chairman
		Date:		March 31, 2009
		By:		/s/ RICHARD W. GAENZLE, JR.
		Name:		Richard W. Gaenzle, Jr.
		Title:		Director
		Date:		March 31, 2009
		By:		/s/ JEFFREY W. JOHNSON
		Name:		Jeffrey W. Johnson
		Title:		Director
		Date:		March 31, 2009
		By:		/s/ WILLIAM P. LAUDER
		Name:		William P. Lauder
		Title:		Director
		Date:		March 31, 2009

Table of Contents


		By:		/s/ SCOTT C. HENNESSY
		Name:		Scott C. Hennessy
		Title:		President, Chief Executive Officer and Director
		Date:		March 31, 2009
		By:		/s/ JASON A. JENNE
		Name:		Jason A. Jenne
		Title:		Vice President, Chief Financial Officer and Principal Accounting Officer
		Date:		March 31, 2009

Table of Contents

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).*

Table of Contents


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.**

*: Incorporated by reference
**: Filed herewith

TRUE TEMPER SPORTS INC 10-K