##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended January 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 001-14547
 Ashworth, Inc.
  Delaware
    
    84-1052000(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)
 2765 LOKER AVENUE WEST
CARLSBAD, CA 92010
 (760) 438-6610
 þ o
  Large accelerated filer  o
    
    Accelerated filer  þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company  o
 o þ
  Title
    
    Outstanding at February 29, 2008$.001 par value Common Stock
    
    14,713,511




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##### 



PAGEPart I. Financial InformationItem 1. Financial StatementsCondensed Consolidated Balance Sheets
    
    
    1Condensed Consolidated Statements of Operations
    
    
    2Condensed Consolidated Statements of Cash Flows
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4. Controls and Procedures
    
    
    23Part II. Other InformationItem 1. Legal Proceedings
    
    
    24Item1A. Risk Factors
    
    
    25Item 6. Exhibits
    
    
    25Signatures
    
    
    27Exhibit Index
    
    
    28EXHIBIT 10(e)EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
  -i-




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##### Table of Contents



PART I
 FINANCIAL INFORMATION
  
  January 31, 2008
    
    
    October 31, 2007(UNAUDITED)AssetsCurrent assets:Cash and cash equivalents
    
    $
    4,207,000
    
    
    $
    6,104,000Accounts receivable  trade, net
    
    
    25,086,000
    
    
    
    34,545,000Accounts receivable  other, net
    
    
    75,000
    
    
    
    147,000Inventories, net
    
    
    58,199,000
    
    
    
    50,529,000Income tax refund receivable
    
    
    1,549,000
    
    
    
    1,117,000Other current assets
    
    
    6,882,000
    
    
    
    4,981,000Deferred income tax asset, net
    
    
    61,000
    
    
    
    48,000Total current assets
    
    
    96,059,000
    
    
    
    97,471,000Property, plant and equipment, at cost
    
    
    63,806,000
    
    
    
    68,495,000Less accumulated depreciation and amortization
    
    
    (27,574,000
    )
    
    
    (30,980,000
    )Total property, plant and equipment, net
    
    
    36,232,000
    
    
    
    37,515,000Goodwill
    
    
    15,250,000
    
    
    
    15,250,000Intangible assets, net
    
    
    9,784,000
    
    
    
    9,806,000Other assets
    
    
    390,000
    
    
    
    372,000Total assets
    
    $
    157,715,000
    
    
    $
    160,414,000Liabilities and Stockholders EquityCurrent liabilities:Line of credit payable
    
    $
    31,205,000
    
    
    $
    19,615,000Current portion of long-term debt
    
    
    869,000
    
    
    
    2,360,000Accounts payable
    
    
    9,224,000
    
    
    
    12,728,000Accrued liabilities:Salaries and commissions
    
    
    4,081,000
    
    
    
    5,442,000Other
    
    
    8,352,000
    
    
    
    5,235,000Total current liabilities
    
    
    53,731,000
    
    
    
    45,380,000Long-term debt, net of current portion
    
    
    11,104,000
    
    
    
    13,844,000Deferred income tax liability
    
    
    1,624,000
    
    
    
    1,469,000Other long-term liabilities
    
    
    
    
    
    
    84,000Stockholders equity:Common stock
    
    
    15,000
    
    
    
    15,000Capital in excess of par value
    
    
    50,513,000
    
    
    
    50,325,000Retained earnings
    
    
    34,794,000
    
    
    
    42,217,000Accumulated other comprehensive income
    
    
    5,934,000
    
    
    
    7,080,000Total stockholders equity
    
    
    91,256,000
    
    
    
    99,637,000Total liabilities and
stockholders equity
    
    $
    157,715,000
    
    
    $
    160,414,000
  1




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Three months ended January 31,2008
    
    
    2007Net revenues
    
    $
    34,519,000
    
    
    $
    38,272,000Cost of goods sold
    
    
    22,021,000
    
    
    
    22,655,000Gross profit
    
    
    12,498,000
    
    
    
    15,617,000Selling, general and administrative expenses
    
    
    19,362,000
    
    
    
    19,117,000Loss from operations
    
    
    (6,864,000
    )
    
    
    (3,500,000
    )Other income (expense):Interest income
    
    
    30,000
    
    
    
    37,000Interest expense
    
    
    (1,007,000
    )
    
    
    (601,000
    )Net foreign currency exchange gain
    
    
    686,000
    
    
    
    50,000Other expense, net
    
    
    (76,000
    )
    
    
    (66,000
    )Total other expense, net
    
    
    (367,000
    )
    
    
    (580,000
    )Loss before income tax
    
    
    (7,231,000
    )
    
    
    (4,080,000
    )Provision (benefit) for income taxes
    
    
    192,000
    
    
    
    (1,632,000
    )Net loss
    
    $
    (7,423,000
    )
    
    $
    (2,448,000
    )Net loss per share:Basic
    
    $
    (0.50
    )
    
    $
    (0.17
    )Diluted
    
    $
    (0.50
    )
    
    $
    (0.17
    )Weighted-average shares outstanding:Basic
    
    
    14,714,000
    
    
    
    14,520,000Diluted
    
    
    14,714,000
    
    
    
    14,520,000
  2




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Three months ended January 31,2008
    
    
    2007CASH FLOW FROM OPERATING ACTIVITIES:Net cash used in operating activities
    
    $
    (7,433,000
    )
    
    $
    (5,320,000
    )CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment
    
    
    (623,000
    )
    
    
    (1,392,000
    )Purchase of intangibles
    
    
    (91,000
    )
    
    
    (43,000
    )Net cash used in investing activities
    
    
    (714,000
    )
    
    
    (1,435,000
    )CASH FLOWS FROM FINANCING ACTIVITIESPrincipal payments on capital lease obligations
    
    
    (101,000
    )
    
    
    (43,000
    )Borrowings on line of credit
    
    
    19,993,000
    
    
    
    12,250,000Payments on line of credit
    
    
    (8,403,000
    )
    
    
    (8,800,000
    )Principal payments on notes payable and long-term debt
    
    
    (4,130,000
    )
    
    
    (420,000
    )Net cash provided by financing activities
    
    
    7,359,000
    
    
    
    2,987,000Effect of exchange rate changes
    
    
    (1,109,000
    )
    
    
    226,000Net decrease in cash and cash equivalents
    
    
    (1,897,000
    )
    
    
    (3,542,000
    )Cash, beginning of period
    
    
    6,104,000
    
    
    
    7,508,000Cash, end of period
    
    $
    4,207,000
    
    
    $
    3,966,000
  3




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NOTE 1  Basis of Presentation.
   Shipping and Handling Revenue
 Accounting of Shipping
and Handling Fees and Costs
 Cost of Goods Sold
  Shipping and Handling Expenses
  Earnings (Loss) Per Share
  4




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Earnings Per Share
 Three months ended January 31,2008
    
    
    2007Numerator:Net loss
    
    $
    (7,423,000
    )
    
    $
    (2,448,000
    )Denominator:Weighted-average shares outstanding
    
    
    14,714,000
    
    
    
    14,520,000Effect of dilutive options
    
    
    
    
    
    
    Denominator for dilutive earnings per share
    
    
    14,714,000
    
    
    
    14,520,000Basic loss per share
    
    $
    (0.50
    )
    
    $
    (0.17
    )Diluted loss per share
    
    $
    (0.50
    )
    
    $
    (0.17
    )
  NOTE 2  Inventories.
  January 31,
    
    
    October 31,2008
    
    
    2007Raw materials
    
    $
    723,000
    
    
    $
    135,000Finished goods
    
    
    57,476,000
    
    
    
    50,394,000Total inventories, net
    
    $
    58,199,000
    
    
    $
    50,529,000
 NOTE 3  Property, Plant and Equipment.
  5




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NOTE 4  Goodwill and Other Intangible Assets.
 Goodwill and Other Intangible Assets.
 January 31, 2008
    
    
    October 31, 2007Gross Carrying
    
    
    Accumulated
    
    
    Net Book
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    Net BookAmount
    
    
    Amortization
    
    
    Value
    
    
    Amount
    
    
    Amortization
    
    
    ValueIndefinite life:Tradenames
    
    $
    8,700,000
    
    
    $
    
    
    
    $
    8,700,000
    
    
    $
    8,700,000
    
    
    $
    
    
    
    $
    8,700,000Finite life:Customer lists
    
    
    1,530,000
    
    
    
    (819,000
    )
    
    
    711,000
    
    
    
    1,530,000
    
    
    
    (767,000
    )
    
    
    763,000Non-competes
    
    
    1,372,000
    
    
    
    (1,280,000
    )
    
    
    92,000
    
    
    
    1,372,000
    
    
    
    (1,238,000
    )
    
    
    134,000Customer sales backlog
    
    
    190,000
    
    
    
    (190,000
    )
    
    
    
    
    
    
    190,000
    
    
    
    (190,000
    )
    
    
    Trademarks
    
    
    1,674,000
    
    
    
    (1,393,000
    )
    
    
    281,000
    
    
    
    1,582,000
    
    
    
    (1,373,000
    )
    
    
    209,000Total intangible assets
    
    $
    13,466,000
    
    
    $
    (3,682,000
    )
    
    $
    9,784,000
    
    
    $
    13,374,000
    
    
    $
    (3,568,000
    )
    
    $
    9,806,000
   Remainder 2008
    
    $
    297,0002009
    
    
    305,0002010
    
    
    272,0002011
    
    
    185,0002012
    
    
    25,0002013
    
    
    Thereafter
    
    
    Total
    
    $
    1,084,000
 NOTE 5  Business Loan Agreement.
  6




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NOTE 6  Common Stock and Capital in Excess of Par Value.
  NOTE 7  Stock-Based Compensation.
   Three months ended January 31,2008
    
    2007Expected life (years)
    
    
    3.51
    
    
    
    4.96Risk-free interest rate
    
    
    2.74
    %
    
    
    4.62
    %Volatility
    
    
    50.6
    %
    
    
    37.5
    %Dividend yields
    
    
    
    
    
    
    Weighted-average fair value of options
during the period
    
    $
    1.00
    
    
    $
    2.95
  NOTE 8  Comprehensive Loss.
  Three months ended January 31,2008
    
    
    2007Net loss
    
    $
    (7,423,000
    )
    
    $
    (2,448,000
    )Effects of foreign currency translation
    
    
    (1,146,000
    )
    
    
    268,000Total comprehensive loss
    
    $
    (8,569,000
    )
    
    $
    (2,180,000
    )
 8




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NOTE 9  Legal Proceedings.
    NOTE 10  Income Taxes.
 Accounting for Income Taxes
 9




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Accounting for Uncertainty in Income Taxes 
An Interpretation of FASB Statement No. 109 Accounting for Income Taxes
      10




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NOTE 11  Segment Information.
  Three months ended January 31,2008
    
    
    2007Net revenues:Domestic
    
    $
    19,231,000
    
    
    $
    21,579,000Gekko Brands, LLC
    
    
    10,908,000
    
    
    
    10,428,000Ashworth, U.K., Ltd.
    
    
    2,641,000
    
    
    
    4,813,000Other International
    
    
    1,739,000
    
    
    
    1,452,000Total
    
    $
    34,519,000
    
    
    $
    38,272,000Income (loss) from operations:Domestic
    
    $
    (6,724,000
    )
    
    $
    (4,467,000
    )Gekko Brands, LLC
    
    
    185,000
    
    
    
    653,000Ashworth, U.K., Ltd.
    
    
    (571,000
    )
    
    
    80,000Other International
    
    
    246,000
    
    
    
    234,000Total
    
    $
    (6,864,000
    )
    
    $
    (3,500,000
    )Capital expenditures:Domestic
    
    $
    518,000
    
    
    $
    1,266,000Gekko Brands, LLC
    
    
    96,000
    
    
    
    102,000Ashworth, U.K., Ltd.
    
    
    9,000
    
    
    
    24,000Total
    
    $
    623,000
    
    
    $
    1,392,000Depreciation expense:Domestic
    
    $
    1,314,000
    
    
    $
    1,267,000Gekko Brands, LLC
    
    
    134,000
    
    
    
    101,000Ashworth, U.K., Ltd.
    
    
    58,000
    
    
    
    50,000Total
    
    $
    1,506,000
    
    
    $
    1,418,000
 January 31,
    
    
    October 31,2008
    
    
    2007Total assets:Domestic
    
    $
    77,193,000
    
    
    $
    80,715,000Gekko Brands, LLC
    
    
    45,761,000
    
    
    
    45,217,000Ashworth, U.K., Ltd.
    
    
    25,753,000
    
    
    
    25,733,000Other International
    
    
    9,008,000
    
    
    
    8,749,000Total
    
    $
    157,715,000
    
    
    $
    160,414,000Long-lived assets, at cost:Domestic
    
    $
    62,225,000
    
    
    $
    65,533,000Gekko Brands, LLC
    
    
    28,495,000
    
    
    
    29,653,000Ashworth, U.K., Ltd.
    
    
    2,192,000
    
    
    
    2,306,000Total
    
    $
    92,912,000
    
    
    $
    97,492,000Goodwill:Gekko Brands, LLC
    
    $
    15,250,000
    
    
    $
    15,250,000
 11




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NOTE 12  Recent Accounting Pronouncements.
 Fair
Value Measurements
 Fair Value Option for Financial Assets and
Financial Liabilities  Including an Amendment of FASB Statement No. 115 , Fair Value Measurements
 Business Combinations
  12




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Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 General
   Cautionary Statements and Risk Factors
 ®
 Critical Accounting Policies and Estimates
 Cautionary Advice Regarding Disclosure About
Critical Accounting Policies
 Revenue Recognition. Revenue Recognition Accounting of Shipping and Handling Fees and Costs
 13




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Sales Returns and Other Allowances.
 Allowance for Doubtful Accounts.
 Inventory.
 Deferred Taxes and Uncertain Tax Positions. Accounting for Income Taxes
 14




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Accounting for Uncertainty in Income Taxes
 Stock-Based Compensation. Share-Based Payment
 Off-Balance Sheet Arrangements
  Overview
   15




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® ®
 Accounting for Income Taxes (SFAS No. 109
  16




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Results of Operations
 First quarter 2008 compared to first quarter 2007
  Three months ended
    
    
    
    
    
    
    
    
    
    
    % of TotalJanuary 31,
    
    
    Change
    
    
    Revenue2008
    
    
    2007
    
    
    $
    
    
    %
    
    
    2008
    
    
    2007Net revenues:Retail distribution
    
    $
    3,124
    
    
    $
    4,118
    
    
    $
    (994
    )
    
    
    (24.1
    )%
    
    
    9.0
    %
    
    
    10.8
    %Domestic green grass
    
    
    9,530
    
    
    
    9,028
    
    
    
    502
    
    
    
    5.6
    %
    
    
    27.6
    %
    
    
    23.6
    %Domestic corporate
    
    
    4,061
    
    
    
    5,701
    
    
    
    (1,640
    )
    
    
    (28.8
    )%
    
    
    11.8
    %
    
    
    14.9
    %Domestic outlet store
    
    
    2,516
    
    
    
    2,732
    
    
    
    (216
    )
    
    
    (7.9
    )%
    
    
    7.3
    %
    
    
    7.1
    %Total domestic
    
    
    19,231
    
    
    
    21,579
    
    
    
    (2,348
    )
    
    
    (10.9
    )%
    
    
    55.7
    %
    
    
    56.4
    %Gekko
    
    
    10,908
    
    
    
    10,428
    
    
    
    480
    
    
    
    4.6
    %
    
    
    31.6
    %
    
    
    27.2
    %Ashworth U.K.
    
    
    2,641
    
    
    
    4,813
    
    
    
    (2,172
    )
    
    
    (45.1
    )%
    
    
    7.7
    %
    
    
    12.6
    %Other international
    
    
    1,739
    
    
    
    1,452
    
    
    
    287
    
    
    
    19.8
    %
    
    
    5.0
    %
    
    
    3.8
    %Total net revenues
    
    
    34,519
    
    
    
    38,272
    
    
    
    (3,753
    )
    
    
    (9.8
    )%
    
    
    100.0
    %
    
    
    100.0
    %Cost of goods sold
    
    
    22,021
    
    
    
    22,655
    
    
    
    (634
    )
    
    
    (2.8
    )%
    
    
    63.8
    %
    
    
    59.2
    %Selling, general and administrative
expenses
    
    
    19,362
    
    
    
    19,117
    
    
    
    245
    
    
    
    1.3
    %
    
    
    56.1
    %
    
    
    50.0
    %Total operating expenses
    
    
    41,383
    
    
    
    41,772
    
    
    
    (389
    )
    
    
    (0.9
    )%
    
    
    119.9
    %
    
    
    109.2
    %Loss from operations
    
    
    (6,864
    )
    
    
    (3,500
    )
    
    
    (3,364
    )
    
    
    96.1
    %
    
    
    (19.9
    )%
    
    
    (9.2
    )%Interest expense, net
    
    
    (977
    )
    
    
    (564
    )
    
    
    (413
    )
    
    
    73.2
    %
    
    
    (2.8
    )%
    
    
    (1.5
    )%Other income (expense), net
    
    
    610
    
    
    
    (16
    )
    
    
    626
    
    
    
    (3,912.5
    )%
    
    
    1.8
    %
    
    
    (0.0
    )%Loss before provision for income taxes
    
    
    (7,231
    )
    
    
    (4,080
    )
    
    
    (3,151
    )
    
    
    77.2
    %
    
    
    (20.9
    )%
    
    
    (10.7
    )%Provision (benefit) for income taxes
    
    
    192
    
    
    
    (1,632
    )
    
    
    1,824
    
    
    
    (111.8
    )%
    
    
    0.6
    %
    
    
    (4.3
    )%Net loss
    
    $
    (7,423
    )
    
    $
    (2,448
    )
    
    $
    (4,975
    )
    
    
    203.2
    %
    
    
    (21.5
    )%
    
    
    (6.4
    )%
     17




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th
     18




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Capital Resources and Liquidity
    19




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Contractual Obligations
  Recent Accounting Pronouncements
 Fair Value Measurements
 Fair Value Option for Financial Assets and
Financial Liabilities  Including an Amendment of FASB Statement No. 115 , Fair Value Measurements
 Business Combinations
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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
  Foreign Currency Exchange Rate Risk
  
 Item 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  23




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Changes in Internal Control over Financial Reporting
   
 PART II
 OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
   24




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Item 1A. Risk Factors
  Callaway Golf Company has claimed a material breach of the Companys exclusive licensing
agreement.
 
 Item 6. EXHIBITS
 3(a)
    
    Certificate of Incorporation as filed March 19, 1987 with the Secretary of State of Delaware,
Amendment to Certificate of Incorporation as filed August 3, 1987 and Amendment to Certificate
of Incorporation as filed April 26, 1991 (filed as Exhibit 3(a) to the Companys Registration
Statement dated February 21, 1992 (File No. 33-45078) and incorporated herein by reference)
and Amendment to Certificate of Incorporation as filed April 6, 1995 (filed as Exhibit 3(a) to
the Companys Form 10-K for the fiscal year ended October 31, 1994 (File No. 001-14547) and
incorporated herein by reference).3(b)
    
    Amended and Restated Bylaws of the Company (filed as Exhibit 3.1 to the Companys Current
Report on Form 8-K on February 23, 2000 (File No. 001-14547) and incorporated herein by
reference).4(a)
    
    Specimen certificate for Common Stock, par value $.001 per share, of the Company (filed as
Exhibit 4(a) to the Companys Registration Statement dated November 4, 1987 (File No.
33-16714-D) and incorporated herein by reference).4(b)
    
    Specimen certificate for Options granted under the Amended and Restated Nonqualified Stock
Option Plan dated March 12, 1992 (filed as Exhibit 4(b) to the Companys Form 10-K
for the fiscal year ended October 31, 1993 (File No. 001-14547) and incorporated herein
by reference).
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##### Table of Contents



4(c)
    
    Specimen certificate for Options granted under the Incentive Stock Option Plan dated
June 15, 1993 (filed as Exhibit 4(c) to the Companys Form 10-K for the fiscal year ended
October 31, 1993 (File No. 001-14547) and incorporated herein by reference).4(d)
    
    Rights Agreement dated as of October 6, 1998 and amended on February 22, 2000 by and between
Ashworth, Inc. and American Securities Transfer & Trust, Inc. (filed as Exhibit 4.1 to the
Companys Form 8-K filed on March 14, 2000 (File No. 001-14547) and incorporated herein by
reference).4(e)
    
    Amendment No. 1 effective as of July 3, 2007 to the Rights Agreement dated as of February
22, 2000 by and between Ashworth, Inc. and Computershare Trust Company, N. A., as successor
Rights Agent (filed as Exhibit 4.1 to the Companys Form 8-K filed on July 3. 2007 (File No.
001-14547) and incorporated herein by reference).10(a)
    
    Amendment to License Agreement, effective March 29, 2007, by and between Ashworth, Inc. and
Callaway Golf Company (filed as Exhibit 99.1 to the Companys Form 8-K on December 7, 2007
(File No. 001-14547) and incorporated herein by reference.10(a)(2)
    
    Amendment to License Agreement, effective December 3, 2007, by and between Ashworth, Inc.
and Callaway Golf Company (filed as Exhibit 99.2 to the Companys Form 8-K on December 7, 2007
(File No. 001-14547) and incorporated herein by reference.10(b)
    
    Amendment to the Companys Code of Business Conduct and Ethics effective December 12,
2007 (filed as Exhibit 14.1 to the Companys Form 8-K on December 14, 2007 (File No.
001-14547) and incorporated herein by reference).10(c)
    
    Consulting agreement between Fletcher Leisure Group Ltd. and the Company, effective January
11, 2008 (filed as Exhibit 10(ap) to the Companys Form 10-K on January 14, 2008 (File No.
001-14547) and incorporated herein by reference).10(d)
    
    Loan agreement, effective January 11, 2008 by and between the Company and Bank of America,
N. A. (filed as Exhibit 10(aq) to the Companys Form 10-K on January 14, 2008 (File No.
001-14547) and incorporated herein by reference.10(e)
    
    Loan agreement, effective February 29, 2008 by and between Ashworth U.K. and Bank of
America, N. A.31.1
    
    Certification Pursuant to Rules 13a-14 and 15d-14, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 by Allan H. Fletcher.31.2
    
    Certification Pursuant to Rules 13a-14 and 15d-14, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 by Greg W. Slack.32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 by Allan H. Fletcher.32.2
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 by Greg W. Slack.
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SIGNATURES
  ASHWORTH, INCDate: March 11, 2008
    
    By:
    
    /s/ Allan H. FletcherAllan H. FletcherChief Executive OfficerDate: March 11, 2008
    
    By:
    
    /s/ Greg W. SlackGreg W. SlackChief Financial Officer andPrincipal Accounting Officer
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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description of Exhibit10(e)
    
    Loan agreement, effective February
29, 2008 by and between Ashworth U.K. and Bank of America, N.A.31.1
    
    Certification Pursuant to Rules 13a-14 and 15d-14, as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002 by Allan H. Fletcher.31.2
    
    Certification Pursuant to Rules 13a-14 and 15d-14, as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002 by Greg W. Slack.32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 by Allan H. Fletcher.32.2
    
    Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 by Greg W. Slack.
 28