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FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2002

OR

[   ] 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: 0-18553

Ashworth, Inc.

|                                                                        |  |                                                
|----------------------------------------------------------------------- |  | -----------------------------------------------
|Delaware
(State or other jurisdiction of
incorporation or organization) |  | 84-1052000
(I.R.S. Employee
Identification No.)

2765 LOKER AVENUE WEST
CARLSBAD, CA 92008
(Address of Principal Executive Offices)

(760) 438-6610
(Telephone No. Including Area Code)

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

Indicate the number of shares outstanding of each of the registrants classes
of common stock, as of the latest practicable date.

|                             |  |                             
|---------------------------- |  | ----------------------------
|Title                        |  | Outstanding at March 7, 2002
|$.001 par value Common Stock |  | 13,200,774                  





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|                  |                                                                                               |                                                      |  |  |  |  |  | 
|----------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|                  |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS               
|                  |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS     
|                  |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                  |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|                  | Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                  | Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|PART II          
|OTHER INFORMATION
|                  | Item 1. LEGAL PROCEEDINGS                                                                    
|                  | Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS  NONE                                     
|                  | Item 3. DEFAULTS UPON SENIOR SECURITIES  NONE                                               
|                  | Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  NONE                           
|                  | Item 5. OTHER INFORMATION  NONE                                                             
|                  | Item 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES       



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INDEX

|        |                                                                                       |                                                      |    |   
|------- | ------------------------------------------------------------------------------------- | ---------------------------------------------------- | -- | --
|        | PAGE                                                                                 
|        |                                                                                      
|Part I  | Financial Information                                                                 |                                                      |   
|       
|Item 1. | Financial Statements                                                                 
|       
|        |                                                                                       | Condensed Consolidated Balance Sheets                |    | 1 
|        |                                                                                       | Condensed Consolidated Statements of Operations      |    | 2 
|        |                                                                                       | Condensed Consolidated Statements of Cash Flows      |    | 3 
|        |                                                                                       | Notes to Condensed Consolidated Financial Statements |    | 4 
|       
|Item 2. | Managements Discussion and Analysis of
Financial Condition and Results of Operations |                                                      | 7 
|       
|Item 3. | Quantitative and Qualitative Disclosures About Market Risk                            |                                                      | 13
|       
|Part II | Other Information                                                                     |                                                      | 13
|       
|Item 1. | Legal Proceedings                                                                     |                                                      | 13
|       
|Item 2. | Changes in Securities and Use of Proceeds                                             |                                                      | 14
|       
|Item 3. | Defaults Upon Senior Securities                                                       |                                                      | 14
|       
|Item 4. | Submission of Matters to a Vote of Security Holders                                   |                                                      | 14
|       
|Item 5. | Other Information                                                                     |                                                      | 14
|       
|Item 6. | Exhibits and Reports on Form 8-K                                                      |                                                      | 14
|       
|        |                                                                                       | Signatures                                           |    | 17





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ASHWORTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

|                                       |                                                |                                          |                                            |             |             |            |             |             |            |            | 
|-------------------------------------- | ---------------------------------------------- | ---------------------------------------- | ------------------------------------------ | ----------- | ----------- | ---------- | ----------- | ----------- | ---------- | ---------- | 
|                                       |                                                |                                          |                                            |             | January 31, |            | October 31,
|                                       |                                                |                                          |                                            |             | 2002        |            | 2001       
|                                       |                                                |                                          |                                            |             |             |            |            
|                                       |                                                |                                          |                                            |             | (UNAUDITED) |            |             |             |           
|ASSETS                                 |                                                |                                          |                                            |             |             |            |             |            
|Current assets:                        |                                                |                                          |                                            |             |             |            |             |            
|                                       | Cash and cash equivalents                      |                                          | $                                          | 1,626,000   |             |            | $           | 1,055,000   |           
|                                       | Accounts receivable  trade, net               |                                          |                                            | 27,769,000  |             |            |             | 26,817,000  |           
|                                       | Accounts receivable  other                    |                                          |                                            | 2,113,000   |             |            |             | 2,199,000   |           
|                                       | Inventories, net                               |                                          |                                            | 36,512,000  |             |            |             | 35,841,000  |           
|                                       | Income tax refund receivable                   |                                          |                                            | 1,663,000   |             |            |             | 941,000     |           
|                                       | Other current assets                           |                                          |                                            | 4,508,000   |             |            |             | 2,359,000   |           
|                                       | Deferred income tax asset                      |                                          |                                            | 1,831,000   |             |            |             | 1,833,000   |           
|                                       |                                                |                                          |                                            |             |             |            |             |            
|                                       |                                                | Total current assets                     |                                            |             | 76,022,000  |            |             |             | 71,045,000 |           
|                                       |                                                |                                          |                                            |             |             |            |             |            
|Property, plant and equipment, at cost |                                                |                                          | 36,542,000                                 |             |             |            | 36,507,000  |            
|                                       | Less accumulated depreciation and amortization |                                          |                                            | (18,500,000 | )           |            |             | (17,862,000 | )         
|                                       |                                                |                                          |                                            |             |             |            |             |            
|                                       |                                                | Total property, plant and equipment, net |                                            |             | 18,042,000  |            |             |             | 18,645,000 |           
|                                       |                                                |                                          |                                            |             |             |            |             |            
|Other assets                           |                                                |                                          | 3,883,000                                  |             |             |            | 3,966,000   |            
|                                       |                                                |                                          |                                            |             |             |            |             |            
|                                       |                                                |                                          | Total assets                               |             | $           | 97,947,000 |             |             | $          | 93,656,000 | 
|                                       |                                                |                                          |                                            |             |             |            |             |            
|LIABILITIES AND STOCKHOLDERS EQUITY   |                                                |                                          |                                            |             |             |            |             |            
|Current liabilities:                   |                                                |                                          |                                            |             |             |            |             |            
|                                       | Note payable                                   |                                          | $                                          | 11,100,000  |             |            | $           | 5,950,000   |           
|                                       | Current portion of long-term debt              |                                          |                                            | 659,000     |             |            |             | 659,000     |           
|                                       | Accounts payable  trade                       |                                          |                                            | 4,769,000   |             |            |             | 4,203,000   |           
|                                       | Accrued liabilities                            |                                          |                                            | 3,156,000   |             |            |             | 3,306,000   |           
|                                       |                                                |                                          |                                            |             |             |            |             |            
|                                       |                                                | Total current liabilities                |                                            |             | 19,684,000  |            |             |             | 14,118,000 |           
|                                       |                                                |                                          |                                            |             |             |            |             |            
|Long-term debt, net of current portion |                                                |                                          | 3,002,000                                  |             |             |            | 3,166,000   |            
|Deferred income tax liability          |                                                |                                          | 752,000                                    |             |             |            | 752,000     |            
|Other long term liabilities            |                                                |                                          | 509,000                                    |             |             |            | 626,000     |            
|Stockholders equity:                  |                                                |                                          |                                            |             |             |            |             |            
|                                       | Common stock                                   |                                          |                                            | 13,000      |             |            |             | 13,000      |           
|                                       | Capital in excess of par value                 |                                          |                                            | 38,237,000  |             |            |             | 37,959,000  |           
|                                       | Retained earnings                              |                                          |                                            | 37,103,000  |             |            |             | 38,069,000  |           
|                                       | Accumulated other comprehensive loss           |                                          |                                            | (1,353,000  | )           |            |             | (1,047,000  | )         
|                                       |                                                |                                          |                                            |             |             |            |             |            
|                                       |                                                | Total stockholders equity               |                                            |             | 74,000,000  |            |             |             | 74,994,000 |           
|                                       |                                                |                                          |                                            |             |             |            |             |            
|                                       |                                                |                                          | Total liabilities and stockholders equity |             | $           | 97,947,000 |             |             | $          | 93,656,000 | 
|                                       |                                                |                                          |                                            |             |             |            |             |            

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ASHWORTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

|                                             |                                                                 |                     |            |                                |          |      |            |            |          |  
|-------------------------------------------- | --------------------------------------------------------------- | ------------------- | ---------- | ------------------------------ | -------- | ---- | ---------- | ---------- | -------- | -
|                                             |                                                                 |                     |            | Three months ended January 31,
|                                             |                                                                 |                     |            |                               
|                                             |                                                                 |                     |            | 2002                           |          | 2001
|                                             |                                                                 |                     |            |                                |          |     
|Net revenues                                 |                                                                 | $                   | 19,811,000 |                                |          | $    | 27,706,000 |           
|Cost of goods sold                           |                                                                 |                     | 12,793,000 |                                |          |      | 17,760,000 |           
|                                             |                                                                 |                     |            |                                |          |      |            |           
|                                             | Gross profit                                                    |                     |            | 7,018,000                      |          |      |            | 9,946,000  |         
|Selling, general and administrative expenses |                                                                 |                     | 8,497,000  |                                |          |      | 9,070,000  |           
|                                             |                                                                 |                     |            |                                |          |      |            |           
|                                             | Income (loss) from operations                                   |                     |            | (1,479,000                     | )        |      |            | 876,000    |         
|Other income (expense):                      |                                                                 |                     |            |                                |          |      |            |           
|                                             | Interest income                                                 |                     |            | 7,000                          |          |      |            | 3,000      |         
|                                             | Interest expense                                                |                     |            | (151,000                       | )        |      |            | (331,000   | )       
|                                             | Other income                                                    |                     |            | 13,000                         |          |      |            | 87,000     |         
|                                             |                                                                 |                     |            |                                |          |      |            |           
|                                             |                                                                 | Total other expense |            |                                | (131,000 | )    |            |            | (241,000 | )
|                                             |                                                                 |                     |            |                                |          |      |            |           
|                                             | Income (loss) before provision for income tax expense (benefit) |                     |            | (1,610,000                     | )        |      |            | 635,000    |         
|Provision for income tax expense (benefit)   |                                                                 |                     | (644,000   | )                              |          |      | 254,000    |           
|                                             |                                                                 |                     |            |                                |          |      |            |           
|                                             | Net income (loss)                                               |                     | $          | (966,000                       | )        |      | $          | 381,000    |         
|                                             |                                                                 |                     |            |                                |          |      |            |           
|Net income (loss) per share                  |                                                                 |                     |            |                                |          |      |            |           
|Basic:                                       |                                                                 |                     |            |                                |          |      |            |           
|                                             | Weighted average shares outstanding                             |                     |            | 13,161,000                     |          |      |            | 13,118,000 |         
|                                             | Net income (loss) per share                                     |                     |            | ($0.07                         | )        |      | $          | 0.03       |         
|Diluted:                                     |                                                                 |                     |            |                                |          |      |            |           
|                                             | Weighted average shares outstanding                             |                     |            | 13,161,000                     |          |      |            | 13,437,000 |         
|                                             | Net income (loss) per share                                     |                     |            | ($0.07                         | )        |      | $          | 0.03       |         

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ASHWORTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

|                                                     |                                                        |   |                                |            |      |   |             |            |  
|---------------------------------------------------- | ------------------------------------------------------ | - | ------------------------------ | ---------- | ---- | - | ----------- | ---------- | -
|                                                     |                                                        |   | Three months ended January 31,
|                                                     |                                                        |   |                               
|                                                     |                                                        |   | 2002                           |            | 2001
|                                                     |                                                        |   |                                |            |     
|Cash flows from operating activities:                |                                                        |   |                                |            |      |   |             |           
|Net cash used in operating activities                |                                                        | $ | (4,042,000                     | )          |      | $ | (10,208,000 | )         
|Cash flows from investing activities:                |                                                        |   |                                |            |      |   |             |           
|                                                     | Proceeds from disposal of property and equipment       |   |                                |           |      |   |             | 8,000      |  
|                                                     | Purchases of property and equipment                    |   |                                | (345,000   | )    |   |             | (2,176,000 | )
|                                                     |                                                        |   |                                |            |      |   |             |           
|Net cash used in investing activities                |                                                        |   | (345,000                       | )          |      |   | (2,168,000  | )         
|Cash flows from financing activities:                |                                                        |   |                                |            |      |   |             |           
|                                                     | Principal payments on capital
lease obligations        |   |                                | (10,000    | )    |   |             | (2,000     | )
|                                                     | Borrowings on line of credit                           |   |                                | 7,250,000  |      |   |             | 17,200,000 |  
|                                                     | Payments on line of credit                             |   |                                | (2,100,000 | )    |   |             | (5,600,000 | )
|                                                     | Proceeds from long-term borrowing                      |   |                                |           |      |   |             | 3,000,000  |  
|                                                     | Principal payments on notes payable
and long-term debt |   |                                | (154,000   | )    |   |             | (2,829,000 | )
|                                                     | Proceeds from issuance of common stock                 |   |                                | 278,000    |      |   |             | 159,000    |  
|                                                     |                                                        |   |                                |            |      |   |             |           
|Net cash provided by financing activities            |                                                        |   | 5,264,000                      |            |      |   | 11,928,000  |           
|Effect of exchange rate changes on cash              |                                                        |   | (306,000                       | )          |      |   | 111,000     |           
|                                                     |                                                        |   |                                |            |      |   |             |           
|Net increase (decrease) in cash and cash equivalents |                                                        |   | 571,000                        |            |      |   | (337,000    | )         
|Cash and cash equivalents, beginning of period       |                                                        |   | 1,055,000                      |            |      |   | 1,231,000   |           
|                                                     |                                                        |   |                                |            |      |   |             |           
|Cash and cash equivalents, end of period             |                                                        | $ | 1,626,000                      |            |      | $ | 894,000     |           
|                                                     |                                                        |   |                                |            |      |   |             |           

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ASHWORTH, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2002

NOTE 1- Basis of Presentation.



| |  |  | In the opinion of management, the accompanying condensed consolidated
balance sheets and related interim condensed consolidated statements
of operations and cash flows include all adjustments (consisting only
of normal recurring items) necessary for their fair presentation. The
preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues, and expenses and the
disclosure of contingent assets and liabilities. Actual results could
differ from those estimates. Interim results are not necessarily
indicative of results to be expected for the full year.
| |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Certain information in footnote disclosures normally included in
financial statements has been condensed or omitted in accordance with
the rules and regulations of the Securities and Exchange Commission.
The information included in this Form 10-Q should be read in
conjunction with Managements Discussion and Analysis of Financial
Condition and Results of Operations, and consolidated financial
statements and notes thereto included in the annual report on Form
10-K for the year ended October 31, 2001, filed with the Securities
and Exchange Commission.                                                                                                                                                                                        

NOTE 2  Inventories.



| |  |  | Inventories consisted of the following at January 31, 2002 and October
31, 2001:
| |  |  | --------------------------------------------------------------------------------

|                       |  |             |            |             |  |   |            | 
|---------------------- |  | ----------- | ---------- | ----------- |  | - | ---------- | 
|                       |  | January 31, |            | October 31,
|                       |  | 2002        |            | 2001       
|                       |  |             |            |            
|Raw materials          |  | $           | 381,000    |             |  | $ | 449,000    | 
|Work in process        |  |             | 14,000     |             |  |   | 107,000    | 
|Finished goods         |  |             | 36,117,000 |             |  |   | 35,285,000 | 
|                       |  |             |            |             |  |   |            | 
|Total inventories, net |  | $           | 36,512,000 |             |  | $ | 35,841,000 | 
|                       |  |             |            |             |  |   |            | 

NOTE 3  Income (Loss) Per Share Information.



| |  |  | Basic income (loss) per share has been computed based on the weighted
average number of common shares outstanding during the period.
Diluted income (loss) per share has been computed based on the
weighted average number of common shares outstanding plus the dilutive
effects of common shares potentially issuable from the exercise of
stock options. Common stock options are excluded from the computation
of net income (loss) per share if their effect is anti-dilutive. The
following table sets forth the computation of basic and diluted income
(loss) per share based on the requirements of SFAS No. 128:
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|                                                                                                                           |  |                                |            |      |  |   |            | 
|-------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------ | ---------- | ---- |  | - | ---------- | 
|                                                                                                                           |  | Three months ended January 31,
|                                                                                                                           |  | 2002                           |            | 2001
|                                                                                                                           |  |                                |            |     
|Numerator:                                                                                                                 |  |                                |            |      |  |   |            | 
|Net income (loss)
numerator for basic and diluted
income (loss) per share  income (loss) available
to common stockholders |  |                                | ($966,000  | )    |  | $ | 381,000    | 
|                                                                                                                           |  |                                |            |      |  |   |            | 
|Denominator:                                                                                                               |  |                                |            |      |  |   |            | 
|Denominator for basic income (loss)
per share  weighted average shares                                                    |  |                                | 13,161,000 |      |  |   | 13,118,000 | 
|Effect of dilutive securities -
stock options                                                                              |  |                                |           |      |  |   | 319,000    | 
|                                                                                                                           |  |                                |            |      |  |   |            | 
|Denominator for diluted income (loss)
per share  adjusted weighted average
shares and assumed conversions                 |  |                                | 13,161,000 |      |  |   | 13,437,000 | 
|                                                                                                                           |  |                                |            |      |  |   |            | 
|Basic income (loss) per share                                                                                              |  |                                | ($0.07     | )    |  | $ | 0.03       | 
|Diluted income (loss) per share                                                                                            |  |                                | ($0.07     | )    |  | $ | 0.03       | 



| |  |  | For the quarters ended January 31, 2002 and 2001, the diluted weighted
average shares outstanding computation excludes 1,576,000 and
1,209,000 options whose impact would have an anti-dilutive effect,
respectively.
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 4  Comprehensive Income (Loss).



| |  |  | The Company includes the cumulative foreign currency translation
adjustment as a component of the comprehensive income (loss) in
addition to net income (loss) for the period. For the quarters ended
January 31, 2002 and 2001, total comprehensive income (loss) was
($1,272,000) and $492,000, respectively.
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 5  Legal Proceedings.



| |  |  | On January 22, 1999, Milberg Weiss Bershad Hynes & Lerach LLP filed a
class action in the United States District Court for the Southern
District of California (U.S. District Court) on behalf of purchasers
of the Companys common stock during the period between September 4,
1997 and July 15, 1998. The action was subsequently consolidated with
two similar suits and plaintiffs filed their Amended and Consolidated
Complaint on December 17, 1999. Upon the Companys motion, the U.S.
District Court dismissed the Complaint with leave to amend on July 18,
2000. On September 18, 2000, plaintiffs served their Second
Consolidated Amended Complaint (Second Amended Complaint). On
November 6, 2000, the Company filed its motion to dismiss the Second
Amended Complaint, which the U.S. District Court granted, in part, and
denied, in part. The remaining portions of the Second Amended
Complaint allege that, among other things, during the class period and
in violation of the Securities Exchange Act of 1934, the Companys
financial statements, as reported, did not conform to generally
accepted accounting principles with
| |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |  |  | respect to revenues and inventory
levels. It further alleges that certain Company executives made false
or misleading statements or omissions concerning product demand and that two former executives
engaged in insider trading. The plaintiffs seek unspecified damages.
The parties are currently in the early stages of the discovery
process.                                                                                                                                                                                                
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | The Company is party to other claims and litigation proceedings
arising in the normal course of business. Although the legal
responsibility and financial impact with respect to such other claims
and litigation cannot currently be ascertained, the Company does not
believe that these other matters will result in payment by the Company
of monetary damages, net of any applicable insurance proceeds, that,
in the aggregate, would be material in relation to the consolidated
financial position or results of operations of the Company.

NOTE 6  Segment Information.



| |  |  | The Company defines its operating segments as components of an
enterprise for which separate financial information is available and
regularly reviewed by the Companys senior management. The Company
has the following two reportable segments: Domestic and International.
Management evaluates segment performance based primarily on revenue
and earnings from operations. Interest income and expense is
evaluated on a consolidated basis and is not allocated to the
Companys business segments. Segment information is summarized (for
the dates or periods presented) below:
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                              |               |       |   |             |             |             |   |            |            | 
|----------------------------- | ------------- | ----- | - | ----------- | ----------- | ----------- | - | ---------- | ---------- | 
|                              |               |       |   | Three       |             | Three      
|                              |               |       |   | Months      |             | Months     
|                              |               |       |   | Ended       |             | Ended      
|                              |               |       |   | January 31, |             | January 31,
|                              |               |       |   | 2002        |             | 2001       
|                              |               |       |   |             |             |            
|Net Revenue:                  |               |       |   |             |             |             |   |           
|                              | Domestic      |       | $ | 17,577,000  |             |             | $ | 24,128,000 |           
|                              | International |       |   | 2,234,000   |             |             |   | 3,578,000  |           
|                              |               |       |   |             |             |             |   |           
|                              |               | Total |   | $           | 19,811,000  |             |   | $          | 27,706,000 | 
|                              |               |       |   |             |             |             |   |           
|Income (Loss) From Operations |               |       |   |             |             |             |   |           
|                              | Domestic      |       |   | ($964,000   | )           |             | $ | 1,177,000  |           
|                              | International |       |   | (515,000    | )           |             |   | (301,000   | )         
|                              |               |       |   |             |             |             |   |           
|                              |               | Total |   |             | ($1,479,000 | )           |   | $          | 876,000    | 
|                              |               |       |   |             |             |             |   |           

|              |               |       |   |             |            |             |   |            |            | 
|------------- | ------------- | ----- | - | ----------- | ---------- | ----------- | - | ---------- | ---------- | 
|              |               |       |   | January 31, |            | October 31,
|              |               |       |   | 2002        |            | 2001       
|              |               |       |   |             |            |            
|Total Assets: |               |       |   |             |            |             |   |           
|              | Domestic      |       | $ | 84,453,000  |            |             | $ | 79,878,000 |           
|              | International |       |   | 13,494,000  |            |             |   | 13,778,000 |           
|              |               |       |   |             |            |             |   |           
|              |               | Total |   | $           | 97,947,000 |             |   | $          | 93,656,000 | 
|              |               |       |   |             |            |             |   |           

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|        |  |                                                                                      
|------- |  | -------------------------------------------------------------------------------------
|Item 2. |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

In response to the SECs Release Numbers 33-8040, Cautionary Advice Regarding
Disclosure About Critical Accounting Policies and 33-8056, Commission
Statement about Managements Discussion and Analysis of Financial Condition and
Results of Operations, the Company has identified the following critical
accounting policies that affect its more significant judgments and estimates
used in the preparation of its consolidated financial statements.

The Companys business is seasonal; therefore, the current balance sheet
balances as of January 31, 2002 may more meaningfully be compared to the
balances as of January 31, 2001 rather than to the balance as of October 31,
2001.

Sales Returns and Other Allowances.Management must make estimates of
potential future product returns related to current period product revenue.
Management analyzes historical returns, current economic trends, changes in
customer demand, and sell through of our products when evaluating the adequacy
of the sales returns and other allowances. Significant management judgments
and estimates must be made and used in connection with establishing the sales
returns and other allowances in any accounting period. Material differences
may result in the amount and timing of our revenue for any period if management
makes different judgments or utilizes different estimates. The reserves for
sales returns and other allowances amounted to $420,000 at January 31, 2002
compared to $716,000 at October 31, 2001 and $514,000 at January 31, 2001.

Allowance for Doubtful Accounts.Similarly, management must make estimates of
the uncollectability of the accounts receivable. The Company maintains an
allowance for doubtful accounts for estimated losses resulting from the
inability of its customers to make required payments, which results in bad debt
expense. Management determines the adequacy of this allowance by analyzing
historical bad debts, continually evaluating individual customer receivables
considering the customers financial condition and current economic conditions.
If the financial condition of our customers were to deteriorate, resulting in
an impairment of their ability to make payments, additional allowances may be
required. Our accounts receivable balance was $27.8 million, net of allowance
for doubtful accounts of $1.4 million as of January 31, 2002 as compared to the
balance of $26.8 million, net of allowances for doubtful accounts of $1.4
million at October 31, 2001. As of January 31, 2001, the accounts receivable
balance was $28.1 million, net of allowances for doubtful accounts of $1.1
million.

Inventory.The Company writes down its inventory for estimated obsolescence or
unmarketable inventory equal to the difference between the cost of inventory
and the estimated net realizable value based on assumptions about age of the
inventory, future demand and market conditions. This process provides for a
new basis for the inventory until it is sold. If actual market conditions are
less favorable than those projected by management, additional inventory
write-downs may be required. Our inventory balance was $36.5 million, net of
inventory write-downs of $918,000 as of January 31, 2002 as compared to an
inventory balance of $35.8 million, net of inventory write-downs of $955,000 at
October 31, 2001. As of January 31, 2001, the inventory balance was $42.9
million, net of inventory write-downs of $1.2 million.

Asset Purchase Credits.In November 2000 the Company entered into an agreement
with a third party whereby inventory was exchanged for future asset purchase
credits (APCs) which may be utilized to purchase future goods and services
over a four year period. The original value of the inventory exchanged (at
cost) was $1.4 million resulting in $1.4 million in future APCs. The Company
has

7



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entered into contracts with several third party suppliers who have agreed
to accept these APCs, in part, as payment for goods and services. From time to time the Company may enter into
additional contracts with such third party suppliers to use the APCs. As of
January 31, 2002, the Company has $1.2 million of the APCs remaining and
management fully expects to utilize them over the remaining life of the
contract.

The Company participates in an industry that is highly competitive and the
Company must accurately anticipate fashion trends and consumer demand for its
products. The following are important factors, among others, that could cause
actual results to differ materially from the projected results contained in the
forward-looking statements in this report.



| |  | Continued weak global economic conditions could adversely impact the Companys revenues and growth rate.            
|- |  | --------------------------------------------------------------------------------------------------------------------
| 
| |  | The competitive environment in the golf apparel industry places pressure on revenue, gross margins and market share.
| 
| |  | Erosion of the financial condition of customers could adversely affect the Companys business.                      

For additional information, see Cautionary Statements and Risk Factors.

At January 31, 2002 and 2001, the Company did not have any relationships with
unconsolidated entities or financial partnerships, such as entities often
referred to as structured finance or special purpose entities, which would have
been established for the purpose of facilitating off-balance sheet arrangements
or other contractually narrow or limited purposes. In addition, the Company
does not engage in trading activities involving non-exchange traded contracts.
As such, the Company is not exposed to any financing, liquidity, market or
credit risk that could arise if the Company had engaged in such relationships.

Results of Operations

First Quarter 2002 compared to First Quarter 2001

Consolidated net revenue for the first quarter of fiscal 2002 decreased 28.5%
to $19,811,000 from $27,706,000 for the same period in 2001. Net revenue for
the domestic segment decreased 27.2% to $17,577,000 from $24,128,000 in the
first quarter of fiscal 2001,due to decreased net revenues in green grass and
off-course specialty stores which decreased by $4,473,000 or 27.6% and retail
which decreased by $2,141,000 or 66.4%. The net revenue decreases are due
primarily to the generally poor economic conditions that caused travel to
resort destinations to decline and retail buyers to delay their orders and thus
reduce their inventory risk. Net revenue for the international segment
decreased 37.6% to $2,234,000 from $3,578,000 for the same period of the prior
year. Net revenues from the Companys U.K. subsidiary for the first quarter of
fiscal 2002 decreased by $750,000 or 35.4% as compared to net revenues in the
first quarter of fiscal 2001. This decrease was primarily due to a planned
decrease in net revenues due to a timing difference between the first and
second quarters of fiscal 2002 that resulted from the conversion of one
territory from a distributorship to an agent as well as switching agents in two
other territories. Other international net revenues decreased by $594,000 or
40.7% to $865,000 primarily due to declines in Asia and Canada resulting from
the soft economy and the stronger U.S. dollar.

Consolidated gross profit margin for the first quarter of fiscal 2002 decreased
to 35.4% as compared to

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35.9% a year earlier. The relatively small decrease of
50 basis points was due to negative leverage of fixed expenses caused by sales
weakness and industry wide price pressure as competitors lowered prices to
clear excess inventory, partially offset by improved sourcing. For the most
part the Company was able to maintain its pricing.

Consolidated selling, general and administrative (SG&A) expenses decreased
6.3% to $8,497,000 from $9,070,000 for the same period in fiscal 2001.
However, as a percentage of net revenue, SG&A expenses increased to 42.9% of
net revenue for the first quarter of fiscal 2002 compared to 32.7% in the first
quarter of fiscal 2001. This increase as a percent of net revenue was due to
the fixed expenses being spread over a lower net revenue base as well as the
additional expenses incurred in launching the Callaway Golf® apparel product
line. Going forward, the Company expects to benefit from the expense
initiatives implemented during fiscal 2001 as industry and economic conditions
improve and net revenue volume increases.

Total other expense decreased to $131,000 for the first quarter of fiscal 2002
from $241,000 in the first quarter of 2001, due primarily to a lower net
interest expense resulting from lower interest rates on the average borrowing
on the Companys line of credit with the bank.

The effective income tax rate for the first quarter of fiscal 2002 remained at
40.0% of pre-tax income.

Capital Resources and Liquidity

The Companys primary sources of liquidity for fiscal 2002 are expected to be
its working capital line of credit with its bank and other financial
alternatives such as leasing. The Company requires cash for expansion of its
domestic and international sales, capital expenditures and for general working
capital purposes. In June 2000, the Company extended its business loan
agreement with its bank through May 1, 2002. The loan agreement provides a
revolving line of credit of $25,000,000. The Company negotiated an amendment
to the line of credit agreement effective February 20, 2002 that provides for a
seasonal increase in the line of credit to $35,000,000 through to May 1, 2002.
Interest is charged at the banks reference (prime) rate, minus one-half of one
percentage point. The loan agreement also provides for optional interest rates
based on inter-bank offered rates (IBOR) for periods of at least 30 days in
increments of $500,000. The loan agreement contains various restrictive
covenants requiring, among other matters, the maintenance of certain financial
ratios. The Company believes it was in compliance with or had obtained waivers
for all such covenants as of January 31, 2002. The loan agreement permits the
Company to acquire, for value, shares of Ashworth stock in an aggregate amount
not to exceed $10,200,000 during the term of the agreement. As of January 31,
2002, The Company had repurchased $2,526,000 of its common stock during the
loan agreement term. The line of credit may also be used to finance commercial
letters of credit and standby letters of credit. Commercial letters of credit
outstanding under this loan agreement totaled $9,602,000 at January 31, 2002
and $5,506,000 at October 31, 2001. The Company had $11,100,000 outstanding
against the line at January 31, 2002, compared to $5,950,000 outstanding
against the line as of October 31, 2001. The increases are primarily due to
the seasonality of the Companys business.

Trade receivables were $27,769,000 at January 31, 2002, an increase of $952,000
or 3.6% over the balance at October 31, 2001. Because the Companys business
is seasonal, the receivables balance may more meaningfully be compared to the
balance of $28,066,000 at January 31, 2001, which shows a decrease of 1.1% in
receivables. The slower level of decline in receivables relative to the net
revenues decline is due to slower collections from our accounts resulting from
the weak economic conditions. Because of the weakness in the economy, the
Company has increased its allowance for doubtful

9



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accounts. The Company
anticipates that if economic conditions do not improve, the Company may
experience an increase in delinquent and uncollectable customer accounts.

Inventory increased to $36,512,000 at January 31, 2002 from $35,841,000 at
October 31, 2001, an increase of 1.9%. Compared to the inventory of
$42,912,000 at January 31, 2001, inventory decreased by 14.9% due to improvements made during fiscal 2001 in sourcing and inventory
management. The Company responded to the slowing sales trends that became
evident in the third quarter by reducing incoming orders from vendors. The
Company believes that its current inventory mix is appropriate to respond to
market demand.

During the first three months of fiscal 2002, the Company incurred capital
expenditures of $345,000 mainly for computer equipment and leasehold
improvements. The Company anticipates spending approximately $2,555,000 during
the balance of fiscal 2002 primarily on upgrades of computer systems and
equipment and trade show fixtures. Management currently intends to finance the
purchase of the Companys capital equipment from its own cash resources, but
may use leases or equipment financing agreements if deemed appropriate.

Common stock and capital in excess of par value increased by $278,000 in the
three months ended January 31, 2002, due to the issuance of shares on exercise
of options.

Based on current levels of operations, the Company expects sufficient cash flow
will be generated from operations so that, combined with other financing
alternatives available, including cash on hand, bank credit facilities, and
leasing alternatives, the Company believes it will be able to meet all of its
debt service, capital expenditure, and working capital requirements during the
next 12 months.

Derivatives

Although the Company and its subsidiaries did not do so during the first
quarter of fiscal 2002, from time to time the Company enters into short-term
foreign exchange contracts with its bank to hedge against the impact of
currency fluctuations between the U.S. dollar and the British pound. The
contracts provide that, on specified dates, the Company will sell the bank a
specified number of British pounds in exchange for a specified number of U.S.
dollars. Additionally, the Companys U.K. subsidiary enters into similar
contracts with its bank to hedge against currency fluctuations between the
British pound and other European currencies. Realized gains and losses on
these contracts are recognized in the same period as the hedged transactions.
These contracts have maturity dates that do not normally exceed 12 months. As
of January 31, 2002, the Company was not a party to any outstanding foreign
exchange contracts.

New Accounting Standards

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 143, Accounting for Asset
Retirement Obligations, which addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. The standard applies to legal
obligations associated with the retirement of long-lived assets that result
from the acquisition, construction, development and/or normal use of the asset.

SFAS No. 143 requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred if a
reasonable estimate of fair value can be made. The fair value of the liability
is added to the carrying amount of the associated asset and this additional
carrying amount is

10



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depreciated over the life of the asset. The liability is
accreted at the end of each period through charges to operating expense. If
the obligation is settled for other than the carrying amount of the liability,
the Company will recognize a gain or loss on settlement.

The Company is required and plans to adopt the provisions of SFAS No. 143 for
the quarter ending January 31, 2003. To accomplish this, the Company must
identify all legal obligations for asset retirement
obligations, if any, and determine the fair value of these obligations on the
date of adoption. The determination of fair value is complex and will require
the Company to gather market information and develop cash flow models.
Additionally, the Company will be required to develop processes to track and
monitor these obligations. Management does not expect the adoption of SFAS No.
143 to have a material impact on the Companys financial statements.

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

The Company is required to adopt SFAS No. 144 no later than the fiscal year
beginning after December 15, 2001, and plans to adopt its provisions for the
quarter ending January 31, 2003. The provisions of the statement for assets
held for sale or other disposal generally are required to be applied
prospectively after the adoption date to newly initiated disposal activities.
Management does not expect the adoption of SFAS No. 144 for long-lived assets
held for use to have a material impact on the Companys financial statements
because the impairment assessment under SFAS No. 144 is largely unchanged from
SFAS No. 121.

Effective November 1, 2001, the Company adopted SFAS No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets, which
supersede Accounting Principles Board Opinion No. 17, Intangible Assets. SFAS
No. 141 requires that all business combinations be accounted for under the
purchase method. The statement further requires separate recognition of
intangible assets that meet one of the two criteria, as defined in the
statement. This statement applies to all business combinations initiated after
June 30, 2001. Under SFAS No. 142, goodwill and intangible assets with
indefinite lives are no longer amortized but are tested at least annually for
impairment. Separable intangible assets with defined lives will continue to be
amortized over their useful lives. The provisions of SFAS No. 142 apply to
goodwill and intangible assets acquired before and after the statements
effective date. The adoption of SFAS No. 141 and SFAS No. 142 has had no
impact on the results of operations for the first quarter of fiscal 2002 as the
Company has no goodwill or intangible assets with indefinite lives.

11



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Cautionary Statements and Risk Factors

This report contains certain forward-looking statements, including without
limitation those regarding the Companys plans and expectations for revenue
growth, product lines, strategic alliances, designs and seasonal collections,
marketing programs, foreign sourcing, cost controls, inventory levels and
availability of working capital. These forward-looking statements may contain
the words believe, anticipate,
expect, estimate, project, will be, will continue, will likely
result, or other similar words and phrases. Forward-looking statements and
the Companys plans and expectations are subject to a number of risks and
uncertainties that could cause actual results to differ materially from those
anticipated, and the Companys business in general is subject to certain risks
that could affect the value of the Companys stock. These risks include, but
are not limited to, the following:



| |  | Demand for the Companys products may decrease significantly if the
economy continues to weaken or if the popularity of golf decreases.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Like other apparel manufacturers, the Company must correctly anticipate
and help direct fashion trends within its industry. The Companys
results of operations could suffer if the Company fails to develop
fashions and styles that are well received in any season.                                                                                                                                                                                                                                                                                                                                                                     
| 
| |  | The Company is party to a multi-year licensing agreement to design,
source and sell Callaway Golf® apparel primarily in the United States,
Europe, Canada and Australia. The Company must correctly anticipate the
fashion trends and demand for this product line. The Companys results
of operations could suffer if it fails to develop fashions and styles
that are well received in any season.                                                                                                                                                                                                                                      
| 
| |  | The market for golf apparel and sportswear is extremely competitive.
While the Company is currently a leader in the core green grass market,
it has several strong competitors that are better capitalized and have
stronger distribution systems. Outside the green grass market, the
Companys market share is not as significant. Price competition or
industry consolidation could weaken the Companys competitive position.                                                                                                                                                                                                          
| 
| |  | The Company relies on domestic and foreign contractors to manufacture
various products. If these contractors deliver goods late or fail to
meet the Companys quality standards, the Company could lose sales.                                                                                                                                                                                                                                                                                                                                                                                                                             
| 
| |  | Fluctuations in foreign currency exchange rates could affect the
Companys ability to sell its products in foreign markets and the value
in U.S. dollars of revenues received in foreign currencies.                                                                                                                                                                                                                                                                                                                                                                                                                                       
| 
| |  | If economic conditions do not improve, our customers ability to pay
current obligations may be adversely impacted and the Company may
experience an increase in delinquent and uncollectable accounts.                                                                                                                                                                                                                                                                                                                                                                                                                                    
| 
| |  | The Company maintains high levels of inventory to support its Authentics
program. Additional products, greater sales volume, and customer trends
toward increased at-once ordering may require increased inventory.
Disposal of excess prior season inventory is an ongoing part of the
Companys business, and writedowns of inventories may materially impair
the Companys financial performance in any period. Particular
inventories may be subject to multiple writedowns if the Companys
initial reserve estimates for inventory obsolescence or lack of
throughput prove to be too low. These risks increase as inventory grows.

12



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|        |  |                                                           
|------- |  | ----------------------------------------------------------
|Item 3. |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Companys debt consists of notes payable with a total balance of $3,661,000
at January 31, 2002. The debt bears interest at variable and fixed rates
ranging from 8.0% to 11.0%, which approximates fair value based on current
rates offered for debt with similar risks and maturities. The Company also had
$11,100,000 outstanding as of January 31, 2002 on its revolving line of credit
with interest charged at the
banks reference (prime) rate minus one-half of one percentage point. The loan
agreement also provides for optional interest rates based on IBOR for periods
of at least 30 days in increments of $500,000. A hypothetical 10% increase in
interest rates during the quarter ended January 31, 2002 would have resulted in
a $4,000 change in net income.

The Companys ability to sell its products in foreign markets and the U.S.
dollar value of the sales made in foreign currencies can be significantly
influenced by foreign currency fluctuations. A decrease in the value of
foreign currencies relative to the U.S. dollar could result in downward price
pressure for the Companys products or losses from currency exchange rates.
Although the Company and its subsidiaries did not do so during the first
quarter of fiscal 2002, from time to time the Company enters into short-term
foreign exchange contracts with its bank to hedge against the impact of
currency fluctuations between the U.S. dollar and the British pound. The
contracts provide that, on specified dates, the Company would sell the bank a
specified number of British pounds in exchange for a specified number of U.S.
dollars. Additionally, the Companys U.K. subsidiary enters into similar
contracts with its bank to hedge against currency fluctuations between the
British pound and other European currencies. Realized gains and losses on these
contracts are recognized in the same period as the hedged transaction. These
contracts have maturity dates that do not normally exceed 12 months. The
Company will continue to assess the benefits and risks of strategies to manage
the risks presented by currency exchange rate fluctuations. There is no
assurance that any strategy will be successful in avoiding losses due to
exchange rate fluctuations, or that the failure to manage currency risks
effectively would not have a material adverse effect on the Companys results
of operations. As of January 31, 2002, the Company had no outstanding foreign
currency forward exchange contracts.




PART II




OTHER INFORMATION




|        |  |                  
|------- |  | -----------------
|Item 1. |  | LEGAL PROCEEDINGS

On January 22, 1999, Milberg Weiss Bershad Hynes & Lerach LLP filed a class
action in the United States District Court for the Southern District of
California (U.S. District Court) on behalf of purchasers of the Companys
common stock during the period between September 4, 1997 and July 15, 1998.
The action was subsequently consolidated with two similar suits and plaintiffs
filed their Amended and Consolidated Complaint on December 17, 1999. Upon the
Companys motion, the U.S. District Court dismissed the Complaint with leave to
amend on July 18, 2000. On September 18, 2000, plaintiffs served their Second
Consolidated Amended Complaint (Second Amended Complaint). On November 6,
2000, the Company filed its motion to dismiss the Second Amended Complaint,
which the U.S. District Court granted, in part, and denied, in part. The
remaining portions of the Second Amended Complaint allege that, among other
things, during the class period and in violation of the Securities Exchange Act
of 1934, the Companys financial statements, as reported, did not conform to
generally accepted accounting principles with respect to revenues and inventory
levels. It further alleges that certain Company executives made false or
misleading statements or omissions concerning product

13



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demand and that two
former executives engaged in insider trading. The plaintiffs seek unspecified
damages. The parties are currently in the early stages of the discovery
process.

The Company is party to other claims and litigation proceedings arising in the
normal course of business. Although the legal responsibility and financial
impact with respect to such other claims and litigation cannot currently be
ascertained, the Company does not believe that these other matters will result
in payment by the Company of monetary damages, net of any applicable insurance
proceeds, that, in the aggregate, would be material in relation to the
consolidated financial position or results of operations of
the Company.
















|        |  |                                                           
|------- |  | ----------------------------------------------------------
|Item 2. |  | CHANGES IN SECURITIES AND USE OF PROCEEDS  NONE          
|       
|Item 3. |  | DEFAULTS UPON SENIOR SECURITIES  NONE                    
|       
|Item 4. |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  NONE
|       
|Item 5. |  | OTHER INFORMATION  NONE                                  
|       
|Item 6. |  | EXHIBITS AND REPORTS ON FORM 8-K                          

(a) 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 Registrant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 Registrants Form 10-K
for fiscal year ended October 31, 1994 (File No. 0-18553) and incorporated
herein by reference)
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|3(b)    | Amended and Restated Bylaws of the Registrant (filed as Exhibit 3.1 to
Registrants Current Report on Form 8-K on February 22, 2000 (File No.
0-18553) and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                                                                                  
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|4(a)    | Specimen certificate for Common Stock, par value $.001, of the Registrant
(filed as Exhibit 4(a) to Registrants Registration Statement dated
November 4, 1987 (File No.33-16714-D) and incorporated herein by
reference)                                                                                                                                                                                                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|4(b)(1) | Specimen certificate for Options granted under the Amended and Restated
Nonqualified Stock Option Plan dated March 12, 1992 (filed as Exhibit 4(b)
to Registrants Form 10-K for the fiscal year ended October 31, 1993 (File
No. 0-18553) and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|4(b)(2) | Specimen certificate for Options granted under the Founders Stock
Option Plan dated November 6, 1992 (filed as Exhibit 4(b)(2) to
Registrants Form 10-K for the fiscal year ended October 31, 1993 (File
No. 0-18553) and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                  
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|4(c)    | Specimen certificate for Options granted under the Incentive Stock Option
Plan dated June 15, 1993 (filed as Exhibit 4(c) to Registrants Form 10-K
for the fiscal year ended October 31, 1993 (File No. 0-18553) 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                                                                                                                                                                                                                                                                                                                                                                                                                           

14



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##### Table of Contents



|         |                                                                                                                                                                                                                                                                                                                                                                                                                         
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         | Registrants Form 8-K filed on March 14, 2000 (File No. 0-18553) and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                  
|         |                                                                                                                                                                                                                                                                                                                                                                                                                         
|10(a)*   | Personal Services Agreement and Acknowledgement of Termination of
Executive Employment effective December 31, 1998 by and between Ashworth,
Inc. and Gerald W. Montiel (filed as Exhibit 10(b) to Registrants Form
10-K for the year ended October 31, 1998 (File No. 0-18553) and
incorporated herein by reference)                                                                                                   
|         |                                                                                                                                                                                                                                                                                                                                                                                                                         
|10(b)*   | Amendment to Personal Services Agreement effective January 1, 1999 by
and between Ashworth, Inc. and Gerald W. Montiel (filed as Exhibit 10(c)
to Registrants Form 10-K for the year ended October 31, 1998 (File No.
0-18553) and incorporated herein by reference)                                                                                                                                                   
|         |                                                                                                                                                                                                                                                                                                                                                                                                                         
|10(c)    | Promotion Agreement effective November 1, 2001 by and among Ashworth,
Inc., James W. Nantz, III and Nantz Communications, Inc. (filed as Exhibit
10(c) to Registrants Form 10-K for the year ended October 31, 2001 (File
No. 0-18553) and incorporated herein by reference)                                                                                                                                           
|         |                                                                                                                                                                                                                                                                                                                                                                                                                         
|10(d)*   | First Amended and Restated Executive Employment Agreement effective
February 22, 1999 by and between Ashworth, Inc. and Randall L. Herrel, Sr.
(filed as Exhibit 10(a) to Registrants Form 10-Q for the quarter ended
April 30, 1999 (File No. 0-18553) and incorporated herein by reference)                                                                                                                          
|         |                                                                                                                                                                                                                                                                                                                                                                                                                         
|10(e)*   | Employment Agreement effective December 15, 2000 by and between
Ashworth, Inc. and Terence W. Tsang (filed as Exhibit 10(f) to
Registrants Form 10-Q for the quarter ended January 31, 2001 (File No.
0-18553) and incorporated herein by reference)                                                                                                                                                                   
|         |                                                                                                                                                                                                                                                                                                                                                                                                                         
|10(f)*   | Founders Stock Option Plan dated November 6, 1992 (filed as Exhibit
10(g) to Registrants Form 10-K for the year ended October 31, 1993 (File
No. 0-18553) and incorporated herein by reference)                                                                                                                                                                                                                        
|         |                                                                                                                                                                                                                                                                                                                                                                                                                         
|10(g)*   | Amended and Restated Nonqualified Stock Option Plan dated November 1,
1996 (filed as Exhibit 10(i) to Registrants Form 10-K for the year ended
October 31, 2000 (File No. 0-18553) and incorporated herein by reference)                                                                                                                                                                                               
|         |                                                                                                                                                                                                                                                                                                                                                                                                                         
|10(h)*   | Amended and Restated Incentive Stock Option Plan dated November 1, 1996
(filed as Exhibit 10(j) to Registrants Form 10-K for the year ended
October 31, 2000 (File No. 0-18553) and incorporated herein by reference)                                                                                                                                                                                                  
|         |                                                                                                                                                                                                                                                                                                                                                                                                                         
|10(i)*   | Amended and Restated 2000 Equity Incentive Plan dated December 14, 1999
adopted by the stockholders on March 24, 2000 (filed as Exhibit 4.1 to
Registrants Form S-8 filed on December 12, 2000 (File No. 333-51730) and
incorporated herein by reference)                                                                                                                                                              
|         |                                                                                                                                                                                                                                                                                                                                                                                                                         
|10(j)(1) | Business Loan Agreement dated June 1, 2000, between the Registrant and
Bank of America, expiring May 1, 2002 (filed as Exhibit 10(m) to
Registrants Form 10-Q for the quarter ended April 30, 2000 (File No.
0-18553) and incorporated herein by reference)                                                                                                                                                            
|         |                                                                                                                                                                                                                                                                                                                                                                                                                         
|10(j)(2) | Amendment to the Business Loan Agreement dated June 1, 2000, effective
January 31, 2001, between Ashworth, Inc., Ashworth Store I, Inc., Ashworth
Store II, Inc., Ashworth International, Inc., Ashworth U.K. Ltd. and Bank
of America, N. A. expiring May 1, 2002. (filed as Exhibit 10(l)(2) to
Registrants Form 10-Q for the quarter ended January 31, 2001 (File No.
0-18553) and incorporated herein by reference)
|         |                                                                                                                                                                                                                                                                                                                                                                                                                         
|10(k)*   | Change in Control Agreement dated November 1, 2000 by and between
Ashworth, Inc. and Randall L. Herrel, Sr. (filed as Exhibit 10(m) to
Registrants Form 10-K for the year ended October 31, 2000 (File No.
0-18553) and incorporated herein by reference)                                                                                                                                                              

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##### Table of Contents



|       |                                                                                                                                                                                                                                                                                                         
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10(l)* | Change in Control Agreement dated November 1, 2000 by and between
Ashworth, Inc. and Terence W. Tsang (filed as Exhibit 10(n) to
Registrants Form 10-K for the year ended October 31, 2000 (File No.
0-18553) and incorporated herein by reference)                                                    
|       |                                                                                                                                                                                                                                                                                                         
|10(m)  | Promotion Agreement effective November 1, 1999 by and between Ashworth,
Inc. and Fred Couples (filed as Exhibit 10(o) to Registrants Form 10-K
for the year ended October 31, 2000 (File No. 0-18553) and incorporated
herein by reference)                                                            
|       |                                                                                                                                                                                                                                                                                                         
|10(n)* | Amended and Restated Offer and Acceptance of Executive Employment
effective February 1, 2000 by and between Ashworth, Inc. and Nicoletta
Larucci-Miele (filed as Exhibit 10(p) to Registrants Form 10-Q for the
quarter ended January 31, 2001 (File No. 0-18553) and incorporated herein
by reference)
|       |                                                                                                                                                                                                                                                                                                         
|10(o)* | Offer and Acceptance of Executive Employment effective November 29, 1999
by and between Ashworth, Inc. and Anthony Wilkinson (filed as Exhibit
10(q) to Registrants Form 10-Q for the quarter ended January 31, 2001
(File No. 0-18553) and incorporated herein by reference)                          



---

|* |  | Management contract or compensatory plan or arrangement required to be
filed as an Exhibit to this Form 10-Q pursuant to Item 14(c) of Form 10-K
and applicable rules of the Securities and Exchange Commission.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(b) Reports on Form 8-K  NONE

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##### Table of Contents






SIGNATURES

Pursuant to the requirements 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.

|                     |                                                                        |                           
|-------------------- | ---------------------------------------------------------------------- | --------------------------
|                     | ASHWORTH, INC. (Registrant)                                           
|                    
|Date: March 15, 2002 | By:                                                                    | /s/ Randall L. Herrel, Sr.
|                     |                                                                       
|                     | Randall L. Herrel, Sr.
Chairman, President and Chief Executive Officer

|                     |                                                                                               |                     
|-------------------- | --------------------------------------------------------------------------------------------- | --------------------
|                    
|Date: March 15, 2002 | By:                                                                                           | /s/ Terence W. Tsang
|                     |                                                                                              
|                     | Terence W. TsangExecutive Vice President, Chief Operating Officer
and Chief Financial Officer

17