CARLSBAD, Calif. – Dec. 17, 2004 – Ashworth, Inc. (NASDAQ:ASHW), a leading designer of golf-inspired lifestyle sportswear, has announced financial results for the fourth quarter and fiscal year ended October 31, 2004.

For the fourth quarter ended October 31, 2004, the Company reported that consolidated net revenue increased 49.3% to a record $48.3 million as compared to $32.3 million for the fourth quarter of fiscal 2003. Consolidated fourth quarter net income increased 116.4% to $1.9 million or $0.14 per diluted share as compared to consolidated net income of $877,000 or $0.07 per diluted share in the same quarter of the prior year.

Net revenue for the domestic segment increased 48.2% to $41.1 million from $27.7 million reported the same quarter of the prior year. Net revenue from the international segment increased 56.1% to $7.2 million from $4.6 million in the same period of the previous year. Fourth quarter revenue from Ashworth branded merchandise increased 9.1% to $27.6 million and revenue from Callaway Golf apparel increased 49.9% to $10.5 million during the quarter.

For fiscal 2004, consolidated net revenue increased 15.8% to a record $173.1 million as compared to $149.4 million for fiscal 2003. Consolidated net income for fiscal 2004 was a record $8.2 million or $0.60 per diluted share compared to $7.3 million or $0.56 per diluted share in fiscal 2003. In the second quarter of 2004, the Company sold its existing distribution center facility located in Carlsbad, California and recorded a pre-tax gain on disposal of fixed assets of $1.6 million. Additionally, during the third quarter of fiscal 2004, the Company incurred a $3.0 million pre-tax charge related to a settlement to conclude a 1999 securities class action lawsuit against the Company and certain current and former directors and officers.

Without the pre-tax gain on the sale of the distribution center and the pre-tax charge in connection with the settlement, the Company would have reported consolidated net income of $9.1 million or $0.66 per diluted share for fiscal 2004 which would have reflected a 23.5% increase in net income for fiscal 2004 over fiscal 2003. The Company believes that excluding the effects of these non-recurring items provides additional information to investors to better understand the impact the transactions had on the Company's performance for fiscal 2004 as compared to fiscal 2003 and, therefore, the adjusted consolidated net income measure is useful to investors.

For fiscal 2004, net revenue for the domestic segment increased 14.3% to $144.4 million from $126.4 million in the prior year. Net revenue from the international segment increased 24.5% to $28.7 million from $23.1 million in the prior year. Fiscal 2004 revenue from Ashworth branded merchandise increased 1.5% to $120.3 million and revenue from Callaway Golf apparel increased 27.1% to $39.2 million for the twelve-month period.

Randall L. Herrel, Sr., Chairman and Chief Executive Officer, stated, "Adding new brands and three new distribution channels to our multi-brand, multi-channel growth strategy has given us record results for this fiscal year and sets the stage for an even stronger fiscal 2005 performance. With growth momentum from the Ashworth and Callaway Golf apparel brands and the acquisition of Gekko Brands, LLC ("Gekko") headwear, as well as expected cost savings from our U.S. distribution center, we are entering fiscal 2005 with a stronger company. The addition and integration of the Gekko headwear (The Game and Kudzu) brands is already bringing additional revenues and margin improvements which should be a key factor for us going forward."

Ashworth's July 2004 acquisition of Gekko added popular lines of headwear and apparel under The Game and Kudzu brands to the Company's product offerings. The acquisition also provides the Company the opportunity in 2005 to distribute Ashworth sportswear into The Game's and Kudzu's three channels of distribution and existing account base which includes over 1,000 colleges and universities, resorts, sporting goods team dealers that serve the high school and college markets and Kudzu's outdoor and NASCAR-related customers. Additionally, Gekko is designing Ashworth-branded and Callaway Golf apparel-branded headwear for sale into Ashworth's existing green grass and retail channels in 2005.

Mr. Herrel continued, "Our quarterly sales increase of 18%, not counting any contribution from Gekko, proves to us that our multi-channel strategy is the right approach in today's golf environment. We are successfully strengthening our brands so that they can grow independently of the relative performance of any one distribution channel. The strong growth from the Ashworth brand in the fourth quarter and the continued strong performance of our Callaway Golf apparel lines, with a 50% sales increase in our fourth quarter versus last year, shows that our multi-brand strategy is also winning."

In reviewing the Company's financial position, Terence Tsang, Executive Vice President and Chief Financial Officer, stated, "Our operating margin has increased to 7.3% in the fourth quarter of fiscal 2004 as compared to 4.9% in the same period last year. This improvement was driven by a higher gross margin as well as lower selling, general and administrative ("SG&A") expense as a percent of sales due to the leverage generated by including Gekko's peak selling season in the current quarter. We have moved into our new U.S. distribution center in Oceanside, California and it is operational. We are currently finalizing the systems integration and acceptance testing process and expect it to generate per-unit cost reductions in the latter half of fiscal year 2005."

Mr. Tsang continued, "Our accounts receivable increased 26.7%, which is a much slower rate of increase than our 49.3% fourth quarter revenue increase, resulting in improvement in our DSOs to 74 days. Consolidated inventories increased 10.7% but were essentially flat excluding Gekko. In addition, we continue to improve our trade credit terms with our overseas vendors and have reduced our need for bank financing for ongoing operations."

The Company confirmed its previously expanded revenue and earnings guidance for fiscal 2005. Based on current trends, the Company expects consolidated net revenues for fiscal 2005 of $207.0 million to $215.0 million versus $173.1 million in fiscal 2004 and earnings of $0.76 to $0.82 per diluted share versus $0.60 per diluted share in fiscal 2004.

For the first quarter of fiscal 2005, which is traditionally a relatively low-volume sales quarter, the Company expects to see less in labor savings from its new distribution center than in later, higher-volume quarters. In the first quarter, the higher fixed costs associated with the new distribution center will be spread over seasonally low production volume. Based on these factors and current business trends, the Company expects fiscal 2005 first quarter net revenues of $36.7 million to $38.3 million versus $26.6 million and earnings of zero to $0.02 per diluted share versus $0.01 per diluted share. The Company currently expects to report fiscal 2005 first quarter results on Thursday, March 3, 2005 at market close.

Mr. Herrel concluded, "Ashworth is now executing an exciting strategy for the future. With our unmatched heritage in golf, our proven ability to successfully manage leading sports-inspired apparel lines, and with cross-selling into an expanded array of distribution channels, Ashworth has the opportunity to grow its portfolio of product lines and strengthen sales across all our brands and distribution channels."

Investors and all others are invited to listen to a conference call discussing fourth quarter and year-end results and fiscal 2005 outlook, today at 4:30 p.m. Eastern Time. The call will be broadcast over the Internet at www.ashworthinc.com. An online replay will be available until December 25, 2004. Additionally, a 48-hour telephone replay will be accessible by calling 1-877-519-4471 for domestic callers and 1-973-341-3080 for international callers; conference ID 5484947.

To learn more, please visit our Web site at www.ashworthinc.com.

Contacts:
Ashworth, Inc.
Randall L. Herrel, Sr., 760-929-6142
Terence Tsang, 760-929-4611
or
CCG Investor Relations and Strategic Communications
Sean Collins, 818-789-0100. ext. 202