Ashworth, Inc. Announces Engagement of Financial Advisor, Warns on Fourth Quarter 2005 Financial Results, and Affirms Fiscal 2006 Guidance for Net Revenues.

CARLSBAD, Calif. -- Ashworth, Inc. (Nasdaq:ASHW), a leading designer of golf-inspired lifestyle sportswear, today announced that it will explore a full range of strategic alternatives and options to enhance shareholder value. The Company also commented on expected financial results for the fourth quarter ended October 31, 2005 and affirmed its net revenue guidance for fiscal year 2006.

Exploration of Strategic Alternatives

The Company has retained Houlihan Lokey Howard & Zukin ("Houlihan Lokey"), an international investment bank, to advise the Company in identifying and evaluating strategic alternatives and options. Given the Company's growth in its Ashworth(R) and Callaway Golf apparel brands and the development of its multi-channel business model, the Company believes it is well positioned to increase shareholder value despite general softness in the golf industry. Management also believes the Company's current stock price does not reflect the true value of the Company and its prospects. With the assistance of Houlihan Lokey, the Company will assess its position in the market and evaluate a wide range of strategies and alternatives to increase future shareholder value. No assurance can be given, however, that any transaction will be entered into or consummated.

Fourth Quarter 2005

Net revenues for the fourth quarter of 2005 are expected to grow approximately 15% to approximately $55 million, up from $48 million in net revenues for the same period a year ago. However, the Company warned that it expects a loss of approximately $2.1 million to $2.4 million or $0.15 to $0.17 per diluted share for the fourth quarter ended October 31, 2005.

Gross margins and earnings were adversely impacted by lower than anticipated sales of full-margin products. Gross margins and earnings were also impacted by special promotional programs and by aggressive sales of low-margin product during the quarter as the Company was successful in reducing inventories to a level below that of a year ago.

Accounts receivable were below levels of a year ago despite the increase in sales. The Company's new Embroidery and Distribution Center ("EDC") also demonstrated increased operating efficiency in the quarter. Long-term debt is below last year's level and the Company's commercial banks remain supportive of the Company.

The Company's selling, general and administrative expenses ("SG&A") were higher due to increased selling and promotional costs and expenses related to Sarbanes Oxley compliance. The SG&A expenses were also impacted by several costs associated with management changes and personnel reductions to improve product, financial and operational performance in 2006.

With the Company's new U.S. EDC operating more efficiently and its inventories in line with plans and below last year's levels, the Company has now focused many of its domestic initiatives on improving gross margins and reducing promotional expenses in 2006 so as to increase margins and profitability.

2006 Fiscal Year Guidance

Based on increases in 2006 Spring/Summer pre-book orders as compared to a year ago and other current information, the Company expects an increase in net revenues for fiscal year 2006 to approximately $210 million to $220 million, up from approximately $205 million in fiscal year 2005. The Company also expects improvement in operational execution and financial performance in each of its distribution channels, with resulting contributions to earnings in fiscal year 2006.

Conference Call and Webcast

Ashworth management will conduct a conference call and webcast providing details on its fourth quarter results and outlook for fiscal 2006 on Thursday, December 15, 2005, at 4:30 p.m. ET (1:30 p.m. PT). The call will be broadcast live over the Internet at www.ashworthinc.com. Randall Herrel, Chairman and Chief Executive Officer, and Peter Case, Executive Vice President and Chief Financial Officer, will host the call.

An online archive of the broadcast will be available after the completion of the call and will be accessible on the Company's website until December 30, 2005. Additionally, a telephone replay will be accessible for 48 hours by calling 1-877-519-4471 or 1-973-341-3080 for international callers; enter conference ID 6777180.

About Houlihan, Lokey, Howard & Zukin, Inc.

Houlihan, Lokey, Howard & Zukin provides a wide range of services, including mergers and acquisitions, financing, financial opinions and advisory services, and financial restructuring. In 2004, Houlihan Lokey ranked as the No. 1 M&A advisor, as ranked by number of transactions, for U.S. transactions under $500 million and the No. 5 advisor for all U.S. announced transactions, according to Thomson Financial. The firm has over 600 employees in nine offices in the United States and United Kingdom. The firm annually serves more than 1,000 clients ranging from closely held companies to Global 500 corporations. For more information, visit Houlihan Lokey's Web site at http://www.hlhz.com/.

About Ashworth, Inc.

Ashworth, Inc. is a designer of men's and women's golf-inspired lifestyle sportswear distributed domestically and internationally in golf pro shops, resorts, upscale department and specialty stores and to corporate customers. Ashworth products include three main brand extensions. Ashworth Collection(TM) is a range of upscale sportswear designed to be worn on and off course. Ashworth Authentics(TM) showcases popular items from the Ashworth line. Ashworth Weather Systems(R) utilizes technology to create a balance between fashion and function in a variety of climatic conditions. Callaway Golf is a trademark of Callaway Golf Company. Ashworth, Inc., 2765 Loker Avenue West, Carlsbad, CA 92008 is an Official Licensee of Callaway Golf Company.

In July 2004, Ashworth, Inc. acquired Gekko Brands, LLC ("Gekko"), a leading designer, producer and distributor of headwear and apparel under The Game(R) and Kudzu(R) brands. This strategic acquisition provides opportunity for additional growth in three new, quality channels of distribution for the Ashworth(R) and Callaway Golf apparel brands as well as further growth from The Game and Kudzu brands' sales into the Company's three traditional distribution channels. The Game brand products are marketed primarily under licenses to over 1,000 colleges and universities, as well as to the PGA TOUR, resorts, entertainment complexes and sporting goods dealers that serve the high school and college markets. The Game brand is one of the leading headwear brands in the College/Bookstore distribution channel. The Kudzu brand products are sold into the NASCAR/racing markets and through outdoor sports distribution channels, including fishing and hunting.

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

Forward-Looking Statements 

This press release contains forward-looking statements related to the Company's market position, finances, operating results, marketing plans and strategies. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. These statements involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the timely development and acceptance of new products, as well as strategic alliances, the integration of the Company's recent acquisition, the impact of competitive products and pricing, the success of the Callaway Golf apparel product line, the preliminary nature of bookings information, the ongoing risk of excess or obsolete inventory, potential inadequacy of booked reserves, the successful operation of the new distribution facility in Oceanside, CA, and other risks described in Ashworth, Inc.'s SEC reports, including the report on Form 10-K for the year ended October 31, 2004 and Form 10-Q's filed thereafter. The Company undertakes no obligation to publicly release the results of any revision of the forward-looking statements.