<PAGE> 1
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, 2000
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 84-1052000
(State or other jurisdiction of (I.R.S. Employee
incorporation or organization) Identification No.)
2791 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.
<TABLE>
<CAPTION>
Title Outstanding at MARCH 9, 2000
<S> <C>
$.001 PAR VALUE COMMON STOCK 13,536,573
</TABLE>
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
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 10
PART II. OTHER INFORMATION 10
SIGNATURES 14
</TABLE>
<PAGE> 3
ASHWORTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
January 31, October 31,
2000 1999
------------ ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,020,000 $ 6,507,000
Accounts receivable - trade, net 24,089,000 21,194,000
Accounts receivable - other 1,445,000 1,686,000
Inventories 35,474,000 30,644,000
Income tax refund receivable 994,000 1,099,000
Other current assets 1,673,000 1,928,000
Deferred income tax asset 1,442,000 1,503,000
------------ ------------
Total current assets 66,137,000 64,561,000
------------ ------------
PROPERTY, PLANT AND EQUIPMENT 27,496,000 26,955,000
Less accumulated depreciation and amortization (14,318,000) (13,852,000)
------------ ------------
13,178,000 13,103,000
------------ ------------
OTHER ASSETS 2,370,000 2,442,000
------------ ------------
$ 81,685,000 $ 80,106,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Note payable $ 2,600,000 $ --
Current portion of long-term debt 680,000 681,000
Accounts payable - trade 3,111,000 3,460,000
Accrued liabilities 3,013,000 2,686,000
------------ ------------
Total current liabilities 9,404,000 6,827,000
------------ ------------
LONG-TERM DEBT, net of current portion 2,583,000 2,764,000
DEFERRED INCOME TAX LIABILITY 750,000 750,000
OTHER LONG TERM LIABILITIES 346,000 339,000
STOCKHOLDERS' EQUITY:
Common stock 14,000 14,000
Capital in excess of par value 39,812,000 40,830,000
Retained earnings 28,917,000 28,644,000
Accumulated other comprehensive income (loss) (141,000) (62,000)
------------ ------------
68,602,000 69,426,000
------------ ------------
$ 81,685,000 $ 80,106,000
============ ============
</TABLE>
1
<PAGE> 4
ASHWORTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended January 31,
2000 1999
------------ ------------
<S> <C> <C>
NET REVENUE $ 22,499,000 $ 19,662,000
COST OF GOODS SOLD 14,469,000 13,421,000
------------ ------------
Gross profit 8,030,000 6,241,000
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 7,432,000 6,879,000
------------ ------------
Income (loss) from operations 598,000 (638,000)
OTHER INCOME (EXPENSE):
Interest income 33,000 10,000
Interest expense (86,000) (110,000)
Other expense (94,000) (62,000)
------------ ------------
Total other expense (147,000) (162,000)
Income (loss) before provision for income tax expense (benefit) 451,000 (800,000)
PROVISION FOR INCOME TAX EXPENSE (BENEFIT) 178,000 (313,000)
------------ ------------
Net income (loss) $ 273,000 $ (487,000)
============ ============
NET EARNINGS (LOSS) PER SHARE
Basic:
Weighted average shares outstanding 13,684,000 14,080,000
Net earnings (loss) per share $ 0.02 $ (0.03)
Diluted:
Weighted average shares outstanding 13,696,000 14,080,000
Net earnings (loss) per share $ 0.02 $ (0.03)
</TABLE>
2
<PAGE> 5
ASHWORTH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended January 31,
2000 1999
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES -
NET CASH USED IN OPERATING ACTIVITIES $(6,311,000) $(6,553,000)
CASH FLOWS FROM INVESTING ACTIVITIES -
Purchases of property and equipment (497,000) (385,000)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (497,000) (385,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital
lease obligations (10,000) (25,000)
Borrowing on line of credit 4,450,000 6,725,000
Payments on line of credit (1,850,000) (2,625,000)
Principal payments on notes payable
and long-term debt (172,000) (242,000)
Payments for repurchase of common stock (1,018,000) --
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,400,000 3,833,000
EFFECT OF EXCHANGE RATE CHANGES ON CASH (79,000) (41,000)
----------- -----------
NET DECREASE IN CASH AND
CASH EQUIVALENTS (5,487,000) (3,146,000)
CASH AND CASH EQUIVALENTS,
beginning of period 6,507,000 4,763,000
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 1,020,000 $ 1,617,000
=========== ===========
</TABLE>
3
<PAGE> 6
ASHWORTH, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2000
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 generally
accepted accounting principles 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, 1999, filed with the Securities and Exchange Commission.
NOTE 2 - INVENTORIES.
Inventories consisted of the following at January 31, 2000, and October
31, 1999:
<TABLE>
<CAPTION>
January 31, October 31,
2000 1999
----------- -----------
<S> <C> <C>
Raw materials $ 1,769,000 $ 2,499,000
Work in process 806,000 3,427,000
Finished goods 32,899,000 24,718,000
----------- -----------
$35,474,000 $30,644,000
=========== ===========
</TABLE>
4
<PAGE> 7
NOTE 3 - EARNINGS (LOSS) PER SHARE INFORMATION.
Basic earnings (loss) per share has been computed based upon the
weighted average number of common shares outstanding during the period.
Diluted earnings (loss) per share has been computed based upon 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
earnings (loss) per share if their effect is anti-dilutive. The
following table sets forth the computation of basic and diluted earnings
(loss) per share based upon the requirements of SFAS No. 128:
<TABLE>
<CAPTION>
Three months ended January 31,
2000 1999
------------ ------------
<S> <C> <C>
NUMERATOR:
----------
Net income (loss) -
numerator for basic and diluted
earnings per share - income (loss)
available to common shareholders $ 273,000 $ (487,000)
============ ============
DENOMINATOR:
------------
Denominator for basic earnings
per share - weighted average shares 13,684,000 14,080,000
Effect of dilutive securities -
employee stock options 12,000 --
------------ ------------
Denominator for diluted earnings
per share - adjusted weighted average
shares and assumed conversions 13,696,000 14,080,000
============ ============
BASIC EARNINGS (LOSS) PER SHARE $ 0.02 $ (0.03)
DILUTED EARNINGS (LOSS) PER SHARE $ 0.02 $ (0.03)
</TABLE>
For the quarters ended January 31, 2000 and 1999, the diluted weighted
average shares outstanding computation excludes 2,703,000 and 2,654,000
anti-dilutive options, respectively.
NOTE 4 - COMPREHENSIVE INCOME.
As of November 1, 1998, the Company adopted SFAS No. 130 Reporting
Comprehensive Income. SFAS No. 130 establishes standards for the
reporting and display of comprehensive income and its components. SFAS
No. 130 requires the cumulative translation adjustment to be included as
a component of the comprehensive income (loss) in addition to net income
(loss) for the period. For the quarters ended January 31, 2000 and 1999,
total comprehensive income (loss) was $194,000 and ($528,000),
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")
5
<PAGE> 8
on behalf of purchasers of the Company's common stock during the period
between September 4, 1997 and July 15, 1998 alleging violations of the
Securities Exchange Act of 1934 by the Company and certain of its
officers and directors. The complaint alleged that, during the class
period, Company executives made positive statements about the Company's
business including statements concerning product demand, offshore
production and inventories. The complaint further alleged that the
defendants knew these statements to be false and concealed adverse
conditions and trends in the Company's business during the class period.
The plaintiff seeks to recover unspecified damages on behalf of all
purchasers of the Company's common stock during the period September 4,
1997 to July 15, 1998. The Company was served a copy of the complaint on
January 26, 1999. Subsequently, two other suits were served upon the
Company making similar allegations. The three actions have been
consolidated by order of the United States District Court and lead
counsel for the plaintiffs has been appointed. Per order of the Court,
Plaintiffs filed their Amended and Consolidated Complaint on December
17, 1999. On February 18, 2000, the Company filed a motion to dismiss
which is scheduled for hearing on May 22, 2000. No discovery has
occurred to date.
NOTE 6 - SEGMENT INFORMATION
The Company adopted Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information",
which established reporting disclosure standards for an enterprise's
operating segments. Operating segments are defined 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 revenues 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) as of January 31, 2000 (in thousands).
<TABLE>
<CAPTION>
Three Three
Months Months
Ended Ended
1/31/2000 1/31/1999
--------- ---------
<S> <C> <C>
NET REVENUE:
------------
Domestic 19,733 17,995
International 2,766 1,667
------ ------
Total 22,499 19,662
====== ======
</TABLE>
<TABLE>
<CAPTION>
January 31, October 31,
2000 1999
----------- -----------
<S> <C> <C>
TOTAL ASSETS:
-------------
Domestic 75,995 73,768
International 5,690 6,338
------ ------
Total 81,685 80,106
====== ======
</TABLE>
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
FIRST QUARTER 2000 COMPARED TO FIRST QUARTER 1999
Consolidated net revenue for the first quarter of fiscal 2000 increased 14.4% to
$22,499,000 from $19,662,000 for the same period in 1999. Net revenue for the
domestic segment increased 9.7% to $19,733,000 from $17,995,000 in the first
quarter of fiscal 1999, due to strong growth in all domestic wholesale channels
of distribution. Net revenue for the foreign segment increased 65.9% to
$2,766,000 from $1,667,000 for the same period of the prior year primarily due
to the improvement in the Company's European subsidiary, which grew by
$1,000,000 in sales, as well as in Asia and South Africa. This increase was
partially offset by a decline in Canada, which was a result in timing of sales
between the fourth and first quarter compared to the prior year.
Consolidated gross profit for the quarter increased to 35.7% as compared to
31.7% a year earlier, primarily due to improved inventory management and
sourcing.
Consolidated selling, general and administrative (SG&A) expenses increased 8.0%
to $7,432,000. As a percentage of net revenue, SG&A expenses decreased to 33.0%
of net revenue for the first quarter of fiscal 2000 compared to 35.0% in the
first quarter of fiscal 1999, reflecting increased revenue and continuing focus
on cost efficiencies. The Company installed an additional 60 golfman shop
fixtured locations during the first quarter of fiscal 2000, bringing the total
number to 875 at January 31, 2000.
Net other expense decreased to $147,000 for the first quarter of fiscal 2000
from $162,000 in the first quarter of 1999, due primarily to a lower net
interest expense offset by a higher currency transaction loss by Ashworth UK
Ltd. in its transactions with Ashworth, Inc.
The effective income tax rate for the first quarter of fiscal year 2000 was
39.5% of pre-tax income as compared to 39.1% of pre-tax loss in the same quarter
of fiscal year 1999.
CAPITAL RESOURCES AND LIQUIDITY
The Company's primary sources of liquidity 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. The Company has a $20,000,000 working capital line of credit with Bank
of America. At January 31, 2000, the Company had $2,600,000 outstanding against
the line and had no amounts outstanding against the line as of October 31, 1999.
Trade receivables were $24,089,000 at January 31, 2000, an increase of
$2,895,000 or 13.7% over the balance at October 31, 1999. Because the Company's
business is seasonal, the receivables balance may more meaningfully be compared
to the balance of $20,488,000 at January 31, 1999, rather than the year-end
balance. This shows an increase of 17.6% in receivables which is primarily due
to the 21.1% increase in net revenue in the Company's wholesale business.
Inventory increased to $35,474,000 at January 31, 2000, from $30,644,000 at
October 31, 1999, an increase of 15.8%. However, compared to the inventory of
$38,673,000 at January 31, 1999, inventory decreased by 8.3%. This is primarily
attributable to the successful execution of the inventory
7
<PAGE> 10
management initiative consisting of a reduced number of fashion styles and a
more conservative buying philosophy.
During the first three months of fiscal 2000, the Company incurred capital
expenditures of $497,000 mainly for warehouse automation and computer equipment.
Common stock and capital in excess of par value decreased by $1,018,000 in the
three months ended January 31, 2000 primarily due to the repurchase of shares.
The Company repurchased 240,000 shares of its common stock in the first quarter
at an aggregate cost of $1,018,000 and retired those shares in January 2000.
This brings the total repurchased shares to 493,000 of the 1,000,000 shares
authorized by the board of directors in July 1999. Accordingly, Company is
currently authorized to repurchase up to an additional 507,000 shares.
Based upon current levels of operations, the Company expects that 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 expects to be able to meet all
of its debt service, capital expenditure, and working capital requirements.
DERIVATIVES
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 subsidiary in
England has 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, 2000 the Company had outstanding foreign
currency forward exchange contracts with a notional value of approximately
$679,000 dollars and had an unrealized gain of $55,000.
YEAR 2000 COMPUTER COMPLIANCE
As of March 10, 2000, to the best of management's knowledge, neither Ashworth
nor any key vendors have experienced any material adverse effects related to the
Year 2000 issue. At this time, Ashworth does not expect to encounter any Year
2000 issues that would have a material adverse effect on the results of
operations, liquidity and financial condition of the Company in fiscal year
2000.
NEW ACCOUNTING STANDARDS
In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, which establishes accounting and reporting
standards for derivative instruments and hedging activities. SFAS No. 133
requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. In July 1998, the FASB issued SFAS No. 137, which delays the
effective date of SFAS No. 133 to all fiscal years beginning after July 15,
2000. Thus SFAS No. 133 is effective for the Company's fiscal year ending
October 31, 2001, and is not expected to have a material effect on the Company's
financial position or results of operations.
8
<PAGE> 11
CAUTIONARY STATEMENTS AND RISK FACTORS
This report on Form 10-Q contains certain forward-looking statements, including
without limitation those regarding the Company's plans and expectations for
revenue growth, product lines, designs and seasonal collections, marketing
programs, foreign sourcing, cost controls, inventory levels and availability of
working capital. These 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
the following:
- - Demand for the Company's products may decrease 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 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 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 significant. Price competition or industry
consolidation could weaken the Company's competitive position.
- - Certain of the Company's competitors may be better positioned to
capitalize on the opportunities provided by e-commerce (i.e. sales and
marketing over the Internet). This could result in weakening the
Company's competitive position.
- - The Company relies upon 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.
- - There can be no assurance that the Company's future revenues will not
decline due to various factors, including potential consolidation of the
Company's core green grass market, which could result in discounting, as
well as possible general declines in economic conditions from the levels
recently experienced.
- - The Company maintains high levels of inventory to support its Basics
program, and 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 inventory writedowns may materially
impair the Company's financial performance in any period. Particular
inventory 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.
9
<PAGE> 12
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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 subsidiary in
England has 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, 2000, the Company had outstanding the
following material purchased foreign currency forward exchange contracts (in
thousands, except average contract rate):
<TABLE>
<CAPTION>
Contract Weighted-Average Unrealized
Amount Rate Against Gain (loss)
Foreign Currency Forward Contracts US $ Equivalent Sterling US $ Equivalent
- ---------------------------------- --------------- ---------------- ---------------
<S> <C> <C> <C>
British Pounds Sterling $ -- $ --
Danish Krone 164.2 11.157 4.3
French Francs 115.6 9.815 11.4
Deutsche Marks 336.0 2.928 33.0
Irish Punts 63.2 1.180 6.1
-------- --------
$ 679.0 $ 54.8
======== ========
</TABLE>
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
alleging violations of the Securities Exchange Act of 1934 by the Company and
certain of its officers and directors. The complaint alleged that, during the
class period, Company executives made positive statements about the Company's
business including statements concerning product demand, offshore production and
inventories. The complaint further alleged that the defendants knew these
statements to be false and concealed adverse conditions and trends in the
Company's business during the class period. The plaintiff seeks to recover
unspecified damages on behalf of all purchasers of the Company's common stock
during the period September 4, 1997 to July 15, 1998. The Company was served a
copy of the complaint on January 26, 1999. Subsequently, two other suits were
served upon the Company making similar allegations. The three actions have been
consolidated by order of the United States District Court and lead counsel for
the plaintiffs has been appointed. Per order of the Court, Plaintiffs filed
their Amended and Consolidated Complaint on December 17, 1999. On February 18,
2000, the Company filed a motion to dismiss which is scheduled for hearing on
May 22, 2000. No discovery has occurred to date.
10
<PAGE> 13
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 as filed 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
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).
11
<PAGE> 14
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 June 1, 1998 by and among Ashworth,
Inc., James W. Nantz, III and Nantz Communications, Inc. (filed as
Exhibit 10(d) to Registrant's Form 10-K for the year ended October
31, 1998 (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)* Personal Services Agreement and Acknowledgement of Termination of
Executive Employment effective May 31, 1999 by and between
Ashworth, Inc. and A. John Newman (filed as Exhibit 10(b) to
Registrant's Form 10-Q for the quarter ended April 30, 1999 (File
No. 0-18553) and incorporated herein by reference).
10(f)* Offer and Acceptance of Executive Employment effective March 2,
1999 by and between Ashworth, Inc. and Gabrielle Sampietro (filed
as Exhibit 10(c) to Registrant's Form 10-Q for the quarter ended
April 30, 1999 (File No. 0-18553) and incorporated herein by
reference).
10(g)* Offer and Acceptance of Executive Employment effective March 15,
1999 by and between Ashworth, Inc. and Terence W. Tsang (filed as
Exhibit 10(d) to Registrant's Form 10-Q for the quarter ended April
30, 1999 (File No. 0-18553) and incorporated herein by reference).
10(h)* Offer and Acceptance of Executive Employment effective June 1, 1999
by and between Ashworth, Inc. and Suzi Chauvel (filed as Exhibit
10(a) to Registrant's Form 10-Q for the quarter ended July 31, 1999
(File No. 0-18553) and incorporated herein by reference).
10(i) 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(j) Amended and Restated Nonqualified Stock Option Plan dated June 17,
1994 (filed as Exhibit 10(f) to Registrant's Form 10-K for the year
ended October 31, 1994 (File No. 0-18553) and incorporated herein
by reference).
10(k) Amended and Restated Incentive Stock Option Plan dated June 17,
1994 (filed as Exhibit 10(h) to Registrant's Form 10-K for the year
ended October 31, 1994 (File No. 0-18553) and incorporated herein
by reference).
10(r)(2) Business Loan Agreement dated May 29, 1998, between the Registrant
and Bank of America, expiring March 1, 2000. Under the agreement,
the Bank provides the Company with a revolving line of credit of up
to $20,000,000 (filed as Exhibit 10(r)(2) to Registrant's Form 10-Q
for the quarter ended April 30, 1998 (File No. 0-18553) and
incorporated herein by reference).
12
<PAGE> 15
10(r)(3) Foreign Exchange Agreement dated May 29, 1998, between the
Registrant and Bank of America, expiring March 1, 2000. Under the
agreement, the Bank provides the Company with a spot and forward
foreign exchange contract up to a maximum of $5,000,000 (filed as
Exhibit 10(r)(2) to Registrant's Form 10-Q for the quarter ended
April 30, 1998 (File No. 0-18553) and incorporated herein by
reference).
27 Financial Data Schedule
(b) Reports on Form 8-K:
The Company filed a report on Form 8-K on February 22, 2000 reporting
that the board of directors of the Company had amended the Bylaws of the
Company.
The Company filed a report on Form 8-K on March 14, 2000 reporting that
the board of directors of the Company had amended the Stockholder Rights
Agreement.
* Compensation plan, contract or agreement required to be filed as an Exhibit
pursuant to applicable rules of the Securities and Exchange Commission.
13
<PAGE> 16
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 16, 2000 By: /s/ Randall L. Herrel, Sr.
------------------ -------------------------------------
Randall L. Herrel, Sr.
President and Chief Executive Officer
Date: March 16, 2000 By: /s/ Terence W. Tsang
------------------ -------------------------------------
Terence W. Tsang
Sr. Vice President - Finance
Chief Financial Officer
14
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<FISCAL-YEAR-END> OCT-31-2000
<PERIOD-START> NOV-01-1999
<PERIOD-END> JAN-31-2000
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