820774--1/16/2007--ASHWORTH

related topics

{customer, product, revenue}

{operation, international, foreign}

{condition, economic, financial}

{regulation, change, law}

{product, market, service}

{control, financial, internal}

{stock, price, operating}

{financial, litigation, operation}

{cost, operation, labor}

{personnel, key, retain}

{investment, property, distribution}

{property, intellectual, protect}

{stock, price, share}

System Failure may adversely affect the Company s financial results. If we are unable to implement a successful transition in executive leadership and recruit and retain key personnel necessary to operate our business, our ability to successfully develop and market our products may be harmed. Failure to determine adequate inventory levels may result in inventory write-downs that could harm our business. Failure to meet certain performance requirements could cause the Company to lose its exclusive licensing agreement with Callaway Golf. Our products face intense competition Changes in the retail industry could cause a decrease in the number of retail stores in which our products are carried. Sales of our product is dependent on the economy, popularity of golf, and weather conditions. Development of fashions or styles not well received could negatively impact our revenues and net profits. Poor sell-through of the Company s products could cause reduced revenues and net profit Our international sourcing involves inherent risks which could result in harm to our business. Contractors may be unable to deliver the Company s products if necessary raw materials are not available. Dealing with companies violating labor laws could disrupt our shipments and damage our reputation. Non-compliance with the Fair Labor Association could cause lost sales in the collegiate market. Failure to meet The Customs-Trade Partnership Against Terrorism criteria could cause lengthy delays in pass-through of the Company s products Currency exchange rate fluctuations could result in higher costs and decreased margins. The Company s international operations involve inherent risk which could result in harm to our business. The Company may be adversely affected by the financial health of our customers. The Company is subject to periodic litigation which could result in unexpected expense of time and resources. A material failure of internal control over financial reporting could materially impact the Company s financial results. Failure to adequately protect our intellectual property rights could adversely affect our business. Failure to retain and continue to obtain high quality endorsers of our products could harm our business. Our business is affected by seasonality and consumer discretionary spending, which could result in fluctuations in out operating results. Our Company borrows on a line of credit that is subject to variable rates of interest, which could negatively impact out net profitability. volving regulation of corporate governance and public disclosure may result in additional expenses and continuing uncertainty. Future changes in financial accounting standards or practices or existing taxation rules or practices may affect the Company s reported results of operations. Risks Related to Our Common Stock Our Company may be forced to expend substantial time and other resources to oppose shareholder nominees for our Board of Directors or other proposals that we believe are not in the best interest of our Company. Our stock price has been volatile, and an investment in our stock could suffer a significant decline in value.

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820774--1/16/2007--ASHWORTH_INC