
                                                     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 April 30, 1996

                                                     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                                           (I.R.S. Employee
jurisdiction of                                           Identification No.)
incorporation or organization)

                                    2791 LOKER AVENUE WEST
                                    CARLSBAD, CA 92008
          (Address of Principal Executive Offices)

                                    (619) 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 May 31, 1996

$.001 par value Common Stock                        12,040,626




<PAGE>



                                      INDEX

                                                                          PAGE

Part I.  Financial Information

Item 1.  Financial Statements.

     Consolidated Balance Sheets                                          1
     Consolidated Statements of Income                                    2
     Consolidated Statements of Cash Flows                                3

     Notes to consolidated financial statements                           4

Item 2.  Management's Discussion and Analysis of
     Financial Condition and Results of Operations                        5

Part II.  Other Information                                               7

Signature                                                                 8

                                       -i-

<PAGE>



<TABLE>
<CAPTION>
ASHWORTH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
                                                                          April 30                   October 31
                                                                          1996                         1995

ASSETS
CURRENT ASSETS:
<S>                                                                    <C>                         <C>        
     Cash and cash equivalents                                         $ 1,570,304                 $ 1,613,029
     Accounts receivable-trade                                          19,900,506                  10,040,200
     Accounts receivable - other                                           900,608                   1,133,771
     Inventories                                                        26,540,789                  27,845,721
     Deferred income tax benefit                                         1,693,062                   1,684,776
     Income tax refund receivable                                                0                   1,239,648
     Other current assets                                                1,715,274                   1,650,792
                                                                        ----------                  ----------
     Total current assets                                               52,320,543                  45,207,937

PROPERTY AND EQUIPMENT                                                  17,170,349                  13,778,742
     Less accumulated depreciation                                      (5,695,699)                 (4,169,348)
                                                                        ----------                  ----------
                                                                        11,474,650                   9,609,394

CAPITAL LEASES - EQUIPMENT                                               1,971,533                   3,561,512
     Less accumulated amortization                                        (885,753)                 (1,401,653)
                                                                        ----------                  ----------
                                                                         1,085,780                   2,159,859

OTHER ASSETS                                                             1,035,509                   1,094,834
                                                                       -----------                 -----------
                                                                       $65,916,482                 $58,072,024
                                                                        ==========                  ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
     Notes payable                                                      $9,900,000               $   6,670,000
     Current portion of long-term debt                                   1,555,985                   1,557,006
     Accounts payable-trade                                              3,649,695                   5,865,878
     Income tax payable                                                    801,574                           0
     Accrued salaries and commissions                                    1,183,368                     972,094
     Accrued liabilities\- other                                         2,104,509                     926,857
                                                                        ----------                  ----------
     Total current liabilities                                          19,195,131                  15,991,835

LONG-TERM DEBT, less current portion                                     6,074,550                   5,195,434

DEFERRED INCOME TAX LIABILITY                                              535,872                     494,747

STOCKHOLDERS' EQUITY:
     Common stock                                                           12,041                      11,902
     Capital in excess of par value                                     23,586,551                  23,242,390
     Retained earnings                                                  16,647,666                  13,296,418
     Deferred compensation                                                (135,329)                   (160,702)
                                                                       -----------                 -----------
Total stockholders' equity                                              40,110,929                  36,390,008
                                                                       -----------                 -----------

                                                                       $65,916,482                $58,072,024
                                                                        ==========                  ==========
</TABLE>

                                                             -1-

<PAGE>



<TABLE>
<CAPTION>
ASHWORTH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
                                                              Three Months                            Six Months
                                                            ended April 30                        ended April 30
                                                  1996                   1995                 1996                 1995
<S>                                             <C>                   <C>                    <C>                    <C>        
NET SALES                                       $26,355,684           $26,438,854            $43,425,548            $41,029,549

COST OF GOODS SOLD                               15,400,546            17,403,588             25,869,699             26,496,620
                                                 -----------           -----------           -----------            -----------
     Gross profit                                 10,955,138             9,035,266            17,555,849             14,532,929

SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES                            6,499,782            5,833,853              11,356,306             9,749,313
                                                 -----------           -----------           ------------            ----------
     Operating profit                              4,455,356            3,201,413               6,199,543             4,783,616

OTHER INCOME (EXPENSE):
     Interest income                                  9,752                 5,586                 22,414                 28,234
     Interest expense                              (379,501)             (326,896)              (698,086)              (475,693)
     Other income (expense)                         (33,247)               33,812                (34,484)                (4,940)
                                                 -----------           ----------             -----------            -----------
     Total other
         income (expense)                          (402,996)             (287,498)              (710,156)              (452,399)

     Net profit before
        income tax                                4,052,360             2,913,915              5,489,387              4,331,217

INCOME TAX PROVISION                              1,535,175             1,103,778              2,138,139              1,715,149
                                                 -----------           -----------            -----------            -----------
     Net earnings                                $2,517,185            $1,810,317             $3,351,248             $2,616,068
                                                 ==========             =========             ==========             ==========

NET INCOME PER COMMON AND
COMMON SHARE EQUIVALENT:

Primary:
     Weighted average shares
     outstanding                                 12,232,755            12,187,819             12,061,644             12,087,874
Net earnings per share                                $0.21                 $0.15                  $0.28                  $0.22

Fully Diluted:
     Weighted average shares
     outstanding                                 12,232,755            12,472,229             12,120,697             12,339,795

Net earnings per share                                $0.21                 $0.15                  $0.28                  $0.21

</TABLE>

                                                              -2-

<PAGE>



<TABLE>
<CAPTION>
ASHWORTH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)



                                                                                             Six months ended April 30
                                                                                1996                          1995

CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                                                              <C>                      <C>          
     Net cash used in operating activities                                       ($2,655,242)             ($14,355,980)

CASH FLOWS FROM INVESTING ACTIVITIES:

     Purchases of property and equipment                                          (1,839,878)               (1,017,285)
     Proceeds from sale of equipment                                                       0                     2,800
                                                                                  ----------                ----------
     Net cash used in investing activities                                        (1,839,878)               (1,014,485)

CASH FLOWS FROM FINANCING ACTIVITIES:

     Proceeds from issuance of common stock                                          344,300                 1,102,132
     Proceeds from revolving line of credit                                       16,905,000                19,900,000
     Principal payments on
         revolving line of credit                                                (13,675,000)               (9,125,000)
     Proceeds from long-term borrowings                                            1,930,013                         0
     Principal payments on long-term debt                                           (570,040)                 (381,323)

     Principal payments on
         capital lease obligations                                                  (481,878)                 (352,712)
                                                                                   ---------                ----------
     Net cash provided by
         financing activities                                                      4,452,395                11,143,097
                                                                                   ---------                ----------
NET INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                                                                (42,725)               (4,227,368)

CASH AND CASH EQUIVALENTS,
     beginning of period                                                           1,613,029                 5,344,244
                                                                                  ----------                ----------
CASH AND CASH EQUIVALENTS,
     end of period                                                                $1,570,304                $1,116,876
                                                                                  ==========                ==========
</TABLE>

                                                              -3-

<PAGE>



ASHWORTH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 1996

NOTE 1- Basis of Presentation.

     In the opinion of management,  the accompanying  balance sheets and related
     interim  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. Actual results could differ from those
     estimates.  Interim results are not necessarily indicative of results for a
     full year.

     Certain  information in footnote  disclosure 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 and financial statements and notes thereto included
     in the annual report on Form 10-K for the year ended October 31, 1995.

NOTE 2 - Inventories.
     Inventories  consisted of the following at April 30, 1996,  and October 31,
     1995:

<TABLE>
<CAPTION>
                                                                      April 30                    October 31,
                                                                       1996                          1995
<S>                                                                     <C>                         <C>        
              Raw materials                                             $ 3,123,436                 $ 4,317,017
              Work in Process                                               885,797                   2,839,828
              Finished Goods                                             22,531,556                  20,688,876
                                                                        -----------                 -----------
                                                                        $26,540,789                 $27,845,721

                                                                         ==========                  ==========
</TABLE>

NOTE 3 - Property & Equipment - Leased.
     During the six month  period,  equipment  leases with an  original  capital
     value of $1,585,628 expired, or were soon to expire, and were purchased for
     their residual values. The original capitalized amounts were transferred to
     Property and Equipment (Company-owned).


NOTE 4 - Long-Term Debt.
     During the six month  period,  long-term  debt and the  current  portion of
     long-term  debt  increased  by  $878,095.  The Company  entered  into three
     equipment  financing  agreements,  one for  $602,513 to purchase  warehouse
     racking,  one for $327,500 to pay for  upgrading  the AS400  computer,  and
     another for  $1,000,000  for  embroidery  machines  and  equipment  and for
     warehouse racking.  Principal  repayments on equipment financing agreements
     and capital leases were $1,051,918.


                                                              -4-

<PAGE>



NOTE 5 - Per Share Information.
     Earnings  per share  amounts are  computed  based on the  weighted  average
     number  of  shares  actually  outstanding  plus the  shares  that  would be
     outstanding  assuming the conversion of the outstanding  dilutive  options,
     all of which are considered to be Common Stock  equivalents.  The number of
     shares  that would be issued from the  exercise  of stock  options has been
     reduced by the number of shares  that  could have been  purchased  from the
     proceeds at the average market price of the Company's stock.

Item 2.           Management's Discussion and Analysis of Financial
                  Condition and Results of Operations.

Results of Operations

     Consolidated  sales for the quarter were $26,355,684,  compared to sales of
$26,438,854 for the same period in 1995. Adjusting for the  discontinuation,  in
fiscal  1995,  of the  Women's  and Kid's  divisions,  sales  increased  6.5% to
$26,355,684  from  $24,738,392  in the April  quarter  1995.  This  increase was
primarily due to increased sales volume.

<TABLE>
<CAPTION>
                                                                 Apr Qtr 1996                     Apr Qtr 1995
                                                                 ------------                     ------------

Consolidated Sales:
<S>                                                               <C>                              <C>        
Ashworth Golf Apparel                                             $16,135,521                      $17,532,566
Ashworth Golf Headwear                                              1,100,845                        1,174,552
Ashworth Golf Footwear                                                820,912                        2,302,131
                                                              ---------------                  ---------------
Ashworth Golf Sales                                                18,057,278                       21,009,249
Ashworth Harry Logan Division                                       2,096,335                        1,625,989
Ashworth Factory Stores                                             2,399,797                        1,073,641
Ashworth U.K., Ltd.                                                 3,802,274                        2,729,975
                                                              ---------------                  ---------------

Consolidated Sales                                                $26,355,684                      $26,438,854
      Less Women's & Kids                                                   0                        1,700,462
                                                                   ----------                  ---------------
Sales excluding Women's & Kids                                    $26,355,684                      $24,738,392
                                                                   ==========                       ==========

Consolidated Sales Analysis - Domestic & Foreign:

Sales from the United States
      Canada                                                         $173,330                         $463,058
      Japan                                                           146,366                          659,394
      Other                                                         1,142,540                        1,127,685
                                                                -------------                    -------------
Sales from the U.S.                                                 1,462,236                        2,250,137
Ashworth U.K., Ltd.                                                 3,802,274                        2,729,975
                                                                -------------                    -------------
Foreign Sales                                                       5,264,510                        4,980,112

                                                              -5-

<PAGE>



Domestic Sales                                                     21,091,174                       21,458,742
                                                              ---------------                    -------------
Consolidated Sales                                                $26,355,684                      $26,438,854
      Less Women's & Kid's                                                  0                        1,700,462
                                                              ---------------                  ---------------
Sales excluding Women's & Kid's                                   $26,355,684                      $24,738,392
                                                                    =========                        =========
</TABLE>

         Sales for the Ashworth  Harry Logan division grew 29% in the quarter to
$2,096,335  from  $1,625,989  in the  second  quarter  of 1995.  With a  growing
interest in the game of golf, and a trend towards casual dress in the workplace,
management  believes  that the  Ashworth  Harry Logan  division has an excellent
opportunity for growth.  To help accelerate sales in this division,  the Company
plans to launch a "shop within a shop" fixture program for 1997.  Although there
can be no assurance that the goal can be reached,  the Company's goal is to have
60 of these "Golfman Shops" in place by the Spring of 1997.

         Domestic  sales of  Ashworth  golf  apparel,  after  adjusting  for the
discontinuation of the Women's and Kid's divisions,  increased 5% in the quarter
to $14,967,959  as compared to  $14,194,483 in the second quarter of 1995.  This
sales increase was largely the result of a better customer order fill rate.

         Domestic  sales of Ashworth  golf footwear were $762,214 in the quarter
down from  $1,917,068  in the same quarter of 1995.  The higher sales figures in
the second  quarter 1995  largely  reflected  the  shipment of initial  stocking
inventories for this new division.

         The  Company's  Factory  Store sales  increased  to  $2,399,797  in the
quarter up from  $1,073,641 in the  comparable  quarter of the prior year.  This
increase  primarily  resulted  from the  addition of four new stores since April
1995,  from volume  increases in the older stores,  and from a small increase in
the average  unit price.  Except for opening an  additional  store in 1996,  the
Company does not plan any major  expansion of its Factory Store  business in the
future.

         In a continued effort to build the Ashworth brand into a global apparel
brand, the Company, during the quarter,  acquired Ashworth Europe, the Company's
European  distributor.   Ashworth  U.K.,  Ltd.,  a  wholly-owned  subsidiary  of
Ashworth,  Inc., will ship all Ashworth products for continental Europe from its
distribution center in England.

         Management  anticipates  that  sales for the  second  half year will be
approximately  the same as they were in the second half of fiscal 1995,  despite
the  discontinuance  of the  Women's  and  Kid's  divisions  which  had sales of
approximately $1.0 million in the May through October 1995 period.

         Gross margin for the quarter was 41.6% compared to 34.2% in the
second quarter of 1995. The gross margin for the April quarter 1995 was

                                                              -6-

<PAGE>



impacted by management's decision to discontinue the women's and kid's divisions
and to make an increase  of  $1,800,000  in the reserve for excess and  obsolete
inventory.  This  resulted  in a charge  to Cost of Sales  of  $1,800,000  which
reduced the 1995 second quarter gross margin by 6.8%.

         Selling,  General and Administrative expenses increased to 24.7% of net
sales in the  quarter  compared  with  22.1% in the  April  quarter  1995.  This
increase  resulted mainly from the expense of sales and marketing  activities in
the  U.S.  and in  Europe,  an  increase  in the cost of  compensating  the golf
professionals   who  endorse  the   Company's   products,   higher  total  sales
commissions,  the  addition  of a  new  distribution  facility,  and  employment
severance expenses.

         Other income  (expense) shows a net increase in expense of $115,498 for
the  quarter.  The  major  part of this is  attributable  to a loss on  currency
transactions between Ashworth, Inc. and Ashworth U.K., Ltd. In the April quarter
1996,  the Company  experienced a currency loss of $23,547 on its  inter-company
transactions  compared to a currency  gain of $66,728 in the same quarter a year
earlier.



                                                              -7-

<PAGE>



Financial Condition

         The Company has a working  capital line of credit with Bank of America.
At April 30, 1996,  borrowings  against the line were  $9,900,000 as compared to
$6,670,000 at October 31, 1995,  and  $10,775,000  at April 30, 1995. At June 5,
1996,  repayments  by  the  Company  had  reduced  the  balance  outstanding  to
$5,675,000.  The current  available  line of credit is  $15,000,000.  Management
believes  that the line of credit base is adequate for the remainder of the 1996
fiscal year.

         Trade  receivables were $19.9 million at April 30, 1996, an increase of
$9.9  million  over the  balance at October  31,  1995.  Because  the  Company's
business is seasonal,  the receivables balance should be compared to the balance
of $24.4 million at April 30, 1995, rather than the balance at October 31, 1995.
Despite sales being $26.4 million for both 1995 and 1996 second quarters, trade
receivables as of April 30, 1996, were 18.3% lower than trade  receivables as of
April 30, 1995.

         Inventory  decreased to $26.5 million from $27.8 million at October 31,
1995, a reduction of 4.7%. Management believes that the inventory level is still
higher  than  needed for  anticipated  sales and is taking  action to reduce the
inventory, largely through its Factory stores.


                                                              -8-

<PAGE>



Part II.          Other Information

Item 1.           Legal Proceedings.

         There were no material  pending or threatened  legal  proceedings as to
which  the  Company  or any of its  subsidiaries  was a party or of which any of
their property was the subject during the fiscal quarter ended April 30, 1996.

Item 2.           Changes in Securities - None.

Item 3.           Defaults upon Senior Securities - None.

Item 4.           Submission of Matters to a Vote of Security Holders

April 23, 1996 - Annual Meeting:

<TABLE>
<CAPTION>
(1)      Director elected at the meeting:
                  Gerald W. Montiel
<S>                                                                        <C>       
                  Number of votes FOR                                      11,155,952
                  Number of votes WITHHELD                                 260,137
</TABLE>

         Each other director whose term of office as a director  continued after
         the meeting:
                  John L. Ashworth
                  Andre P. Gambucci
                  John M. Hanson, Jr.

(2)      Other matters voted upon at the meeting:
<TABLE>
<CAPTION>
         To ratify the  appointment by the Board of Directors of Arthur Andersen
         & Co as the Company's  independent  public  accountants  for the fiscal
         year ending October 31, 1996.
<S>                                                                        <C>       
                  Number of affirmative votes                              11,312,344
                  Number of negative votes                                     58,682
</TABLE>

Item 5.           Other Information - None.

Item 6.           Exhibits and Reports on Form 8-K.

Exhibit No.                             Description of Exhibit

10(r)(1)              Business Loan Agreement dated March 18, 1996, between
                      the Registrant and Bank of America, expiring February
                      28, 1997.  Under the agreement, the Bank provides the
                      Company with a revolving line of credit of up to
                      $17,000,000 collateralized by the assets of the Company
                      and its subsidiaries.

27            Financial Data Schedule.

Form 8-K:

                                                              -9-

<PAGE>



         No  reports  on Form 8-K were  filed by the  Company  during the second
quarter of the fiscal year ended October 31, 1996.

                                                              -10-

<PAGE>



         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


Date: June 14, 1996                     By:__/s/ Gerald W. Montiel_________
                                        ---------------------
                                        Gerald W. Montiel
                                        Chairman of Board of Directors,
                                        President and
                                        Chief Executive Officer


Date: June 14, 1996                     By:__/s/ John Newman_____________
                                        ---------------
                                        John Newman
                                        Chief Financial Officer and
                                        Chief Accounting Officer
                            -12-
