DENVER, Feb. 16 /PRNewswire-FirstCall/ -- Ultimate Electronics, Inc.
(Nasdaq: ULTEQ) today announced changes to its management, fourth quarter
sales results and the final approval of its $118.5 million DIP financing by
the Bankruptcy Court in Wilmington, DE.
The changes in management include the departure of various members of
management including David Workman, CEO and President, Neal Bobrick, SVP of
Sales and Gerry Demple, SVP of Services. The Board of Directors has appointed
Mark Wattles, the Company's Chairman of the Board, to be the Company's CEO.
Seven individuals, who have previous experience working with Mr. Wattles, will
be joining the Company's management team this week, including the following:
Bill Besselman will be VP of Strategic Planning and Analysis. Mr.
Besselman's experience includes five years of consulting at McKinsey &
Company, and he was most recently VP of Strategic Planning and Analysis at
Hollywood Video.
Lon Weingart will be a consultant to the Company for approximately six
months overseeing the operations of the business. Mr. Weingart's experience
includes Director of Merchandising and Director of Product Development at
Starbucks, VP and SVP of Marketing at Hollywood Video, and most recently SVP
of Operations at Hollywood Video.
Jim Marcum, who joined the Company's Board of Directors when Mark Wattles
became Chairman, has been asked by the Board to take an active role with
respect to the Company's financial operations and restructuring strategy.
Mr. Marcum's prior experience includes Treasurer of Melville Corporation, CFO
of Marshall's, Vice Chairman and CFO of Stage Stores, CFO of Hollywood Video,
and most recently a private investor.
Commenting on the changes, Mark Wattles, Chairman and CEO, said, "I am
excited to be working with some of the talent that led Hollywood Video through
its successful turnaround. As a result of these changes, Ultimate is now a
large Company with management experienced in running a large Company. As a
Company, we want to thank David Workman for his partnership with Bill Pearse,
our Company's founder, in building a great company and a great brand.
Ultimate Electronics and Soundtrack have the best selection of mid to high end
audio/video products with a low price guarantee and we are dedicated to being
the Ultimate destination for entertainment. Our employees are known for
having the best product knowledge in the industry. So, if you want to make
sure you are buying the right product for your needs Ultimate and Soundtrack
are the places to shop. I am confident with this team in place, not only will
Ultimate and Soundtrack be great places to shop but, Ultimately, we will be
financially successful as well."
Sales for the quarter ended January 31, 2005 were approximately
$195.9 million, a decrease of 19.4 percent from $243.2 million for the same
period in the previous year. Comparable store sales were down approximately
19 percent for the quarter ended January 31, 2005. The Company had previously
reported comparable store sales for the month of November as down
approximately 6 percent and December as down approximately 18 percent. Sales
for the year ended January 31, 2005 were approximately $658.3 million, a
decrease of 8 percent from $712.9 million for the previous year. Comparable
store sales were down approximately 13 percent for the year ended January 31,
2005. In light of the Company's Chapter 11 filing, recent changes in
management and the Board, and other financial issues that the Company is
currently addressing, the Company is not providing any guidance on its
earnings or results of operations. In addition, the reported sales figures in
this press release are preliminary and subject to adjustment.
It is not currently possible to predict the length of time the Company
will operate under the protection of Chapter 11 and the supervision of the
Bankruptcy Court, when the Company will file a plan or plans of reorganization
with the Bankruptcy Court, the outcome of the Chapter 11 proceedings in
general, or the effect of the proceedings on the business of the Company or on
the interest of the various interested parties. Based upon testimony given at
the DIP financing hearing on February 14, 2005 by FTI Consulting, it appears
unlikely that the outcome of the Company's reorganization will result in any
value for the holders of our common stock. The Company does, however, believe
that with additional capital, the reorganization will result in an ongoing
business that will be good for its customers, creditors and employees.
Commenting on the Company's financial outlook, Mark Wattles, Chairman and
CEO, said, "Despite the Company's recent difficulties caused in part by
aggressive growth strategies of prior management, I believe that this remains
a good business. The reorganization will give us the opportunity to fix the
Company's financial and operational structure. I believe the outcome of our
reorganization will provide future opportunities for our creditors and our
employees."
Additional information about the Bankruptcy Case and the DIP hearing can
be found at the United States District Bankruptcy Court - District of
Delaware, 824 Market Street, 3rd Floor, Wilmington, Delaware 19801, on the
Bankruptcy Court's web site: http://www.deb.uscourts.gov, or at
http://www.kccllc.net/ultimate
About Ultimate Electronics, Inc. (Nasdaq: ULTEQ).
Ultimate Electronics is a leading specialty retailer of home entertainment
and consumer electronics products in 14 states. The company operates 65
stores, including 54 stores in Arizona, Idaho, Illinois, Iowa, Kansas,
Minnesota, Missouri, Nevada, New Mexico, Oklahoma, South Dakota, Texas and
Utah under the trade name Ultimate Electronics(R) and 11 stores in Colorado
under the trade name SoundTrack(R). In addition, the company operates Fast
Trak Inc., an independent electronics repair company and a wholly owned
subsidiary of Ultimate Electronics. During the past two years, the company
received numerous industry awards including Audio Video International's 2003
"Top 10 Audio/Video Retailer of the Year."
Ultimate Electronics news releases, quarterly sales and operating results
can be found on the Internet on the Company's Web site at
http://www.ultimateelectronics.com.
Certain statements made in this news release are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are made based upon management's current
expectations and beliefs concerning future developments and their potential
effects upon the Company. These forward-looking statements include statements
regarding the Company's expectations concerning the bankruptcy process and the
continuation of its day to day operations and payments to vendors and
employees in the ordinary course. Actual results may differ materially from
those included in the forward-looking statements due to a number of factors,
including, but not limited to, the following: the ability of the Company to
continue as a going concern; court approval of the Company's motions
prosecuted by it from time to time; the ability of the Company to develop,
prosecute, confirm and consummate one or more plans of reorganization with
respect to the Chapter 11 cases; risks associated with third parties seeking
and obtaining court approval to terminate or shorten the exclusivity period
for the Company to propose and confirm one or more plans of reorganization,
for the appointment of a Chapter 11 trustee or to convert the cases to
chapter 7 cases; the ability of the Company to obtain trade credit, and
shipments and terms with vendors and service providers for current orders; the
Company's ability to maintain contracts that are critical to its operations;
potential adverse developments with respect to the Company's liquidity or
results of operations; the ability to fund and execute its business plan; the
ability to attract, retain and compensate key executives and associates; the
ability of the Company to attract and retain customers; and other risk factors
identified in the Company's Annual Report on Form 10-K for the fiscal year
ended January 31, 2004, the Company's Quarterly Report on Form 10-Q for the
quarter ended October 31, 2004 and other filings with the Securities and
Exchange Commission. There can be no assurance that future developments
affecting the Company will be those anticipated by management. The Company
disclaims any obligation to update or revise any of the forward-looking
statements that are in this news release.
Contact: Investor Relations Department, Ultimate Electronics, Inc.
at 303-412-2500 (ext. 2640) or 1-800-260-2660 (ext. 2640) or e-mail
shareholder@ulte.com.
SOURCE Ultimate Electronics, Inc.
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Related links:
http://www.ultimateelectronics.com
Company News On-Call:
http://www.prnewswire.com/comp/877054.html
CONTACT:
Investor Relations Department, Ultimate
Electronics, Inc., +1-303-412-2500 ext. 2640, or +1-800-260-2660
ext. 2640, shareholder@ulte.com
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