* Company continues to explore various strategic alternatives, including
a sale of all or part of the company
* Company enters into further amendments to its debtor-in-possession
financing facility which facilitates the company's exploration of
strategic alternatives
* Form 15 to be filed with the SEC to deregister common stock and
suspend its reporting obligations
DENVER, April 13 /PRNewswire-FirstCall/ -- Ultimate Electronics, Inc.
(OTC: ULTEQ) today announced that it continues to explore various strategic
alternatives in an effort to maximize value for all stakeholders, including a
sale of all or part of the company as a going concern or the sale of all or
part of the assets of the company through a liquidation. In connection with
this process, the company plans to conduct an auction on April 14th and 15th
seeking the highest and best bid or combination of bids from qualified third
parties. The company anticipates seeking approval of such bids at a hearing
before the Bankruptcy Court on April 19, 2005.
The company and its lenders have also entered into further amendments to
the company's debtor-in-possession financing facility. The amendments require
the company to conduct an auction and seek Bankruptcy Court approval of
qualified third party bids for the company by agreed upon dates. The
amendments also permit the company to access $5 million in cash reserves
between April 8 and April 19, 2005.
Ultimate intends to file a Form 15 with the Securities and Exchange
Commission to deregister its common stock and suspend its reporting
obligations under the Securities Exchange Act of 1934 after the close of
trading on April 13, 2005. The company expects the deregistration to become
effective within 90 days of the filing with the SEC. As a result of the Form
15 filing, the company's obligation to file with the SEC certain reports and
forms, including Forms 10-K, 10-Q, and 8-K, will be suspended and upon
effectiveness will cease. As previously reported, the company's common stock
was delisted from the Nasdaq National Market effective February 25, 2005.
Since then, the company's common stock has been trading on the Pink Sheets.
The company anticipates that its common stock will continue to be quoted on
the Pink Sheets following deregistration to the extent that market makers
continue to make a market in its shares. However, the company can provide no
assurances that trading of the company's common stock will continue.
In making its determination to deregister its common stock and suspend its
reporting obligations under the Securities Exchange Act, the company's Board
of Directors considered several factors, including the following:
* The company's ongoing restructuring efforts in connection with its
filing under chapter 11 of the United States Bankruptcy Code;
* The company's belief that the outcome of the company's reorganization
under chapter 11 of the Bankruptcy Code will not result in any value
for the holders of the company's common stock;
* The costs, both direct and indirect, incurred by the company in
connection with the preparation and filing of periodic reports and
forms with the SEC which the company expects would increase as a
result of the Sarbanes-Oxley Act of 2002 and new SEC rules promulgated
thereunder; and
* The benefit of allowing senior management to spend less time with SEC
report and form preparation will enable them to devote their full
attention and effort to the company's operations and financial
objectives.
The company today filed a Current Report on Form 8-K with the Securities
and Exchange Commission providing additional information regarding the
company's chapter 11 bankruptcy proceedings, including details concerning the
auction process currently being conducted by the company, the most recent
amendments to its debtor-in-possession financing facility and the
deregistration of its common stock. The Current Report on Form 8-K can be
obtained by accessing the Securities and Exchange Commission's website at
"http://www.sec.gov".
Additional information about the company and its chapter 11 bankruptcy
proceedings 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. Additional information about Ultimate
Electronics can also be found on the Internet on the company's web site at
http://www.ultimateelectronics.com.
About Ultimate Electronics, Inc.
Ultimate Electronics is a leading specialty retailer of home entertainment
and consumer electronics products in 14 states. The company operates 64 stores,
including 54 stores in Arizona, Iowa, Kansas, Minnesota, Nevada, New Mexico
and Oklahoma under the trade name Ultimate Electronics(R) and 10 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."
Certain statements made in this news release are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995 including, without limitation, that the company anticipates that the
company's common stock will be quoted on the Pink Sheets and believes that
deregistering will reduce certain expenses and enable management to focus more
time and resources on the operations of the company. 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;
unanticipated issues that could prevent the company from deregistering its
common stock; failure to have at least one market maker continue to make a
market in the company's common stock on the Pink Sheets following
deregistration; becoming subject to the Securities Exchange Act in the future
due to the filing of a registration statement; risks associated with third
parties seeking and obtaining bankruptcy 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, Ultimate Electronics,
Inc., +1-303-412-2500, ext. 2640, or +1-800-260-2660, ext. 2640,
shareholder@ulte.com
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