DENVER, June 3 /PRNewswire-FirstCall/ -- Ultimate Electronics, Inc.
(Nasdaq: ULTE) announced today its operating results for the first quarter
ended April 30, 2004.
For the first quarter ended April 30, 2004, the company reported a net
loss of $8.4 million or $.57 per share on a diluted basis, compared to a net
loss of $1.4 million or $.10 per share on a diluted basis for the same quarter
of the prior year. Sales for the first quarter were $152.4 million, a 2%
decrease from sales of $155.7 million for the same quarter of the prior year.
Comparable store sales were down 11% for the quarter. Gross profit margins
for the first quarter were 31.5% compared to 32.7% for the same quarter of the
prior year. Gross profit margins were impacted by SKU reduction in certain
categories, a concentrated effort to reduce the amount of product that becomes
discontinued inventory and aggressive promotions. Selling, general and
administrative expenses for the first quarter increased as a percentage of
sales to 40.0% from 34.2% for the same quarter of the prior year. Fixed
general and administrative expenses such as occupancy, depreciation,
information systems, and payroll increased as a percentage of sales by 5.3%
compared to the first quarter of the prior year due to lower than anticipated
sales for the quarter, an additional seven stores opened in the second half of
last year and the increased costs of operating our new management information
system. Net advertising was up 27 basis points and professional fees were up
26 basis points over the same quarter of the previous year.
First quarter sales by category were as follows:
First Quarter Ended
Category 4/30/2004 4/30/2003
Television/DBS 47% 42%
Audio 18% 18%
Video/DVD 12% 15%
Mobile 8% 10%
Home Office 1% 3%
Other 14% 12%
The company's inventory finished the quarter at $113.9 million, an 8%
increase from its inventory level as of April 30, 2003 and no change from its
inventory level as of January 31, 2004. Borrowings under the company's
revolving line of credit were $68.9 million at the end of the first quarter.
Currently, borrowings under the company's revolving line of credit are
$59.8 million.
Dave Workman, President and Chief Executive Officer, stated, "The sales
shortfall in February and March, combined with our decision to aggressively
reduce inventory before it becomes discontinued, were the primary contributors
to the loss for the quarter. While reducing the standing levels of end-of-
life cycle inventory and discontinued merchandise during the quarter had a
negative effect on profitability, we expect our operating results to benefit
in the second half of the year from a more profitable overall level of
inventory. In addition, we believe we have resolved most of the remaining
system issues and expect to begin realizing operating efficiencies with our
new management information system by the end of the year.
"Based on current sales trends (May comparable store sales, our toughest
comparison for the second quarter, were down 6%) and the sales initiatives we
have implemented, and in light of easier comparisons against our previous
years' sales, we believe comparable store sales for the second quarter will
improve to negative low single digits and comparable store sales for the
second half of the year will improve to positive mid single digits. Most of
our cost initiatives have been implemented and should allow us to leverage the
improvement in sales expected for the second half of the year. Based on the
improvements in sales and margins expected from our operating initiatives and
the cost reductions we have implemented, we anticipate break-even earnings
results for our fiscal year. With most of our operating initiatives in place,
we are now focusing on fine-tuning traffic initiatives and long-term strategic
initiatives that will uniquely position us in the market place for the future.
"We are continuing to develop new business opportunities in our builder
division. We have provided products and services for home builders since
1995. Last year, we expanded that area of our business and completed over
6,000 homes. We are currently partnered with 14 builders and have agreements
pending commencement of work with four additional builders to supply home
theater equipment, security systems, and wiring packages for approximately
12,500 homes over the next twelve months."
Ultimate Electronics quarterly earnings conference call is scheduled for
June 3, 2004 at 11:00 a.m. Eastern Time and will be broadcast live on the
Internet. Please visit the Company's Web site at
http://www.ultimateelectronics.com and click on the Webcast -- Live icon on
the Investor Relations page.
The statements made in this news release, other than those concerning
historical financial information, 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: (i) our more profitable level of inventory and its benefits to our
operating results; (ii) the resolution of the remaining issues associated with
our new information system and the timing and realization of operating
efficiencies from our new system; (iii) comparable store sales for the second
quarter and second half of fiscal 2005; (iv) the success of sales, margin and
cost initiatives; (v) anticipated earnings results for the year; (vi) the
results of our traffic and long-term initiatives; and (vii) the number of new
homes expected to be completed by our builder division pursuant to current
arrangements. Actual results may differ materially from those included in the
forward-looking statements due to a number of factors, including, but not
limited to: changes in general economic conditions; success of sales
promotions and marketing efforts; activities of competitors; terrorism and
acts of war; consumer acceptance of new technologies; risks associated with
the operation of our new management information system; the number of new home
starts; and other risk factors identified in the company's Annual Report on
Form 10-K for the fiscal year ended January 31, 2004, filed 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.
About Ultimate Electronics, Inc. (Nasdaq: ULTE)
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 or accessed via PR Newswire's Web site at
http://www.prnewswire.com.
For further information, please contact Alan E. Kessock, Chief Financial
Officer of Ultimate Electronics, Inc., +1-303-801-4000.
SELECTED FINANCIAL INFORMATION
(amounts in thousands except share and per share data)
Quarter ended Quarter ended
April 30, 2004 % of April 30, 2003 % of
(unaudited) Sales (unaudited) Sales
Sales $152,381 $155,685
Cost of goods sold 104,351 68.5% 104,776 67.3%
Gross profit 48,030 31.5% 50,909 32.7%
Selling, general &
administrative expenses 60,958 40.0% 53,160 34.2%
Loss from operations (12,928) (8.5)% (2,251) (1.5)%
Interest expense, net 595 0.4% 45 --
Loss before taxes (13,523) (8.9)% (2,296) (1.5)%
Income tax benefit (5,139) (3.4)% (872) (0.6)%
Net loss $(8,384) (5.5)% $(1,424) (0.9)%
Loss per share
-- basic $(0.57) $(0.10)
Loss per share
-- diluted $(0.57) $(0.10)
Shares outstanding
-- basic 14,807,002 14,580,727
Shares outstanding
-- diluted 14,807,002 14,580,727
SUMMARY BALANCE SHEETS
(amounts in thousands)
April 30, 2004 January 31, 2004
Assets: (unaudited)
Current assets:
Cash and cash equivalents $1,138 $4,413
Accounts receivable, net 36,467 44,306
Income tax receivable 398 7,975
Merchandise inventories, net 113,937 113,875
Prepaid expenses and other 5,110 3,800
Total current assets 157,050 174,369
Property and equipment, net 156,011 158,247
Deferred tax asset 5,946 806
Other assets 2,772 2,805
Total assets $321,779 $336,227
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable $32,008 $35,330
Accrued liabilities 26,597 35,177
Deferred revenue 208 353
Other current liabilities 144 141
Total current liabilities 58,957 71,001
Revolving line of credit 68,944 63,186
Capital lease obligations
-- less current portion 1,260 1,297
Other long term liabilities 1,808 1,808
Stockholders' equity 190,810 198,935
Total liabilities
and stockholders' equity $321,779 $336,227
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:
Alan E. Kessock, Chief Financial Officer of
Ultimate Electronics, Inc., +1-303-801-4000
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