DENVER, Dec. 13 /PRNewswire-FirstCall/ -- Ultimate Electronics, Inc.
(Nasdaq: ULTE) today announced it has filed a request for an extension to file
its 10-Q for the quarter ended October 31, 2004.
The Company has substantially completed its work on its Quarterly Report
on Form 10-Q for the quarter ended October 31, 2004 (its "Form 10-Q"). On
December 10, 2004, however, the Company's lenders notified the Company that
they would be requiring significant additional reserves against availability
of funds under the credit facility, commencing December 10, 2004 and
increasing those reserves through January 31, 2005 under the Company's
revolving credit facility. Despite an improved trend with the Thanksgiving
weekend sales, which historically are an indicator of the holiday selling
season, fourth quarter sales to date have been weak. Based on continued
deterioration in fourth quarter sales trends, the Company anticipates that it
will be in violation of one or more covenants under its credit facility.
Although the Company intends to seek a waiver from its lenders relating to the
loan covenant violation(s), its lenders may not grant such waiver. The
Company has concluded that the continued sales decline, the requirement for
additional reserves and the potential loan covenant violation(s) raise
substantial doubt about its ability to continue as a going concern. The
Company is examining all of its strategic alternatives including a potential
reorganization of its business. Due to these recent events, the Company has
requested an extension of time to file its Form 10-Q, as it could not complete
the filing of its Form 10-Q without unreasonable effort. The Company expects
to file its Form 10-Q on or before December 15, 2004.
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 potential loan covenant violation(s), the Registrant's intention to
seek a waiver from its lenders, the potential reorganization of its business
and the expected date for filing its Form 10-Q. 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 Company's relationships
with its suppliers, vendors and lenders; the decision of any of the Company's
lenders to withhold its consent to provide waivers; the assessment of the
Company's independent accountants regarding the Company's financial condition;
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 July 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.
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.
For further information, please 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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CONTACT:
Investor Relations Department of Ultimate
Electronics, Inc., +1-303-412-2500, ext. 2640, +1-800-260-2660,
ext. 2640, shareholder@ulte.com
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