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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 29, 1997
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ULTIMATE ELECTRONICS, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-22532 84-0585211
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
321-A West 84th Avenue, Thornton, Colorado 80221
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 412-2500
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ULTIMATE ELECTRONICS, INC.
Information to be included in the Report
ITEM 5. OTHER EVENTS.
At 6:00 a.m., Mountain Standard Time, on May 29, 1997, Ultimate
Electronics, Inc. (the "Company") issued the following press release
relating to its operating results for the quarter ended April 30, 1997.
The Company reported a net loss for the first quarter ended April 30, 1997 of
$311,000, or 4 cents per share on 6,995,000 shares outstanding, compared to a
net loss of $653,000 or 9 cents per share on 6,995,000 shares outstanding for
the same quarter in the prior year.
Sales for the quarter ended April 30, 1997 were $55,508,000, a 7% decrease
from sales of $59,615,000 for the same period in the prior year. Comparable
store sales decreased 15% for the quarter. Gross margins on sales for the
quarter were 26.0%, up from 25.0% for the same quarter in the prior year.
Selling, general and administrative expenses for the first quarter ended
April 30, 1997 decreased to $14.2 million (25.5% of net sales) from $15.2
million (25.5% of net sales) for the same quarter in the prior year. The $1.0
million decrease in expenses compared to the same period in the prior year
was primarily the result of lower sales commissions, bankcard fees and other
sales related costs associated with the lower sales volume, as well as
reduced advertising and preopening costs. Management has addressed the lower
sales trend during the current year by reducing variable costs where
appropriate throughout the Company. Interest expense increased to $783,000
for the quarter from $743,000 for the same period in the prior year primarily
due to a slightly higher interest rate on amounts outstanding under the
Company's revolving line of credit.
On March 4, 1997, the Company announced the signing of a definitive merger
agreement pursuant to which the Company will acquire all of the shares of
Audio King Corporation (NASDAQ: AUDK) for stock and cash. Audio King, a
consumer specialty electronics company, operates 11 retail stores; eight in
Minnesota, two in Iowa and one in South Dakota. The merger is subject to
various conditions, including approval of Audio King shareholders,
registration under the Ultimate Electronics shares to be issued, final
approval by Ultimate Electronics' bank and completion of due diligence by
both parties. The merger is expected to be completed by early summer.
Ultimate Electronics is a leading specialty retailer of home entertainment
and consumer electronics products in Colorado, Idaho, Oklahoma, Nevada, New
Mexico and Utah. The Company currently operates 18 stores, including nine
stores in Colorado under the trade name SoundTrack and nine stores outside
Colorado under the trade name Ultimate Electronics.
This news release contains forward-looking statements, which are subject to
risks and uncertainties, including, but not limited to, the consummation of
the proposed merger, the effects of the proposed merger, the ability of the
Company to combine the two companies profitably, as well as risks regarding
increases in promotional activities of competitors, changes in consumer
buying attitudes, the presence or absence of new products or product features
in the Company's merchandise categories, changes in vendor support for
advertising and promotional programs, changes in the Company's merchandise
sales mix and economic conditions.
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Ultimate Electronics
First Quarter Results
Page 2
May 29, 1997
SELECTED FINANCIAL INFORMATION
(Unaudited)
<TABLE>
<CAPTION>
QUARTER ENDED % OF QUARTER ENDED % OF
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APRIL 30, 1997 SALES APRIL 30, 1996 SALES
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<S> <C> <C> <C> <C>
SALES $55,508,000 $59,615,000
GROSS PROFIT 14,450,000 26.0% 14,901,000 25.0%
SELLING, GENERAL & ADMINISTRATION 14,160,000 25.5% 15,194,000 25.5%
INCOME (LOSS) FROM OPERATIONS 290,000 .5% (293,000) (.5%)
INTEREST EXPENSE 783,000 1.4% 743,000 1.2%
INCOME (LOSS) BEFORE TAXES (493,000) (.9%) (1,036,000) (1.7%)
INCOME TAX EXPENSE (BENEFIT) (182,000) (.3%) (383,000) (.6%)
NET INCOME (LOSS) (311,000) (.6%) (653,000) (1.1%)
EARNINGS (LOSS) PER SHARE $(.04) $(.09)
AVERAGE SHARES OUTSTANDING 6,995,000 6,995,000
</TABLE>
SUMMARY BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
APRIL 30, 1997 JANUARY 31, 1997
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<S> <C> <C>
ASSETS:
CURRENT ASSETS:
CASH $4,138,000 $764,000
ACCOUNTS RECEIVABLE 13,089,000 13,788,000
MERCHANDISE INVENTORIES 39,249,000 41,414,000
OTHER ASSETS 771,000 642,000
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TOTAL CURRENT ASSETS 57,247,000 56,608,000
PROPERTY AND EQUIPMENT, NET 44,560,000 44,632,000
PROPERTY UNDER CAPITAL LEASES 952,000 1,019,000
OTHER ASSETS 996,000 1,051,000
TOTAL ASSETS $103,755,000 $103,310,000
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LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
ACCOUNTS PAYABLE $21,475,000 $21,651,000
OTHER LIABILITIES 5,342,000 7,089,000
TOTAL CURRENT LIABILITIES 26,817,000 28,740,000
NOTE PAYABLE 19,897,000 17,237,000
TERM LOANS 858,000 928,000
BONDS PAYABLE 13,000,000 13,000,000
DEFERRED TAX LIABILITY 860,000 695,000
CAPITAL LEASE OBLIGATIONS 931,000 1,007,000
STOCKHOLDERS' EQUITY 41,392,000 41,703,000
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $103,755,000 $103,310,000
</TABLE>
-End-
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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.
ULTIMATE ELECTRONICS, INC.
Date: June 9, 1997 By: /s/ Alan E. Kessock
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Alan E. Kessock
Vice President of Finance
