<PAGE>
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Quarterly Period Ended October 31, 2000
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Transition Period From _______to ________
Commission file number 0-22532
ULTIMATE ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 84-0585211
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
321 WEST 84TH AVENUE, SUITE A, THORNTON, COLORADO 80260
(Address of principal executive offices, zip code)
(303) 412-2500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
The number of outstanding shares of common stock as of December 7, 2000 was
10,920,355.
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ULTIMATE ELECTRONICS, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets as of October 31, 2000 (unaudited) and
January 31, 2000 . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Operations for the three and nine months ended
October 31, 2000 (unaudited) and October 31, 1999 (unaudited) . . . . . 4
Condensed Consolidated Statements of Cash Flows for the nine months ended
October 31, 2000 (unaudited) and October 31, 1999 (unaudited) . . . . . 5
Notes to Condensed Consolidated Financial Statements (unaudited) . . . . 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations . . . . . . . . . . . . . . . . . . 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk . . . . . . 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . 11
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . 11
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . 11
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . 11
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . 11
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . 12
</TABLE>
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ULTIMATE ELECTRONICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share and per share data)
<TABLE>
<CAPTION>
October 31, January 31,
2000 2000
------------ -----------
(Unaudited)
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents $ 4,728 $ 17,311
Accounts receivable, net 24,104 20,420
Merchandise inventories, net 79,305 51,269
Investments available for sale - 12,003
Other assets 3,050 2,331
------------ -----------
Total current assets 111,187 103,334
Property and equipment, net 64,711 52,261
Property under capital leases, including related
parties, net 1,371 1,473
Goodwill, net 1,820 2,026
Other assets 590 935
------------ -----------
Total assets $ 179,679 $ 160,029
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 41,252 $ 27,626
Accrued liabilities 20,353 21,322
Revolving line of credit 13,716 -
Deferred revenue 2,431 3,066
Other current liabilities 178 394
------------ -----------
Total current liabilities 77,930 52,408
Bonds payable - 11,700
Deferred revenue, less current portion 3,362 5,111
Capital lease obligations, including related parties 1,685 1,760
Other long term liabilities 160 178
------------ -----------
Total long term liabilities 5,207 18,749
Commitments
Stockholders' equity:
Preferred stock, par value $.01 per share
Authorized shares - 10,000,000
No shares issued and outstanding - -
Common stock, par value $.01 per share
Authorized shares - 15,000,000
Issued and outstanding shares: 10,817,355 and
10,705,318 at October 31, 2000 and January
31, 2000 108 107
Additional paid-in capital 71,273 70,801
Retained earnings 25,161 17,964
------------ -----------
Total stockholders' equity 96,542 88,872
------------ -----------
Total liabilities and stockholders' equity $ 179,679 $ 160,029
============ ===========
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements.
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ULTIMATE ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
October 31, October 31,
------------------------- --------------------------
2000 1999 2000 1999
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
Sales $ 117,207 $ 91,899 $ 314,191 $ 254,262
Cost of goods sold 79,473 64,004 213,687 177,221
------------ ----------- ------------ ------------
Gross profit 37,734 27,895 100,504 77,041
Selling, general and administrative expenses 32,285 24,444 88,547 69,892
------------ ----------- ------------ ------------
Income from operations 5,449 3,451 11,957 7,149
Interest expense, net 29 591 75 1,979
------------ ----------- ------------ ------------
Income before taxes and extraordinary item 5,420 2,860 11,882 5,170
Income tax expense 2,033 1,058 4,431 1,914
------------ ----------- ------------ ------------
Income before extraordinary item 3,387 1,802 7,451 3,256
Extraordinary loss on early extinguishment of debt,
net of taxes - - 254 -
------------ ----------- ------------ ------------
Net income $ 3,387 $ 1,802 $ 7,197 $ 3,256
============ =========== ============ ============
Earnings per share before extraordinary item - basic $ . 31 $ . 21 $ . 69 $ . 39
Earnings per share before extraordinary item - diluted $ . 30 $ . 20 $ . 65 $ . 36
Earnings per share - basic $ . 31 $ . 21 $ . 67 $ . 39
Earnings per share - diluted $ . 30 $ . 20 $ . 63 $ . 36
Weighted average shares outstanding - basic 10,804 8,454 10,757 8,277
Weighted average shares outstanding - diluted 11,455 9,159 11,390 8,962
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements.
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ULTIMATE ELECTRONICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(amounts in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
October 31,
-------------------------
2000 1999
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash (used in) provided by operating activities $ (8,677) $ 9,319
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investments available for sale 12,003 -
Purchases of property and equipment (18,089) (4,348)
----------- ------------
Net cash used in investing activities (6,086) (4,348)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term bonds payable (11,700) -
Net proceeds (paydown) on revolving credit agreement 13,716 (13,188)
Proceeds from issuance of common stock - 30,744
Principal payments on term loans and capital lease
obligations (309) (422)
Proceeds from exercise of stock options 473 229
----------- ------------
Net cash provided by financing activities 2,180 17,363
----------- ------------
Net (decrease) increase in cash and cash equivalents (12,583) 22,334
Cash and cash equivalents at beginning of period 17,311 4,421
----------- ------------
Cash and cash equivalents at end of period $ 4,728 $ 26,755
=========== ============
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements.
5
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ULTIMATE ELECTRONICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
OCTOBER 31, 2000
1. SIGNIFICANT ACCOUNTING POLICIES
BACKGROUND
Ultimate Electronics, Inc. is a leading specialty retailer of home
entertainment and consumer electronics products. As of December 8, 2000,
the Company operates thirty-six stores, including seventeen stores in
Arizona, Idaho, Iowa, Nevada, New Mexico, Oklahoma, South Dakota and Utah
under the trade name Ultimate Electronics, eleven stores in Colorado under
the trade name SoundTrack and eight stores in Minnesota under the trade
name Audio King.
The Company's unaudited condensed consolidated financial statements have
been prepared by the Company in accordance with accounting principles
generally accepted in the United States for interim financial reporting and
the regulations of the Securities and Exchange Commission for quarterly
reporting. Accordingly, they do not include all information and footnotes
required by accounting principles generally accepted in the United States
for complete financial statements. In the opinion of the Company, the
statements include all adjustments, consisting only of normal recurring
adjustments that are necessary for a fair presentation of the financial
position, results of operations and cash flows for the interim periods.
Operating results for the three and nine month periods ended October 31,
2000 are not necessarily indicative of the results that may be expected for
the year ending January 31, 2001. Seasonal fluctuations in sales of the
Company's products result primarily from the purchasing patterns of
individual consumers during the holiday selling season. These patterns
tend to moderately concentrate sales in the latter half of the year,
particularly in the fourth quarter. For further information, refer to the
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended January 31, 2000 and other filings
with the Securities and Exchange Commission.
PRINCIPLES OF CONSOLIDATION
The unaudited condensed consolidated financial statements include the
accounts of all subsidiaries. All intercompany accounts and transactions
have been eliminated upon consolidation.
BOND REDEMPTION
On March 31, 2000 the Company paid $13,111,000 to redeem, in full, its
outstanding bonds payable. The bonds were redeemable by the Company at par
any time at or after March 31, 2000. The bonds were redeemed at a
redemption price of 100% of the principal amount and all accrued and unpaid
interest as of such date, which totaled $111,000. As a result of the
redemption of the bonds, the Company recognized an extraordinary loss of
$254,000 (net of taxes).
NEW STORE OPENINGS
On July 27, 2000 the Company entered the Phoenix, Arizona metropolitan area
with two new stores. The Company opened two additional new Phoenix area
stores on November 21, 2000 and December 6, 2000. The Company also opened a
new store in Colorado Springs, Colorado on November 8, 2000.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's discussion and analysis of financial condition and
results of operations and the financial statements and accompanying
notes may contain statements that are not historical facts but are
forward-looking statements that involve risks and uncertainties that
could cause future results to vary materially from projected
results. Such statements address activities, events or developments
that the Company expects, believes, projects, intends, estimates,
plans or anticipates will, should, could or may occur, including
reference to future profitability and steps being taken to achieve
that result. Factors that could cause actual results to differ
materially from the Company's projections, forecasts, estimates and
expectations include, but are not limited to: risks related to the
Company's ability to open and operate new stores; the Company's
ability to profitably relocate and/or expand existing stores and the
willingness of vendors to permit product sales over the internet;
significant competition, including new competition from internet
retailers; seasonal fluctuations in the Company's business; changes
in trade regulations and currency fluctuations; risks regarding
increases in promotional activities of competitors; the presence or
absence of new products or product features in the Company's
merchandise categories; changes in the distribution strategy of the
Company's vendors; changes in vendor support for advertising and
promotional programs; changes in the Company's merchandise sales
mix; the results of financing efforts; fluctuations in consumer
demand and preferences and general economic conditions. Please refer
to a discussion of these and other factors in the Company's Annual
Report on Form 10-K for the year ended January 31, 2000 and other
filings with the Securities and Exchange Commission. The Company
disclaims any intent or obligation to update publicly these
forward-looking statements, whether as a result of new information,
future events or otherwise.
RESULTS OF OPERATIONS
Sales for the three months ending October 31, 2000 increased 28% to
$117.2 million from $91.9 million for the three months ending October
31, 1999. Sales for the nine months ending October 31, 2000 were
$314.2 million, a 24% increase from sales of $254.3 million for the
nine months ending October 31, 1999. Sales of comparable stores were
up 12% and 15%, respectively, for the three and nine months ending
October 31, 2000. Sales of new digital technology products such as
HDTV, DVD and digital camcorders continued to be the primary drivers
of the comparable store sales growth.
Gross profit for the three months ending October 31, 2000 increased
35% to $37.7 million (32.2% of sales) from $27.9 million (30.4% of
sales) for the three months ending October 31, 1999. Gross profit for
the nine months ending October 31, 2000 increased 30% to $100.5
million (32.0% of sales) from $77.0 million (30.3% of sales) for the
nine months ending October 31, 1999. The increase in gross profit was
related to the change in the Company's extended warranty program as
well as the strong sales in the digital categories listed above.
Selling, general and administrative expenses for the three months
ending October 31, 2000 were $32.3 million (27.5% of sales) compared
to $24.4 million (26.6% of sales) for the three months ending October
31, 1999. Selling, general and administrative expenses for the nine
months ending October 31, 2000 were $88.5 million (28.2% of sales)
compared to $69.9 (27.5% of sales) for the nine months ending October
31, 1999. The increase in selling, general and administrative
expenses as a percentage of sales was directly related to preopening
costs for five new stores and one relocated store as well as variable
costs associated with the higher margins.
As further discussed in the Company's 10-K for the year ending
January 31, 2000, the Company changed its accounting with respect to
the recognition of revenues from the sale of obligor warranty
contracts as a result of a November 1999 clarification made by the
Securities and Exchange Commission. The Company gave retroactive
effect to this change by restatement of its previously published
financial
7
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statements beginning with fiscal year 1996 (refer to the Company's
report on Form 8-K filed on February 11, 2000 for the impact of the
restatement on prior periods).
The Company recorded income from operations of $5.4 million (4.7% of
sales) for the three months ending October 31, 2000 compared to
income from operations of $3.5 million (3.8% of sales) for the three
months ending October 31, 1999. Income from operations was $12.0
million (3.8% of sales) for the nine months ending October 31, 2000
compared to $7.1 million (2.8% of sales) for the nine months ending
October 31, 1999.
Net interest expense decreased to $29,000 and $75,000 for the three
and nine months ending October 31, 2000 from $591,000 and $2.0
million for the three and nine months ending October 31, 1999. This
decrease was partially due to lower average amounts outstanding under
the Company's revolving line of credit. The Company used a portion of
the proceeds from its secondary stock offering completed in October
1999 (the "1999 Offering") to pay off $6.8 million then outstanding
under its line of credit on October 22, 1999. In addition, on March
31, 2000 the Company redeemed, in full, its 10.25% bonds which
decreased interest expense compared to the prior year. Lastly,
interest expense for the nine months ended October 31, 2000 was
offset by $350,000 of interest income on the Company's investment
portfolio acquired with proceeds from the 1999 Offering. The Company
recorded $34,000 of interest income in the nine months ending October
31, 1999.
Extraordinary loss on early extinguishment of debt of $254,000 (net
of taxes) relates to the repayment, in full, of the Company's 10.25%
bonds on March 31, 2000.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company's primary sources of liquidity for funding
expansion and growth have been net cash from operations, revolving
credit lines, term debt and issuances of common stock. The Company's
primary cash requirements are related to expenditures for new store
openings and the relocation and/or remodeling of existing store
locations. These expenditures include preopening expenses and
additional inventory for new or relocated stores, as well as working
capital to support the Company's inventory requirements and selling,
general and administrative expenses. The Company currently operates a
total of thirty-six stores in ten states.
Net cash used in operating activities was $8.7 million for the nine
months ending October 31, 2000 compared to net cash provided by
operating activities of $9.3 million for the nine months ending
October 31, 1999. The decrease in cash provided by operating
activities was primarily the result of increased merchandise
inventory levels in the current year to support the increased sales
levels.
Net cash used in investing activities was $6.1 million for the nine
months ending October 31, 2000 compared to net cash used in investing
activities of $4.3 million for the nine months ending October 31,
1999. During the first quarter of the current year, the Company
received $12.0 in proceeds from the sale of an investment available
for sale, which matured on March 29, 2000. The Company had capital
expenditures of $18.1 million directly related to new store openings
and the relocation and expansion of an existing store location during
the nine months ended October 31, 2000 compared to capital
expenditures of $4.3 million in the same period of the previous year.
Net cash provided by financing activities was $2.2 million for the
nine months ending October 31, 2000 compared to net cash provided by
financing activities of $17.4 million for the nine months ending
October 31, 1999. Net cash provided by financing activities for the
current year related primarily to net borrowings on the Company's
revolving line of credit which were partially offset by repayment, in
full, of the Company's 10.25% bonds on March 31, 2000. Net cash
provided by financing activities for the
8
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prior year were primarily the result of $30.7 million in proceeds
from the Company's secondary stock offering offset by $13.2 million
in revolving line of credit net paydowns.
The Company intends to expand into select metropolitan areas in the
Rocky Mountain, Midwest and Southwest regions with 30,000 to 36,000
square foot stores. In certain smaller markets, the store size may
be as small as 20,000 square feet. With the exception of the
Thornton, Colorado facility, all current stores are leased. On July
27, 2000 the Company entered the Phoenix, Arizona metropolitan area
with two new stores. The Company opened its third Phoenix area store
on November 21, 2000 and a fourth store on December 6, 2000. The
Company intends to open four additional stores in the Phoenix
metropolitan area over the next twelve months. The Company also
opened its second store in Colorado Springs, Colorado on November
8, 2000. On September 11, 2000 the Company announced its entrance
into the Oklahoma City, Oklahoma market with plans to open two new
stores in the summer of fiscal 2002. On October 31, 2000 the company
announced plans for six new stores in the St. Louis, Missouri area
with three stores expected to open in fiscal 2002.
The Company continues to analyze new store opportunities in existing
markets to replace or expand some of its smaller locations. In May
2000, the Company relocated a 9,300 square foot store located in the
Minneapolis/St. Paul area to a 35,000 square foot store. The
Company's Fort Collins, Colorado store is expected to be expanded
from 16,600 to 22,000 square feet in fiscal 2002. The Company also
intends to relocate and expand its Arvada, Colorado store in fiscal
2002 and will be analyzing opportunities in the Minneapolis/St. Paul
area over the next few years to relocate and/or expand a number of
those locations.
The cost of these future stores is anticipated to average $3.3
million per store. Leasehold improvements, fixtures and equipment
are expected to average $2.2 million, depending on tenant
allowances. The inventory requirement for the Company's new stores
is expected to average approximately $1.5 million, approximately
$750,000 of which will be financed through trade credit. Preopening
expenses for new stores are expected to average $350,000, and
include such items as advertising prior to opening, recruitment and
training of new employees and other costs associated with opening
stores. In the event of relocations of existing stores, preopening
costs are expected to average $150,000 and will be higher if the
Company is forced to terminate existing store leases prior to their
maturity.
The Company's expansion strategy focuses on identification of
attractive metropolitan areas in the Rocky Mountain, Midwest and
Southwest regions based on an evaluation of local market
opportunities, as well as the size, strength and merchandising
philosophy of potential competitors. The Company obtains demographic
analyses of major metropolitan areas to determine new store
locations and potential sales volumes, as well as the optimum number
of stores to open in a specific market. The Company's specific
location strategy focuses on power centers or freestanding locations
near shopping malls. In choosing sites within a market, the Company
applies standard site selection criteria that take into account
numerous factors including local demographics, traffic patterns,
highway visibility and overall retail activity.
On September 30, 1998, the Company executed a three year $40 million
credit agreement, as amended, with Foothill Capital Corporation, a
wholly owned subsidiary of Wells Fargo Bank. Borrowings under this
revolving line of credit are limited to the lesser of $40 million or
80% of eligible inventory and a portion of accounts receivable. As
of October 31, 2000, the entire $40 million facility was available
to the Company, of which $13.7 million was outstanding. Borrowings
bear interest, payable monthly, based on a blend of LIBOR plus 2%
and Wells Fargo Bank's prime rate minus 0.375%. Inventories,
accounts receivable, equipment and intangibles secure the
borrowings. The facility includes negative covenants that limit
the Company's ability to, without the bank's prior approval, and
subject to various exceptions, incur indebtedness, create liens,
enter into mergers and consolidations, pay dividends, repurchase
the Company's capital stock, issue guarantees, sell or engage in
transactions with affiliates.
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The facility also contains covenants regulating the Company's gross
margins, inventory levels, tangible net worth and capital
expenditures. The Company was in compliance with all borrowing
covenants as of October 31, 2000.
On March 23, 1995, the Company completed an offering for the sale of
$13,000,000 aggregate principal amount of bonds payable (the
"Bonds"). On March 31, 2000, the Company paid $13,111,000 to redeem
the Bonds in full. The Bonds were redeemable by the Company at par
any time at or after March 31, 2000. The Bonds were redeemed at a
redemption price of 100% of the principal amount and all accrued and
unpaid interest as of such date, which totaled $111,000. As a result
of the redemption of the Bonds, the Company recognized an
extraordinary loss of $254,000 (net of taxes).
The Company believes that its cash flows from operations and
borrowings under its credit facility will be sufficient to fund the
Company's operations, debt repayment and expansion through fiscal
2001. To fund the capital requirements for its anticipated expansion
plans beyond fiscal 2001, the Company may be required to seek
additional financing, which may take the form of expansion of its
existing credit facility, or possibly additional debt or equity
financings. The Company may also re-mortgage its Thornton facility.
There can be no assurance that the Company will be able to obtain
such funds on favorable terms, if at all.
SEASONALITY
The Company's business is affected by seasonal consumer buying
patterns. As is the case with many other retailers, the Company's
sales and profits have been greatest in the fourth quarter (which
includes the holiday selling season). Due to the importance of the
holiday selling season, any factors negatively impacting the holiday
selling season could have a material adverse impact on the Company's
financial condition and results of operations. Operating results are
dependent on a number of factors, including discretionary consumer
spending, which is affected by local, regional and national economic
conditions affecting disposable consumer income, such as employment,
business conditions, interest rates and taxation. The Company's
quarterly results of operations may fluctuate significantly as a
result of a number of factors, including:
- the timing of new or relocated and expanded store openings;
- expenses related to relocation and expansion;
- unexpected changes in volume related rebates from manufacturers;
- the success of new stores; and
- the impact of new stores on existing stores.
As the Company has opened additional stores or relocated and
expanded stores within markets it already serves, sales at existing
stores have been adversely affected. Such adverse effects may occur
in the future. The Company's quarterly operating results also may be
affected by increases in merchandise costs, price changes in
response to competitive factors, new and increased competition and
product availability.
IMPACT OF INFLATION
The Company believes, because of competition among manufacturers and
the technological changes in the consumer electronics industry,
inflation has not had a significant effect on results of operations
during the last few years.
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ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
The following discusses the Company's exposure to market risks
related to changes in interest rates and other general market risks.
All of the Company's investment and financing decisions are
supervised or managed by its executive committee. This discussion
contains forward-looking statements that are subject to risks and
uncertainties. Actual results could vary materially as a result of a
number of factors, including, but not limited to, changes in
interest rates and other general market risks, and those set forth
IN "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS" appearing elsewhere in this Form 10-Q.
CASH AND CASH EQUIVALENTS. As of October 31, 2000, the Company had
$4.7 million in non-restricted cash and cash equivalents held in
various non-interest bearing accounts. Management considers all
highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents. All cash and cash
equivalents investments are readily convertible to known amounts of
cash, and so near their maturity they present insignificant risk of
changes in value because of changes in interest rates. The Company
does not expect any material loss with respect to its cash and cash
equivalents as a result of interest rate changes, and the estimated
fair value of its cash and cash equivalents approximates original
cost.
OUTSTANDING DEBT OF THE COMPANY. The Company had a $40 million
revolving line of credit on October 31, 2000. Borrowings under the
line of credit bear interest, payable monthly, based on a blend of
LIBOR plus 2% and Wells Fargo Bank's prime rate minus 0.375%.
Borrowings under this credit facility were $13.7 million as of
October 31, 2000. Increases in interest rates could increase
interest expense associated with future borrowings by the Company,
if any. The Company has not hedged against interest rate changes.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
From time to time, the Company is a party to certain legal
proceedings arising in the ordinary course of its business.
Management believes that any resulting liability, individually or in
the aggregate, will either be covered by insurance or will not have a
material adverse effect on the Company's financial condition.
ITEM 2. CHANGES IN SECURITIES.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION.
None
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
Documents filed with this report:
27 Financial Data Schedule
(b) Reports on Form 8-K:
On September 15, 2000 the Company filed a report on Form 8-K
disclosing under Item 5 that the Company's Board of
Director's had approved on August 23, 2000 the amendment and
restatement of its 2000 Equity Incentive Plan and its
Employee Stock Purchase Plan.
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SIGNATURES
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: December 8, 2000 By: /s/ Alan E. Kessock
------------------------ ---------------------------------
Alan E. Kessock
Senior Vice President, Chief Financial
Officer, Secretary and a Director
(Principal Financial and Accounting Officer)
13
