<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
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 401(K) RETIREMENT SAVINGS PLAN
ULTIMATE ELECTRONICS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 84-0585211
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State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
321 West 84th Avenue, Suite A, Thornton, Colorado 80260
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(Address of principal executive offices) (Zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (303) 412-2500
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Not Applicable
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $.01 PAR VALUE PER SHARE
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Title of Class
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the Registrant has duly caused this annual report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Thornton,
State of Colorado, on this 28th day of June, 2000.
Ultimate Electronics 401(k) Retirement Savings Plan
By: /s/ Alan E. Kessock Date: June 28, 2000
------------------------------------------------ ---------------
Alan E. Kessock
Senior Vice President, Chief Financial Officer,
Secretary and a Director (Principal Financial
and Accounting Officer)
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement No.
33-94636 on Form S-8 pertaining to the Ultimate Electronics 401(k) Retirement
Savings Plan of our report dated June 14, 2000, with respect to the financial
statements and schedule of the Ultimate Electronics 401(k) Retirement Savings
Plan included in this Annual Report on Form 11-K for the year ended December 31,
1999.
/s/ Ernst & Young LLP
---------------------------
Denver, Colorado
June 28, 2000
<PAGE>
AUDITED FINANCIAL STATEMENTS
AND SCHEDULE
ULTIMATE ELECTRONICS 401(k)
RETIREMENT SAVINGS PLAN
YEAR ENDED DECEMBER 31, 1999
WITH REPORT OF INDEPENDENT AUDITORS
<PAGE>
ULTIMATE ELECTRONICS 401(k) RETIREMENT SAVINGS PLAN
AUDITED FINANCIAL STATEMENTS
AND SCHEDULE
Year ended December 31, 1999
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors .............................................. 1
Audited Financial Statements
Statements of Net Assets Available for Benefits.............................. 2
Statement of Changes in Net Assets Available for Benefits.................... 3
Notes to Financial Statements................................................ 4
Schedule
Schedule of Assets Held for Investment Purposes at End of Year............... 8
</TABLE>
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Ultimate Electronics, Inc.
as Plan Administrator of the
Ultimate Electronics 401(k) Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of Ultimate Electronics 401(k) Retirement Savings Plan as of December 31, 1999
and 1998, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1999. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment purposes at end of year as of December 31, 1999 is presented
for purposes of additional analysis and is not a required part of the financial
statements but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
Denver, Colorado
June 14, 2000
1
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ULTIMATE ELECTRONICS 401(k) RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1999 1998
----------- -----------
<S> <C> <C>
Cash $ -- $ 106,221
Investments, at fair value:
Mutual funds 12,412,192 10,098,239
Ultimate Electronics, Inc. common stock 3,434,451 1,055,676
Loans to participants 802,339 613,986
----------- -----------
16,648,982 11,767,901
Receivables:
Employer contributions 285,787 147,607
Employee contributions 150,144 200,469
----------- -----------
Total receivables 435,931 348,076
----------- -----------
Net assets available for benefits $17,084,913 $12,222,198
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
2
<PAGE>
ULTIMATE ELECTRONICS 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
Additions:
Investment income:
Net appreciation in fair value of investments $ 3,764,172
Interest and dividends 943,692
-----------
4,707,864
Contributions:
Employer 274,795
Employee 1,603,859
-----------
1,878,654
-----------
Total additions 6,586,518
Deductions:
Benefits paid to participants 1,723,803
-----------
Net increase 4,862,715
Net assets available for benefits:
Beginning of year 12,222,198
-----------
End of year $17,084,913
===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
ULTIMATE ELECTRONICS 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. DESCRIPTION OF THE PLAN
The following description of the Ultimate Electronics 401(k) Retirement Savings
Plan (the "Plan") provides only general information. Participants should refer
to the Plan agreement for a more complete description of the Plan's provisions.
Copies of these documents are available from the Plan administrator.
The Ultimate Electronics 401(k) Retirement Savings Plan is a defined
contribution plan for the benefit of eligible employees of Ultimate Electronics,
Inc. (the "Company" or the "Plan Sponsor"). The Plan, which was adopted
effective January 1, 1988, is available to any employee of the Company who has
completed one year of service and is age twenty-one or older.
Under the provisions of the Plan, participating employees may elect to defer up
to $10,000 (in 1999) or 15% of their eligible compensation, whichever is less,
during the Plan year, and have such deferred amount contributed to the Plan on
their behalf. The participant may direct their investments to a variety of
investment options offered by the Plan. The balance in each participant's salary
deferral account is fully vested at all times and is not subject to forfeiture
for any reason. Participants may not make withdrawals from their elective
accounts prior to retirement at age 59 1/2, except in the event of disability,
death or termination of employment. The Company determines annually the amount
of any profit sharing contribution to be made to the Plan. Amounts contributed
by the Company in 1999 matched 25% of an employee's contribution limited to 1.5%
of the employee's eligible compensation. The employer's contribution is
allocated to each participant's account based upon each participant's eligible
compensation for the year. Vesting in the employer's contributions plus earnings
thereon is based on years of service. A participant is 100 percent vested after
six years of service (vesting 20% per year after the second year of service) or
upon death or disability. When a participant terminates employment with the
Company, nonvested amounts are forfeited and applied against future employer
contributions.
The Company has established a trust fund on behalf of the Plan at US Bank (the
"Trustee") effective July 1998 to which contributions are made, from which
benefit disbursements are paid, and in which investments are maintained.
Expenses of administering the Plan are paid by the Plan Sponsor. For the year
ended December 31, 1999, administrative expenses were approximately $15,000.
4
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1. DESCRIPTION OF THE PLAN (CONTINUED)
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of plan termination, the
net assets of the Plan are to be distributed to participants based upon the
redemption value of their individual accounts as of the termination date. All
plan participants become fully vested in the employer's contributions upon plan
termination.
2. SIGNIFICANT ACCOUNTING POLICIES
The Plan's accounting records are maintained on an accrual basis.
The fair value of equity and fixed income securities is based on quoted
redemption values on the last business day of the year. The fair value of loans
to participants approximates carrying value.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Certain amounts in the 1998 financial statements have been reclassified to
conform with the 1999 financial statement presentation.
3. INCOME TAX STATUS
The Plan Sponsor has received a determination letter from the Internal Revenue
Service dated December 27, 1995, stating that the Plan is qualified, in form,
under Section 401(a) of the Internal Revenue Code (the "Code"), and therefore,
the related trust is exempt from taxation. Once qualified, the Plan is required
to operate in conformity with the Code to maintain its qualification. The Plan
administrator believes the Plan is being operated in compliance with the
applicable requirements of the Code and therefore, believes that the Plan is
qualified and the related trust is tax exempt.
5
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4. INVESTMENTS
The fair values of individual investments that represent 5% or more of the
Plan's net assets at December 31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Mutual funds:
First American Balanced Fund $1,160,360 $1,282,133
Fidelity Equity Income Fund 2,956,708 3,043,241
Fidelity Equity Growth Fund 6,078,137 4,639,192
Janus Fund 724,055 *
First American Stable Value Fund 958,266 685,941
Common stock:
Ultimate Electronics, Inc. Common Stock 3,434,451 1,055,676
</TABLE>
* The Janus Fund was a new investment option added to the Plan during 1999.
During 1999, the Plan's investments (including investments purchased, sold as
well as held during the year) appreciated in fair value as determined by quoted
market prices as follows:
<TABLE>
<CAPTION>
NET REALIZED AND
UNREALIZED APPRECIATION
(DEPRECIATION) IN FAIR
VALUE OF INVESTMENTS
-----------------------
<S> <C>
Mutual funds $1,351,329
Ultimate Electronics, Inc. common stock 2,412,843
----------
$3,764,172
==========
</TABLE>
6
<PAGE>
5. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
DECEMBER 31
1999 1998
----------- ------------
<S> <C> <C>
Net assets available for benefits per the
financial statements $17,084,913 $ 12,222,198
Amounts allocated to withdrawn
participants -- (121,050)
----------- ------------
Net assets available for benefits per the
Form 5500 $17,084,913 $ 12,101,148
=========== ============
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1999
-----------
<S> <C>
Benefits paid to participants per the
financial statements $ 1,723,803
Less amounts allocated to withdrawn participants at
beginning of plan year (121,050)
-----------
Benefits paid to participants per the Form 5500 $ 1,602,753
===========
</TABLE>
7
<PAGE>
ULTIMATE ELECTRONICS 401(k) RETIREMENT SAVINGS PLAN
EMPLOYER ID# 84-0585211, PLAN 002
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT
PURPOSES AT END OF YEAR
DECEMBER 31, 1999
<TABLE>
<CAPTION>
CURRENT
IDENTITY OF ISSUER/DESCRIPTION SHARES COST VALUE
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
First American Stable Value Fund 44,711 $ 929,566 $ 958,266
First American Balanced Fund 93,577 1,278,006 1,160,360
First American Fixed Income Fund 34,920 384,684 364,219
First American Equity Index Fund 5,991 161,890 170,447
Fidelity Equity Income Fund 113,371 3,153,606 2,956,708
Fidelity Equity Growth Fund 84,924 5,369,436 6,078,137
Janus Fund 16,437 682,367 724,055
Ultimate Electronics, Inc. Common Stock** 133,855 1,498,564 3,434,451
Loans to Participants** -- 802,339
-----------
$16,648,982
===========
</TABLE>
** Denotes investment with a party-in-interest to the Plan.
8
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SCHEDULE
9
