ULTE Ultimate Electronics (MM)

Ultimate Electronics Reports Sales Results for the Two Months Ended December 31, 2003 DENVER, Jan. 8 /PRNewswire-FirstCall/ -- Ultimate Electronics, Inc. today announced its sales results for the two months ended December 31, 2003. Sales for the two months ended December 31, 2003 were $183.1 million, compared to sales of $183.2 million for the same period in the previous year. Comparable store sales were down 11% for the two months ended December 31, 2003. Dave Workman, president and chief executive officer, stated "Comparable store sales were down 10% for the month of November and down 12% for the month of December. Our sales for the holiday season did not meet our expectations despite the growth seen in digital and flat panel television sales. The advertising campaign we conducted during December did not yield the sales results that we anticipated. In addition, while improvement was made with our new management information system, integration issues continued to hamper our efforts to maximize the selling opportunities presented to us during the holidays." Mr. Workman added, "We expect total sales for the fiscal year ending January 31, 2004 to be approximately $710 million. We also anticipate a loss for the year. We are disappointed with our operating results and are in the process of analyzing every aspect of our business to determine ways to improve our operations. We expect to implement changes to our operations during the first quarter of fiscal 2005. We plan to direct our advertising to a more targeted audience and to focus such advertising on communicating the advantages to customers of shopping at Ultimate Electronics. We plan to reduce our capital expenditures to under $20 million for fiscal 2005. We plan to limit new store openings to one or two new stores in existing markets and to relocate and expand one or two of our smaller stores. We expect to discuss these and other changes to our business in greater detail in mid-February." 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 2002 "Top 10 Audio/Video Retailer of the Year." 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: expected total sales, anticipated losses, the implementation of changes in operations, the direction of advertising, the reduction of capital expenditures, the number and locations of new store openings, the number and size of stores relocated or expanded, and the timing of discussions regarding changes to the business. 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; shifts in merchandise mix; activities of competitors; terrorism and acts of war; consumer acceptance of new technologies; risks associated with the operation of our new management information system; risks associated with entering new markets; and other risk factors identified in the company's Annual Report on Form 10-K for the fiscal year ended January 31, 2003, 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. 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/. Contact: Alan E. Kessock, Chief Financial Officer, Ultimate Electronics, Inc., 303-801-4000 DATASOURCE: Ultimate Electronics, Inc. CONTACT: Alan E. Kessock, Chief Financial Officer, Ultimate Electronics, Inc., +1-303-801-4000 Web site: http://www.ultimateelectronics.com/ Company News On-Call: http://www.prnewswire.com/comp/877054.html

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