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Ultimate Electronics Reports Third Quarter Results.

DENVER, Colo.--(BUSINESS WIRE)--Nov. 27, 1996--Ultimate Electronics, Inc. (NASDAQ:ULTE) announced today its operating results for the quarter and the nine months ended Oct. 31, 1996.

The Company reported a net profit for the third quarter ended Oct. 31, 1996 of $190,000, or 3 cents per share on 6,995,000 shares outstanding, compared to pro forma net income of $1,194,000 (pro forma for the change in method for accounting for preopening expenses), or 21 cents per share on 5,584,538 shares outstanding, for the same quarter in the prior year.

Sales for the quarter ended Oct. 31, 1996 were $60,772,000, a 3% decrease from sales of $62,547,000 for the same period in the prior year. Comparable store sales decreased 20% for the quarter. Gross margins on sales for the quarter were 26.8%, down sightly from 27.2% for the same quarter of the prior year.

Selling, general and administrative expenses for the quarter ended Oct. 31, 1996 rose to 24.9% of sales from 22.1% of sales for the same period in the prior year. The increased percentage was attributable to the comparable store sales decrease and the cost of operating 18 stores as compared to 16 stores in the prior year. Interest expense increased to $841,000 for the quarter from $551,000 for the same period in the prior year.

For the nine months ended Oct. 31, 1996, the Company reported a net loss of $283,000, or 4 cents per share on 6,995,000 shares outstanding, compared to pro forma net income of $2,405,000, or 43 cents per share on 5,563,123 shares outstanding, for the same period in the prior year.

Sales for the nine months ended Oct. 31, 1996 were $177,531,000, a 9% increase from sales of $163,340,000 for the same period in the prior year. Comparable store sales decreased 15% for the nine months.

President and Chief Operating Officer Dave Workman commented, "Sluggish sales of consumer electronics products nationally coupled with increased competition in our markets continued to impact sales during the quarter. By aggressively implementing cost control measures during this year and focusing on stabilizing our margins, the Company was able to achieve two profitable quarters after a loss in the first quarter of the year. The Company expects the current retail environment for consumer electronics companies to continue through the balance of the year."

On Nov. 21, 1996, the Company closed on a $35 million secured line of credit with Norwest Bank Colorado, N.A. The line of credit, which will be used for working capital and expansion of the business, matures in two years.

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, 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. -0-

Ultimate Electronics, Inc. 321-A West 84th Ave. Thornton, Colo. 80221 -0-

 Selected Financial Information
 (Unaudited)

 Quarter ended Quarter ended
 Oct. 31, 1996 Oct. 31, 1995(1)

Sales $ 60,772,000 $ 62,547,000
Gross profit 16,304,000 26.8% 17,010,000 27.2%
Selling, general
 & administration 15,126,000 24.9% 13,796,000 22.1%
Preopening expenses 35,000 - 770,000 1.2%
Income from
 operations 1,143,000 1.9% 2,444,000 3.9%
Interest expense 841,000 1.4% 551,000 .9%
Income (loss)
 before taxes 302,000 .5% 1,893,000 3.1%
Income tax
 expense (benefit) 112,000 .2% 699,000 1.1%
Net income (loss) 190,000 .3% 1,194,000 1.9%
Earnings (loss)
 per share $.03 $.21
Average shares
 outstanding 6,995,000 5,584,538


 Selected Financial Information
 (Unaudited)

 Nine months ended Nine months ended
 Oct. 31, 1996 Oct. 31, 1995(1)

Sales $177,531,000 $163,340,000
Gross profit 46,940,000 26.4% 44,700,000 27.4%
Selling, general
 & administration 44,681,000 25.2% 37,876,000 23.2%
Preopening expenses 269,000 .2% 1,686,000 1.0%
Income from
 operations 1,990,000 1.1% 5,138,000 3.1%
Interest expense 2,438,000 1.4% 1,326,000 .8%
Income (loss)
 before taxes (448,000) (.3%) 3,812,000 2.3%
Income tax expense
 (benefit) (165,000) (.1%) 1,407,000 .9%
Net income (loss) (283,000) (.2%) 2,405,000 1.5%
Earnings (loss)
 per share $(.04) $.43
Average shares
 outstanding 6,995,000 5,563,123

(1) The results for the quarter and nine months ended Oct. 31, 1995
have been restated to reflect the Company's change in accounting for
preopening expenses from amortizing the costs over the twelve months
following the opening of a new store location to expensing the costs
as incurred.

 Summary Balance Sheets

 Oct. 31, 1996 Jan. 31, 1996

Assets:

Current assets:

 Cash $ 1,283,000 $ 979,000
 Accounts receivable 14,103,000 16,406,000
 Merchandise inventories 42,868,000 38,053,000
 Prepaids and other assets 767,000 885,000
 Deferred tax asset 270,000 262,000

 Total current assets 59,291,000 56,585,000

Property and equipment, net 44,674,000 41,503,000
Property under capital leases 1,085,000 1,283,000
Other assets 1,083,000 1,095,000
Total assets $106,133,000 $100,466,000

Liabilities and Stockholders'
 Equity:

Current Liabilities:
 Accounts payable $ 22,898,000 $ 16,972,000
 Accrued liabilities 5,219,000 8,014,000
 Deferred revenue 16,000 149,000
 Current portion of
 capital lease obligations
 and term loans 536,000 455,000

 Total current
 liabilities 28,669,000 25,590,000

Note payable 21,000,000 18,000,000
Term loans 995,000 996,000
Bonds payable 13,000,000 13,000,000
Deferred tax liability 752,000 667,000
Capital lease obligations 1,083,000 1,295,000
Stockholders' equity 40,634,000 40,918,000

Total liabilities and
 stockholders' equity $106,133,000 $100,466,000





CONTACT: Ultimate Electronics, Inc.

Alan Kessock, 303/412-2500
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Date:Nov 27, 1996
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