<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, 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, 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 6, 1999 was
10,584,143.

<PAGE>

                           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, 1999
         (unaudited) and January 31, 1999 ...........................................  3

         Consolidated Statements of Operations for the three and nine months ended
         October 31, 1999 (unaudited) and October 31, 1998 (unaudited) ..............  4

         Condensed Consolidated Statements of Cash Flows for the nine months ended
         October 31, 1999 (unaudited) and October 31, 1998 (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 ................. 12

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings .......................................................... 12

Item 2.  Changes in Securities ...................................................... 12

Item 3.  Defaults Upon Senior Securities ............................................ 12

Item 4.  Submission of Matters to a Vote of Security Holders ........................ 12

Item 5.  Other Information .......................................................... 12

Item 6.  Exhibits and Reports on Form 8-K ........................................... 13

</TABLE>

                                       2

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                           ULTIMATE ELECTRONICS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                    (amounts in thousands, except share data)

<TABLE>
<CAPTION>
                                                                   October 31,  January 31,
                                                                      1999         1999
                                                                  ------------  -----------
                                                                   (Unaudited)
<S>                                                               <C>           <C>
ASSETS:
Current assets:
   Cash and cash equivalents                                        $ 26,755       $  4,421
   Accounts receivable, net                                           19,013         17,814
   Merchandise inventories                                            59,094         46,908
   Other assets                                                        2,782          1,087
                                                                    --------       --------
      Total current assets                                           107,644         70,230
Property and equipment, net                                           46,340         46,636
Property under capital leases, including related
parties, net                                                           1,506          1,729
Goodwill, net                                                          2,095          2,300
Other assets                                                           1,002          1,009
                                                                    --------       --------
      Total assets                                                  $158,587       $121,904
                                                                    ========       ========

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
   Accounts payable                                                 $ 42,636       $ 29,888
   Other current liabilities                                          16,299         13,602
                                                                    --------       --------
      Total current liabilities                                       58,935         43,490
Revolving line of credit                                                   -         13,188
Bonds payable                                                         13,000         13,000
Term loans                                                                79            330
Capital lease obligations, including related parties                   1,784          1,841
Deferred tax liability                                                 2,370          2,380
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: 10,238,393 and 8,160,796
      at October 31, 1999 and January 31, 1999                           102             81
   Additional paid-in capital                                         64,864         33,912
   Retained earnings                                                  17,453         13,682
                                                                    --------       --------
      Total stockholders' equity                                      82,419         47,675
                                                                    --------       --------
      Total liabilities and stockholders' equity                    $158,587       $121,904
                                                                    ========       ========

</TABLE>

See accompanying notes to Condensed Consolidated Financial Statements.

                                       3
<PAGE>

                           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,
                                                       -------------------------  --------------------------
                                                          1999          1998         1999          1998
                                                       ------------  -----------  ------------  ------------
<S>                                                    <C>           <C>          <C>           <C>
Sales                                                    $  94,481    $  79,441     $ 261,093    $ 221,505
Cost of goods sold                                          65,981       55,038       182,597      156,939
                                                         ---------    ---------     ---------    ---------
Gross profit                                                28,500       24,403        78,496       64,566
Selling, general and administrative expenses                24,710       21,451        70,524       62,824
                                                         ---------    ---------     ---------    ---------
Income from operations                                       3,790        2,952         7,972        1,742
Interest expense, net                                          591          978         1,979        3,176
                                                         ---------    ---------     ---------    ---------
Income (loss) before income taxes                            3,199        1,974         5,993       (1,434)
Income tax expense (benefit)                                 1,185          724         2,222         (531)
                                                         ---------    ---------     ---------    ---------
Net income (loss)                                        $   2,014    $   1,250     $   3,771    $    (903)
                                                         =========    =========     =========    =========


Earnings (loss) per share - Basic                        $    . 24    $    . 15     $    . 46     $   (.11)
Earnings (loss) per share - Diluted                      $    . 22    $    . 15     $    . 42     $   (.11)
Weighted average shares outstanding - Basic                  8,454        8,152         8,277        8,147
Weighted average shares outstanding - Diluted                9,159        8,160         8,962        8,147

</TABLE>

See accompanying notes to Condensed Consolidated Financial Statements.

                                       4
<PAGE>

                            ULTIMATE ELECTRONICS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                              (amounts in thousands)

<TABLE>
<CAPTION>
                                                                 Nine Months Ended
                                                                    October 31,
                                                           -----------------------------
                                                               1999             1998
                                                           -----------      ------------
<S>                                                        <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities                   $  9,319          $  6,201

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment                           (4,348)           (1,068)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net paydown on revolving line of credit                      (13,188)           (2,549)
Principal payments on term loans and capital lease
obligations                                                     (422)             (446)
Proceeds from issuance of stock                               30,744                 -
Proceeds from exercise of stock options                          229                21
                                                            --------          --------
Net cash provided by (used in) financing activities           17,363            (2,974)
                                                            --------          --------
Net increase in cash and cash equivalents                     22,334             2,159

Cash and cash equivalents at beginning of period               4,421             2,006
                                                            --------          --------

Cash and cash equivalents at end of period                  $ 26,755          $  4,165
                                                            ========          ========

</TABLE>

See accompanying notes to Condensed Consolidated Financial Statements.

                                       5
<PAGE>

                           ULTIMATE ELECTRONICS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                OCTOBER 31, 1999

1.   SIGNIFICANT ACCOUNTING POLICIES

     BACKGROUND

     Ultimate Electronics, Inc. is a leading specialty retailer of home
     entertainment and consumer electronics. As of December 3, 1999, the Company
     operates thirty-one stores, including ten stores in Colorado under the
     trade name SoundTrack, thirteen stores in Idaho, Iowa, Nevada, New Mexico,
     Oklahoma, South Dakota and Utah under the trade name Ultimate Electronics
     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 generally accepted
     accounting principles 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
     generally accepted accounting principles for complete financial statements.
     In the opinion of the Company, the statements include all adjustments,
     consisting only of normal recurring adjustments, which 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, 1999 are not necessarily indicative of the
     results that may be expected for the year ending January 31, 2000. Seasonal
     fluctuations in sales of the Company's products result primarily from the
     purchasing patterns of individual consumers during the holiday shopping
     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, 1999 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.

2.   PUBLIC STOCK OFFERING

     On October 22, 1999, the Company completed a public offering (the
     "Offering") for the sale of 2,000,000 shares of its common stock at the
     Offering price of $16.50 per share. The Company received proceeds from the
     Offering of approximately $30.7 million, net of all offering costs. On
     November 9, 1999, the underwriters exercised their overallotment option
     related to the Offering. As a result, the Company issued an additional
     337,500 shares of its common stock at a price of $16.50 per share. The
     Company received proceeds from the sale of these shares of approximately
     $5.3 million, net of all offering costs. The shares issued related to the
     overallotment option brought the total shares issued in the Offering to
     2,337,500 and the total proceeds received by the Company to approximately
     $36.0 million, net of all offering costs.

                                       6
<PAGE>

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 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; the risks associated with Year 2000 Issues
            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, 1999 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 ended October 31, 1999 increased 19% to
           $94.5 million from $79.4 million for the three months ended October
           31, 1998. Sales for the nine months ended October 31, 1999 were
           $261.1 million, an 18% increase from sales of $221.5 million for the
           same period in the prior year. Sales of comparable stores were up 19%
           and 18%, respectively, for the three and nine months ended October
           31, 1999. Sales of new technology products such as DVD, HDTV and
           digital camcorders were the primary drivers of comparable store sales
           growth in the current year. Beginning in November 1998, the Company
           began mailing a 70 to 80 page full color catalog to its customer base
           and prospective customers on a quarterly basis. The catalog, along
           with refinements to the Company's merchandising and sales systems and
           a favorable consumer electronics market, contributed to the increase
           in comparable store sales in the current year.

           Gross profit for the three months ended October 31, 1999 increased
           17% to $28.5 million (30.2% of sales) from $24.4 million (30.7% of
           sales) for the three months ended October 31, 1998. Gross profit for
           the nine months ended October 31, 1999 increased 22% to $78.5 million
           (30.1% of sales) from $64.6 million (29.1% of sales) for the nine
           months ended October 31, 1998. Gross margins for the current year
           third quarter reflect a higher mix of television, DVD and camcorder
           sales compared to the same period in the prior year. For the nine
           months ended October 31, 1999, the improved gross margins were
           primarily the result of increased sales in the Company's higher
           margin core categories including audio and mobile electronics coupled
           with reduced sales of low margin computers. The prior year's margin
           was negatively impacted by $700,000 in increased inventory reserves
           recorded in the first quarter of fiscal 1999 associated with the
           decision to reduce the Company's computer assortment.

           Selling, general and administrative expenses for the three months
           ended October 31, 1999 increased 15% to $24.7 million (26.2% of
           sales) from $21.5 million (27.0% of sales) for the three months ended
           October 31, 1998. Selling, general and administrative expenses for
           the nine months ended October 31, 1999 increased to $70.5 million
           (27.0% of sales) from $62.8 million (28.3% of sales) for the nine
           months

                                       7
<PAGE>

           ended October 31, 1998. The decrease in selling, general and
           administrative expenses as a percentage of sales was primarily due to
           the leveraging of the Company's fixed expenses against the 19% and
           18% comparable store sales increases that the Company achieved in the
           three and nine month periods of the current year as well as the
           continued focus on cost control measures.

           As a result of the foregoing, the Company recorded income from
           operations of $3.8 million (4.0% of sales) for the three months ended
           October 31, 1999, compared to income from operations of $3.0 million
           (3.7% of sales) for the three months ended October 31, 1998. Income
           from operations for the nine months ended October 31, 1999 was $8.0
           million (3.1% of sales) compared to income from operations of $1.7
           million (0.8% of sales) for the nine months ended October 31, 1998.

           Net interest expense decreased to $591,000 and $2.0 million for the
           three and nine months ended October 31, 1999 from $1.0 million and
           $3.2 million for the three and nine months ended October 31, 1998.
           This decrease was due primarily to lower average amounts outstanding
           under the Company's revolving line of credit as well as a reduction
           in the interest rate associated with the change in the line of credit
           from Norwest Bank to Foothill Capital Corporation on September 30,
           1998. The Company used a portion of the proceeds from the Offering to
           pay off $6.8 million then outstanding under its line of credit on
           October 22, 1999.

           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 capital requirements are directly related to expenditures for
           new store openings and the relocation and/or remodeling of existing
           store locations, including 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 31
           stores in nine states.

           Net cash provided by operations was $9.3 million for the nine months
           ended October 31, 1999 compared to $6.2 million for the nine months
           ended October 31, 1998.

           On October 22, 1999, the Company completed a public offering for the
           sale of 2,000,000 shares of its common stock at the Offering price of
           $16.50 per share. The Company received proceeds from the Offering of
           approximately $30.7 million, net of all offering costs. On November
           9, 1999, the underwriters exercised their overallotment option
           related to the Offering. As a result, the Company issued an
           additional 337,500 shares of its common stock at a price of $16.50
           per share. The Company received proceeds from the sale of these
           shares of approximately $5.3 million, net of all offering costs. The
           shares issued related to the overallotment option brought the total
           shares issued in the Offering to 2,337,500 and the total proceeds
           received by the Company to approximately $36.0 million, net of all
           offering costs. A portion of the proceeds from the Offering was
           used by the Company to pay off $6.8 million then outstanding under
           its revolving line of credit. The remaining proceeds have been
           invested by the Company in highly liquid, short-term government
           treasury backed securities.

           In March 1995, the Company issued $13.0 million aggregate principal
           amount of 10.25% First Mortgage Bonds and received net proceeds of
           $12.3 million. The proceeds of the bond offering were used to fund a
           substantial portion of the construction of the Company's warehouse,
           offices, service and store facility in Thornton, Colorado. Interest
           accrues at a rate of 10.25% per year until maturity or earlier
           redemption. The Company is required to redeem $3.25 million aggregate
           principal amount of the bonds (reduced to the extent of the bonds
           previously purchased or redeemed by the Company) on January 31, 2002
           and on January 31 of each of the three years thereafter, at a
           redemption price equal to par plus accrued interest to the date of
           redemption. The bonds are redeemable at par on or after March 31,
           2000 and are secured

                                       8
<PAGE>

           by the Company's Thornton facility. The Company intends to use a
           portion of the proceeds from the Offering to redeem all of the
           outstanding mortgage bonds on or after March 31, 2000.

           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
           Facility, all stores are leased. The Company opened its 31st store,
           a new 36,000 square foot store in Davenport, Iowa on December 3,
           1999. For fiscal 2001, the Company expects to open six to eight
           new stores, primarily in the Phoenix metropolitan area, and eight
           to twelve additional stores in fiscal 2002. At the present time,
           two leases and/or contracts have been signed for next year and the
           Company has entered into letters of intent and is negotiating
           leases for the remaining sites. The Company currently anticipates
           opening some of the Phoenix stores late in the second quarter of
           fiscal 2001 and additional Phoenix stores prior to the holiday
           selling season of fiscal 2001.

           The Company continues to analyze new store opportunities in existing
           markets to replace or expand some of its smaller locations. In
           November 1999, the Company completed construction to expand a
           Minneapolis, Minnesota store from 9,700 to 18,000 square feet. On
           December 2, 1999, the Company relocated and expanded its Sioux Falls,
           South Dakota store from 3,200 to 22,000 square feet. In the second
           quarter of fiscal 2001, the Company plans to relocate 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 also
           expected to be expanded from 16,600 to 22,000 square feet in fiscal
           2001. The Company also expects to relocate and expand its Arvada,
           Colorado store within the next 18 months 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 $3.0
           million. Leasehold improvements, fixtures and equipment are expected
           to average $1.9 million, depending upon tenant allowances. The
           inventory requirement for the Company's new stores is expected to
           average approximately $1.5 million, approximately $750,000 of which
           is 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 of 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.

           On September 30, 1998, the Company executed a three-year $40 million
           credit agreement with Foothill Capital Corporation, a wholly owned
           subsidiary of Norwest Bank. Borrowings under the Company's 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, 1999, the entire $40 million facility was available to
           the Company and no amounts were outstanding. Borrowings bear
           interest, payable monthly, based on a blend of LIBOR plus 2.0% and
           Norwest Bank's prime rate minus 0.375%. Borrowings are secured by
           inventories, accounts receivable, equipment and intangibles. The
           facility includes negative covenants which limit the Company's
           ability to, among other things, 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 transfer assets, consign inventory, prepay or
           retire any debt owed to third parties, make investments or engage in
           transactions with affiliates. The facility also contains covenants
           requiring that the Company maintains specified levels of gross
           margin, inventory and tangible net worth and not exceed specified
           levels of capital expenditures. The Company was in compliance with
           all borrowing covenants at October 31, 1999.

           The Company believes that its cash flow from operations and available
           borrowings under its current credit facility, along with the proceeds
           from the Offering, will be sufficient to fund the Company's

                                       9
<PAGE>

           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 increased borrowing capacity
           under credit facilities, 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 shopping season, any factors negatively impacting the
            holiday selling season could have a material adverse effect on the
            Company's financial condition and results of operations. Operating
            results are dependent upon a number of factors, including
            discretionary consumer spending, which is affected by local,
            regional or 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, but not limited to:

            -    the timing of new or relocated and expanded stores;

            -    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.

           YEAR 2000

           Until recently, most computer programs were written to store only two
           digits of date-related information in order to more efficiently
           handle and sort data. As a result, these programs were unable to
           properly distinguish between dates occurring in the year 1900 and
           dates occurring in the year 2000. This is referred to as the "Year
           2000 Issue". During fiscal 1999, the Company reviewed all
           applications and equipment to evaluate the Company's exposure to the
           Year 2000 Issue. The required modifications to existing systems were
           identified, and plans were developed for upgrades or remediation. The
           Company completed these upgrades and remediation in November 1999.

           The Company's primary information system software is provided by
           Tyler Retail Systems, Inc. ("Tyler") of Clearwater, Florida. This
           software operates the vast majority of the Company's systems and has
           been evaluated by Tyler for Year 2000 compliance. Tyler has stated to
           the Company that the Tyler system is Year 2000 compliant.

           Other items found in the Company's review were few in number and were
           replaced to the extent necessary to ensure Year 2000 compliance. The
           costs of the evaluation, replacements and upgrades were not material
           to the financial condition or operation of the Company.

           The Company is also in communication with third parties with whom it
           does significant business in order to assess their Year 2000
           compliance and minimize the potential for adverse consequences, if
           any, that could result from failure of such entities to address this
           issue. The Company's major vendors have

                                       10
<PAGE>

           communicated to the Company that they will be Year 2000 compliant by
           December 31, 1999. However, the Company cannot assure that its
           vendors products will be Year 2000 compliant. While the Company
           believes that its vendors are responsible for the Year 2000
           functionality of the products they supply for resale, any significant
           disruption to the Company's supply of goods could have a material
           adverse effect on the Company's business, results of operations and
           financial condition. In the event of any Year 2000 failure by
           third-party product suppliers, the Company plans to pursue
           alternative suppliers for Year 2000 compliant products. However, the
           Company anticipates its competitors will be similarly impacted in
           any such event. In the event the Company is not able to operate
           normally after December 31, 1999, the Company has not identified
           a near-term economically feasible alternative for operations
           support. The most likely worst case scenario would be that the
           Company would be required to resort to manual or other processing
           methods. These methods are the standard procedures used during any
           utility, communication or other processing outage. Year 2000 Issues
           present risks that are outside of the control of the Company,
           including, but not limited to, the potential for significant volumes
           of product returns due to widespread product failure, the failure of
           utility companies to provide electricity, the failure of
           telecommunication companies to provide voice and data transfer
           services, the failure of financial services companies to process
           transactions or transfer funds and the failure of third-party vendors
           or suppliers to become Year 2000 compliant.

           The Company can make no assurances that Year 2000 issues will not
           have an adverse effect on the Company's business, financial
           condition, or future operations. The information provided in this
           disclosure constitutes a "Year 2000 Readiness Disclosure" under the
           Year 2000 Information and Readiness Disclosure Act of 1998.


                                       11
<PAGE>

ITEM 3.    QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

           OUTSTANDING DEBT OF THE COMPANY. As of October 31, 1999, the Company
           had outstanding debt of approximately $13.1 million, $13.0 million of
           which bears interest at an annual fixed rate of 10.25%. A
           hypothetical 10.0% decrease in interest rates would not have a
           material impact on the Company. Increases in interest rates could,
           however, increase interest expense associated with future borrowings
           by the Company, if any. For example, the Company frequently effects
           borrowings under its $40.0 million revolving line of credit for
           general corporate purposes, capital expenditures and other purposes
           related to expansion of the Company's capacity. Borrowings under the
           $40.0 million line of credit bear interest based on a blend of LIBOR
           plus 2.0% and Norwest Bank's prime rate minus 0.375%. The Company had
           no outstanding borrowings under this credit facility at October 31,
           1999. 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.

           On September 29, 1999, a Special Meeting of Stockholders of Ultimate
           Electronics, Inc. was held. The matter voted upon and passed at this
           meeting was the amendment of the Company's Amended and Restated
           Certificate of Incorporation to increase the authorized number of
           shares from 20,000,000 to 25,000,000, of which the number of shares
           of common stock, each with a par value of $.01, was increased from
           10,000,000 to 15,000,000 and the number of shares of preferred
           stock, each with a par value of $.01, remained at 10,000,000. The
           results of the voting on this matter is outlined in the following
           table:

<TABLE>
<CAPTION>
                                                 VOTES           VOTES           VOTES
                     PROPOSAL                     FOR           AGAINST        ABSTAINED
       -------------------------------------------------------------------------------------
<S>                                           <C>             <C>             <C>
       Increase the authorized number of       7,221,118        509,735           3,540
       shares from 20,000,000 to
       25,000,000.
</TABLE>

ITEM 5.    OTHER INFORMATION.

           None

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<PAGE>

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:

                   -    Report on Form 8-K dated November, 9, 1999, reporting on
                        Item 5 a Press Release entitled "Ultimate Electronics
                        Reports Exercise of Over-allotment Option."

                   -    Report on Form 8-K dated March 23, 1995, reporting on
                        Item 5 the executed Indenture, dated as of March 23,
                        1995, between Ultimate Electronics, Inc. and Colorado
                        National Bank, filed in place of the Form of Indenture
                        filed with the Commission on March 14, 1995 with
                        Amendment No. 3 to the Ultimate Electronics, Inc.
                        Registration Statement on Form S-1 (33-88740).


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<PAGE>

                                   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 10, 1999                By:   /s/ Alan E. Kessock
     -----------------------              -----------------------
                                          Alan E. Kessock
                                          Senior Vice President, Chief Financial
                                          Officer, Secretary and a Director
                                          (Principal Financial and Accounting
                                          Officer)


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