<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 July 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 September 8, 2000 was
10,800,273.

<PAGE>

                           ULTIMATE ELECTRONICS, INC.

                                    FORM 10-Q

                                      INDEX


<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements:                                                       Page No.
<S>                                                                                  <C>
         Condensed Consolidated Balance Sheets as of July 31, 2000 (unaudited)
         and January 31, 2000 ...................................................       3

         Consolidated Statements of Operations for the three and six months ended
         July 31, 2000 (unaudited) and July 31, 1999 (unaudited) ................       4

         Condensed Consolidated Statements of Cash Flows for the six months ended
         July 31, 2000 (unaudited) and July 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 .............      10

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 ......................................................      12

Item 6.  Exhibits and Reports on Form 8-K .......................................      12

</TABLE>



                                       2
<PAGE>

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>
                                                               July 31,        January 31,
                                                                 2000             2000
                                                               --------         --------
                                                              (Unaudited)
<S>                                                           <C>             <C>
ASSETS:
Current assets:
   Cash and cash equivalents                                   $  6,453         $ 17,311
   Accounts receivable, net                                      20,772           20,420
   Merchandise inventories, net                                  61,068           51,269
   Investments available for sale                                    --           12,003
   Other assets                                                   2,106            2,331
                                                               --------         --------
      Total current assets                                       90,399          103,334
Property and equipment, net                                      62,720           52,261
Property under capital leases, including related                  1,405            1,473
parties, net                                                      1,889            2,026
Goodwill, net                                                       533              935
Other assets
                                                               --------         --------
      Total assets                                             $156,946         $160,029
                                                               ========         ========

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
   Accounts payable                                            $ 37,035         $ 27,626
   Accrued liabilities                                           18,280           21,322
   Deferred revenue                                               2,632            3,066
   Other current liabilities                                        261              394
                                                               --------         --------
      Total current liabilities                                  58,208           52,408
Bonds payable                                                        --           11,700
Deferred revenue, less current portion                            3,907            5,111
Capital lease obligations, including related parties .            1,711            1,760
Other long term liabilities                                         160              178
                                                               --------         --------
     Total long term liabilities                                  5,778           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: 10,786,906 and
      10,705,318 at July 31, 2000 and January 31, 2000              108              107
   Additional paid-in capital                                    71,078           70,801
   Retained earnings                                             21,774           17,964
                                                               --------         --------
      Total stockholders' equity                                 92,960           88,872
                                                               --------         --------
      Total liabilities and stockholders' equity               $156,946         $160,029
                                                               ========         ========

</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               Six Months Ended
                                                                       July 31,                         July 31,
                                                               ------------------------         -------------------------
                                                                 2000            1999             2000             1999
                                                               --------         -------         --------         --------
<S>                                                            <C>              <C>             <C>              <C>
Sales                                                          $101,978         $83,965         $196,984         $162,363
Cost of goods sold                                               68,929          58,005          134,214          113,217
                                                               --------         -------         --------         --------
Gross profit                                                     33,049          25,960           62,770           49,146
Selling, general and administrative expenses                     29,441          23,461           56,262           45,448
                                                               --------         -------         --------         --------
Income from operations                                            3,608           2,499            6,508            3,698
Interest expense, net                                                38             707               46            1,388
                                                               --------         -------         --------         --------
Income before taxes and extraordinary item                        3,570           1,792            6,462            2,310
Income tax expense                                                1,314             658            2,398              856
                                                               --------         -------         --------         --------
Income before extraordinary item                                  2,256           1,134            4,064            1,454
Extraordinary loss on early extinguishment
  of debt, net of taxes                                              --              --              254               --
                                                               --------         -------         --------         --------
Net income                                                     $  2,256         $ 1,134         $  3,810         $  1,454
                                                               ========         =======         ========         ========

Earnings per share before extraordinary item - basic           $    .21         $   .14         $    .38         $    .18
Earnings per share before extraordinary item - diluted         $    .20         $   .13         $    .36         $    .16
Earnings per share - basic                                     $    .21         $   .14         $    .35         $    .18
Earnings per share - diluted                                   $    .20         $   .13         $    .34         $    .16
Weighted average shares outstanding - basic                      10,752           8,211           10,734            8,187
Weighted average shares outstanding - diluted                    11,395           8,926           11,370            8,866

</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>
                                                                 Six Months Ended
                                                                      July 31,
                                                             -------------------------
                                                               2000             1999
                                                             --------          -------
<S>                                                          <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities                    $  2,966          $ 4,613

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investments available for sale           12,003               --
Purchases of property and equipment                           (14,109)          (1,609)
                                                             --------          -------
Net cash used in investing activities                          (2,106)          (1,609)

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term bonds payable                 (11,700)              --
Net paydown on revolving credit agreement                          --           (1,210)
Principal payments on term loans and capital lease
obligations                                                      (296)            (314)
Proceeds from exercise of stock options                           278              212
                                                             --------          -------
Net cash used by financing activities                         (11,718)          (1,312)
                                                             --------          -------
Net (decrease) increase in cash and cash equivalents          (10,858)           1,692

Cash and cash equivalents at beginning of period               17,311            4,421
                                                             --------          -------
Cash and cash equivalents at end of period                   $  6,453          $ 6,113
                                                             ========          =======

</TABLE>

     See accompanying notes to Condensed Consolidated Financial Statements.



                                       5
<PAGE>

                           ULTIMATE ELECTRONICS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

                                  JULY 31, 2000


1.   SIGNIFICANT ACCOUNTING POLICIES

     BACKGROUND

     Ultimate Electronics, Inc. is a leading specialty retailer of home
     entertainment and consumer electronics products. The Company operates
     thirty-three stores, including fifteen stores in Arizona, Idaho, Iowa,
     Nevada, New Mexico, Oklahoma, South Dakota and Utah under the trade name
     Ultimate Electronics, ten 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 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 six
     month periods ended July 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 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, 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 28, 2000 the Company entered the Phoenix, Arizona metropolitan area
     with two new stores.


                                       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 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 July 31, 2000 increased 21% to $102.0
     million from $84.0 million for the three months ending July 31, 1999. Sales
     for the six months ending July 31, 2000 were $197.0 million, a 21% increase
     from sales of $162.4 million for the six months ending July 31, 1999. Sales
     of comparable stores were up 15% and 16%, respectively, for the three and
     six months ending July 31, 2000. Sales of new digital technology products
     such as DVD, HDTV and digital camcorders continued to be the primary
     drivers of the comparable store sales growth.

     Gross profit for the three months ending July 31, 2000 increased 27% to
     $33.0 million (32.4% of sales) from $26.0 million (30.9% of sales) for the
     three months ending July 31, 1999. Gross profit for the six months ending
     July 31, 2000 increased 28% to $62.8 million (31.9% of sales) from $49.1
     million (30.3% of sales) for the six months ending July 31, 1999. This
     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
     July 31, 2000 were $29.4 million (28.9% of sales) compared to $23.5 million
     (27.9% of sales) for the three months ending July 31, 1999. Selling,
     general and administrative expenses for the six months ending July 31, 2000
     were $56.3 million (28.6% of sales) compared to $45.4 (28.0% of sales) for
     the six months ending July 31, 1999. The increase in selling, general and
     administrative expenses was primarily related to preopening costs of
     $925,000 (0.5% of sales) for two 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 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
<PAGE>

     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 $3.6 million (3.5% of sales)
     for the three months ending July 31, 2000 compared to income from
     operations of $2.5 million (3.0% of sales) for the three months ended July
     31, 1999. Income from operations was $6.5 million (3.3% of sales) for the
     six months ending July 31, 2000 compared to $3.7 million (2.3% of sales)
     for the six months ending July 31, 1999.

     Net interest expense decreased to $38,000 and $46,000 for the three and six
     months ended July 31, 2000 from $707,000 and $1.4 million for the three and
     six months ended July 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, the Company redeemed, in full, its 10.25% bonds on March 31,
     2000, which decreased interest expense compared to the prior year. Lastly,
     interest expense for the six months ended July 31, 2000 was offset by
     $300,000 of interest income on the Company's investment portfolio acquired
     with proceeds from the 1999 Offering. There was no interest income recorded
     in the six months ending July 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-three stores in ten
     states.

     Net cash provided by operating activities was $3.0 million for the six
     months ended July 31, 2000 compared to net cash provided by operating
     activities of $4.6 million for the six months ended July 31, 1999.
     The decrease in cash provided by operating activities was primarily the
     result of increased merchandise inventory levels in the current year.

     Net cash used in investing activities was $2.1 million for the six months
     ended July 31, 2000 compared to net cash used in investing activities of
     $1.6 million for the six months ended July 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 $14.1 million directly
     related to new store openings and the relocation and expansion of an
     existing store location during the six months ended July 31, 2000 compared
     to capital expenditures of $1.6 million in the same period of the previous
     year.

     Net cash used in financing activities was $11.7 million for the six months
     ended July 31, 2000 compared to net cash used in financing activities of
     $1.3 million for the six months ended July 31, 1999. Cash used in financing
     activities for the six months ended July 31, 2000 related primarily to
     repayment, in full, of the Company's 10.25% bonds on 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

                                       8
<PAGE>

     may be as small as 20,000 square feet. With the exception of the Thornton,
     Colorado facility, all current stores are leased. On July 28, 2000 the
     Company entered the Phoenix, Arizona metropolitan area with two new stores.
     The Company intends to open a total of six additional stores in the Phoenix
     metropolitan area over the next eighteen months. Two of the six Phoenix
     stores are expected to open in the fourth quarter of the current fiscal
     year. The Company also expects to open its second store in Colorado
     Springs, Colorado in the fourth quarter of the current fiscal year. 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. Excluding Phoenix and Oklahoma City, the Company expects to
     open two to six additional stores 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 Norwest 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 July 31, 2000, the entire facility
     was available to the Company and no amounts were outstanding. Borrowings
     bear interest, payable monthly, based on a blend of LIBOR plus 2% and
     Norwest 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. 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 July 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

                                       9
<PAGE>

     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 shopping 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 upon 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.


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,

                                       10
<PAGE>

     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 July 31, 2000, the Company had $6.5
     million in cash and cash equivalents, which was not restricted, and
     consisted of: (i) approximately $0.4 million invested in overnight treasury
     repurchase agreements with an average interest rate of approximately 5.0%;
     and (ii) approximately $6.1 million 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 July 31, 2000. Borrowings under the line of credit bear
     interest, payable monthly, based on a blend of LIBOR plus 2% and Norwest
     Bank's prime rate minus 0.375%. The Company had no outstanding borrowings
     under this credit facility as of July 31, 2000. Increases in interest rates
     could, however, 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.

     The 2000 Annual Meeting of Stockholders of Ultimate Electronics, Inc. was
     held on June 22, 2000 and adjourned to July 17, 2000. At the July 17, 2000
     meeting, William J. Pearse and J. Edward McEntire were elected as Class III
     Directors for three-year terms expiring at the 2003 Annual Meeting of
     Stockholders. David J. Workman, Alan E. Kessock, Robert W. Beale and
     Randall F. Bellows continue in their respective terms as Directors of the
     Company.

     The matters voted upon and passed at the Meeting were the election of the
     above noted directors, the proposal to adopt the 2000 Equity Incentive
     Plan, the proposal to adopt an Employee Stock Purchase Plan and the
     ratification of the appointment of Ernst & Young LLP as the Company's
     independent public accountants for the fiscal year ending January 31, 2001.
     The results of the voting on these matters is outlined in the following
     table.


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<PAGE>

<TABLE>
<CAPTION>
                                       Votes            Votes             Votes
            Proposal                    For            Against          Abstained
--------------------------------------------------------------------------------------
<S>                                 <C>                 <C>             <C>
Election of Directors:
   William J. Pearse                   9,879,141             2,324         503,060
   J. Edward McEntire                  9,879,141             2,324         503,060
Proposal to adopt the 2000
Equity Incentive Plan                  4,940,826         4,415,255           8,515
Proposal to adopt an Employee
Stock Purchase Plan                    6,211,618         3,150,357           2,621
Ratification of Ernst & Young
LLP                                   10,378,347             2,678           3,500

</TABLE>

ITEM 5. OTHER INFORMATION.

     None

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:

          None



                                       12
<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:  September 11, 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