<PAGE>

                          SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C.  20549

                                     -----------

                                      FORM 10-K

                          FOR ANNUAL AND TRANSITION REPORTS
                       PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934

(MARK ONE)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 1998

                                          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.)

 321A WEST 84TH AVENUE, THORNTON, COLORADO                    80221
-------------------------------------------      -------------------------------
 (Address of principal executive offices)                   (Zip code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE    (303) 412-2500
                                                    ----------------------------

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                    Not Applicable

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                        COMMON STOCK, $.01 PAR VALUE PER SHARE
--------------------------------------------------------------------------------
                                    Title of Class

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
                                       -----        -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

The aggregate market value of the voting and non-voting stock held by
non-affiliates of the Registrant as of April 30, 1998 was approximately
$19,344,819.  The number of outstanding shares of Common Stock as of April 30,
1998 was 8,139,548.

DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Annual Report to Stockholders for the fiscal year ended January
31, 1998 are incorporated by reference into Parts II, III and IV of this report.
Portions of the Registrant's definitive Proxy Statement for the 1998 Annual
Meeting of Stockholders to be held June 17, 1998 are incorporated by reference
into Part III of this report.

<PAGE>

                                        PART I

ITEM 1.   BUSINESS

Ultimate Electronics, Inc. (the "Company") is a leading specialty retailer of
home entertainment and consumer electronics in Colorado, Idaho, Iowa, Minnesota,
Nevada, New Mexico, Oklahoma, South Dakota and Utah.  The Company operates
thirty stores, including ten stores in Colorado under the trade name SoundTrack,
eleven stores in Idaho, Iowa, Nevada, New Mexico, Oklahoma, and Utah under the
trade name Ultimate Electronics and nine store in Minnesota and South Dakota
under the trade name Audio King.  On June 27, 1997, the Company completed a
merger in which the Company acquired all of the outstanding shares of Audio King
Corporation ("Audio King").  Audio King, a consumer specialty electronics
company, operated 11 retail stores, eight in Minnesota, two in Iowa and one in
South Dakota.  The results of operations since the acquisition date are included
in the consolidated financial statements.  In addition to the Audio King
acquisition, the Company since 1993 has opened ten new 31,000 to 52,000 square
foot stores and relocated and expanded five of its existing Colorado stores to
this larger format.  The remaining 15 stores range in size from 3,200 to 28,000
square feet and include four stores in Colorado, two stores in Iowa, eight
stores in Minnesota and one store in South Dakota.  In November 1997, the
Company completed the remodel of two Audio King stores and grand opened the
stores under the name Ultimate Electronics and also completed changes to four of
the Minneapolis Audio King stores to allow for increased selection in those
stores in the key area of larger format television as well as other product
categories.

The Company strives to appeal to a wide range of customers with an emphasis on
selling mid to upscale products.  The Company believes its stores enable it to
differentiate itself from its competitors by providing a comprehensive selection
of name brand consumer electronics, with an emphasis on limited distribution
upscale brands, as well as by offering an extensive range of customer services
and by displaying multiple home theater and audio demonstration rooms.  The
Company believes that these factors, together with its open and uncrowded
merchandise displays and its policy of matching the lowest prices of its
competitors, make it an attractive alternative to appliance/electronics
superstores and mass merchants selling consumer electronics.

For the year ended January 31, 1998, sales were $306.3 million, a 17% increase
from sales of $261.2 million for the prior year.  The increase in sales during
fiscal 1998 was due primarily to the acquisition of Audio King.  Comparable
store sales decreased 6% for the year ended January 31, 1998 compared to a
decrease of 16% in comparable store sales for the year ended January 31, 1997.
The Company believes the decrease in comparable store sales over the past two
years was due primarily to a sluggish retail environment for consumer
electronics products and increased competition in the Company's markets.

BUSINESS STRATEGY

The Company's strategy is to position itself as the upscale, full service
consumer electronics alternative to its competitors and to satisfy consumer
demand for increasingly sophisticated consumer electronics products,
particularly in the core categories of audio and video.  Key elements of its
business strategy include:

EXTENSIVE PRODUCT SELECTION.  The Company is committed to offering an extensive
selection of high quality, brand name home entertainment and consumer
electronics products.  The Company offers over 6,000 stock keeping units
("SKU's") representing approximately 200 brand names, a significant portion of
which are limited distribution brands that are only available through selected
retailers.  As a result, the Company carries a larger selection of
full-featured, high quality products than is generally available at the
Company's competitors.  Each product category includes a wide range of price
points.

EXCELLENT CUSTOMER SERVICE. Since inception, the Company has been committed to
providing excellent customer service through well-trained sales consultants and
an extensive range of customer services.  The Company provides its new sales
consultants with more than two weeks of intensive classroom training and
continues with on-the-job instruction in product and vendor knowledge, sales
techniques and customer service.  The Company has regional service centers in
Albuquerque, Boise, Denver, Des Moines, Las Vegas, Minneapolis, Salt Lake City
and Tulsa enabling it to provide fast and efficient service. The Company also
provides a 30-day money-back satisfaction


                                          1
<PAGE>

guarantee, an in-stock guarantee on advertised items, home delivery and setup,
home theater and audio installation and design, home satellite installation,
mobile electronics installation and extended service contracts.

ADVERTISING AND MARKETING.  The Company's advertising strategy stresses
nationally recognized brands at competitive prices primarily through newspaper,
radio and direct mail media.  The Company is a significant newspaper advertiser
in the markets it serves, producing all of its print advertising through its
in-house advertising department.  The Company also employs an outside
advertising agency that produces and places the Company's radio commercials.
The Company's marketing programs are designed to create an awareness of the
Company's comprehensive selection of high quality, brand name merchandise, as
well as its competitive pricing.  The Company typically advertises a broader
selection of audio and video products than its competitors and presents a blend
of aggressive promotional starting price points on competing products with
higher price points on more fully featured products.  The Company has spent
substantial funds on advertising and marketing in various forms of media to
establish name recognition for its new stores.

UPSCALE STORE FORMAT.  The Company has developed a store format to emphasize and
merchandise mid to upscale products.  Each store has displays designed to
provide the customer with a full spectrum of the Company's products upon
entering a store.  These displays allow customers to make extensive side-by-side
product comparisons.  The Company's new and recently relocated stores have
substantially larger selling space, providing customers with an uncluttered
presentation of the latest technology and featuring multiple demonstration rooms
dedicated to home theater and mobile electronics products.

COMPETITIVE PRICING.  The Company emphasizes competitive product pricing and
reinforces this strategy with extensive advertising and a "60-day price
guarantee."  The Company monitors pricing at competing stores on a weekly basis
through pricing surveys and adjusts its prices by market as necessary.  The
Company believes that competitive pricing enables it to attract new customers as
well as to maintain customer loyalty.

EXPANSION STRATEGY

The Company intends to continue its expansion into select metropolitan areas in
the Rocky Mountain, Midwest and Southwest regions with its larger format stores.
Currently, the Company does not anticipate adding any new stores during fiscal
1999.  The Company expects to relocate or consolidate and expand two to five of
its locations within the next three years along with the possibility of adding
new stores.

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 free-standing locations near shopping malls.  In choosing
sites within a market, the Company applies standard site selection criteria
which take into account numerous factors including local demographics, traffic
patterns, highway visibility and overall retail activity.

Capital expenditures for new stores and to relocate and expand existing stores
in the future are expected to average approximately $2.0 million per store,
excluding preopening costs ranging from $100,000 to $300,000.  Preopening costs
include such items as advertising prior to opening, recruitment and training of
new employees, and any costs of early termination of store leases.  The Company
expenses preopening costs as incurred prior to the relocation or opening of a
new store.  The initial inventory requirement for the Company's larger format
stores averages approximately $2.0 million per store, approximately $1.0 million
of which is financed through trade credit.

MERCHANDISING

PRODUCTS.  The Company offers its customers a comprehensive selection of high
quality, brand name television, video, home audio, mobile electronics and home
office products.  This selection consists of over 6,000 SKU's,


                                          2
<PAGE>

representing approximately 200 brand names.  The Company offers customers a wide
range of price points within each product category, with the greatest depth in
middle to higher priced items.  Within its product categories, the Company
carries and actively promotes new models as they become available.  The Company
does not carry home appliances or software.

The following table, which is derived from the Company's internal sales records,
indicates the percentage of sales in each major product group for the Company's
last three fiscal years.  The percentages include installation and other
services in these categories.  Historical percentages may not be indicative of
the Company's future product mix.

<TABLE>
<CAPTION>
                                         FISCAL YEAR ENDED JANUARY 31,
                                     -------------------------------------
                                        1998         1997          1996
                                     ----------   -----------   ----------
             PRODUCT CATEGORY
             <S>                     <C>          <C>           <C>
             Television/Satellite        28%          29%           27%
             Audio                       23%          22%           23%
             Home Office                 12%          16%           16%
             Video                       14%          13%           15%
             Mobile                      14%          12%           11%
             Other                        9%           8%            8%
</TABLE>

PRICING.  The Company emphasizes competitive pricing on high visibility items
and reinforces this strategy with extensive advertising.  The Company monitors
pricing at competing stores on a weekly basis through pricing surveys and
adjusts its prices by market as necessary.  The Company's commitment to offer
competitive prices is supported by its "60-day price guarantee", under which the
Company refunds 110% of the difference between the original purchase price and
any locally available lower price for the same item under the same purchase
conditions.  Sales and other special events, which the Company conducts from
time to time, may have lower than normal prices on selected products and product
categories.

PURCHASING.  Substantially all of the Company's products are purchased directly
from manufacturers.  Each of the Company's buyers has responsibility for
specified product categories.  Buyers are assisted by a management information
system which provides them with current inventory quantity, price and sales
information by SKU, thus allowing them to react quickly to market changes.  The
Company works closely with its manufacturers and forecasts purchases on a
non-binding basis up to one year in advance.

The Company is a member of a volume buying group, Progressive Retailers'
Organization, consisting of other companies similar to the Company with respect
to the type of merchandise sold.  Membership in this organization has enabled
the Company to obtain volume rebates, special buys and access to close-out and
final production items.  As a result, the Company believes it is able to obtain
competitive pricing and terms.

During the fiscal year ended January 31, 1998, the Company's ten largest
suppliers accounted for approximately 67% of the merchandise purchased by the
Company.  Two of the Company's suppliers, Sony and Mitsubishi, each accounted
for more than 10% of its merchandise mix.  The master agreements under which the
Company operates with each of its suppliers are normally terminable upon 30 to
60 days notice by either party.  The Company does not have commitments of longer
than one year with the majority of its product suppliers, as is customary in the
industry.


STORE OPERATIONS

STORES.  The Company's 15 larger format stores each occupy 31,000 to 52,000
square feet, with 16,700 to 30,400 square feet of selling space.  The Company
has developed this store format to emphasize and merchandise mid to upscale
products. Each store has displays designed to provide the customer with a full
spectrum of the Company's products upon entering a store.  These stores have
additional home audio and car stereo demonstration rooms, additional home
theater rooms, expanded portable electronics displays and expanded computer and
home office


                                          3
<PAGE>

displays as compared to the smaller store format.  In addition, the new stores
offer home installation, home satellite installation, a home planning center,
home theater furniture, and an expanded area for large-screen televisions.  The
remaining space is dedicated to a designated play area for children, a car
installation facility, a service facility, a store warehouse and general office
space.

The Company's 13 smaller format stores range in size from 9,300 to 28,200 square
feet (5,600 to 17,900 square feet of selling space).  The selling space in the
stores typically contains two audio and two car stereo demonstration rooms, one
home entertainment theater and an automobile equipped with the latest in car
audio and car security products.  The Company also operates two mall based
stores that are each 3,200 square feet (both stores have off-site install and
storage).

DISTRIBUTION.  The Company currently distributes products to all of its stores
from a 175,000 square foot warehouse located in Thornton, Colorado, a suburb of
Denver.  All of the Company's stores in Colorado are located within
approximately 60 miles of this warehouse.  For stores over 100 miles away from
Denver, the Company uses contract carriers for distribution from its warehouse.

MANAGEMENT INFORMATION SYSTEMS.  The Company's management information system,
using proven third party software, was installed in August 1990.  During the
fall of 1994, the Company increased its system capabilities significantly with
the installation of Unix-based Hewlett Packard computer hardware.  The Company
believes that this system will support  its anticipated growth.  This on-line
system connects all of the Company's facilities through digital phone lines
which allows sales consultants to determine the location of all of the Company's
inventory at any time.  Pricing can be changed immediately in each geographical
market by the Company's buyers and store management to react to competitor
pricing.  New signage can be generated on a daily basis.  Immediately following
the merger with Audio King, all of Audio Kings' store systems and inventory were
integrated into the Company's management information system.

CUSTOMER SERVICE

Since its inception, the Company has been committed to providing excellent
customer service through well-trained sales consultants and a broad range of
customer services.

SALES CONSULTANTS.  The Company provides its sales consultants with a minimum of
two weeks of intensive classroom training which begins with an orientation from
the Company's executive officers and continues with instruction in areas such as
technical knowledge by product category and vendor, policies and procedures of
the Company and various other sales techniques.  On an ongoing basis, sales
consultants attend in-house training sessions conducted by dedicated in-house
trainers and manufacturers' representatives and also receive sales, product and
other information in daily store meetings.  Certain sales consultants specialize
in particular product categories to provide customers with greater technical
assistance.

The Company's sales consultants are compensated pursuant to a flexible incentive
pay plan with commissions determined on the basis of sales and gross margins.
The Company also motivates its sales consultants by providing opportunities for
advancement within the Company.  All of the Company's store management has been
promoted from within the Company.

SERVICES.  The Company supports its product sales by providing many important
customer services, including  home delivery and setup, home theater and audio
installation and design, home satellite installation, mobile electronics
installation, extended service contracts and regional service centers that offer
in-home and carry-in repair services.  The Company also provides in-store
product instruction and will provide follow-up instruction at a customer's home
upon request.

Virtually all merchandise purchased from the Company may be taken to any of the
Company's stores for repair, whether or not the product is under the
manufacturer's warranty or an extended service contract.  In order to provide
maximum service to its customers, the Company has regional service centers in
Albuquerque, Boise, Denver, Des Moines, Las Vegas, Minneapolis, Salt Lake City
and Tulsa.  Two of the Company's service facilities, located at its


                                          4
<PAGE>

distribution centers in Thornton and Minneapolis, provide backup for the
Company's other regional service centers.  The Company employs over 150
full-time employees in connection with its service business.  Each service
department is staffed with product specialists capable of making complex
repairs.  In addition, the Company operates a fleet of approximately 60 customer
service vehicles to provide in-home repair and delivery, installation and setup
of home satellites, home theater components and televisions.

The Company offers extended service contracts to its customers for most
categories of its products.  The extended service contracts cover services or
time periods not covered by the manufacturer's warranty on such products and are
non-cancellable.  These contracts are administered for the Company by an
unaffiliated third party (the "Warrantor") which pays for the repair service.
The Warrantor is required by its agreement with the Company to maintain
insurance to protect the Company in the event that the Warrantor fails to
fulfill its obligations under the extended service contracts and the Company is
a named loss-payee under the agreement.  The Company sells the extended service
contracts to the Warrantor on a non-recourse basis.  Gross margins from the sale
of extended service contracts are higher than the average gross margins of the
Company's other products.

The Company has a private label credit card which is financed, operated and
serviced by a third party (the "Finance Company"). The Company entered into an
agreement with the Finance Company which provides that the Finance Company will
retain all credit risk associated with the private label credit card.  In
addition, certain manufacturers sponsor their own private label credit cards.
These arrangements permit the Company to provide its customers with financing
promotions, including interest-free and deferred payments, without using its
working capital.  During fiscal 1998, approximately 29% of the Company's sales
were purchased through these private label and manufacturer sponsored credit
cards.

COMPETITION

The Company operates in a highly competitive and price sensitive industry.  The
Company faces competition from mass merchants, department stores, specialty
stores, appliance/electronics stores and smaller independent merchants.  The
Company considers its primary competitors to include consumer electronics
retailers such as Best Buy and Circuit City as well as mass merchants such as
Sears and Montgomery Ward.  The Company's primary competitors have greater
financial and other resources than the Company.  Many of these competitors have
recently entered the Company's markets and continue to add stores.  For fiscal
1998, the Company's operating results were adversely affected by such increased
competition and there can be no assurance that the Company's operating results
will not be adversely affected in fiscal 1999 and beyond by such increased
competition.  In addition, if such competitors seek to gain or retain market
share by reducing prices, the Company may be required to reduce its prices,
thereby reducing gross margins and profits.  In addition, as the Company expands
into markets where the Company's name may not be recognized, its success will
depend in part on its ability to compete with established and any future
competitors in such markets.

EMPLOYEES

As of January 31, 1998, the Company employed approximately 1,600 persons,
approximately 1,410 of whom were store, customer delivery or service employees
and approximately 190 of whom were main warehouse or corporate personnel.  The
Company considers its employee relations to be good.  Most employees, other than
corporate and store support personnel, are paid pursuant to a flexible pay plan.
The Company believes that it provides working conditions and wages that compare
favorably with those of other companies within the industry.  The Company's
employees do not have a collective bargaining agreement.

SERVICE MARKS

Ultimate Electronics-Registered Trademark-, Audio King-Registered Trademark- 
and Fast Trak-Registered Trademark- are registered service marks and 
SoundTrack-SM- is a service mark of the Company.


                                          5
<PAGE>

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995

Statements which are not historical facts contained in this report are forward
looking statements that involve risks and uncertainties that could cause actual
results to differ from projected results.  Factors that could cause actual
results to differ materially include, among others, the merger with Audio King,
risks regarding 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, general economic conditions, fluctuations in consumer demand, the results
of financing efforts and other risk factors detailed in the Company's Securities
and Exchange Commission filings.

As provided for under the Private Securities Litigation Reform Act of 1995, the
Company wishes to caution investors that the following important factors, among
others, in some cases have affected and in the future could affect the Company's
actual results of operations and cause such results to differ materially from
those anticipated in forward-looking statements made in this document and
elsewhere by or on behalf of the Company:

     a)   Competition.  The Company encounters intense competition in all
product categories and competes with national and other companies.  Most of the
companies with which the Company competes have greater capital and other
resources.

     b)   Dependence on Key Suppliers.  The Company is dependent on certain
suppliers for delivery of products that contribute significantly to the
Company's sales.  While the Company believes that alternative suppliers are
available, the loss of a key supplier could have an adverse effect on the
Company's business.

     c)   Industry Factors.  The presence or lack of new products or product
features as well as the expectation of new products in the product categories
that the Company sells has an impact on the Company's business, as well as the
product mix of actual merchandise sold.

     d)   Economic and Market Conditions.  The Company's business is affected by
changes in general economic conditions such as consumer attitudes towards the
economy in general, consumer credit availability, interest rates and inflation.

     e)   Litigation.  Adverse results in significant litigation matters would
affect the Company's earnings to the extent that insurance is not present or
available.


                                          6
<PAGE>

ITEM 2.   PROPERTIES

As of January 31, 1998, the Company operates ten stores in Colorado, eight
stores in Minnesota, four stores in Utah, two stores in Las Vegas, Nevada, two
stores in Iowa, and one store each in Albuquerque, New Mexico, Boise, Idaho,
Tulsa, Oklahoma and Sioux Falls, South Dakota.  Each store, other than the store
located in Thornton, Colorado, is leased.  The following table sets forth data
regarding the Company's store locations.

<TABLE>
<CAPTION>
                                                    YEAR               APPROXIMATE           APPROXIMATE               LEASE
                                                 ORIGINALLY               TOTAL            RETAIL SELLING           EXPIRATION
                CURRENT STORE LOCATIONS            OPENED              SQUARE FEET          SQUARE FEET               DATE (1)
             ---------------------------------------------------------------------------------------------------------------------
             <C>                                 <C>                   <C>                 <C>                      <C>
             COLORADO:

             6490 Wadsworth Blvd.
             Arvada, CO (2)                         1968                 14,500                 9,500                  2006

             1955 28th Street
             Boulder, CO                            1985                 34,700                20,300                  2047

             1230 N. Academy Blvd.
             Colorado Springs, CO                   1989                 14,900                 9,800                  1999

             1370 S. Colorado Blvd.
             Denver, CO                             1976                 31,600                16,700                  2004

             9657 E. County Line Rd.
             Englewood, CO                          1983                 41,300                23,000                  2004

             4606 S. Mason St.
             Fort Collins, CO                       1990                 16,600                 8,400                  2005

             14391 W. Colfax Ave.
             Lakewood, CO                           1997                 40,400                23,000                  2005

             8262 S. University Blvd.
             Littleton, CO                          1986                 16,600                 9,900                  2007

             8196 W. Bowles Ave.
             Littleton, CO                          1984                 39,100                22,600                  2027

             321 W. 84th Ave.
             Thornton, CO                           1985                 40,300                25,900                   N/A

             IDAHO:

             1085 N. Milwaukee Ave.
             Boise, ID                              1995                 37,100 (2)            19,500                  2025

             IOWA:

             4701 1st Ave. Southeast
             Cedar Rapids, IA                       1995                 15,400                10,300                  2015

             4100 Merle Hay Rd.
             Des Moines, IA                         1994                 20,700 (2)            12,200                  2009

             MINNESOTA:

             5939 John Martin Dr.
             Brooklyn Center, MN                    1980                 15,000                 9,200                  2008

             14232 Burnhaven Dr.
             Burnsville, MN                         1979                  9,700                 6,600                  2007

             1868 Beam Ave.
             Maplewood, MN                          1989                  9,300                 5,600                  1999

             12350 Wayzata Blvd.
             Minnetonka, MN                         1977                 15,000                 9,100                  2008

             103 Apache Mall
             Rochester, MN                          1986                  3,200                 2,700                  1998

             1723 W. County Rd. B-2
             Roseville, MN                          1977                 17,400                11,300                  2015

             7435 France Ave. South
             Edina, MN                              1974                 28,200                17,900                  2015

             2716 Division St.
             St. Cloud, MN                          1987                 10,000                 7,100                  2001

                CONTINUED ON PAGE 8


                                        7
<PAGE>

<CAPTION>

                                                    YEAR               APPROXIMATE           APPROXIMATE               LEASE
                                                 ORIGINALLY               TOTAL            RETAIL SELLING           EXPIRATION
                CURRENT STORE LOCATIONS            OPENED              SQUARE FEET          SQUARE FEET               DATE (1)
             ---------------------------------------------------------------------------------------------------------------------
             <C>                                 <C>                   <C>                 <C>                      <C>
             NEVADA:

             2555 E. Tropicana Ave.
             Las Vegas, NV                          1995                 37,300 (2)            17,900                  2025

             741 S. Rainbow Blvd.
             Las Vegas, NV                          1994                 31,500                17,600                  2014

             NEW MEXICO:

             3821 Menaul Blvd., N.E.
             Albuquerque, NM                        1994                 37,100 (2)            17,700                  2014

             OKLAHOMA:

             10021 E. 71st St.
             Tulsa, OK                              1995                 51,700 (2)            30,400                  2025

             SOUTH DAKOTA:

             701 Empire Mall
             Sioux Falls, SD                        1986                  3,200                 2,400                  1999

             UTAH:

             879 W. Hill Field Rd.
             Layton, UT                             1995                 33,800                18,600                  2025

             6284 S. State St.
             Murray, UT                             1994                 32,200                18,000                  2024

             1375 S. State St.
             Orem, UT                               1993                 32,900                17,100                  2010

             1130 E. Brickyard Rd.
             Salt Lake City, UT                     1993                 33,400                18,200                  2013
</TABLE>
 ------------------------------

(1)  Including renewal options.
(2)  Includes regional service center.

Construction of the Company's main warehouse, business office, service center
and store location in Thornton, Colorado was completed in early fiscal 1997.
This facility, in addition to the retail store, is comprised of 175,000 square
feet of warehouse space, 30,000 square feet for the Company's business offices,
21,000 square feet devoted to a service department and 18,000 square feet for a
training and employee facility.  The Company leases a 45,000 square foot
facility in Minneapolis, Minnesota which it uses as a training center, service
center for the greater Minneapolis/St. Paul area and office space for its
delivery department.  The Company also leases an 8,500 square foot service
center in Salt Lake City, Utah.  Additionally, the Company leases its store
locations in Colorado Springs, Colorado and Fort Collins, Colorado from an
affiliated party (see "Certain Relationships and Related Transactions").  The
Company is also in the process of negotiating leases to relocate stores and,
from time to time, analyzes lease opportunities in new markets (see "Business -
Expansion Strategy" and "Management's Discussion and Analysis of Financial
Conditions and Results of Operations - Liquidity and Capital Resources").


                                          8
<PAGE>

ITEM 3.   LEGAL PROCEEDINGS

The Company is not a party to any material legal proceedings.  The Company is,
however, involved in various routine claims and legal actions which arise in the
ordinary course of business.  Management of the Company intends to vigorously
defend these claims and believes that the ultimate disposition of these matters
will not have a material adverse effect on the Company's financial condition,
results of operations or cash flow.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.



                                    PART II

Certain information required by Part II is omitted from this Report in that the
Registrant will file the 1998 Annual Report to Stockholders (the "1998 Annual
Report to Stockholders"), which report is attached hereto as Exhibit 13, and
certain information included therein is incorporated herein by reference.  Only
those sections of the 1998 Annual Report to Stockholders which specifically
address the items set forth herein are incorporated by reference.


ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The section labeled "Stockholder Information" appearing on the inside back cover
of the 1998 Annual Report to Stockholders is incorporated herein by reference.
As of April 30, 1998, there were approximately 3,106 beneficial holders of the
Company's Common Stock.


ITEM 6.   SELECTED FINANCIAL DATA

The section labeled "Selected Financial Data" appearing on pages 13 and 14 of
the 1998 Annual Report to Stockholders is incorporated herein by reference.


ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

The section labeled "Management's Discussion and Analysis of Financial Condition
and Results of Operations" appearing on pages 15 through 17 of the 1998 Annual
Report to Stockholders is incorporated herein by reference.


ITEM 7(a).  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable


ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The report of independent auditors and financial statements included on pages 18
through 30 of the Company's 1998 Annual Report to Stockholders are incorporated
herein by reference.


                                          9
<PAGE>

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

Not applicable.



                                       PART III

Certain information required by Part III is omitted from this Report in that the
Registrant will file a definitive proxy statement pursuant to Regulation 14A
(the "Proxy Statement") not later than 120 days after the end of the fiscal year
covered by this Report, and certain information included therein is incorporated
herein by reference.  Only those sections of the Proxy Statement which
specifically address the items set forth herein are incorporated by reference.


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this Item is incorporated by reference to the
section labeled "Directors and Executive Officers" in the Proxy Statement.


ITEM 11.  EXECUTIVE COMPENSATION

The information required by this Item is incorporated by reference to the
section labeled "Compensation of Directors and Executive Officers" excluding the
"Board Compensation Committee Report on Executive Compensation" and the
"Performance Graph" in the Proxy Statement.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this Item is incorporated by reference to the
section labeled "Principal Stockholders" in the Proxy Statement.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item is incorporated by reference to the
section labeled "Certain Relationships and Related Transactions" in the Proxy
Statement.


                                          10
<PAGE>

                                       PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  The following documents are filed as a part of this Report:

     1.   FINANCIAL STATEMENTS:  The following financial statements of the
          Company included in the Registrant's 1998 Annual Report to
          Stockholders are incorporated by reference to Item 8:

          -    Consolidated Statements of Income for the fiscal years ended
               January 31, 1998, 1997 and 1996.

          -    Consolidated Balance Sheets at January 31, 1998 and 1997.

          -    Consolidated Statements of Stockholders' Equity for the fiscal
               years ended January 31, 1998, 1997 and 1996.

          -    Consolidated Statements of Cash Flows for the fiscal years ended
               January 31, 1998, 1997 and 1996.

          -    Notes to Consolidated Financial Statements.


     2.   FINANCIAL STATEMENT SCHEDULES:  The following financial statement
          schedule for the fiscal years ended January 31, 1998, 1997 and 1996 is
          filed as part of this Form 10-K:

<TABLE>
<CAPTION>
            SCHEDULE                     DESCRIPTION             PAGE
            --------                     -----------             ----
            <S>          <C>                                     <C>
               II        Valuation and Qualifying Accounts        15
</TABLE>

          All other schedules for which provision is made in the applicable
          accounting regulations of the Commission are not required under the
          related instructions or are inapplicable and therefore have been
          omitted.


                                          11
<PAGE>

3.   EXHIBITS:  The following exhibits are filed pursuant to Item 601 of
     Regulation S-K.

<TABLE>
<CAPTION>
  EXHIBIT #                DESCRIPTION OF EXHIBITS
<S>          <C>
     3(i)    Amended and Restated Certificate of Incorporation of the
             Company. (3)

     3(ii)   Bylaws of the Company. (3)

     4.1     Form of Indenture, dated as of March 23, 1995, between the
             Registrant and Colorado National Bank, as Trustee for the 10.25%
             First Mortgage Bonds Due 2005. (2)

     4.2     Rights Agreement, dated as of January 31, 1995, by and between the
             Company and Norwest Bank Minnesota, National Association, as
             rights agent. (5)

     4.3     Amendment No. 1, dated as of January 31, 1995, to the Rights
             Agreement, dated as of January 31, 1995, by and between the
             Company and Norwest Bank Minnesota, N.A., as rights agent. (6)

     10.1    Lease Agreement, dated April 1, 1989, between the Registrant and
             William J. and Barbara A. Pearse. (3)

     10.2    Lease Agreement, dated October 13, 1989, between the Registrant
             and William J. and Barbara A. Pearse. (3)

     10.4    Form of Authorized Dealer Agreement between the Registrant and
             Panasonic Communications and Systems Company, a Division of
             Matsushita Electric Corporation of America. (3)

     10.5    Form of Sony Corporation of America Consumer Sales Company Dealer
             Agreement between the Registrant and Sony Consumer Sales Company,
             a division of Sony Corporation of America. (3)

     10.6    Form of Dealer Agreement between the Registrant and Mitsubishi
             Electric Sales America, Inc. (3)

     10.7    Form of Employee Stock Option Plan. (3)

     10.8    Form of Non-employee Directors' Stock Option Plan. (4)

     10.9    Ultimate Electronics, Inc. Rule 401(k) Benefit Plan. (3)

     10.10   Form of Confidentiality and Non-Competition Agreement. (4)

     10.12   Form of Deed of Trust, Assignment of Rents and Security Agreement
             between the Registrant, as Grantor, and Colorado National Bank, as
             beneficiary. (2)

     10.13   Purchase and Sale Agreement, dated May 2, 1995, between the
             Company and Cirque Property L.C. (6)

     10.14   Commercial Promissory Note and Security Agreement between the
             Company and Colorado National Leasing, Inc., dated November 1,
             1995. (7)

     10.15   Commercial Promissory Note and Security Agreement between the
             Company and Colorado National Leasing, Inc., dated December 19,
             1995. (7)

     10.16   Commercial Promissory Note and Security Agreement between the
             Company and Colorado National Leasing, Inc., dated January 22,
             1996. (7)

     10.17   Commercial Promissory Note and Security Agreement between the
             Company and Colorado National Leasing, Inc., dated February 28,
             1996. (7)

     10.18   Credit Agreement between Ultimate Electronics, Inc. and Norwest
             Bank Colorado, National Association and Norwest Business Credit,
             Inc., dated November 21, 1996. (8)

     10.19   First Amendment to Credit Agreement between Ultimate Electronics,
             Inc. and Norwest Bank Colorado, National Association and Norwest
             Business Credit, Inc., dated February 28, 1997. (9)

     10.20   Second Amendment to Credit Agreement between Ultimate Electronics,
             Inc. and Norwest Bank Colorado, National Association and Norwest
             Business Credit, Inc., dated March 11, 1997. (9)

     10.21   Third Amendment to Credit Agreement between Ultimate Electronics,
             Inc. and Norwest Bank Colorado, National Association and Norwest
             Business Credit, Inc., dated June 27, 1997. (10)

     10.30   Ultimate Electronics, Inc. Form of Change of Control Agreement
             dated June 27, 1997 with each of William J. Pearse, J. Edward
             McEntire, David J. Workman, Alan E. Kessock and Neal A.
             Bobrick. (10)

     13      Pages 13 through 30 of the Company's 1998 Annual Report to
             Stockholders. (1)

     23.1    Consent of Independent Auditors. (1)

     27      Financial Data Schedule (1)
</TABLE>


                                          12
<PAGE>

(b)  Reports on Form 8-K:

     On June 9, 1997, the Company filed a current report on Form 8-K reporting
     under Item 5 its operating results for the quarter ended April 30, 1997 and
     the signing of a merger agreement to acquire Audio King.

--------------

 (1)  Filed herewith.
 (2)  Incorporated by reference to Amendment No. 3 to the Registrant's
      Registration Statement on Form S-1 (File No. 33-88740),
      filed with the Commission on March 14, 1995.
 (3)  Incorporated by reference to the Registrant's Registration Statement on
      Form S-1 (File No. 33-68314), filed with the Commission on
      September 2, 1993.
 (4)  Incorporated by reference to Amendment No. 1 to the Registrant's
      Registration Statement on Form S-1 (File No. 33-68314),
      filed with the Commission on October 7, 1993.
 (5)  Incorporated by reference to the Registrant's Form 8-K filed with the
      Commission on February 10, 1995.
 (6)  Incorporated by reference to the Registrant's Quarterly Report on Form
      10-Q for the period ended April 30, 1995.
 (7)  Exhibits filed with the Company's Form 10-K Annual Report for the fiscal
      year ended January 31, 1996, and are incorporated herewith by reference.
 (8)  Exhibits filed with the Company's Form 10-K Annual Report for the fiscal
      year ended January 31, 1997, and are incorporated herewith by reference.
 (9)  Incorporated by reference to the Registrant's Quarterly Report on Form
      10-Q for the period ended April 30, 1997.
(10)  Incorporated by reference to the Registrant's Quarterly Report on Form
      10-Q for the period ended July 31, 1997.


                                          13
<PAGE>

                                      SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Thornton, State of
Colorado, on this 1st day of May, 1998.

ULTIMATE ELECTRONICS, INC.


By:      /s/ William J. Pearse
     -------------------------------------
     William J. Pearse
     Chairman of the Board

Pursuant to the requirements of the Securities Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.


By:      /s/ William J. Pearse                    Date:     May 1, 1998
     -------------------------------------                  -----------
     William J. Pearse
     Chairman of the Board and a Director


By:      /s/ J. Edward McEntire                   Date:     May 1, 1998
     -------------------------------------                  -----------
     J.  Edward McEntire
     Chief Executive Officer and a Director
     (Principal Executive Officer)


By:      /s/ David J. Workman                     Date:     May 1, 1998
     -------------------------------------                  -----------
     David J. Workman
     President, Chief Operating Officer
     and a Director


By:      /s/ Alan E. Kessock                      Date:     May 1, 1998
     -------------------------------------                  -----------
     Alan E. Kessock
     Vice President, Chief Financial
     Officer, Secretary and a Director
     (Principal Financial and Accounting
     Officer)


By:      /s/ Robert W. Beale                      Date:     May 1, 1998
     -------------------------------------                  -----------
     Robert W. Beale
     Director


By:      /s/ Randall F. Bellows                   Date:     May 1, 1998
     -------------------------------------                  -----------
     Randall F. Bellows
     Director


                                          14

<PAGE>

                              ULTIMATE ELECTRONICS, INC.

                   SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                                    (IN THOUSANDS)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                  CHARGED
                                                              BALANCE AT          TO COSTS                           BALANCE AT
                                                             BEGINNING OF           AND            DEDUCTIONS          END OF
                             DESCRIPTION                        PERIOD            EXPENSES         (DESCRIBE)          PERIOD
           -----------------------------------------------------------------------------------------------------------------------
           <S>                                               <C>                 <C>              <C>               <C>
           Year ended January 31, 1998
              Deducted from asset accounts:
                 Allowance for doubtful accounts             $        180        $      786       $      706(1)     $        260
                 Reserve for cash and cooperative
                    advertising discounts                              72               154              171(1)               55
                 Allowance for obsolete inventory                     266               597              427(2)              436
                                                            ----------------------------------------------------------------------
                    Total                                    $        518        $    1,537       $    1,304        $        751
                                                            ----------------------------------------------------------------------
                                                            ----------------------------------------------------------------------

           Year ended January 31, 1997
              Deducted from asset accounts:
                 Allowance for doubtful accounts             $        251        $      196       $      267(1)     $        180
                 Reserve for cash and cooperative
                    advertising discounts                              96               213              237(1)               72
                 Allowance for obsolete inventory                     344                 6               84(2)              266
                                                            ----------------------------------------------------------------------
                    Total                                    $        691        $      415       $      588        $        518
                                                            ----------------------------------------------------------------------
                                                            ----------------------------------------------------------------------

           Year ended January 31, 1996
              Deducted from asset accounts:
                 Allowance for doubtful accounts             $        146        $      403       $      298(1)     $        251
                 Reserve for cash and cooperative
                    advertising discounts                             181               140              225(1)               96
                 Allowance for obsolete inventory                     150               263               69(2)              344
                                                            ----------------------------------------------------------------------
                    Total                                    $        477        $      806       $      592        $        691
                                                            ----------------------------------------------------------------------
                                                            ----------------------------------------------------------------------
</TABLE>
 
----------------------------------

(1)  Uncollectible accounts written off, net of recoveries.
(2)  Write-offs of obsolete inventory.

                                       15