Ultimate Electronics Sells 32 Stores to Ultimate Acquisition Partners and Plans to Liquidate Remaining 30 Stores

Ultimate Electronics, Inc. (OTC: ULTEQ - News) today announced that following a public auction for the company's assets which commenced on April 15, 2005, the company has sold the assets of 32 of its Ultimate Electronics and SoundTrack stores to Ultimate Acquisition Partners, L.P. ("UAP"), an entity owned and controlled by Mark J. Wattles, the Company's CEO. In consideration for the assets acquired by UAP, the company received approximately $43.8 million and UAP agreed to assume various of the company's liabilities.

The company also announced that it would proceed with the liquidation of assets from its remaining 30 stores over the next 60 to 90 days in accordance with the terms of an agency agreement.

The Company entered into a sixth amendment to its debtor-in-possession financing facility that permits the company to effect the sale of assets to UAP and the liquidation of the remaining stores.

The United States Bankruptcy Court for the District of Delaware approved the transactions at a hearing on April 19, 2005.

The proceeds from the sale to UAP and the liquidation will be used to satisfy claims of the company's secured lenders and unsecured creditors of the company and its affiliates and subsidiaries. The company cannot project at this point the extent of any payment to its unsecured creditors as a result of these transactions and/or any additional asset sales the company may consummate in the future. As previously reported, the company has filed a Form 15 with the Securities and Exchange Commission to deregister its common stock and suspend its reporting obligations under the Securities Exchange Act of 1934 after the close of trading on April 13, 2005. The company does not believe that its reorganization will result in any value for the holders of the Company's common stock.

The company filed a voluntary petition for reorganization under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on January 11, 2005. Additional information about the company and its chapter 11 bankruptcy proceedings can be found at the United States District Bankruptcy Court -- District of Delaware, 824 Market Street, 3rd Floor, Wilmington, Delaware 19801, on the Bankruptcy Court's web site: http://www.deb.uscourts.gov, or at http://www.kccllc.net/ultimate.

Certain statements made in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are made based upon management's current expectations and beliefs concerning future developments and their potential effects upon the company.

Contact: David Carter, President


(303) 801-4025



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Source: Ultimate Electronics, Inc.

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