Colorado-Based Dyer & Shuman, LLP Announces Class Action on Behalf of Purchasers of Ultimate Electronics, Inc. (ULTE) Securities Between March 13, 2002 and August 8, 2002

Market Wire, 20050229

The law firm of Dyer & Shuman, LLP today announced that it has filed a class action lawsuit in the United States District Court for the District of Colorado on behalf of purchasers of the securities of Ultimate Electronics, Inc. ("Ultimate Electronics" or the "Company") (NASDAQ: ULTE), during the period between March 13, 2002 and August 8, 2002 (the "Class Period"), inclusive, against Ultimate Electronics and certain of its officers ("defendants"). A copy of the complaint filed in this action (Civil Action No. 03-N-0597 (PAC)) is available from the court.

If you wish to serve as a lead plaintiff in this action, you must move the court no later than June 9, 2003. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. Your ability to share in any recovery is not affected by your decision whether or not to serve as a lead plaintiff. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Trig R. Smith of Dyer & Shuman, LLP, at (800) 711-6483 or (303) 861-3003 or via e-mail at tsmith@dyershuman.com. Dyer & Shuman, LLP has extensive experience in securities class action litigation, and has played lead roles in major securities fraud cases throughout the nation, resulting in the recovery of hundreds of millions of dollars to investors. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his or her choice, or may choose to do nothing and remain an absent class member.

The complaint alleges that defendants violated Section 11 of the Securities Act of 1933 by disseminating an inaccurate and misleading Registration Statement and Prospectus in connection with a Secondary Offering of 2.75 million shares of the Company's common stock to the public. In addition, the complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between March 13, 2002 and August 8, 2002, thereby artificially inflating the price of Ultimate Electronics securities. Throughout the Class Period, defendants issued positive statements regarding the Company's financial results, sales, and product demand. Defendants' statements were materially false and misleading because they failed to disclose material adverse facts which were known to defendants or recklessly disregarded by them. For example, the Company was experiencing significant declines in its sale of high-margin products like audio equipment and direct broadcast satellite (DBS) systems, while its lower-margin products, like televisions, comprised the bulk of the Company's sales. This placed extreme pressure on the Company's bottom line, thereby diminishing the Company's ability to achieve its stated projections in Q2 2002 and to support its artificially inflated stock price.

On August 8, 2002, Ultimate Electronics issued a press release announcing that it would miss its second quarter earnings guidance by almost 50%. The press release also revealed that, "[a]bout 50% of the shortfall in the gross margin percentage is attributable to the DBS category."