Wattles Named CEO of Ultimate Electronics16 Feb, 2005 By: Erik Gruenwedel
As expected, Mark Wattles today was named CEO of bankrupt Denver-based Ultimate Electronics.
The founder, former chairman/CEO and dominant shareholder of Hollywood Video last month was named chairman of Ultimate's board.
Prior to becoming chairman, Wattles purchased 6.85 million shares of Ultimate common stock for $4.4 million, with separate two-year agreements to purchase 1.85 million shares for $1.2 million and 1.8 million shares from Ultimate founder and chairman William Pearse for no more than 65 cents per share.
Wattles' appointment came as Ultimate, retailer of home entertainment and consumer electronics in 14 states with listed debts of more than $160 million against assets totaling $329 million in Chapter 11 filings, announced the departure of CEO and president David Workman and two senior executives.
Joining Wattles at Ultimate are Bill Besselman, former VP of strategic planning and analysis at Hollywood, taking the same position; and Lon Weingart, former SVP of operations at Hollywood, as consultant. Jim Marcum, former Hollywood CFO and current member of Ultimate's board, will assist in financial restructuring.
“I am excited to be working with some of the talent that led Hollywood Video through its successful turnaround,” said Wattles in a statement. “As a result of these changes, Ultimate is now a large company with management experienced in running a large company.”
At a meeting Monday, a financial consultant doubted ongoing restructuring would “result in any value for the holders of [its] common stock.”
They declined to announce when Ultimate might emerge from bankruptcy protection.
“Despite the company's recent difficulties caused in part by aggressive growth strategies of prior management, I believe that this remains a good business,” Wattles said.For the fourth quarter ended Jan. 31, Ultimate reported sales of $195.9 million, down 19.4 percent from $243.2 million the same period last year. Sales for the year were about $658.3 million, down 8 percent from $712.9 million last year.