Nu Horizons Electronics Corp. Reports Financial Results for the Second Quarter and Six Months of Fiscal Year 2010

http://www.businesswire.com/news/home/20091008006175/en

MELVILLE, N.Y.--(Business Wire)--
Nu Horizons Electronics Corp. (Nasdaq/NM:NUHC), a leading distributor of active
and passive electronic components, today reported financial results for the
second quarter and six months of fiscal 2010 ended August 31, 2009.

Net sales for the quarter ended August 31, 2009 were $156,600,000 as compared to
$211,813,000 for the comparable period last year, a decrease of 26.1%. Net
income for the quarter was $543,000 or $0.03 per diluted share as compared to
net income of $192,000 or $0.01 per diluted share for the second quarter of the
prior year. The current quarter included a tax benefit of $0.07 per diluted
share primarily related to a net operating loss and foreign income taxed at
lower rates than the U.S. Sequentially, net sales for the quarter ended August
31, 2009 increased $8,841,000 or 6.0%, from $147,759,000 in the first quarter of
fiscal 2010. Sequentially, for the current quarter ended August 31, 2009, growth
in North America and Asia was $9,919,000 (11.9%) and $2,001,000 (4.4%),
respectively, which was partially offset by a $3,079,000 (16.3%) decline in
Europe.

For the six months ended August 31, 2009, net sales decreased to $304,360,000 or
26.1% from $411,965,000 in the comparable period last year. The net loss for the
six-month period was $401,000 or $0.02 per diluted share (including a tax
benefit of $0.08 per diluted share) compared to net income of $1,347,000 or
$0.07 per diluted share in the prior year.

Net of tax, the effect on diluted earnings per share related to professional
fees associated with the ongoing SEC investigation of Vitesse Semiconductor
Corp. was $0.01 and $0.06 for the three months and $0.02 and $0.08 for the six
months ended August 31, 2009 and 2008, respectively.

Gross profit in the second quarter of fiscal 2010 decreased 27.1% compared to
the prior comparable period. The decline in gross profit is attributed to lower
sales, as well as a change in the product mix to include a higher volume of
lower margin business. However, sequential gross profit increased $1,437,000 or
6.8% on the sequential increase in sales.

Arthur Nadata, Executive Chairman and Interim Chief Executive Officer of Nu
Horizons stated, "During the second quarter economic conditions remained
challenging but we are encouraged by the modest sequential increase in sales
over the prior quarter. Visibility remains unclear for the remainder of the
year, however based on an improved backlog and previously announced new business
initiatives, we believe the company is poised for improving financial
performance compared to recent prior periods subject to the world economy
continuing to emerge from the deep recession. In August, we became a North
American Alcatel-Lucent Master Distributor, which is expected to provide us the
opportunity to elevate our Systems division by broadening our marketplace beyond
the OEM community. We continue to focus on cost-saving initiatives combined with
our aggressive sales efforts. Selling, general and administrative expenses
decreased $6,425,000 or 22.0% over the second quarter of fiscal 2009 and
$12,879,000 or 22.4% from the six month period ended August 31, 2008. The
decrease in selling, general and administrative expenses is primarily due to
lower commission expenses as a result of lower sales, combined with cost-cutting
initiatives instituted in the third and fourth quarter of fiscal 2009, including
a reduction in workforce in both the third and fourth quarters of fiscal 2009, a
salary reduction program implemented in the fourth quarter of fiscal 2009, a
mandatory furlough program in both the first and second quarters of fiscal 2010,
and a decrease in other operating expenses, including professional fees related
to the ongoing SEC investigation of Vitesse."

"In the six months ended August 31, 2009, the company generated $18,329,000 of
cash from operations and approximately $3,243,000 of debt was repaid. We have a
strong balance sheet and at August 31, 2009, the company had $146,994,000 in
working capital including $19,046,000 of cash on hand," added Kurt Freudenberg,
Executive Vice President and Chief Financial Officer.

A conference call to further discuss earnings will be held today at 4:30 pm ET.
The conference call may be accessed by dialing 1-800-263-8506 (international,
dial 1-719-457-2665) and providing the passcode 7400008. Listeners can also
access the webcast live through the company's website at www.nuhorizons.com. The
webcast will be archived on the company`s website for 60 days following the
call. An audio replay of the conference call will be available for seven days
beginning at 7:30 p.m. Eastern time on October 8, 2009. The audio replay dial-in
number for North America is 1-888-203-1112 and 1-719-457-0820 for international
callers. The replay passcode is 7400008. A transcript of the call will remain
available on the company's website.

About Nu Horizons Electronics Corp.

Nu Horizons Electronics Corp. is a leading global distributor of advanced
technology semiconductor, display, illumination, power and system solutions to a
wide variety of commercial original equipment manufacturers (OEMs) and
electronic manufacturing services providers (EMS). With sales facilities in 54
locations across North America, Europe and Asia and regional logistics centers
throughout the globe, Nu Horizons partners with a limited number of
best-in-class suppliers to provide in-depth product development, custom
logistics and life-cycle support to its customers. Information on Nu Horizons
and its services is available at www.nuhorizons.com.

Cautionary Statement Regarding Forward-Looking Statements

Except for historical information contained herein, the matters set forth in
this news release are forward-looking statements. When used in this press
release, words such as "anticipate," "believe," "estimate," "expect," "intend"
and similar expressions, as they relate to Nu Horizons or its management,
identify forward-looking statements. Such forward-looking statements are based
on the current beliefs of Nu Horizons` management, as well as assumptions made
by and information currently available to its management. Forward-looking
statements involve certain risks and uncertainties that could cause actual
results to differ from those in the forward looking-statements. Potential risks
and uncertainties include such factors as the level of business and consumer
spending for electronic products, the amount of sales of the Company`s products,
the competitive environment within the electronics industry, the ability of the
Company to continue to expand its operations, the level of costs incurred in
connection with the Company`s expansion efforts, the financial strength of the
Company`s customers and suppliers and risks and costs related to the pending
Vitesse-related SEC investigation. Investors are also directed to consider other
risks and uncertainties discussed in documents filed by the Company with the
Securities and Exchange Commission. Such statements reflect our current view
with respect to the future and are subject to these and other risks,
uncertainties and assumptions relating to Nu Horizons` financial condition,
results of operations, growth strategy and liquidity. The Company does not
undertake any obligation to update its forward-looking statements.

NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

For the Three Months Ended For the Six Months Ended
August 31, August 31, August 31, August 31,

2009 2008 2009 2008

NET SALES $ 156,600,000 $ 211,813,000 $ 304,360,000 $ 411,965,000

COSTS AND EXPENSES:
Cost of sales 134,125,000 180,969,000 260,846,000 350,195,000
Selling, general and administrative expenses 22,852,000 29,277,000 44,545,000 57,424,000
156,977,000 210,246,000 305,391,000 407,619,000

OPERATING (LOSS) INCOME (377,000 ) 1,567,000 (1,031,000 ) 4,346,000

OTHER EXPENSE (INCOME)
Interest expense 270,000 882,000 693,000 1,816,000
Interest income (7,000 ) (2,000 ) (10,000 ) (4,000 )
263,000 880,000 683,000 1,812,000

(LOSS) INCOME BEFORE (BENEFIT) PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST (640,000 ) 687,000 (1,714,000 ) 2,534,000

(Benefit) provision for income taxes (1,253,000 ) 403,000 (1,414,000 ) 976,000

CONSOLIDATED NET INCOME (LOSS) 613,000 284,000 (300,000 ) 1,558,000

Net income attributable to noncontrolling interest 70,000 92,000 101,000 211,000

NET INCOME (LOSS) ATTRIBUTED TO NU HORIZONS ELECTRONICS CORP. $ 543,000 $ 192,000 $ (401,000 ) $ 1,347,000

NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO NU HORIZONS ELECTRONICS CORP.

Basic $ .03 $ .01 $ (.02 ) $ .07

Diluted $ .03 $ .01 $ (.02 ) $ .07

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 18,103,244 18,066,923 18,095,668 18,019,381
Diluted 18,156,640 18,206,320 18,095,668 18,246,377

NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

August 31, February 28, 2009
2009
(unaudited)
- ASSETS -
CURRENT ASSETS:
Cash $ 19,046,000 $ 4,793,000
Accounts receivable - net of allowance for doubtful accounts of $3,310,000 and $3,438,000 as of August 31, 2009 and February 28, 2009, respectively 106,324,000 111,572,000
Inventories 85,917,000 107,877,000
Deferred tax asset 5,172,000 3,323,000
Prepaid expenses and other current assets 4,853,000 4,979,000
TOTAL CURRENT ASSETS 221,312,000 232,544,000

PROPERTY, PLANT AND EQUIPMENT - NET 4,828,000 4,827,000

OTHER ASSETS:
Cost in excess of net assets acquired 5,022,000 5,020,000
Intangibles - net 3,573,000 3,742,000
Other assets 4,268,000 5,222,000

TOTAL ASSETS $ 239,003,000 $ 251,355,000

- LIABILITIES AND SHAREHOLDERS` EQUITY -
CURRENT LIABILITIES:
Accounts payable $ 57,747,000 $ 67,133,000
Accrued expenses 7,730,000 8,498,000
Bank debt 7,365,000 8,450,000
Income taxes payable 1,476,000 1,322,000
TOTAL CURRENT LIABILITIES 74,318,000 85,403,000

LONG TERM LIABILITIES
Bank debt 13,000,000 14,950,000
Deferred tax liability 1,899,000 1,903,000
Other long term liabilities 2,939,000 2,590,000
TOTAL LONG TERM LIABILITIES 17,838,000 19,443,000

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS` EQUITY:
Preferred stock, $1 par value, 1,000,000 shares authorized; none issued or outstanding - -
Common stock, $.0066 par value, 50,000,000 shares authorized; 18,517,379 and 18,578,946 shares issued and outstanding as of August 31, 2009 and February 28, 2009, respectively 122,000 122,000
Additional paid-in capital 56,937,000 56,386,000
Retained earnings 86,985,000 87,386,000
Other accumulated comprehensive income 170,000 83,000
Total Shareholders` Equity 144,214,000 143,977,000
Noncontrolling interest 2,633,000 2,532,000
TOTAL EQUITY 146,847,000 146,509,000

TOTAL LIABILITIES AND SHAREHOLDERS` EQUITY $ 239,003,000 $ 251,355,000

EXHIBIT A

Quarterly Sales Analysis

($ in Thousands)

FY 2010
YTD % of Q2 % of Q1 % of
Total Total Total
North America $ 177,273 58.2 $ 93,596 59.8 $ 83,677 56.6
Asia 92,401 30.4 47,201 30.1 45,200 30.6
Europe 34,686 11.4 15,803 10.1 18,882 12.8
$ 304,360 100.0 $ 156,600 100.0 $ 147,759 100.0

FY 2009
YTD % of Q2 % of Q1 % of
Total Total Total
North America $ 269,284 65.4 $ 138,927 65.6 $ 130,357 65.1
Asia 109,332 26.5 56,385 26.6 52,947 26.5
Europe 33,349 8.1 16,501 7.8 16,848 8.4
$ 411,965 100.0 $ 211,813 100.0 $ 200,152 100.0

Nu Horizons Electronics Corp.
Kurt Freudenberg, 631-396-5000
Executive Vice President and Chief Financial Officer
kurt.freudenberg@nuhorizons.com

Copyright Business Wire 2009