Nu Horizons Electronics Corp. Reports Fourth Quarter and Full-Year Results for Fiscal 2008

Net Sales Increased 24.3% for the Quarter and 11.8% for the Year

For the fiscal year ended February 29, 2008, net sales from continuing operations increased to $747,170,000 from $668,591 ,000 in the comparable period last year, an increase of 11.8 %.  Sales in the core distribution business increased 20.1% year-over-year (see Exhibit A). 

Net sales for the fourth quarter increased to $193,188,000 from $155,363,000 for the comparable period last year, an increase of 24.3 %.  Sales in the core distribution business increased 28.2% in the fourth quarter of fiscal 2008. 

The Company has reevaluated its accounting policy for revenue reporting for its Titan division, which provides supply chain services ranging from order management through distribution and transportation.  In accordance with EITF 99-19, "Reporting Revenue Gross as a Principal vs. Net as an Agent," the Company has revised its revenue presentation to Net as an Agent and therefore reduced sales and cost of sales in fiscal years 2008 and 2007 by $69,209,000 and $70,252,000, respectively, and for the fourth quarters of fiscal 2008 and 2007 by $15,357,000 and $15,089,000, respectively.  Titan revenue will now be reported in sales as a fee for services for future periods, as well as for prior periods presented in this release and in filings with the Securities and Exchange Commission.  There is no change to net income resulting from this classification change.

Net income for fiscal 2008 was $2,519,000 , compared with a net income of $7,717 ,000 in the same period last year.  Diluted earnings per share is $.14 for the year ended February 29, 2008 compared with $.41 per diluted share in the same period last year .

Net income for the current quarter was $424,000 or $.02 per diluted share, compared with a net income of $523 ,000 or $.03 per diluted share in the same period last year.

The Company's results in fiscal 2008 include a number of items noted below that impact comparability with fiscal 2007.  Excluding those items, on a proforma basis diluted earnings per share would have been $.44 and $.12 for the year and fourth quarter ended February 29, 2008, respectively, compared to $.41 and $.03 per diluted share in the comparable periods in the prior fiscal year.

See Exhibit B for a reconciliation of GAAP net income to proforma net income.

Arthur Nadata, Chairman of the Board and Chief Executive Officer of Nu Horizons stated, "We are executing well on our sales growth strategy with 42% growth in Asia, 106% in Europe and 11.8% total sales growth year-over-year.  We continue to invest in Germany and expect this to fuel future growth in Europe.  While we
are disappointed that professional fees continue to adversely effect our earnings, which we expect will continue in the near term, we are committed to continuing to increase earnings through market expansion, increased design wins and cost controls.  We are excited about our new IBM systems agreement which provides us not only with a new set of products and services, but is expected to allow us to enter into new markets where IBM's market leadership offers a competitive advantage."

A conference call to further discuss earnings will be held today at 4:15 pm ET.  The call can be accessed by dialing 1-877-719-9786, (international, dial 1-719-325-4836).  A telephone replay of the call will be available beginning at 7:00 pm ET at (888)-203-1112 (international, dial 1-719-457-0820) Please refer to confirmation code 5926049.  A webcast of the call will also be available, online (both live and after the call), at www.nuhorizons.com. 

Certain Non-GAAP Financial Information
In addition to disclosing results that are determined in accordance with Generally Accepted Accounting Principles ("GAAP"), the Company provides certain non-GAAP financial information relating to net income and net income per diluted share, each as adjusted for certain charges, credits and losses that the Company believes impact the comparability of its results of operations. These charges, credits and losses arise out of (i) professional fees related to the SEC inquiry related to "In the Matter of Vitesse Semiconductor" and the restatement of our financial statements, (ii) the Company's investment in a start-up in Germany, and (iii) severance costs.  A reconciliation of the company's non-GAAP financial information to GAAP is set forth in the table below.

The Company believes that such non-GAAP financial information is useful to investors to assist in assessing and understanding the Company's operating performance and underlying trends in the Company's business because management considers the charges, credits and losses referred to above to be outside the Company's core operating results. This non-GAAP financial information is among the primary indicators management uses as a basis for evaluating the Company's financial and operating performance.

The presentation of this additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for, or alternative to, operating income, net income and net income per diluted share determined in accordance with GAAP. Analysis of results and outlook on a non-GAAP basis should be used as a complement to, and in conjunction with, data presented in accordance with GAAP.

Table of Results, Exhibit A and Exhibit B (PDF)

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 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.