Nu Horizons Reports Fourth Quarter and Fiscal Year End 2002 Earnings

MELVILLE, N.Y.--(BUSINESS WIRE)--May 6, 2002--Nu Horizons Electronics Corp. (Nasdaq/NM: NUHC - news), a leading distributor of active and passive electronic components today reported financial and operating results for the fourth quarter and year ended February 28, 2002.

Net sales from continuing operations for the fourth quarter decreased to $64.0 million from $141.9 million for the comparable period last year. Net loss from continuing operations for the quarter was $2.3 million or $0.14 per share on 16,609,005 basic shares outstanding ($0.13 per share on 17,477,151 diluted shares), compared with net income from continuing operations of $6.1 million or $0.37 per share on 16,501,860 basic shares outstanding ($0.35 per share on 17,474,558 diluted shares) in the same period last year.

For the fiscal year ended February 28, 2002, net sales from continuing operations decreased to $281.9 million from $634.0 million in the comparable period last year. Net loss from continuing operations for fiscal 2002 was $2.8 million or $0.17 per share on 16,574,911 basic shares outstanding ($0.16 per share on 17,430,332 diluted shares), compared with net income from continuing operations of $33.6 million, or $2.07 per share on 16,213,084 basic shares outstanding ($1.89 per share on 17,746,075 diluted shares) in the year-earlier period.

Included in the fourth quarter and fiscal year results is a one time charge of $1.1 million representing impairment of the valuation for goodwill. This impairment accounts for a loss of $.07 per basic share and $.06 per diluted share of the net loss from continuing operations for both the year and the quarter. There is no remaining goodwill on the balance sheet subsequent to this charge.

On August 23, 2001, the Company sold its contract-manufacturing subsidiary, located in Springfield, Mass. Earnings for the reported periods and the gain on the sale of this operation are reported separately as discontinued operations. The sale of the Company's contract-manufacturing facility resulted in an approximate after-tax gain of $4.2 million or approximately $0.25 per basic share and $0.24 per diluted share.

Net income from discontinued operations for the fiscal year ended February 28, 2002 was $799,000 or $0.05 per basic and diluted share, compared with $1.8 million or $.11 per basic share and $0.10 per diluted share in the year-earlier period. There was no income or loss from discontinued operations for the three month period ended February 28, 2002 as compared to net income of $0.8 million or $0.05 per basic and diluted share for the same period last year.

Arthur Nadata, President and Chief Executive Officer, commented, "We concluded a difficult year with a modest net operating loss for the year and the quarter while managing to post a small net profit overall. Included in the fourth quarter operating loss is a one time charge of $1.1 million representing the write off of our remaining goodwill on the balance sheet. We also continued to strengthen our balance sheet by generating $83 million in free cash flow for the year, enabling us to substantially reduce our borrowing levels to $2.5 million at year end as compared to $85 million a year ago.

Nadata continued, "Sales were down 56% from the prior year reflecting the well publicized reduction in demand for electronic components in general and in our case, more specifically, communications and networking products. This decline was evidenced in increasing sequential sales declines through the first three quarters of our fiscal year. The fourth quarter showed some signs of a mild recovery in that we posted a 10% sequential increase in sales over the third quarter, the first sequential increase in more than a year. Although we cannot predict when the semiconductor and passive component marketplace will recover, we believe this increase, coupled with a better than one to one book to bill ratio for the last four months of our fiscal year, are the first indicators of a gradual segment recovery."

Nadata concluded, "Our industry is historically cyclical and while this has been a particularly severe downturn we anticipate that there will be an overall recovery in the near future. We believe that our strong financial condition coupled with the aforementioned positive indicators, our strong infrastructure and continued dedication to our long term marketing strategies bodes well for a moderate increase in sales performance in the first quarter of our current fiscal year, with a return to profitability later in the year."

A conference call to further discuss earnings will be held today at 4:15 PM ET. The call can be accessed by dialing (800) 360-9865, (international, dial 1-973-694-6836), refer to NuHorizons call. A webcast of the call will also be available online (both live and after the call) at www.nuhorizons.com.

Nu Horizons is a national distributor of high technology electronic components, which provide innovative, total semiconductor solutions through products and technologies that are faster, smaller and lower powered. Nu Horizons was established in 1982 and currently has 30 branch and subsidiary offices located in the U.S., Asia and Europe. For more information, visit the Nu Horizons' home page at http://www.nuhorizons.com.

Except for historical information contained herein, the matters set forth in this news release are forward looking statements that 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 electronic 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 and the financial strength of the Company's customers and suppliers. Investors are also directed to consider other risks and uncertainties discussed in documents filed by the Company with the Securities and Exchange Commission.

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