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

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.