Nu Horizons Reports Third Quarter Fiscal Year 2007 Results

Nu Horizons Electronics Corp. (Nasdaq/NM: NUHC), a leading distributor of active and passive electronic components today reported financial and operating results for the third quarter and nine months ended November 30, 2006. Net sales for the quarter ended November 30, 2006 increased 26% to $186.1 million as compared to $147.5 million for the comparable period last year. Net income for the quarter was $2.4 million or $0.13 per diluted share up 59% and 62% respectively, as compared to net income of $1.5 million or $0.08 per diluted share for the third quarter of the prior year. Sales, however, declined from the immediately preceding quarter primarily as a result of a decline in the Company's systems business related to a substantial customer-specific decrease, as well as to market weakness related to some end customer and manufacturing channel inventory builds. For the nine months ended November 30, 2006, net sales increased to $567.4 million from $397.2 million in the comparable period last year, an increase of 43%. Net income for the first nine months of fiscal 2007 was $9.0 million or $0.49 per diluted share, up 224% and 206% respectively, compared to net income of $2.8 million or $0.16 per diluted share in the same period last year. Arthur Nadata, Chairman of the Board and Chief Executive Officer stated, "We are pleased with our continued earnings performance for the third quarter compared to the prior year, which we attribute to increased net sales and lower operating expenses as a percentage of sales. We have expanded our sales force, line card and geographic presence, all of which have enabled us to gain market share and contributed to this quarter's strong financial performance. We believe that notwithstanding the current market weakness, we will continue to gain market share and outperform our competitors." A conference call to further discuss earnings will be held today at 4:15 pm ET. The call can be accessed by dialing 1-800-500-0311, (international, dial 1-719-457-2698). A rebroadcast 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 7383419. A webcast of the call will also be available, online (both live and after the call), at www.nuhorizons.com. About Nu Horizons Electronics Corp. Nu Horizons Electronics Corp. is a leading global distributor of advanced technology semiconductor, display and system solutions to a wide variety of commercial original equipment manufacturers (OEMs) and Electronic Manufacturing Services providers (EMS). With sales facilities in 49 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 http://www.nuhorizons.com 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 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. 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 INCOME (unaudited)   For the Three Months Ended For the Nine Months Ended Nov. 30, 2006 Nov. 30, 2005 Nov. 30, 2006 Nov. 30, 2005   NET SALES $ 186,080,000  $ 147,515,000  $ 567,361,000  $ 397,200,000    COSTS AND EXPENSES: Cost of sales 157,025,000  124,271,000  480,913,000  333,843,000  Operating expenses   23,994,000    20,054,000    68,991,000    56,608,000    181,019,000    144,325,000    549,904,000    390,451,000    OPERATING INCOME   5,061,000    3,190,000    17,457,000    6,749,000    OTHER (INCOME) EXPENSE Interest expense 1,036,000  715,000  2,928,000  2,107,000  Interest income   (24,000)   (73,000)   (536,000)   (248,000)   1,012,000    642,000    2,392,000    1,859,000    INCOME BEFORE PROVISION FOR INCOME TAXES AND MINORITY INTERESTS 4,049,000  2,548,000  15,065,000  4,890,000    Provision for income taxes   1,565,000    992,000    5,748,000    1,825,000    INCOME BEFORE MINORITY INTERESTS 2,484,000  1,556,000  9,317,000  3,065,000    Minority interest in earnings of subsidiaries   93,000    55,000    268,000    269,000    NET INCOME $ 2,391,000  $ 1,501,000  $ 9,049,000  $ 2,796,000    NET INCOME PER COMMON SHARE:   Basic $ .13  $ .09  $ .51  $ .16    Diluted $ .13  $ .08  $ .49  $ .16    WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic 18,059,849  17,198,133  17,777,952  17,004,309  Diluted 19,018,687  17,760,196  18,558,163  17,746,808  NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS   November 30, 2006 February 28, 2006 (unaudited) - ASSETS - CURRENT ASSETS: Cash $ 6,635,000  $ 10,873,000  Accounts receivable - net of allowance for doubtful accounts of $4,860,000 and $4,702,000 as of November 30, 2006 and February 28, 2006, respectively 118,569,000  98,418,000  Inventories 121,191,000  125,178,000  Prepaid expenses and other current assets   3,220,000    1,746,000  TOTAL CURRENT ASSETS 249,615,000  236,215,000    PROPERTY, PLANT AND EQUIPMENT – NET 3,647,000  3,614,000    OTHER ASSETS: Cost in excess of net assets acquired 4,879,000  -  Subordinated note receivable -  2,000,000  Other assets   1,698,000    1,645,000    TOTAL ASSETS $ 259,839,000  $ 243,474,000    - LIABILITIES AND SHAREHOLDERS’ EQUITY - CURRENT LIABILITIES: Accounts payable $ 42,770,000  $ 48,352,000  Accrued expenses 10,808,000  4,515,000  Bank credit line 1,970,000  -  Income taxes payable   2,087,000    1,525,000  TOTAL CURRENT LIABILITIES   57,635,000    54,392,000    LONG TERM LIABILITIES Revolving credit line 50,000,000  50,600,000  Deferred income taxes   2,413,000    1,339,000  TOTAL LONG TERM LIABILITIES   52,413,000    51,939,000    MINORITY INTEREST IN SUBSIDIARIES   1,755,000    1,487,000    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; 18,145,534 and 17,431,482 shares issued and outstanding as of November 30, 2006 and February 28, 2006, respectively 120,000  115,000  Additional paid-in capital 50,260,000  46,924,000  Retained earnings 97,657,000  88,608,000  Other accumulated comprehensive (loss) income   (1,000)   9,000  TOTAL SHAREHOLDERS’ EQUITY   148,036,000    135,656,000    TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 259,839,000  $ 243,474,000