<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT
Under Section 13 or 15(d) of the Securities Exchange Act of 1934
For Quarter Ended Commission file number
November 30, 1995 1-8798
- ----------------- ----------------------
Nu Horizons Electronics Corp.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 11-2621097
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6000 New Horizons Blvd., Amityville, New York 11701
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(516) 226-6000
----------------------------------------------------
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by this
report.
Common Stock - Par Value $.0066 8,081,844
- ------------------------------- ------------------
Class Outstanding Shares
<PAGE>
NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
----------------------------------------------
INDEX
-----
Page(s)
PART I. Financial Information:
ITEM 1. Financial Statements
Consolidated Condensed Balance Sheets -
November 30, 1995 (Unaudited) and February 28, 1995 3.
Consolidated Condensed Statements of Income
(Unaudited) - Nine Months and Three Months Ended
November 30, 1995 and 1994 4.
Consolidated Condensed Statements of Cash Flows
(Unaudited) - Nine Months Ended November 30, 1995
and 1994 5. - 6.
Notes to Interim Consolidated Condensed Financial
Statements (Unaudited) 7. - 8.
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9. - 12.
PART II. Other Information
ITEM 6. Exhibits and Reports on Form 8-K 13.
SIGNATURES 14.
INDEX TO EXHIBITS
Exhibit 10.14 - Amendment No. 2 to Amended and Restated
Revolving Credit Agreement and Tenth Amendment
to Revolving Credit and Term Loan Agreement
dated as of November 29, 1995 between the
Company and National Westminster Bank, USA
Exhibit 10.15 - Amendment No. 3 to Amended and Restated Revolving
Credit Agreement and Eleventh Amendment to Revolving
Credit and Term Loan Agreement dated as of November
30, 1995 between the Company and National Westminster
Bank, USA
Exhibit 11 - Computation of Earnings per Common Share
Exhibit 27 - Financial Data Schedules
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial Statements
NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
----------------------------------------------
CONSOLIDATED CONDENSED BALANCE SHEETS
-------------------------------------
-ASSETS-
--------
<TABLE>
<CAPTION>
NOVEMBER FEBRUARY
30, 1995 28, 1995
------------ ------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 1,275,691 $ 498,919
Accounts receivable-net of allowance for doubtful
accounts of $1,379,161 and $1,302,163 for
November 30, 1995 and February 28, 1995,
respectively 28,420,702 20,786,943
Inventories 35,718,728 22,255,545
Prepaid expenses and other current assets 812,859 1,637,611
----------- -----------
TOTAL CURRENT ASSETS 66,227,980 45,179,018
PROPERTY, PLANT AND EQUIPMENT - NET (Note 2) 3,315,232 3,141,054
OTHER ASSETS
Costs in excess of net assets acquired - Net 2,105,411 2,223,104
Other Assets 1,463,505 1,429,430
----------- -----------
$73,112,128 $51,972,606
=========== ===========
<CAPTION>
-LIABILITIES AND SHAREHOLDERS' EQUITY-
--------------------------------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 9,520,092 $ 6,286,579
Accrued expenses 2,539,590 2,201,006
Current portion of long-term debt 256,996 311,063
Income taxes 716,541 7,743
Other current liabilities - 43,686
----------- -----------
TOTAL CURRENT LIABILITIES 13,033,219 8,850,077
----------- -----------
DEFERRED INCOME TAXES 1,082,424 585,209
----------- -----------
REVOLVING CREDIT LINE (Note 3) 14,000,000 4,400,000
----------- -----------
LONG-TERM DEBT 983,946 595,404
----------- -----------
SUBORDINATED CONVERTIBLES NOTES (Note 4) 12,000,000 15,000,000
----------- -----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY :
Preferred stock, $1 par value, 1,000,000 shares
authorized; none issued or outstanding - -
Common stock, $.0066 par value, 20,000,000 shares
authorized; 8,081,844 and 7,732,051 shares
issued and outstanding for November 30, 1995
and February 28, 1995, respectively 53,342 51,032
Additional paid-in capital (Note 4) 13,778,730 10,726,727
Retained earnings 18,635,305 11,764,157
----------- -----------
32,467,377 22,541,916
Less: loan to ESOP 454,838 -
----------- -----------
32,012,539 22,541,916
----------- -----------
$73,112,128 $51,972,606
=========== ===========
</TABLE>
See notes to interim consolidated condensed financial statements.
3
<PAGE>
NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
----------------------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
-------------------------------------------
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED FOR THE THREE MONTHS ENDED
-------------------------- --------------------------
NOVEMBER NOVEMBER NOVEMBER NOVEMBER
30, 1995 30, 1994 30, 1995 30, 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET SALES $149,874,502 $93,100,847 $55,066,644 $33,324,316
------------ ------------ ------------ ------------
COSTS AND EXPENSES:
Cost of sales 114,584,192 70,638,529 41,983,941 25,573,225
Operating expenses 22,186,588 15,792,181 7,699,044 5,670,063
Interest expense 1,479,951 964,965 545,290 456,380
Interest income (2,537) (12,017) - -
------------ ------------ ------------ ------------
138,248,194 87,383,658 50,228,275 31,699,668
------------ ------------ ------------ ------------
INCOME BEFORE PROVISION
FOR INCOME TAXES 11,626,308 5,717,189 4,838,369 1,624,648
Provision for
income taxes 4,755,160 2,344,048 2,004,226 664,892
------------ ------------ ------------ ------------
NET INCOME $ 6,871,148 $ 3,373,141 $ 2,834,143 $ 959,756
============ ============ ============ ============
NET INCOME
PER SHARE (Note 5):
Primary $.85 $.43 $.34 $.12
==== ==== ==== ====
Fully diluted $.71 $.40 $.29 $.11
==== ==== ==== ====
</TABLE>
See notes to interim consolidated condensed financial statements.
4
<PAGE>
NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
----------------------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
----------------------------
NOVEMBER NOVEMBER
30, 1995 30, 1994
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS:
Cash flows from operating activities:
Cash received from customers $ 141,605,743 $ 88,280,315
Cash paid to suppliers and employees (145,064,324) (96,187,976)
Interest received 2,537 18,917
Interest paid (1,479,951) (964,965)
Income taxes paid (3,008,216) (4,788,545)
------------- -------------
Net cash (used-in) operating
activities (7,944,211) (13,642,254)
------------- -------------
Cash flows from investing activities:
Capital expenditures (708,005) (711,928)
Purchase of Stock for ESOP (559,800) -
Sale of subordinated notes (3,000,000) -
------------- -------------
Net cash (used in) investing activities (4,267,805) (711,928)
------------- -------------
Cash flows from financing activities:
Borrowings under revolving credit line 50,200,000 62,590,000
Repayments under revolving credit line (40,600,000) (64,640,000)
Principal payments of long-term debt (225,325) (337,146)
Proceeds from stock options 3,054,313 26,809
Proceeds from subordinated debt - 15,000,000
Proceeds from long-term debt 559,800 281,992
------------- -------------
Net cash provided by financing activities 12,988,788 12,921,655
------------- -------------
Net increase (decrease) in cash and
cash equivalents 776,772 (1,432,527)
Cash and cash equivalents, beginning
of year 498,919 2,124,307
------------- -------------
Cash and cash equivalents, end of period $ 1,275,691 $ 691,780
============= =============
</TABLE>
See notes to interim consolidated condensed financial statements.
5
<PAGE>
NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
----------------------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED)
-----------------------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
---------------------------
NOVEMBER NOVEMBER
30, 1995 30, 1994
------------ ------------
<S> <C> <C>
RECONCILIATION OF NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Net income $ 6,871,148 $ 3,373,141
------------ ------------
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 844,366 580,940
Contribution to ESOP 104,962 22,312
Bad debt provision 635,000 340,000
Changes in assets and liabilities:
(Increase) in accounts receivable (8,268,759) (4,820,532)
(Increase) in inventories (13,463,183) (6,163,947)
Decrease (increase) in prepaid expenses
and other current assets 824,752 (1,385,563)
(Increase) in goodwill - (2,353,874)
(Increase) in other assets (226,921) (802,606)
Increase (decrease) in accounts payable
and accrued expenses 3,528,411 (1,217,032)
Increase (decrease) in income taxes 708,798 (1,428,568)
Increase in deferred taxes 497,215 213,475
------------ ------------
Total adjustments (14,815,359) (17,015,395)
------------ ------------
Net cash (used in) operating activities $ (7,944,211) $(13,642,254)
============ ============
</TABLE>
See notes to interim consolidated condensed financial statements.
6
<PAGE>
NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
----------------------------------------------
NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
------------------------------------------------------------
(unaudited)
1. In the opinion of management, the accompanying unaudited interim consolidated
condensed financial statements of Nu Horizons Electronics Corp. (the
"Company") and its subsidiaries (Nu Horizons/Merit Electronics Corp., NIC
Components Corp., Nu Horizons International Corp. and Nu Visions
Manufacturing, Inc.) contain all adjustments necessary to present fairly the
Company's financial position as of November 30, 1995 and February 28, 1995
and the results of its operations for the nine and three month periods ended
November 30, 1995 and 1994 and cash flows for the nine month periods ended
November 30, 1995 and 1994.
The accounting policies followed by the Company are set forth in Note 2 to
the Company's consolidated financial statements included in its Annual Report
on Form 10-K for the year ended February 28, 1995, which is incorporated
herein by reference. Specific reference is made to this report for a
description of the Company's securities and the notes to consolidated
financial statements included therein.
The results of operations for the nine and three month periods ended November
30, 1995 are not necessarily indicative of the results to be expected for the
full year.
2. PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment consists of the following:
<TABLE>
<CAPTION>
NOVEMBER FEBRUARY
30, 1995 28, 1995
---------- ----------
<S> <C> <C>
Land $ 266,301 $ 266,301
Building and improvements 1,687,570 1,574,435
Furniture, fixtures and
office equipment 1,822,457 1,512,926
Computer equipment 2,206,114 1,920,776
Assets held under capitalized leases 919,834 919,834
---------- ----------
6,902,276 6,194,272
Less: accumulated depreciation
and amortization 3,587,044 3,053,218
---------- ----------
$3,315,232 $3,141,054
========== ==========
</TABLE>
3. BANK LINE OF CREDIT:
In February, 1988 the Company entered into a revolving credit agreement, as
amended, with its bank which provides for a $20,000,000 unsecured revolving
line of credit at the bank's prime rate through May 1, 1997. Direct
borrowings under the line of credit were $14,000,000 and $4,400,000 at
November 30, 1995 and February 28, 1995, respectively.
7
<PAGE>
NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
----------------------------------------------
NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
------------------------------------------------------------
(unaudited)
4. SUBORDINATED CONVERTIBLE NOTES:
In a private placement completed on August 31, 1994, the Company issued $15
million principal amount of Subordinated Convertible Notes, which are due
in $5,000,000 increments on August 31, 2000, 2001 and 2002. The notes are
subordinate in right of payment to all existing and future senior
indebtedness of the Company. The notes bear interest at 8.25%, payable
quarterly on November 30, February 28, May 31 and August 31. The notes are
convertible into shares of common stock at a conversion price of $9.00 per
share. The cost of issuing these notes was $521,565 and is being amortized
over the life of the notes. As of November 30, 1995, $3,000,000 of the
notes were converted into 333,333 shares of common stock and $12,000,000
principal amount of subordinated convertible notes remained outstanding.
5. NET INCOME PER SHARE:
Net income per share has been computed on the basis of the weighted
average number of common shares and common equivalent shares outstanding
during each period presented. Fully diluted earnings per share has been
computed assuming conversion of all dilutive stock options.
The following average shares were used in the computation of primary and
fully diluted earnings per share:
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
November 30, November 30,
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Primary 8,098,973 7,845,534 8,310,144 7,840,474
Fully diluted 10,410,189 8,995,726 10,416,109 10,111,109
</TABLE>
All per share amounts have been retroactively restated as a result of stock
dividends and a three for two stock split.
A detailed computation of earnings per common share appears in Exhibit 11
of this Form 10-Q.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS:
--------------------------
Introduction:
-------------
Nu Horizons Electronics Corp. (the "Company") and its wholly-owned
subsidiaries, Nu Horizons/Merit Electronics Corp. ("Merit"), NIC
Components Corp. ("NIC") and Nu Horizons International Corp.
("International"), are engaged in the distribution of high technology
active and passive electronic components to a wide variety of original
equipment manufacturers ("OEMs") of electronic products. Active
components distributed by the Company include semiconductor products
such as memory chips, microprocessors, digital and linear circuits,
microwave/RF and fiberoptic components, transistors and diodes. Passive
components distributed by NIC, principally to OEMs and other
distributors nationally, consist of a high technology line of chip and
leaded components including capacitors, resistors and related networks.
Nu Visions Manufacturing, Inc. ("NUV") located in Springfield,
Massachusetts, another subsidiary of the Company, is a contract
assembler of circuit boards, harnesses and related electromechanical
devices for various OEM's.
The financial information presented herein includes: (i) Balance sheets
as of November 30, 1995 and February 28, 1995; (ii) Statements of income
for the nine and three month periods ended November 30, 1995 and 1994
and (iii) Statements of cash flows for the nine month periods ended
November 30, 1995 and 1994.
Results of Operations:
----------------------
Sales for the three month period ended November 30, 1995 were
$55,066,644 as compared to $33,324,316 for the comparable period of the
prior year, an increase of approximately $21,742,000 or 65%. Management
attributes the increase in sales for the three month period to the
following reasons: Approximately $4,284,000 or 20% of the overall
increase resulted from incremental sales generated by the recently
formed West Coast distribution group which consists of the San Jose,
Irvine, Los Angeles and San Diego branches. Approximately $467,000 or 2%
of the increase was generated by the Nu Visions Manufacturing
subsidiary. The balance of the increase, approximately $16,991,000 or
78% resulted from incremental sales generated by the core distribution
business through greater market penetration and continued economic
strength in the electronic industry.
Sales for the nine month period ended November 30, 1995 were
$149,874,502 as compared to $93,100,847 for the comparable period of the
prior year, an increase of approximately 61%. Management attributes the
increase in sales for the nine month period to the following reasons:
Approximately $8,821,000 or 16% of the overall increase resulted from
incremental sales generated by the recently formed West Coast
distribution group sales branches. Approximately $2,338,000 or 4% of the
increase was generated by the Nu Visions Manufacturing subsidiary. The
balance of the increase, approximately, $45,615,000 or 80% resulted from
incremental sales generated by the core distribution business
through greater market penetration and continued economic strength in
the electronic industry.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS (Continued):
--------------------------------------
Results of Operations (Continued):
----------------------------------
The Company experienced compressed gross profit margins of 23.7% for the
year ended February 28, 1995 as compared to 27% for the year ended
February 28, 1994 primarily due to overall competitive pressures in the
active (semiconductor) component industry across all product lines.
Semiconductors comprise approximately 78% of the Company's sales.
Gross profit margins for the three and nine months ended November 30,
1995 were 23.8% and 23.5% as compared to 23.3% and 24.1% for the
comparable periods of the prior year. Management attributes the relative
stabilization of profit margins during these periods primarily to a
settling effect in the marketplace subsequent to the downward adjustment
in calendar 1994. Although the Company expects that these conditions
will continue, as long as current market trends prevail, no assurances
can be given in this regard.
Operating expenses have increased from approximately $15,792,000 for the
nine months ended November 30, 1994 to approximately $22,187,000 for the
nine months ended November 30, 1995, an increase of 41% or approximately
$6,395,000. For the three months ended November 30, 1994 as compared to
the three months ended November 30, 1995 operating expenses increased
from approximately $5,670,000 to $7,699,000, an increase of 36%, or
approximately $2,029,000. As a percentage of sales, operating expenses
for the nine and three month periods decreased from 17.0% and 17.0%
respectively to 14.8% and 14.0% respectively. The decrease is due to
increased sales volume associated with fixed costs. The dollar increases
in operating expenses were due to increases in the following expense
categories: Approximately $5,309,000 of the increase for the nine month
period and approximately $1,962,000 of the increase for the three month
period, were for personnel related costs -commissions, salaries, travel,
fringe benefits and the addition of the San Jose, California branch and
other facilities. These increases were needed to produce the increased
sales which were achieved in these periods. The remaining increases of
approximately $1,086,000 and $67,000 respectively are a result of
increases in various other operating expenses.
Interest expense increased from approximately $965,000 to approximately
$1,480,000 when comparing the nine month periods ended November 30, 1994
and 1995. This increase was primarily due to the subordinated
convertible notes being outstanding for a full nine months this year
versus approximately four months last year and higher average bank
borrowings. For the three months ended November 30, 1995, interest
expense was approximately $545,000 as compared to approximately $456,000
for the corresponding period of the prior year as higher levels of bank
debt more than offset the lower outstanding amount of subordinated
convertible debt. These increases were primarily due to higher average
borrowings resulting from an increase in the Company's inventory and
receivables.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS (Continued):
--------------------------------------
<TABLE>
<CAPTION>
INTEREST EXPENSE
-------------------------------------------
FOR THE THREE FOR THE NINE
MONTHS ENDED MONTHS ENDED
------------------- ---------------------
NOVEMBER NOVEMBER NOVEMBER NOVEMBER
30, 1995 30, 1994 30, 1995 30, 1994
-------- -------- ---------- --------
<S> <C> <C> <C> <C>
Revolving Bank Credit $297,790 $147,005 $613,701 $655,590
Sub. Convert. Notes 247,500 309,375 866,250 309,375
-------- -------- ---------- --------
Total Interest Expense $545,290 $456,380 $1,479,951 $964,965
======== ======== ========== ========
</TABLE>
Results of Operations (Continued):
----------------------------------
Net income for the nine month period ended November 30, 1995 was
$6,871,000 or $.71 per share fully diluted as compared to $3,373,000 or
$.40 per share fully diluted for the nine month period ended November
30, 1994. Net income for the three month period ended November 30, 1995
was $2,834,000 or $.29 per share fully diluted as compared to $960,000
or $.11 per share fully diluted for the corresponding period of the
prior year. The increase in earnings is primarily due to increased sales
volume net of lower operating expenses as a percentage of sales.
Liquidity and Capital Resources:
--------------------------------
At November 30, 1995 and at the fiscal year ended February 28, 1995, the
Company's current ratio was approximately 5.1:1. Working capital
increased from approximately $36,329,000 as of February 28, 1995 to
approximately $53,195,000 at November 30, 1995 while cash increased from
February 28, 1995 to November 30, 1995 by approximately $777,000. The
primary reasons for the increase in working capital was an increase in
cash, accounts receivable and inventories financed primarily through
long term debt during the current period. These increases were required
to support the increase in sales as discussed above.
In February 1988, the Company entered into an unsecured revolving line
of credit agreement, as amended, which currently provides for maximum
borrowings of $20,000,000 at the bank's prime rate with payments of
interest only through May 1, 1997.
In a private placement completed on August 31, 1994, the Company issued
$15 million principal amount of Subordinated Convertible Notes, which
are due in $5,000,000 increments on August 31, 2000, 2001 and 2002. The
notes are subordinate in right of payment to all existing and future
senior indebtedness of the Company. The notes bear interest at 8.25%,
payable quarterly on November 15, February 15, May 15 and August 15. The
notes are convertible into shares of common stock at a conversion price
of $9.00 per share. As of November 30, 1995, $3,000,000 of the notes had
been converted into 333,333 shares of common stock and $12,000,000
principal amount of subordinated convertible notes remained outstanding.
11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS (Continued):
--------------------------------------
Liquidity and Capital Resources (Continued):
--------------------------------------------
The Company has experienced an overall short fall in operating cash flow
over the last seven fiscal quarters primarily due to the approximate
sixty percent increase in sales for the nine month period of the current
fiscal year and the approximately forty percent increase in sales in
fiscal 1995. As a result of this sales growth the Company has been
required to finance increased levels of accounts receivable and
inventory which exceed the amounts that can be supported by operating
cash flows. The short fall in operating cash flow has been supplemented
through the issuance of the subordinated convertible notes and the
utilization of the unsecured bank credit line as described above.
While the Company cannot predict that growth will continue at the same
rate experienced over the prior seven quarters, management is planning
for substantial growth over the ensuing twelve month period which more
than likely will result in a continued short fall in operating cash
flow. The Company anticipates that its capital resources provided by its
bank line of credit will be sufficient to meet its financing
requirements during that period.
Inflationary Impact:
--------------------
Since the inception of operations, inflation has not significantly
affected the operating results of the Company. However, inflation and
changing interest rates have had a significant effect on the economy in
general and therefore could affect the operating results of the Company
in the future.
12
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
There are no material legal proceedings against the Company or in which
any of their property is subject.
ITEM 2. Changes in Securities
None
ITEM 3. Defaults upon Senior Securities
None
ITEM 4. Submission of Matters to a Vote of Security Holders
None
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports:
(a) Exhibits:
Exhibit 10.14 - Amendment No. 2 to Amended and Restated Revolving
Credit Agreement and Tenth Amendment to Revolving
Credit and Term Loan Agreement dated as of November
29, 1995 between the Company and National
Westminster Bank, USA
Exhibit 10.15 - Amendment No. 3 to Amended and Restated Revolving
Credit Agreement and Eleventh Amendment to Revolving
Credit and Term Loan Agreement dated as of November
30, 1995 between the Company and National
Westminster Bank, USA
Exhibit 11 - Computation of Earnings per Common Share
Exhibit 27 - Financial Data Schedules
(b) Reports on Form 8-K
None
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Nu Horizons Electronics Corp.
-----------------------------
Registrant
/s/ Arthur Nadata
----------------------------
Date: January 12, 1996 Arthur Nadata, President and
Chief Executive Officer
/s/ Paul Durando
------------------------------------
Date: January 12, 1996 Paul Durando, Vice President-Finance
and Chief Financial Officer
14
<PAGE>
(EXHIBIT 10.14)
SECOND AMENDMENT
TO
AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT dated as of
November 29, 1995, by and among NU HORIZONS ELECTRONICS CORP., a Delaware
corporation, NIC COMPONENTS CORP., NU HORIZONS INTERNATIONAL CORP., each a New
York corporation, NU VISIONS MANUFACTURING, INC., a Massachusetts corporation,
and NU HORIZONS/MERIT ELECTRONICS CORP., a Delaware corporation, having their
respective principal offices at 6000 New Horizons Boulevard, North Amityville,
New York (collectively, the "Borrowers") and NATWEST BANK, N.A., formerly known
as National Westminster Bank USA, a national banking association, having offices
at 190 Vanderbilt Motor Parkway, Hauppauge, New York (the "Bank").
RECITALS
The Borrowers and the Bank entered into an Amended and Restated Loan
Agreement dated as of April 29, 1994 as amended by a First Amendment dated as of
August 24, 1994 (collectively, the "Loan Agreement"), under which certain
financial accommodations were made available by the Bank to the Borrowers.
Unless otherwise expressly provided herein, all capitalized terms used in this
Second Amendment to Amended and Restated Loan Agreement shall have the
respective meanings ascribed to such terms in the Loan Agreement.
The Borrowers have requested that the Bank increase the amount of the
Commitment to $20,000,000 and the Bank is willing to comply with such request
but only upon and subject to the following terms and conditions.
NOW THEREFORE, in consideration of the premises and the mutual covenants
and promises exchanged herein, the parties hereto mutually agree as follows:
1. The Amended and Restated Loan Agreement is hereby amended by the
Borrowers and the Bank as follows:
(a) Section 1.1 is hereby amended to add a new definition entitled
"New Headquarters Premises" to read as follows:
Page 1 of 15
<PAGE>
"'New Headquarters Premises' shall have the meaning ascribed thereto
in Section 2.16 hereof."
(b) Section 2.1(a) is hereby deleted and the following is substituted
therefor:
"Subject to the terms and conditions hereof, the Bank agrees to make
Revolving Credit Loans to each of the Borrowers and to issue Letters
of Credit and to provide steamship guarantees and airway releases and
to create Bankers Acceptances for the account of each of the Borrowers
from time to time during the Commitment Period of which the aggregate
principal amount of Revolving Credit Loans, Letters of Credit, Bankers
Acceptances, steamship guarantees and airway releases at any one time
outstanding as to the Borrowers collectively shall not exceed
$20,000,000 as such amount may be reduced as provided in Section 2.12
hereof (the "Commitment"). During the Commitment Period each of the
Borrowers may use the Commitment (i) for obtaining Revolving Credit
Loans by borrowing, paying, prepaying in whole or in part and
reborrowing on a revolving basis, all in accordance with the terms and
conditions hereof and (ii) for obtaining the issuance of Letters of
Credit, the creation of Bankers Acceptances and the providing of
steamship guarantees and airway releases in accordance with the
provisions of Section 2.2 hereof."
(c) Section 2.16 is hereby deleted and the following is substituted
therefor:
2.16 Use of Proceeds. The Borrowers may utilize up to $6,000,000 of
the proceeds of the initial Revolving Credit Loans to fund the
Acquisition. Any remaining proceeds of the initial borrowing and of
any subsequent Revolving Credit Loans may be used by the Borrower for
general corporate purposes. The Borrower may utilize up to an
aggregate amount of $2,000,000 of any subsequent Re-
Page 2 of 15
<PAGE>
volving Credit Loans to purchase land located in Suffolk County, New
York (the "New Headquarters Premises") on which the Borrowers intend
to construct a new corporate headquarters building. No portion of the
proceeds of any Revolving Credit Loan shall be used by any Borrower in
any manner which might cause the borrowing or the application of such
proceeds to violate Regulation G, Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System."
(d) Sections 6.1 and 6.2 are hereby amended to add the following at
the end of each of such Sections:
"For purposes of calculating compliance with this Section, amounts
outstanding under Revolving Credit Loans which are utilized to
purchase the New Headquarters Premises in an aggregate amount not
exceeding $2,000,000 shall be excluded from consolidated current
liabilities."
(e) Section 7.7 is hereby deleted and the following is substituted
therefor:
"7.7 Capital Expenditures. Expend in any fiscal year in the
aggregate for the Borrower and all Subsidiaries an amount in excess of the
greater of $1,500,000 or 25% of the aggregate of the prior fiscal year's net
income plus depreciation for the acquisition of fixed assets (inclusive of
rental payments under capitalized leases); provided, however, for the fiscal
year ending 2/28/96, such amount may be increased by up to $2,000,000 of the
expenditures related to the purchase of the New Headquarters Premises. The
foregoing expenditures made within the limitations of this Section 7.7 shall be
inclusive of payments made on account of any deferred purchase price or on
account of any purchase money indebtedness incurred to finance any such purchase
price."
(f) Exhibit A is hereby amended to conform to the amendment
hereinabove set forth in paragraph 1(a) and, as amended, is set forth in its
entirety in an attachment annexed hereto and make a part hereof.
Page 3 of 15
<PAGE>
2. It is expressly understood and agreed that all collateral security for
the Revolving Credit Loans and other extensions of credit set forth in the
Amended and Restated Loan Agreement prior to the amendment provided for herein
is and shall continue to be collateral security for the Revolving Credit Loans
and other extensions of credit provided in the Amended and Restated Loan
Agreement as herein amended. Without limiting the generality of the foregoing,
the Borrowers hereby absolutely and unconditionally confirm that (i) each
document and instrument executed by the Borrowers pursuant to the Amended and
Restated Loan Agreement continues in full force and effect, is ratified and
confirmed and is and shall continue to be applicable to the Amended and Restated
Loan Agreement (as herein amended), and (ii) the Amended and Restated Note is
hereby ratified and confirmed and shall remain in full force and effect in
accordance with its terms. The terms "Revolving Credit Note" and "Note" shall
include any Amended and Restated Revolving Credit Note.
3. In order to induce the Bank to enter into this Second Amendment
to Amended and Restated Loan Agreement, the Borrowers represent and warrant to
the Bank that each of their representations and warranties made in the Amended
and Restated Loan Agreement is true and correct as of the date hereof except as
otherwise set forth in writing(s) to which the Bank is a party.
4. No modification or waiver of any provisions of the Amended and
Restated Loan Agreement or any other agreement or instrument made or issued
pursuant thereto or contemplated thereby, nor consent to any departure by the
Borrowers therefrom shall, in any event, be effective unless made in writing and
signed by the Bank and the Borrowers, and then any such modification or waiver
shall be effective only in the specific instance and for the purpose for which
given unless otherwise specified therein. No notice to, or demand on, the
Borrowers in any case shall, of itself, entitle them to any further notice or
demand in similar or other circumstances.
5. The Borrowers agree to pay on demand, and the Bank may charge any
deposit or loan accounts(s) of the Borrowers, for all expenses incurred by the
Bank in connection with the negotiation, preparation and administration
(including any future waiver or modification and legal counsel as to the rights
and duties of the Bank) of this Second Amendment to Amended and Restated Loan
Agreement.
Page 4 of 15
<PAGE>
6. The amendments set forth herein are limited precisely as written
and shall not be deemed to (a) be a consent to or waiver of any other term or
condition of the Amended and Restated Loan Agreement or of any of the documents
referred to therein or (b) prejudice any right or rights which the Bank may now
have or may have in the future under or in connection with the Amended and
Restated Loan Agreement or any of the documents referred to therein.
7. This Second Amendment to Amended and Restated Loan Agreement is
dated for convenience as of November 29, 1995 and shall be effective on the
delivery of an executed counterpart hereof to the Borrowers. This Second
Amendment to Amended and Restated Loan Agreement may be executed in
counterparts, each of which shall constitute an original, and each of which
taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
Amended and Restated Loan Agreement to be duly executed and delivered by their
duly authorized officers, all as of the day and year first above written.
NU HORIZONS ELECTRONICS CORP. NIC COMPONENTS CORP.
By:______________________ By:______________________
Paul Durando Paul Durando
Vice President-Finance Vice President-Finance
NU HORIZONS INTERNATIONAL CORP. NU VISIONS MANUFACTURING, INC.
By:______________________ By:______________________
Paul Durando Paul Durando
Vice President-Finance Vice President-Finance
NU HORIZONS/ NATWEST BANK N.A.
MERIT ELECTRONICS CORP. formerly known as
National Westminster Bank USA
By:______________________ By:______________________
Paul Durando Jeffrey B. Carstens
Vice President-Finance Vice President
Page 5 of 15
<PAGE>
STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 29th day of November, 1995, before me personally came PAUL DURANDO,
to me known, who, being by me duly sworn, did depose and say that he resides at
c/o 6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU HORIZONS ELECTRONICS CORP., the corporation described in
and which executed the foregoing instrument; and that he signed his name thereto
by order of the board of directors of said corporation.
Notary Public
STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 29th day of November, 1995, before me personally came PAUL DURANDO,
to me known, who, being by me duly sworn, did depose and say that he resides at
c/o 6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NIC COMPONENTS CORP., the corporation described in and
which executed the foregoing instrument; and that he signed his name thereto by
order of the board of directors of said corporation.
Notary Public
STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 29th day of November, 1995, before me personally came PAUL DURANDO,
to me known, who, being by me duly sworn, did depose and say that he resides at
c/o 6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU HORIZONS INTERNATIONAL CORP., the corporation described
in and which executed the foregoing instrument; and that he signed his name
thereto by order of the board of directors of said corporation.
Notary Public
Page 6 of 15
<PAGE>
STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 29th day of November, 1995, before me personally came PAUL DURANDO,
to me known, who, being by me duly sworn, did depose and say that he resides at
c/o 6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU VISIONS MANUFACTURING, INC., the corporation described
in and which executed the foregoing instrument; and that he signed his name
thereto by order of the board of directors of said corporation.
Notary Public
STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 29th day of November, 1995, before me personally came PAUL DURANDO,
to me known, who, being by me duly sworn, did depose and say that he resides at
c/o 6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU HORIZONS/MERIT ELECTRONICS CORP., the corporation
described in and which executed the foregoing instrument; and that he signed his
name thereto by order of the board of directors of said corporation.
Notary Public
STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 29th day of November, 1995, before me personally came JEFFREY B.
CARSTENS, to me known, who, being by me duly sworn, did depose and say that he
resides at c/o 190 Vanderbilt Motor Parkway, Hauppauge, New York; that he is a
Vice President of NATWEST BANK N.A., the banking institution described in and
which executed the foregoing instrument; and that he signed his name thereto by
authority of such banking institution.
Notary Public
Page 7 of 15
<PAGE>
(EXHIBIT 10.14)
TENTH AMENDMENT TO REVOLVING CREDIT
AND TERM LOAN AGREEMENT
-----------------------
TENTH AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT dated as of
November 29, 1995, by and between NU HORIZONS ELECTRONICS CORP., a Delaware
corporation having its executive offices at 6000 New Horizons Boulevard, North
Amityville, New York (the "Company") and NATWEST BANK, N.A. formerly known as
National Westminster Bank USA, a national banking association, having offices at
190 Vanderbilt Motor Parkway, Hauppauge, New York (the "Bank").
RECITALS
--------
The Company and the Bank entered into a Revolving Credit and Term Loan
Agreement dated as of May 26, 1988 (as amended by the First Amendment dated as
of March 19, 1990, the Second Amendment dated as of February 28, 1991, the Third
Amendment dated as of April 1, 1992, the Fourth Amendment dated as of April 8,
1992, a Fifth Amendment dated as of August 1, 1992, a Sixth Amendment dated as
of October 1, 1992, a Seventh Amendment dated as of May 20, 1993, an Eighth
Amendment dated as of January 14, 1994, a Ninth Amendment dated as of April 29,
1994 and as may be further amended, the "Loan Agreement"), pursuant to which
certain financial accommodations were made available by the Bank to the Company.
Unless otherwise expressly provided herein, all capitalized terms used in this
Tenth Amendment shall have the respective meanings ascribed to such terms in the
Loan Agreement.
The Company has requested that the Bank modify certain of the terms set
forth in the Loan Agreement and the Bank is willing to comply with such request
but only upon and subject to the following terms and conditions.
NOW THEREFORE, in consideration of the premises and mutual covenants and
promises exchanged herein, the parties hereto mutually agree as follows:
1. The Loan Agreement is hereby amended by the Company and the Bank as
follows:
(a) Section 1.1 is hereby amended to add a new definition entitled
"New Headquarters Premises" to read as follows:
Page 8 of 15
<PAGE>
"'New Headquarters Premises' shall mean certain land located on
Wireless Boulevard, Hauppauge, New York on which the Company intends
to construct a new corporate headquarters building."
(b) Section 5.10 subsections (c) and (f) are hereby amended to add the
following at the end of each of such subsections:
"For purposes of calculating compliance with this subsection, amounts
outstanding under the Amended and Restated Revolving Credit Note made
by the Company and certain related corporations payable to the order
of the Bank dated as of November 29, 1995 which are utilized to
purchase the New Headquarters Premises in an aggregate amount not
exceeding $2,000,000 shall be excluded from current liabilities."
(c) Section 6.16 is hereby deleted and the following is substituted
therefor:
"Capital Expenditures. Expend in any fiscal year in the aggregate for
the Company and its Subsidiaries an amount in excess of the greater of
$1,500,000 or 25% of the aggregate of the prior fiscal year's net
income plus depreciation for the acquisition of fixed assets
(inclusive of rental payments under capitalized leases); provided,
however, for the fiscal year ending 2/28/96, such amount may be
increased by up to $2,000,000 of the expenditures related to the
purchase of the New Headquarters Premises. The foregoing expenditures
made within the limitations of this Section shall be inclusive of
payments made on account of any deferred purchase price or on account
of any purchase money indebtedness incurred to finance any such
purchase price."
Page 9 of 15
<PAGE>
2. It is expressly understood and agreed that all collateral security
for the Loans and other extensions of credit set forth in the Loan Agreement
prior to the amendments provided for herein is and shall continue to be
collateral security for the Loans and other extensions of credit provided in the
Loan Agreement as herein amended. Without limiting the generality of the
foregoing, the Company hereby absolutely and unconditionally confirms that (i)
each document and instrument executed by the Company pursuant to the Loan
Agreement continues in full force and effect, is ratified and confirmed and is
and shall continue to be applicable to the Loan Agreement (as herein amended)
and (ii) the Notes are hereby ratified and confirmed and shall remain in full
force and effect in accordance with their respective terms. Nonetheless, at the
request of the Bank, the Company shall promptly execute and deliver replacement
notes to evidence all indebtedness outstanding under the Loan Agreement as
hereby amended. The term "Notes" shall include any such replacement notes.
3. In order to induce the Bank to enter into this Tenth Amendment to Loan
Agreement, the Company represents and warrants to the Bank that each of its
representations and warranties made in the Loan Agreement is true and correct as
of the date hereof except as otherwise set forth in writing(s) to which the Bank
is a party. Notwithstanding the foregoing, to the extent that the
representations and warranties contained in the Loan Agreement and in that
certain amended and restated loan agreement dated as of April 29, 1994 among the
Company, certain related corporations and the Bank (as previously amended and as
may be amended from time to time, the "Restated Loan Agreement") differ, the
representations and warranties contained in the Restated Loan Agreement shall
control.
4. No modifications or waiver or any provisions of the Loan Agreement or
any other agreement or instrument made or issued pursuant thereto or
contemplated thereby, nor consent to any departure by the Company therefore
shall, in any event, be effective unless made in writing and signed by the Bank
and the Company, and then any such modification or waiver shall be effective
only in the specific instance and for the purpose for which given unless
otherwise specified therein. No notice to, or demand on, the Company in any
case shall, of itself, entitle it to any further notice or demand in similar or
other circumstances.
Page 10 of 15
<PAGE>
5. The Company agrees to pay on demand, and the Bank may charge any
deposit or loan account(s) of the Company, for all expenses incurred by the Bank
in connection with the negotiation, preparation and administration (including
any future waiver or modification and legal counsel as to the rights and duties
of the Bank) of this Tenth Amendment to Loan Agreement.
6. This amendment is limited precisely as written and shall not be deemed
to (a) be a consent or waiver of any other term or condition of the Loan
Agreement or of any of the documents referred to therein or (b) prejudice any
right or rights which the Bank may now have or may have in the future under or
in connection with the Loan Agreement or any of the documents referred to
therein.
7. This Tenth Amendment to Loan Agreement is dated for convenience of as
November 29, 1995 and shall be effective on the delivery of an executed
counterpart to the Company. This Tenth Amendment to Loan Agreement may be
executed in counterparts, each of which shall constitute an original, and each
of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to Loan
Agreement to be duly executed and delivered by their duly authorized officers,
all as of the day and year first above written.
NU HORIZONS ELECTRONICS CORP.
By:______________________
Arthur Nadata
President
NATWEST BANK, N.A.
Page 11 of 15
<PAGE>
formerly known as
National Westminster Bank USA
By:______________________
Jeffrey B. Carstens
Vice President
STATE OF NEW YORK )
:ss.:
COUNTY OF NASSAU )
On the 29th day of November, 1995, before me personally came ARTHUR NADATA,
to me known, who, being by me duly sworn, did depose and say that he resides at
c/o 6000 New Horizons Boulevard, North Amityville, New York; that he is the
President of NU HORIZONS ELECTRONICS CORP., the corporation described in and
which executed the foregoing instrument; and that he signed his name thereto by
order of the board of directors of said corporation.
Notary Public
STATE OF NEW YORK )
:ss.:
COUNTY OF NASSAU )
On this 29th day of November, 1995, before me personally came JEFFREY B.
CARSTENS, to me known, who, being by me duly sworn, did depose and say that he
resides at c/o 190 Vanderbilt Motor Parkway, Hauppauge, New York ; that he is a
Vice President of NATWEST BANK N.A., the banking institution described in and
which executed the foregoing instrument; that he signed his name thereto by
authority of such banking institution.
Notary Public
Page 12 of 15
<PAGE>
(EXHIBIT 10.14)
AMENDED AND RESTATED REVOLVING CREDIT NOTE
------------------------------------------
$20,000,000 Hauppauge, New York
As of November 29, 1995
FOR VALUE RECEIVED, NU HORIZONS ELECTRONICS CORP., NIC COMPONENTS CORP.,
NU HORIZONS INTERNATIONAL CORP., NU VISIONS MANUFACTURING, INC. and NU
HORIZONS/MERIT ELECTRONICS CORP. (collectively, the "Borrowers") jointly and
severally promise to pay to the order of NATWEST BANK N.A. (the "Bank") on the
Termination Date, at the office of the Bank specified in Section 10.12 of the
Amended and Restated Loan Agreement, dated as of April 29, 1994 between the
Borrowers and the Bank (as amended from time to time, the "Agreement"; terms
defined in the Agreement shall have their defined meanings when used in the
Note), in lawful money of the United States of America and in immediately
available funds the principal amount of TWENTY MILLION ($20,000,000) DOLLARS or,
if less than such principal amount, the aggregate unpaid principal amount of all
Loans made by the Bank to the Borrowers pursuant to Section 2.1 of the
Agreement. The Borrowers further promise to pay interest in like money on the
unpaid principal balance of this Note from time to time outstanding at such
rates, and payable at such times, as are specified in the Agreement. All Loans
made by the Bank pursuant to subsection 2.1 of the Agreement and all payments of
principal thereon shall be endorsed by the holder of this Note on the schedule
annexed hereto, which holder may add additional pages to such schedule. The
aggregate net unpaid amount of Loans set forth in such schedule shall be
presumed to be the principal balance hereof. After the stated or any
accelerated maturity hereof, this Note shall bear interest at such rates as are
specified in the Agreement, payable on demand, but in no event in excess of the
maximum rate of interest permitted under applicable law.
This Note is the Note referred to in the Agreement, and is entitled to the
benefits thereof and may be prepaid in whole or in part as provided therein.
Upon the occurrence of any one or more of the Events of Default specified
in the Agreement, all amounts then remaining unpaid on this Note may be declared
to be immediately due and payable as provided in the Agreement.
Page 13 of 15
<PAGE>
This Note replaces and substitutes for (but is not a repayment of) a
certain Amended and Restated Revolving Credit Note dated as of August 24, 1994
(the "Prior Note") in the aggregate principal amount of $20,000,000.00, of which
$14,400,000.00 was outstanding as of November 29, 1995. Such outstanding amount
or such other sum as shall be outstanding under the Prior Note on the date this
Note is executed shall constitute the first Loan hereunder and shall be subject
to all the terms and conditions hereof and of the Amended and Restated Loan
Agreement.
This Note shall be construed in accordance with and governed by the laws of
the State of New York.
NU HORIZONS ELECTRONICS CORP. NIC COMPONENTS CORP.
By:______________________ By:______________________
Paul Durando Paul Durando
Vice President-Finance Vice President-Finance
NU HORIZONS INTERNATIONAL CORP. NU VISIONS MANUFACTURING, INC.
By:______________________ By:______________________
Paul Durando Paul Durando
Vice President-Finance Vice President-Finance
NU HORIZONS/MERIT ELECTRONICS CORP.
By:______________________
Paul Durando
Vice President-Finance
Page 14 of 15
<PAGE>
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO AMENDED AND RESTATED REVOLVING CREDIT NOTE
DATED AS OF AUGUST 24, 1994
NU HORIZONS ELECTRONICS CORP.
NIC COMPONENTS CORP.
NU HORIZONS INTERNATIONAL CORP.
NU VISIONS MANUFACTURING, INC.
NU HORIZONS/MERIT ELECTRONICS CORP.
TO
NATWEST BANK N.A.
Amount Balance
and Type Interest Principal Remaining Notation
Date Borrower of Loan Period Paid Unpaid Made By
- ---- -------- -------- -------- ---- ------ ---------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Page 15 of 15
<PAGE>
EXHIBIT 10.15
THIRD AMENDMENT
TO
AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT dated as of January
10, 1996, by and among NU HORIZONS ELECTRONICS CORP., a Delaware corporation,
NIC COMPONENTS CORP., NU HORIZONS INTERNATIONAL CORP., each a New York
corporation, NU VISIONS MANUFACTURING, INC., a Massachusetts corporation, and NU
HORIZONS/MERIT ELECTRONICS CORP., a Delaware corporation, having their
respective principal offices at 6000 New Horizons Boulevard, North Amityville,
New York (collectively, the "Borrowers") and NATWEST BANK, N.A., formerly known
as National Westminster Bank USA, a national banking association, having offices
at 100 Jericho Quadrangle, Jericho, New York (the "Bank").
RECITALS
The Borrowers and the Bank entered into an Amended and Restated Loan
Agreement dated as of April 29, 1994 as amended by a First Amendment dated as of
August 24, 1994 and a Second Amendment dated as of November 29, 1995
(collectively, the "Loan Agreement"), under which certain financial
accommodations were made available by the Bank to the Borrowers. Unless
otherwise expressly provided herein, all capitalized terms used in this Third
Amendment to Amended and Restated Loan Agreement shall have the respective
meanings ascribed to such terms in the Loan Agreement.
The Borrowers have requested that the Bank modify certain of the terms set
forth in the Loan Agreement and the Bank is willing to comply with such request
but only upon and subject to the following terms and conditions.
NOW THEREFORE, in consideration of the premises and the mutual covenants
and promises exchanged herein, the parties hereto mutually agree as follows:
1. Section 6.1 of The Amended and Restated Loan Agreement is hereby
amended by the Borrowers and the Bank to read as follows:
Current Ratio and Quick Ratio. Maintain at all times (i) a ratio of
-----------------------------
consolidated current assets to consolidated current liabilities of at
least 2.10 to 1.0, and (ii) a ratio of consolidated current assets
composed of cash on hand or on deposit in banks and marketable
Eligible Investment Securities plus Eligible Accounts Receivable to
consolidated current liabilities of at least .85 to 1.0.
<PAGE>
2. It is expressly understood and agreed that all collateral security for
the Revolving Credit Loans and other extensions of credit set forth in the
Amended and Restated Loan Agreement prior to the amendment provided for herein
is and shall continue to be collateral security for the Revolving Credit Loans
and other extensions of credit provided in the Amended and Restated Loan
Agreement as herein amended. Without limiting the generality of the foregoing,
the Borrowers hereby absolutely and unconditionally confirm that (i) each
document and instrument executed by the Borrowers pursuant to the Amended and
Restated Loan Agreement continues in full force and effect, is ratified and
confirmed and is and shall continue to be applicable to the Amended and Restated
Loan Agreement (as herein amended), and (ii) the Amended and Restated Note is
hereby ratified and confirmed and shall remain in full force and effect in
accordance with its terms. The terms "Revolving Credit Note" and "Note" shall
include any Amended and Restated Revolving Credit Note.
3. In order to induce the Bank to enter into this Third Amendment to
Amended and Restated Loan Agreement, the Borrowers represent and warrant to the
Bank that each of their representations and warranties made in the Amended and
Restated Loan Agreement is true and correct as of the date hereof except as
otherwise set forth in writing(s) to which the Bank is a party.
4. No modification or waiver of any provisions of the Amended and
Restated Loan Agreement or any other agreement or instrument made or issued
pursuant thereto or contemplated thereby, nor consent to any departure by the
Borrowers therefrom shall, in any event, be effective unless made in writing and
signed by the Bank and the Borrowers, and then any such modification or waiver
shall be effective only in the specific instance and for the purpose for which
given unless otherwise specified therein. No notice to, or demand on, the
Borrowers in any case shall, of itself, entitle them to any further notice or
demand in similar or other circumstances.
5. The Borrowers agree to pay on demand, and the Bank may charge any
deposit or loan accounts(s) of the Borrowers, for all expenses incurred by the
Bank in connection with the negotiation, preparation and administration
(including any future waiver or modification and legal counsel as to the rights
and duties of the Bank) of this Third Amendment to Amended and Restated Loan
Agreement.
6. The amendments set forth herein are limited precisely as written
and shall not be deemed to (a) be a consent to or waiver of any other term or
condition of the Amended and Restated Loan Agreement or of any of the documents
referred to therein or (b) prejudice any right or rights which the Bank may now
have or may have in the future under or in connection with the
-2-
<PAGE>
Amended and Restated Loan Agreement or any of the documents referred to therein.
7. This Third Amendment to Amended and Restated Loan Agreement is
dated for convenience as of January 10, 1996 and shall be effective retroactive
to November 30, 1995 on the delivery of an executed counterpart hereof to the
Borrowers. This Third Amendment to Amended and Restated Loan Agreement may be
executed in counterparts, each of which shall constitute an original, and each
of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
Amended and Restated Loan Agreement to be duly executed and delivered by their
duly authorized officers, all as of the day and year first above written.
NU HORIZONS ELECTRONICS CORP. NIC COMPONENTS CORP.
By: /s/ Paul Durando By: /s/ Paul Durando
------------------------ -----------------------
Paul Durando Paul Durando
Vice President-Finance Vice President-Finance
NU HORIZONS INTERNATIONAL CORP. NU VISIONS MANUFACTURING, INC.
By: /s/ Paul Durando By: /s/ Paul Durando
------------------------ -----------------------
Paul Durando Paul Durando
Vice President-Finance Vice President-Finance
NU HORIZONS/ NATWEST BANK N.A.
MERIT ELECTRONICS CORP. formerly known as
National Westminster Bank USA
By: /s/ Paul Durando By: /s/ Jeffrey B. Carstens
------------------------ --------------------------
Paul Durando Jeffrey B. Carstens
Vice President-Finance Vice President
-3-
<PAGE>
STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 10th day of January, 1996, before me personally came PAUL DURANDO,
to me known, who, being by me duly sworn, did depose and say that he resides at
c/o 6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU HORIZONS ELECTRONICS CORP., the corporation described in
and which executed the foregoing instrument; and that he signed his name thereto
by order of the board of directors of said corporation.
/s/ Dianne J. Judd
---------------------------
Notary Public
STATE OF NEW YORK) Dianne J. Judd
:ss.: Notary Public, State of New York
COUNTY OF NASSAU ) No. 30-5005169
Qualified in Nassau County
Commission Expires Nov. 30, 1996
On the 10th day of January, 1996, before me personally came PAUL DURANDO,
to me known, who, being by me duly sworn, did depose and say that he resides at
c/o 6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NIC COMPONENTS CORP., the corporation described in and
which executed the foregoing instrument; and that he signed his name thereto by
order of the board of directors of said corporation.
/s/ Dianne J. Judd
---------------------------
Notary Public
STATE OF NEW YORK) Dianne J. Judd
:ss.: Notary Public, State of New York
COUNTY OF NASSAU ) No. 30-5005169
Qualified in Nassau County
Commission Expires Nov. 30, 1996
On the 10th day of January, 1996, before me personally came PAUL DURANDO,
to me known, who, being by me duly sworn, did depose and say that he resides at
c/o 6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU HORIZONS INTERNATIONAL CORP., the corporation described
in and which executed the foregoing instrument; and that he signed his name
thereto by order of the board of directors of said corporation.
/s/ Dianne J. Judd
---------------------------
Notary Public
STATE OF NEW YORK) Dianne J. Judd
:ss.: Notary Public, State of New York
COUNTY OF NASSAU ) No. 30-5005169
Qualified in Nassau County
Commission Expires Nov. 30, 1996
-4-
<PAGE>
STATE OF NEW YORK)
:ss.:
COUNTY OF NASSAU )
On the 10th day of January, 1996, before me personally came PAUL DURANDO,
to me known, who, being by me duly sworn, did depose and say that he resides at
c/o 6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU VISIONS MANUFACTURING, INC., the corporation described
in and which executed the foregoing instrument; and that he signed his name
thereto by order of the board of directors of said corporation.
/s/ Dianne J. Judd
---------------------------
Notary Public
STATE OF NEW YORK) Dianne J. Judd
:ss.: Notary Public, State of New York
COUNTY OF NASSAU ) No. 30-5005169
Qualified in Nassau County
Commission Expires Nov. 30, 1996
On the 10th day of January, 1996, before me personally came PAUL DURANDO,
to me known, who, being by me duly sworn, did depose and say that he resides at
c/o 6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU HORIZONS/MERIT ELECTRONICS CORP., the corporation
described in and which executed the foregoing instrument; and that he signed his
name thereto by order of the board of directors of said corporation.
/s/ Dianne J. Judd
---------------------------
Notary Public
STATE OF NEW YORK) Dianne J. Judd
:ss.: Notary Public, State of New York
COUNTY OF NASSAU ) No. 30-5005169
Qualified in Nassau County
Commission Expires Nov. 30, 1996
On the 10th day of January, 1996, before me personally came JEFFREY B.
CARSTENS, to me known, who, being by me duly sworn, did depose and say that he
resides at c/o 100 Jericho Quadrangle, Jericho, New York; that he is a Vice
President of NATWEST BANK N.A., the banking institution described in and which
executed the foregoing instrument; and that he signed his name thereto by
authority of such banking institution.
/s/ Dianne J. Judd
---------------------------
Notary Public
STATE OF NEW YORK) Dianne J. Judd
:ss.: Notary Public, State of New York
COUNTY OF NASSAU ) No. 30-5005169
Qualified in Nassau County
Commission Expires Nov. 30, 1996
-5-
<PAGE>
EXHIBIT 10.15
ELEVENTH AMENDMENT TO REVOLVING CREDIT
AND TERM LOAN AGREEMENT
-----------------------
ELEVENTH AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT dated as of
January 10, 1996, by and between NU HORIZONS ELECTRONICS CORP., a Delaware
corporation having its executive offices at 6000 New Horizons Boulevard, North
Amityville, New York (the "Company") and NATWEST BANK, N.A. formerly known as
National Westminster Bank USA, a national banking association, having offices at
100 Jericho Quadrangle, Jericho, New York (the "Bank").
RECITALS
--------
The Company and the Bank entered into a Revolving Credit and Term Loan
Agreement dated as of May 26, 1988 (as amended by the First Amendment dated as
of March 19, 1990, the Second Amendment dated as of February 28, 1991, the Third
Amendment dated as of April 1, 1992, the Fourth Amendment dated as of April 8,
1992, a Fifth Amendment dated as of August 1, 1992, a Sixth Amendment dated as
of October 1, 1992, a Seventh Amendment dated as of May 20, 1993, an Eighth
Amendment dated as of January 14, 1994, a Ninth Amendment dated as of April 29,
1994, a Tenth Amendment dated as of November 29, 1995 and as may be further
amended, the "Loan Agreement"), pursuant to which certain financial
accommodations were made available by the Bank to the Company. Unless otherwise
expressly provided herein, all capitalized terms used in this Eleventh Amendment
shall have the respective meanings ascribed to such terms in the Loan Agreement.
The Company has requested that the Bank modify certain of the terms set
forth in the Loan Agreement and the Bank is willing to comply with such request
but only upon and subject to the following terms and conditions.
NOW THEREFORE, in consideration of the premises and mutual covenants and
promises exchanged herein, the parties hereto mutually agree as follows:
1. Section 5.10 (c) of The Loan Agreement is hereby amended by the
Company and the Bank to read as follows:
Current Ratio and Quick Ratio. Maintain at all times (y) a ratio of
-----------------------------
consolidated current assets to consolidated current liabilities of at
least 2.10 to 1.0, and (z) a ratio of consolidated current assets
composed of cash on hand or on deposit in banks and marketable
Eligible Investment Securities plus Eligible Accounts Receivable
current liabilities of at least .85 to 1.0.
-1-
<PAGE>
2. It is expressly understood and agreed that all collateral security
for the Loans and other extensions of credit set forth in the Loan Agreement
prior to the amendments provided for herein is and shall continue to be
collateral security for the Loans and other extensions of credit provided in the
Loan Agreement as herein amended. Without limiting the generality of the
foregoing, the Company hereby absolutely and unconditionally confirms that (i)
each document and instrument executed by the Company pursuant to the Loan
Agreement continues in full force and effect, is ratified and confirmed and is
and shall continue to be applicable to the Loan Agreement (as herein amended)
and (ii) the Notes are hereby ratified and confirmed and shall remain in full
force and effect in accordance with their respective terms. Nonetheless, at the
request of the Bank, the Company shall promptly execute and deliver replacement
notes to evidence all indebtedness outstanding under the Loan Agreement as
hereby amended. The term "Notes" shall include any such replacement notes.
3. In order to induce the Bank to enter into this Eleventh Amendment to
Loan Agreement, the Company represents and warrants to the Bank that each of its
representations and warranties made in the Loan Agreement is true and correct as
of the date hereof except as otherwise set forth in writing(s) to which the Bank
is a party. Notwithstanding the foregoing, to the extent that the
representations and warranties contained in the Loan Agreement and in that
certain amended and restated loan agreement dated as of April 29, 1994 among the
Company, certain related corporations and the Bank (as previously amended and as
may be amended from time to time, the "Restated Loan Agreement") differ, the
representations and warranties contained in the Restated Loan Agreement shall
control.
4. No modifications or waiver or any provisions of the Loan Agreement or
any other agreement or instrument made or issued pursuant thereto or
contemplated thereby, nor consent to any departure by the Company therefore
shall, in any event, be effective unless made in writing and signed by the Bank
and the Company, and then any such modification or waiver shall be effective
only in the specific instance and for the purpose for which given unless
otherwise specified therein. No notice to, or demand on, the Company in any
case shall, of itself, entitle it to any further notice or demand in similar or
other circumstances.
5. The Company agrees to pay on demand, and the Bank may charge any
deposit or loan account(s) of the Company, for all expenses incurred by the Bank
in connection with the negotiation, preparation and administration (including
any future waiver or modification and legal counsel as to the rights and duties
of the Bank) of this Eleventh Amendment to Loan Agreement.
6. This amendment is limited precisely as written and shall not be deemed
to (a) be a consent or waiver of any other term or
-2-
<PAGE>
condition of the Loan Agreement or of any of the documents referred to therein
or (b) prejudice any right or rights which the Bank may now have or may have in
the future under or in connection with the Loan Agreement or any of the
documents referred to therein.
7. This Eleventh Amendment to Loan Agreement is dated for convenience of
as January 10, 1996 and shall be effective retroactive to November 30, 1995 on
the delivery of an executed counterpart to the Company. This Eleventh Amendment
to Loan Agreement may be executed in counterparts, each of which shall
constitute an original, and each of which taken together shall constitute one
and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to Loan
Agreement to be duly executed and delivered by their duly authorized officers,
all as of the day and year first above written.
NU HORIZONS ELECTRONICS CORP.
By:______________________
Paul Durando
Vice President-Finance
NATWEST BANK, N.A.
formerly known as
National Westminster Bank USA
By:______________________
Jeffrey B. Carstens
Vice President
-3-
<PAGE>
STATE OF NEW YORK )
:ss.:
COUNTY OF NASSAU )
On the 10th day of January, 1996, before me personally came PAUL DURANDO,
to me known, who, being by me duly sworn, did depose and say that he resides at
c/o 6000 New Horizons Boulevard, North Amityville, New York; that he is the Vice
President-Finance of NU HORIZONS ELECTRONICS CORP., the corporation described
in and which executed the foregoing instrument; and that he signed his name
thereto by order of the board of directors of said corporation.
/s/ Dianne J. Judd
---------------------------
Notary Public
STATE OF NEW YORK) Dianne J. Judd
:ss.: Notary Public, State of New York
COUNTY OF NASSAU ) No. 30-5005169
Qualified in Nassau County
Commission Expires Nov. 30, 1996
On the 10th day of January, 1996, before me personally came JEFFREY B.
CARSTENS, to me known, who, being by me duly sworn, did depose and say that he
resides at c/o 100 Jericho Quadrangle, Jericho, New York; that he is a Vice
President of NATWEST BANK N.A., the banking institution described in and which
executed the foregoing instrument; that he signed his name thereto by authority
of such banking institution.
/s/ Dianne J. Judd
---------------------------
Notary Public
Dianne J. Judd
Notary Public, State of New York
No. 30-5005169
Qualified in Nassau County
Commission Expires Nov. 30, 1996
-4-
<PAGE>
NU HORIZONS ELECTRONICS CORP.
EXHIBIT 11
COMPUTATION OF EARNINGS PER COMMON SHARE
----------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
FOR THE FOR THE
NINE MONTHS ENDED THREE MONTHS ENDED
------------------------ ------------------------
NOVEMBER NOVEMBER NOVEMBER NOVEMBER
30, 1995 30, 1994 30, 1995 30, 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
PRIMARY EARNINGS:
- ----------------
NET INCOME $ 6,871,148 $3,373,141 $ 2,834,143 $ 959,756
----------- ----------- ----------- -----------
SHARES:
Weighted average
number of common
shares and common
share equivalents
outstanding 8,098,973 7,845,534 8,310,144 7,840,474
----------- ----------- ----------- -----------
PRIMARY EARNINGS PER
COMMON SHARE: $.85 $.43 $.34 $.12
==== ==== ==== ====
FULLY DILUTED EARNINGS:
- -----------------------
Net Income $ 6,871,148 $3,373,141 $ 2,834,143 $ 959,756
Net (after tax)
interest expense
related to
convertible debt 534,764 182,457 170,825 182,457
----------- ----------- ----------- -----------
NET INCOME AS ADJUSTED $ 7,405,912 $3,555,598 $ 3,004,968 $ 1,142,213
=========== =========== =========== ===========
SHARES:
Weighted average
number of common
shares and common
share equivalents
outstanding 8,098,973 7,845,534 8,310,144 7,840,474
Additional options
not included above 681,587 594,637 550,410 603,969
Assuming conversion
of convertible debt 1,629,629 555,555 1,555,555 1,666,666
----------- ----------- ----------- -----------
Weighted average
number of common
shares outstanding
as adjusted 10,410,189 8,995,726 10,416,109 10,111,109
=========== =========== =========== ===========
FULLY DILUTED EARNINGS
PER COMMON SHARE $.71 $.40 $.29 $.11
==== ==== ==== ====
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS FOR THE THIRD QUARTER ENDED NOVEMBER 30, 1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-28-1996
<PERIOD-START> MAR-01-1995
<PERIOD-END> NOV-30-1995
<CASH> 1,275,691
<SECURITIES> 0
<RECEIVABLES> 29,799,863
<ALLOWANCES> 1,379,161
<INVENTORY> 35,718,728
<CURRENT-ASSETS> 66,227,980
<PP&E> 6,902,276
<DEPRECIATION> 3,587,044
<TOTAL-ASSETS> 73,112,128
<CURRENT-LIABILITIES> 13,033,219
<BONDS> 0
<COMMON> 53,342
0
0
<OTHER-SE> 31,959,197
<TOTAL-LIABILITY-AND-EQUITY> 73,112,128
<SALES> 149,874,502
<TOTAL-REVENUES> 149,874,502
<CGS> 114,584,192
<TOTAL-COSTS> 114,584,192
<OTHER-EXPENSES> 22,186,588
<LOSS-PROVISION> 635,000
<INTEREST-EXPENSE> 1,479,951
<INCOME-PRETAX> 11,626,308
<INCOME-TAX> 4,755,160
<INCOME-CONTINUING> 6,871,148
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,871,148
<EPS-PRIMARY> .85
<EPS-DILUTED> .71
</TABLE>
