<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
August 31, 1998 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.)
70 Maxess Road, Melville, New York 11747
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(516) 396-5000
- --------------------------------------------------------------------------------
(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
- ___
Indicated 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 8,753,076
- ------------------------------------------- ---------------------------------
Class Outstanding Shares
<PAGE>
NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
----------------------------------------------
INDEX
-----
<TABLE>
<CAPTION>
PART I. Financial Information Page(s)
ITEM 1. Financial Statements
<S> <C> <C>
Consolidated Condensed Balance Sheets August 31, 1998
(unaudited) and February 28, 1998 3.
Consolidated Condensed Statements of Income (unaudited) -
Six Months and Three Months Ended August 31, 1998 and 1997 4.
Consolidated Condensed Statements of Cash Flows (unaudited) -
Six Months Ended August 31, 1998 and 1997 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 4. Submission of Matters to a Vote of Security Holders 13.
ITEM 6. Exhibits and Reports on Form 8-K 13.
SIGNATURES 14.
INDEX TO EXHIBITS 15.
Exhibit 11 - Schedule re: Computation of Per Share Earnings
(See Notes to Consolidated Financial Statements Note 5)
Exhibit 27 - Financial Data Schedule
</TABLE>
2
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial Statements
NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
----------------------------------------------
CONSOLIDATED CONDENSED BALANCE SHEETS
-------------------------------------
-ASSETS-
--------
<TABLE>
<CAPTION>
AUGUST FEBRUARY
31, 1998 28, 1998
------------------ ------------------
(unaudited)
CURRENT ASSETS:
<S> <C> <C>
Cash $ 2,758,863 $ 4,333,669
Accounts receivable-net of allowance for doubtful
accounts of $2,518,125 and $2,362,722 for August 31, 1998
and February 28, 1998, respectively 33,457,781 37,351,029
Inventories 53,176,556 44,004,890
Prepaid expenses and other current assets 3,731,612 4,837,007
------------------ ------------------
TOTAL CURRENT ASSETS 93,124,812 90,526,595
PROPERTY, PLANT AND EQUIPMENT NET (Note 2) 6,749,321 6,359,775
OTHER ASSETS
Cost in excess of net assets acquired-net 1,673,870 1,752,332
Other assets 1,064,332 1,002,726
------------------ ------------------
$102,612,335 $99,641,428
================== ==================
</TABLE>
-LIABILITIES AND SHAREHOLDERS' EQUITY
-------------------------------------
<TABLE>
<CAPTION>
CURRENT LIABILITIES:
<S> <C> <C>
Accounts payable $ 7,903,882 $12,112,365
Accrued expenses 6,903,938 3,196,623
Income taxes payable 203,463 -
------------------- ------------------
TOTAL CURRENT LIABILITIES 15,011,283 15,308,988
------------------- ------------------
LONG TERM LIABILITIES:
Deferred income taxes 360,350 431,395
Revolving credit line (Note 3) 26,200,000 25,300,000
Subordinated convertible notes (Note 4) 7,059,000 7,059,000
------------------- ------------------
33,619,350 32,790,395
------------------- ------------------
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;
8,753,076 and shares issued and outstanding for
August 31, 1998 and February 28, 1998 57,770 57,770
Additional paid-in capital 19,042,230 19,042,230
Retained earnings 35,884,184 33,532,009
------------------- ------------------
54,984,184 52,632,009
Less: loan to ESOP 1,002,482 1,089,964
------------------- ------------------
53,981,702 51,542,045
------------------- ------------------
$102,612,335 $99,641,428
=================== ==================
</TABLE>
See notes to interim consolidated condensed financial statements
3
<PAGE>
NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
----------------------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
-------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE THREE MONTHS
ENDED ENDED
----------------------------------------- ----------------------------------------
AUGUST AUGUST AUGUST AUGUST
31, 1998 31, 1997 31, 1998 31, 1997
------------------ ------------------ ----------------- ------------------
<S> <C> <C> <C> <C>
NET SALES $123,029,836 $110,964,305 $62,797,917 $56,798,598
------------------ ------------------ ----------------- ------------------
COSTS AND EXPENSES:
Cost of sales 95,441,930 86,794,180 48,848,889 44,570,929
Operating expenses 22,441,520 19,050,564 11,232,302 9,952,639
Interest expense 1,166,395 767,171 637,040 440,277
Interest income - (10,109) - (10,107)
------------------ ------------------ ----------------- ------------------
119,049,845 106,601,806 60,718,231 54,953,738
------------------ ------------------ ----------------- ------------------
INCOME BEFORE PROVISION FOR
INCOME TAXES
3,979,991 4,362,499 2,079,686 1,844,860
Provision for income taxes 1,627,816 1,788,696 848,862 773,444
------------------ ------------------ ----------------- ------------------
NET INCOME $ 2,352,175 $ 2,573,803 $ 1,230,824 $ 1,071,416
================== ================== ================= ==================
NET INCOME PER SHARE (Note 5):
Basic $ .27 $ .29 $ .14 $ .12
============ ============ =========== ===========
Fully diluted $ .22 $ .25 $ .12 $ .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 SIX MONTHS ENDED
---------------------------------------------------
AUGUST AUGUST
31, 1998 31, 1997
--------------------- --------------------
<S> <C> <C>
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS:
Cash flows from operating activities:
Cash received from customers $ 126,745,584 $ 108,697,467
Cash paid to suppliers and employees (125,931,758) (113,122,056)
Interested received - 10,109
Interest paid (1,166,395) (767,171)
Income taxes paid (1,322,170) (2,949,580)
--------------------- --------------------
Net cash (used in) operating activities (1,674,739) (8,131,231)
--------------------- --------------------
Cash flows from investing activities:
Capital expenditures (800,067) (316,100)
Proceeds from sale of building - 1,126,840
--------------------- --------------------
Net cash (used in) provided by investing activities (800,067) 810,740
--------------------- --------------------
Cash flows from financing activities:
Borrowings under revolving credit line 37,300,000 14,550,000
Repayments under revolving credit line (36,400,000) (8,050,000)
Principal payments of long-term debt - (110,797)
Proceeds from stock options - 55,408
--------------------- --------------------
Net cash provided by financing activities 900,000 6,444,611
--------------------- --------------------
Net (decrease) in cash and cash equivalents (1,574,806) (875,880)
Cash and cash equivalents, beginning of year 4,333,669 946,084
--------------------- --------------------
Cash and cash equivalents, end of period $ 2,758,863 $ 70,204
===================== ====================
</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 SIX MONTHS ENDED
----------------------------------------------------
AUGUST 31, 1998 AUGUST 31, 1997
----------------------- -----------------------
RECONCILIATION OF NET INCOME TO NET
CASH (USED IN) OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 2,352,175 $ 2,573,803
----------------------- -----------------------
Adjustments to reconcile net income to net cash
(used in) operating activities:
Depreciation and amortization 488,983 748,510
Contribution to ESOP 87,482 69,975
Bad debt provision 177,500 120,000
Loss on sale of building - 60,871
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 3,715,748 (2,266,838)
(Increase) in inventories (9,171,666) (7,252,931)
Decrease (increase) in prepaid expenses and other
current assets 1,105,395 (1,454,042)
(Increase) in other assets (61,606) (35,681)
(Decrease) in accounts payable and
accrued expenses (501,168) (763,508)
Increase in income taxes 203,463 -
(Decrease) increase in deferred income taxes (71,045) 68,610
----------------------- -----------------------
Total Adjustments (4,026,914) (10,705,034)
----------------------- -----------------------
Net cash (used in) operating activities $(1,674,739) $ (8,131,231)
======================= =======================
</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)
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., Nu Horizons Eurotech
Limited, NIC Eurotech Limited and Nu Visions Manufacturing, Inc.) contain all
adjustments necessary to present fairly the Company's financial position at
August 31, 1998 and February 28, 1998 and the results of its operations for
the six and three month periods ended August 31, 1998 and 1997 and cash flows
for the six month periods ended August 31, 1998 and 1997.
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, 1998, 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 six and three month periods ended August 31,
1998 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>
AUGUST FEBRUARY
31, 1998 28, 1998
------------------ ------------------
<S> <C> <C>
Furniture, fixtures and office equipment $ 6,907,143 $ 6,290,449
Computer equipment 3,345,937 3,016,739
Assets held under capitalized leases 919,834 919,834
Leasehold improvements 1,254,364 1,254,364
------------------ ------------------
12,427,278 11,481,386
Less: accumulated depreciation and amortization 5,677,957 5,121,611
------------------ ------------------
$ 6,749,321 $ 6,359,775
================== ==================
</TABLE>
3. BANK LINE OF CREDIT
On May 23, 1997, the Company entered into a new unsecured revolving line of
credit with two banks, which as amended, provides for maximum borrowings of
$35,000,000 at either (i) the lead bank's prime rate or (ii) LIBOR plus 57.5
to 112.5 basis points depending on the ratio of the Company's debt to its
earnings before interest, taxes, depreciation and amortization, at the option
of the Company through May 23, 2001.
7
<PAGE>
NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
----------------------------------------------
NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued)
------------------------------------------------------------------------
(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 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. The
cost of issuing these notes was $521,565 and was amortized over three years.
As of August 31, 1998, $7,941,000 of the notes have been converted into
882,333 shares of common stock and $7,059,000 principal amount of subordinated
convertible notes remained outstanding and are due in increments of $2,353,000
on August 31, 2000, 2001 and 2002.
5. NET INCOME PER SHARE:
Basic and diluted earnings per share have been computed in accordance with the
adoption of SFAS No. 128. In addition, prior period per share data has been
restated in accordance with SFAS No. 128.
The following average shares were used in the computation of primary and fully
diluted earnings per share:
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
August 31, August 31,
-------------------------- ---------------------------
1998 1997 1998 1997
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Basic 8,753,076 8,746,826 8,753,076 8,746,826
Diluted 11,271,859 10,816,609 11,271,859 10,816,609
</TABLE>
A detailed computation of earnings per common share appears in Exhibit 11 to
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"), Nu Horizons Eurotech Limited, NIC Eurotech
Limited 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, consists 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 wholly-owned subsidiary of the Company, is a
contract assembler of circuit boards and related electromechanical
devices for various OEMs.
The financial information presented herein includes: (i) Consolidated
Condensed Balance Sheets as of August 31, 1998 and February 28, 1998;
(ii) Consolidated Condensed Statements of Income for the six and three
month periods ended August 31, 1998 and 1997 and (iii) Consolidated
Condensed Statements of Cash Flows for the six month periods ended
August 31, 1998 and 1997.
Results of Operations:
----------------------
Sales for the six-month period ended August 31, 1998 were $123,029,836
as compared to $110,964,305 for the comparable period of the prior
year, an increase of approximately $12,065,000 or 11%. Sales for the
three-month period ended August 31, 1998 were $62,797,917 as compared
to $56,798,598 for the comparable period of the prior year, an increase
of approximately $6,000,000 or 11%. Management attributes this increase
in sales entirely to the core semiconductor distribution business which
experienced substantially increased unit sales partially offset by
excess inventory levels at the semiconductor manufacturing (supplier)
level resulting in reduced unit pricing. Management continues to
believe that this latter situation is temporary and expects market
conditions to undergo a correction in the near future; however, no
assurance can be given in this regard.
The gross profit margins for the three and six months ended August 31,
1998 were approximately 22.2 % and 22.4% as compared to 21.5% and 21.8%
for the comparable periods of the prior year. Gross profit percentages
for the past several quarters have remained relatively stable due to
substantial inventory oversupplies at the supplier level, as mentioned
above. No assurance can be given that gross profit stabilization will
continue in future periods.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-----------------------------------------------------------------------
OF OPERATIONS (Continued):
-------------------------
Results of Operations (Continued):
----------------------------------
Operating expenses have increased from approximately $19,051,000 for
the six months ended August 31, 1997 to approximately $22,442,000 for
the six months ended August 31, 1998, an increase of 17.8% or
approximately $3,391,000. For the three months ended August 31, 1997 as
compared to the three months ended August 31, 1997 operating expenses
increased from approximately $9,953,000 to $11,232,000, an increase of
12.9%, or approximately $1,279,000. The dollar increases in operating
expenses were due to increases in the following expense categories:
Approximately $ 2,403,000 or 71% of the increase for the six-month
period and approximately $1,027,000 or 80% of the increase for the
three-month period, were for personnel related costs commissions,
salaries, travel, fringe benefits. During fiscal 1998 and continuing
into fiscal 1999, the Company decided to pursue a policy of upgrading
and enlarging its sales and sales support staff to support anticipated
growth in the near as well as more distant future. Increased sales
levels in fiscal 1998 and the first six months of fiscal 1999 have not
met expectations. The Company continues to believe in this strategy for
long term growth and expects market conditions to undergo a correction
in the near future although no assurances can be given in this regard.
The remaining increase of approximately $988,000 or 29% for the six-
month period and approximately $252,000 or 20% for the three-month
period were a result of increases in various other selling, general,
and administrative expenses.
Interest expense increased from approximately $767,000 for the six
months ended August 31, 1997 to approximately $1,166,000 for the six
months ended August 31, 1998 and from approximately $440,000 for the
three-month period ended August 31, 1997 to $637,000 for the three-
month period ended August 31, 1998. These increases were primarily due
to higher average borrowings resulting from an increase in the
Company's inventories net of a decrease in both cash and accounts
receivable levels.
<TABLE>
<CAPTION>
INTEREST EXPENSE
--------------------
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
--------------------------------------------- ------------------------------------------
AUGUST AUGUST AUGUST AUGUST
31, 1998 31, 1997 31, 1998 31, 1997
--------------------- ------------------ ------------------- ------------------
<S> <C> <C> <C> <C>
Revolving Bank Credit $ 491,448 $ 294,685 $ 875,211 $ 475,987
Sub. Convert. Notes 145,592 145,592 291,194 291,184
Total Interest Expense $ 637,040 $ 440,277 $1,166,395 $ 767,171
===================== ================== =================== ==================
</TABLE>
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-----------------------------------------------------------------------
OF OPERATIONS (Continued):
--------------------------
Results of Operations (Continued):
----------------------------------
Net income for the six-month period ended August 31, 1998 was
$2,352,175 or $.22 per share diluted as compared to $2,573,803 or $.25
per share diluted for the six-month period ended August 31, 1997. Net
income for the three-month period ended August 31, 1998 was $1,230,824
or $.12 per share diluted as compared to $1,071,416 or $.11 per share
diluted for the corresponding period of the prior year. The relative
stability in earnings is primarily due to increased sales net of higher
expenses for the periods.
Liquidity and Capital Resources:
--------------------------------
At August 31, 1998, the Company's current ratio was 6.2:1 as compared
to 5.9:1 at the fiscal year ended February 28, 1998. Working capital
increased from approximately $75,218,000 as of February 28, 1998 to
approximately $78,114,000 at August 31, 1998 while cash decreased from
February 28, 1998 to August 31, 1998 by approximately $1,575,000. The
primary reasons for the increase in both working capital and the
current ratio was the increase in inventories net of the decrease in
both cash and accounts receivable financed primarily through long term
debt during the current period. This increase was required to support
the increased sales activity over the six-month period.
On May 23, 1997, the Company entered into a new unsecured revolving
line of credit with two banks, which as amended, currently provides for
maximum borrowings of $35,000,000 at either (i) the lead bank's prime
rate or (ii) LIBOR plus 57.5 to 112.5 basis points depending on the
ratio of the Company's debt to its earnings before interest, taxes,
depreciation and amortization, at the option of the Company through May
23, 2001.
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 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. The
cost of issuing these notes was $521,565 and was amortized over three
years. As of August 31, 1998, $7,941,000 of the notes have been
converted into 882,333 shares of common stock and $7,059,000 principal
amount of subordinated convertible notes remained outstanding and are
due in increments of $2,353,000 on August 31m 2000, 2001 and 2002. No
assurance can be given that the notes will be converted or that the
shares of common stock underlying the notes will be sold by the holders
thereof.
11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-----------------------------------------------------------------------
OF OPERATIONS (Continued):
--------------------------
Liquidity and Capital Resources:
--------------------------------
The Company anticipates that its capital resources provided by its bank
line of credit will be sufficient to meet its financing requirements
for at least the next twelve-month period.
Impact of Year 2000 Issue:
--------------------------
The year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Any of
the Company's computer programs that have date-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000.
This could potentially result in a system failure or miscalculations
causing disruptions of operations, including, among other things, a
temporary inability to process transactions, send invoices, or engage
in other similar normal business activities. The Company has ensured
that its software is already year 2000 compliant, and as such this
issue is not expected to have a material effect on the operations of
the Company. Nevertheless, the Company cannot predict the effect of the
year 2000 problem on the vendors and customers with which the Company
transacts business or with whose products the Company's products
interact and there can be no assurance that the effect of the year 2000
issues on such entities will not adversely effect the Company's
operations. In an effort the reduce concerns relative to these outside
sources, the Company has undertaken written communications with its
vendors to confirm their preparedness relative to the year 2000 issue
and, with respect to vendors, their continued ability to produce and
deliver the products the Company purchases for resale.
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.
Forward Looking Information
---------------------------
Except for historical information contained herein, the matters set
forth above 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 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.
12
<PAGE>
PART II. OTHER INFORMATION
ITEM 2. 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
(a) The Registrant held its Annual Meeting of Stockholders
on September 24, 1998. The following proposals were
adopted by the votes indicated.
(b) (c) (1) Three directors were elected at the Annual Meeting to
serve until the Annual Meeting of Stockholders in 2001,
in addition to the four other Directors, Irving Lubman,
Arthur Nadata, Paul Durando and Herbert Gardner, whose
term of office continued after the meeting. The names of
these Directors and votes cast in favor of their
election and shares withheld are as follows:
NAME VOTES FOR VOTES WITHHELD
---- ----------- --------------
Harvey Blau 7,940,597 183,273
Dominic Polimeni 7,940,597 183,273
Richard Schuster 7,940,747 183,123
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports:
(a) Exhibits:
11. See Exhibit 11 and Notes to Financial Statements, Note
5, regarding computation of per share earnings.
27. Financial Data Schedule
(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: October 15, 1998 Arthur Nadata, President and
Chief Executive Officer
/s/ Paul Durando
-------------------------------------
Date: October 15, 1998 Paul Durando, Vice President-Finance
and Chief Financial Officer
14
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------
EXHIBIT INDEX
To
FORM 10-Q
FOR THE FISCAL QUARTER ENDED AUGUST 31, 1998
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT 1934
-------------------------------
NU HORIZONS ELECTRONICS CORP.
(Exact Name of Registrant as Specified in Its Charter)
EXHIBIT
NUMBER DESCRIPTION
- --------------------------------------------------------------------------------
11 Computation of Per Share Earnings
27 Financial Data Schedule
15
<PAGE>
Exhibit 11
NU HORIZONS ELECTRONICS CORP.
EXHIBIT 11
- --------------------------------------------------------------------------------
COMPUTATION OF EARNINGS PER COMMON SHARE
----------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
FOR THE THREE FOR THE SIX
MONTHS ENDED MONTHS ENDED
----------------------------------------------------------------------
August August August August
31, 1998 31, 1997 31, 1998 31, 1997
----------------------------------------------------------------------
BASIC EARNINGS:
- --------------
<S> <C> <C> <C> <C>
Net Income $ 1,230,824 $ 1,071,416 $ 2,352,175 $ 2,573,803
======================================================================
Weighted average number
of common shares outstanding 8,753,076 8,746,826 8,753,076 8,746,826
======================================================================
Basic earnings per common share $ .14 $ .12 $ .27 $ .29
=========== =========== =========== ===========
DILUTED EARNINGS:
- -----------------
Net income $ 1,230,824 $ 1,071,416 $ 2,352,175 $ 2,573,803
Net (after tax) interest expense
related to convertible debt 85,000 85,000 170,000 170,000
----------------------------------------------------------------------
Net income as adjusted $ 1,315,824 $ 1,156,416 $ 2,522,175 $ 2,743,803
======================================================================
SHARES:
Weighted average number of
common shares outstanding 8,753,076 8,746,826 8,753,076 8,746,826
Stock options 1,734,450 1,285,450 1,734,450 1,285,450
Assuming conversion of
convertible debt 784,333 784,333 784,333 784,333
----------------------------------------------------------------------
Weighted average number
of common shares outstanding
as adjusted 11,271,859 10,816,609 11,271,859 10,816,609
======================================================================
DILUTED EARNINGS PER
$ .12 $ .11 $ .22 $ .25
COMMON SHARE =========== =========== =========== ===========
</TABLE>
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS FOR THE SECOND QUARTER ENDED AUGUST 31, 1998
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-28-1999
<PERIOD-START> MAR-01-1998
<PERIOD-END> AUG-31-1998
<CASH> 2,758,863
<SECURITIES> 0
<RECEIVABLES> 35,975,906
<ALLOWANCES> 2,518,125
<INVENTORY> 53,176,556
<CURRENT-ASSETS> 93,124,812
<PP&E> 12,427,278
<DEPRECIATION> 5,677,957
<TOTAL-ASSETS> 102,612,335
<CURRENT-LIABILITIES> 15,011,283
<BONDS> 33,619,650
0
0
<COMMON> 57,770
<OTHER-SE> 53,923,932
<TOTAL-LIABILITY-AND-EQUITY> 102,612,335
<SALES> 123,029,836
<TOTAL-REVENUES> 123,029,836
<CGS> 95,441,930
<TOTAL-COSTS> 95,441,930
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 177,500
<INTEREST-EXPENSE> 1,166,395
<INCOME-PRETAX> 3,979,991
<INCOME-TAX> 1,627,816
<INCOME-CONTINUING> 2,352,175
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,352,175
<EPS-PRIMARY> .27
<EPS-DILUTED> .22
</TABLE>
