May 07, 2002 Melville, NY
Nu Horizons Electronics Corp., Melville, a distributor of active and passive electronic components, reported a 55% decline in revenue for the fourth quarter ended Feb. 28.
Revenue from continuing operations for the fourth quarter decreased to $64 million from $141.9 million for the comparable period last year. Net loss from continuing operations for the quarter was $2.3 million, or 13 cents per diluted share, compared with net income from continuing operations of $6.1 million, or 35 cents per diluted share, in the same period last year.
Included in the fourth quarter and fiscal year results is a one-time charge of $1.1 million representing impairment of the valuation for goodwill. This impairment accounts for a loss of 6 cents per diluted share of the net loss from continuing operations for both the year and the quarter. There is no remaining goodwill on the balance sheet subsequent to this charge.
"Sales were down 56% from the prior year reflecting the well publicized reduction in demand for electronic components in general and in our case, more specifically, communications and networking products," said Arthur Nadata, president and chief executive of Nu Horizons, in a statement.
"This decline was evidenced in increasing sequential sales declines through the first three quarters of our fiscal year. The fourth quarter showed some signs of a mild recovery in that we posted a 10% sequential increase in sales over the third quarter, the first sequential increase in more than a year.
"Although we cannot predict when the semiconductor and passive component marketplace will recover, we believe this increase, coupled with a better than one to one book to bill ratio for the last four months of our fiscal year, are the first indicators of a gradual segment recovery."
For the fiscal year ended Feb. 28, 2002, revenue from continuing operations decreased to $281.9 million from $634 million in the previous fiscal year. Net loss from continuing operations for fiscal 2002 was $2.8 million, or 16 cents per diluted share, compared with net income from continuing operations of $33.6 million, or $1.89 per diluted share, in the year-earlier period.
"We concluded a difficult year with a modest net operating loss for the year and the quarter while managing to post a small net profit overall," Nadata said. "We continued to strengthen our balance sheet by generating $83 million in free cash flow for the year, enabling us to substantially reduce our borrowing levels to $2.5 million at year end as compared to $85 million a year ago.
On Aug. 23, 2001, the company sold its contract-manufacturing subsidiary, located in Springfield, Mass. Earnings for the reported periods and the gain on the sale of this operation are reported separately as discontinued operations. The sale of the facility resulted in an approximate after-tax gain of $4.2 million, or about 24 cents per diluted share.
Net income from discontinued operations for the fiscal year was $799,000, or 5 cents per diluted share, compared with $1.8 million, or 10 cents per diluted share, in the year-earlier period.
The company expects a moderate increase in sales performance in its first quarter, with a return to profitability later in the year.
