MELVILLE, NY, — March 10, 2010 — Nu Horizons Electronics Corp. (Nasdaq/NM: NUHC), a leading distributor of active and passive electronic components, announced today that Xilinx, Inc. has formally notified Nu Horizons of its intention to terminate its distribution agreement with Nu Horizons due to a change in Xilinx's distribution strategy. The termination is effective as of June 5, 2010 and until that date Xilinx and Nu Horizons intend to work together to ensure a smooth transition. Additionally, Xilinx has stated that it will work with Nu Horizons to honor customer backlog. Pursuant to the terms of the distribution agreement, Nu Horizons has the right to return all unsold Xilinx inventory to Xilinx, at Xilinx’s expense, for a full refund of the original purchase price.
The net value of Xilinx inventories at February 28, 2010 was $41.2 million, inclusive of confirmed orders. Xilinx product sales were approximately 32% of the Company's total sales for fiscal 2010.
Arthur Nadata, Executive Chairman and Interim Chief Executive Officer of Nu Horizons stated, “We have worked with Xilinx for 23 years and although we are disappointed that Xilinx has decided to terminate our relationship, this change is not related to Nu Horizons’ performance, but solely due to a change in Xilinx’s strategy going forward. We believe that the termination of this relationship will enable Nu Horizons to expand our line card and pursue new business opportunities. We are grateful to have leveraged this relationship to attain a global presence for Nu Horizons. Going forward, we believe that we will see continued global revenue growth from our product lines exclusive of Xilinx. In our third fiscal quarter, we reported our second consecutive quarter of growth in sales, gross profit and operating income. Nu Horizons’ financial position remains healthy and management believes it has adequate resources to grow the business and fund operations in fiscal 2011. We continue to have the ability to build our sales in the many other quality franchise product lines we maintain and in new product lines by offering design-in and other services to our customers globally. We intend to reallocate our sales and engineering resources to support our other key suppliers, as well as to potential new suppliers to further accelerate our growth.”
About Nu Horizons Electronics Corp.
Nu Horizons Electronics Corp. is a leading global distributor of advanced technology semiconductor, display, illumination, power, system and telecommunication solutions to a wide variety of commercial original equipment manufacturers (OEMs) and electronic manufacturing services providers (EMS). With sales facilities in 54 locations across North America, Europe and Asia and regional logistics centers throughout the globe, Nu Horizons partners with a limited number of best-in-class suppliers to provide in-depth product development, custom logistics and life-cycle support to its customers. Information on Nu Horizons and its services is available at www.nuhorizons.com
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