Nu Horizons Electronics Corp. (NUHC) filed Quarterly Report for the period ended 2009-08-31.
NU HORIZONS ELECTRONICS CORP:engaged in the distribution of high tech. active & passive electronic components incl. commercial & military semiconductor products such as memory chips microprocessors digital & linear circuits microwave RF & fiberoptic components transistors & diodes as well as industrial contract manufacturing. Nu Horizons Electronics Corp. has a market cap of $73.2 million; its shares were traded at around $3.95 with and P/S ratio of 0.1.
Highlight of Business Operations:
The Company's current ratio (current assets divided by current liabilities) was 3.0:1 at August 31, 2009. Working capital was $146,994,000 at August 31, 2009 as compared to $147,141,000 at February 28, 2009. As of August 31, 2009 the Company had approximately $19,046,000 of cash and total bank debt of $20,365,000.
On January 31, 2007, the Company entered into an amended and restated secured revolving line of credit agreement with eight banks, which currently provides for maximum borrowings of $120,000,000 (the "Revolving Credit Line"). The Revolving Credit Line provides for borrowings utilizing an asset-based formula predicated on a certain percentage of outstanding domestic accounts receivable and inventory levels at any given month-end. Based on the asset-based formula, the Company may not be able to borrow the maximum amount available under its Revolving Credit Line at all times. At August 31, 2009, borrowings under the Revolving Credit Line incurred interest at either (i) the lead bank s prime rate plus 1.75% or (ii) LIBOR plus 3.5%, at the option of the Company, through September 30, 2011, the due date of the loan. The interest rate at August 31, 2009 was 5.00%. Direct borrowings under the Revolving Credit Line were $13,000,000 and $14,950,000 at August 31, 2009 and February 28, 2009, respectively. As of August 31, 2009, the Company was in compliance with all of the required bank covenants.
On November 20, 2006, the Company entered into a revolving credit agreement with a Singapore bank to provide a $30,000,000 secured line of credit to the Company s Asian subsidiaries and thereby finance the Company s Asian operations (the "Singapore Credit Line"). Borrowings under the Singapore Credit Line utilize an asset-based formula based on a certain percentage of outstanding accounts receivable and inventory levels at any given month end. Borrowings under the Singapore Credit Line bear interest at SIBOR plus 1.5%. The interest rate at August 31, 2009 was 3.26%. Direct borrowings under the Singapore Credit Line were $5,000,000 at August 31, 2009 and February 28, 2009. The Singapore Credit Line expires on November 20, 2009 and is currently being negotiated for renewal.
The Company also has a receivable financing agreement with a bank in England (the "U.K. Credit Line") which provides for maximum borrowings of £2,500,000 (approximately $4,089,000) at August 31, 2009, which bear interest at the bank's base rate plus 1.55%. The interest rate at August 31, 2009 was 2.28%. The Company owed $1,535,000 and $1,944,000 at August 31, 2009 and February 28, 2009, respectively. The U.K. Credit Line renews annually in July.
The Company has a credit agreement with a bank in Denmark ("the Danish Credit Line") which provides for maximum borrowings of 10,072,000 Danish Kroner (approximately $1,927,000) as of August 31, 2009, at the current prevailing interest rate (7.45% at August 31, 2009). Borrowings under the Danish Credit Line were 4,338,000 ($830,000) and 8,953,000 Danish Kroner ($1,506,000) at August 31, 2009 and February 28, 2009, respectively. The Danish Credit Line has no expiration date and is reviewed quarterly by the bank in Denmark.
All of the Company s bank debt and the associated interest expense are sensitive to changes in the level of interest rates. The Company s credit facilities bear interest based on fluctuating interest rates. The interest rate under its Revolving Credit Line is tied to the prime or LIBOR rate, the interest rate under its UK Credit Line is tied to the Bank of England's base rate, and the interest rate under the Singapore Credit Line is tied to SIBOR; all of these interest rates may fluctuate over time based on economic conditions. A hypothetical 100 basis point (one percentage point) increase in interest rates would have resulted in incremental interest expense of approximately $39,000 for the three months ended August 31, 2009 and $124,000 for the six months ended August 31, 2009. As a result, the Company is subject to market risk for changes in interest rates and could be subjected to increased or decreased interest payments if market rates fluctuate and the Company is in a borrowing mode. The Company has not entered into any instruments, such as interest rate swaps, in an effort to manage its interest rate risk.
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