<PAGE>
 
                          SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549

                                      FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                             SECURITIES EXCHANGE ACT OF 1934

                     For the fiscal year ended December 31, 1996

                           Commission file number: 0-9788

                               RICHEY ELECTRONICS, INC.
                (Exact name of registrant as specified in its charter)

         Delaware                                          33-0594451
    (State or other jurisdiction                      (I.R.S. Employer
    of incorporation or organization)                 Identification No.)

             7441 Lincoln Way, Suite 100, Garden Grove, California 92641
              (Address of principal executive office)      (Zip Code)

Registrant's telephone number, including area code:  (714) 898-8288

Securities registered pursuant to Section 12(b) of the Act:  None

             Securities registered pursuant to Section 12(g) of the Act:

                            Common Stock, $0.001 par value
                            ------------------------------
                                   (Title of class)

    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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

    The aggregate market value of the registrant's common stock held by
non-affiliates of the registrant as of March 20, 1997, was $81,448,925
based on the last sales price on the Nasdaq Stock Market ("Nasdaq") on that
date.

    As of March 20, 1997, 9,062,685 shares of the registrant's common stock
were outstanding.
--------------------------------------------------------------------------------

                         DOCUMENTS INCORPORATED BY REFERENCE

    Certain portions of Richey Electronics, Inc.'s (the "Company" or "Richey
Electronics") proxy statement for its annual meeting of stockholders to be held
on May 1, 1997, which is being filed with the Securities and Exchange Commission
(the "Commission") concurrently herewith, are incorporated by reference into
Part III of this Form 10-K (Items 10 through 13).
<PAGE>

                                        PART I

ITEM 1.  BUSINESS

GENERAL

    Richey Electronics is a leading specialty distributor of interconnect,
electromechanical  and  passive electronic components and a provider of related
value-added assembly services to more than 16,000 customers nationwide.  Richey
Electronics has been built through a series of transactions beginning in
December 1990 with the acquisition of the operations of Richey/Impact
Electronics Inc. and continuing with the merger with Brajdas Corporation in 1993
and the acquisition of the operations of In-Stock in 1994, IEI and Deanco in
1995 and MS Electronics and Summit Distributors in 1996.  Since the initial
acquisition, the Company's growth has been directed by one of the most
experienced management teams in its industry.  Through acquisitions and internal
growth that improved the Company's operating leverage, Richey Electronics' sales
and earnings have increased from approximately $33.0 million and $700,000,
respectively, in 1991 to $226.2 million and $6.5 million, respectively, in 1996.
Giving pro forma effect to the acquisition of Deanco, the Company ranked in 1995
as the third largest distributor of interconnect devices in the United States
and as the sixth largest distributor of electromechanical/passive components in
the United States, based on information presented in the April 25, 1996 edition
of PURCHASING MAGAZINE.

    The Company distributes a broad line of connectors, switches, wire, cable
and heat shrinkable tubing and other interconnect, electromechanical and passive
electronic components used in the assembly and manufacturing of electronic
equipment.  Richey Electronics currently distributes electronic components for
more than 100 component manufacturers, of which more than 80 have franchised the
Company nationally by agreeing to supply its distribution activities in all of
its present and future locations.  Management believes that the Company
represents the broadest line of connector manufacturers in its industry, with
nine of the ten leading North American manufacturers supplying the Company.  The
Company is nationally franchised by eight of these leading manufacturers.
Richey Electronics also provides a wide variety of value-added assembly
services, which typically generate higher gross margins than traditional
component distribution.  The Company's customers are primarily small- and
medium-sized original equipment manufacturers ("OEMs") that produce electronic
equipment used in a wide variety of industries, including the
telecommunications, computer, medical, transportation and aerospace industries.

    In 1996, the Company continued to complete strategic acquisitions.  On
March 19, 1996, the Company acquired the assets and business of MS Electronics,
Inc. ("MS Electronics").  MS Electronics specializes in the distribution of
interconnect, electromechanical and passive electronic components and provides
related value-added assembly services in the Baltimore-Washington marketplace.
On December  5, 1996, the Company acquired the assets and business of Summit
Distributors, Inc. ("Summit Distributors"), a Buffalo, New York distributor of
interconnect, electromechancial and passive electronic components.

    In 1996, the Company issued $55,755,000 of 7% Convertible Subordinated
Notes due 2006 (the "Notes") in a private placement.  The Notes are convertible
into shares of the Company's common stock (the "Common Stock") at a conversion
price of $14.125 per share (subject to adjustment).  The Company maintains an
effective shelf registration statement with the Commission to register resales
of the Notes and the Common Stock issuable upon conversion.  The net proceeds
from the issuance of the Notes were approximately $53.8 million and were used to
repay the Company's $30.0 million term loan and to pay down its revolving line
of credit.

    The Company's principal executive offices are located at 7441 Lincoln Way,
Garden Grove, California 92641, and its telephone number is (714) 898-8288.

INDUSTRY OVERVIEW

    Over the last 30 years, the electronics industry has grown significantly as
a result of increased demand for products incorporating sophisticated electronic
components, such as telecommunications and computer equipment. This industry
growth has been matched by an increase in the number of products, component
manufacturers and OEMs.


                                          1
<PAGE>

    The electronics distribution industry has become an increasingly important
sales channel for the electronics industry because distributors can market
component manufacturers' products to a broader range of OEMs than suppliers
could economically serve with their direct sales forces. Historically,
manufacturers of electronic components have sold directly to larger OEMs and
relied upon distributors to serve smaller customers. Today, distributors have
become more of an extension of component manufacturers' product delivery channel
by providing value-added assembly services and technical support to customers,
stocking sufficient local inventory to ensure timely delivery of components and
managing customer credit. Distributors also work with OEMs to ensure that
component manufacturers' products are designed into new products. This is
particularly important because product innovations in the electronics industry
often come from smaller, entrepreneurial companies.

    As component manufacturers have increasingly focused their direct sales
efforts on the largest OEMs, and less on smaller customers, the distribution
segment has increased its share of the total United States connector market from
an estimated 22% in 1980 to an estimated 31% in 1995, according to the August
28, 1995 edition of ELECTRONIC NEWS.  The Company estimates that approximately
one-half of all electronic components are purchased by the top 100 customers who
purchase many of their components directly from component manufacturers.
Approximately 100,000 other OEMs purchase products from both distributors and
manufacturers, with smaller customers purchasing a greater proportion of their
products from distributors.

    MARKET SIZE.  According to the December 2, 1996 edition of ELECTRONIC NEWS,
the electronics distribution industry recorded approximately $21 billion in
sales in 1996. Of these sales, the Company estimates that approximately $15
billion consisted of sales of semiconductors and computer related peripherals,
which management believes are generally characterized by lower margins and are
not sold by the Company. The remaining $6 billion consisted of sales of
interconnect (connectors, sockets), electromechanical (relays, switches) and
passive (resistors, capacitors) components, which are marketed by the Company.
The Company does not intend to directly compete in the semiconductor or computer
peripheral markets of the electronics distribution industry.

    TRENDS.  Consolidation is one of the most significant trends affecting the
electronic component distribution industry. Of the 25 largest electronics
distributors in 1985, only 11 remain independent today. The factors driving
consolidation among electronic component distributors include the desire of
manufacturers to sell through fewer distributors, the need for distributors to
increase operating leverage and the desire of OEMs to satisfy component
requirements with fewer vendors. A series of mergers and acquisitions over the
last ten years have created a number of very large distribution companies that
have increasingly focused on their larger customers and on expanding
international operations. As a result of this large customer focus, regional and
specialty distributors such as the Company have gained market share among small-
and medium-sized OEMs. These smaller customers often require value-added
assembly services, detailed technical information about available products,
assistance in coordinating product design and engineering with materials
resource planning, fast response to inventory availability inquiries, dependable
on-time deliveries and other services.

    In addition to the consolidation of distributors, manufacturers are
limiting the number of distributors through which they market their products in
an effort to improve operating efficiency. Regional distributors must therefore
demonstrate strong local market positions and client relationships when
competing to obtain or retain top manufacturer franchises. Many of these
distributors have made substantial efforts to expand local market share by
emphasizing customer services, such as value-added assembly, just-in-time
inventory management, automatic replenishment and in-plant stores.

    Another key trend is the outsourcing of component assembly, which allows
OEMs to enhance profitability by concentrating resources on product design,
marketing and other core aspects of their business. By serving a number of
customers, distributors can often produce subassemblies more efficiently than
many small- and medium-sized OEMs. The September 9, 1996 edition of ELECTRONIC
BUYERS NEWS estimates that OEM outsourcing is now a $40 billion industry growing
at an estimated 20% per annum.


                                          2
<PAGE>

DISTRIBUTION AND SERVICES

    The Company distributes interconnect, electromechanical and passive
electronic components used in the assembly and manufacturing of electronic
equipment.  It also provides a wide variety of value-added assembly services,
which typically generate higher gross margins than traditional component
distribution. These value-added assembly services consist of (i) component
assembly, which is the assembly of components to manufacturer specifications and
(ii) contract assembly, which is the assembly of cable assemblies, battery packs
and mechanical assemblies to customer specifications. The Company's value- added
assembly services respond to an industry trend toward outsourcing in which
purchasing, manufacturing and distribution functions are allocated to the most
efficient provider.  The Company believes that outsourcing represents a
significant opportunity to expand sales, margins and operating profits.

    COMPONENT DISTRIBUTION.  The distribution of interconnect,
electromechanical and passive electronic components accounted for approximately
70.4% of the Company's net sales in 1996.  These products include connectors,
wire, cable, relays, switches, motors, batteries, power supplies, resistors,
capacitors, transformers, heat shrinkable tubing and potentiometers.  The
Company sources its products from such leading suppliers as 3M, AMP "ACES",
Bentley-Harris, Berg Electronics, Burndy/Framatome, C&K, Dale/Vishay, Delta,
Deutsch, Eaton, EBM/Papst, Grace Specialty Polymers, KEMET, Kings, Micro
Switch/Honeywell, Molex, Panasonic, Panduit, Raychem Electronics, Raychem
PolySwitch, Samtec and Wieland.

    VALUE-ADDED ASSEMBLY SERVICES.  The electronics industry's trend toward the
use of outside vendors to provide value-added assembly services represents a
growth opportunity for the Company. Outsourcing offers OEMs the opportunity to
invest financial resources in areas with higher returns, such as engineering and
marketing. Additionally, the capital investment required to stay current in
manufacturing technologies is beyond the financial capability of many smaller
OEMs. By servicing a large number of such customers, the Company spreads such
costs over a larger business base. Moreover, by integrating assembly services
with extensive inventories, the Company is able to eliminate a large amount of
shipping, handling and receiving costs from the process. For many OEMs, the
Company is able to offer assembly services at a lower cost to the customer while
producing higher margins for itself. The Company currently builds a variety of
component assemblies to customer or manufacturer specifications, including
cable, battery pack, switch and mechanical assemblies, wire harnesses, fan and
motor assemblies, and provides engraving and molding services. With the
acquisition of Deanco in 1995, Richey obtained the capability to encase its
cable and harness assemblies in heat shrinkable tubing, which was a significant
portion of Deanco's value-added assembly business. The Company has increased its
emphasis on higher-margin, value-added assembly services, which grew from $21.2
million, or 23.5% of sales, in 1994 to $33.0 million, or 29.0% of sales, in 1995
and to $66.9 million, or 29.6% of sales, in 1996.

    The Company currently provides value-added assembly services primarily from
its Los Angeles, California, Boston, Massachusetts and Portland, Oregon
facilities, having an aggregate of approximately 81,000 square feet dedicated to
value-added assembly services.  In addition, the Company also provides value-
added assembly services from its San Diego and Santa Clara, California
facilities, its Dallas, Texas facility and its Gaithersburg, Maryland facility.

SALES AND MARKETING

    The Company provides its customers with a wide range of products from a
large number of electronic component manufacturers. The Company believes that it
has developed valuable long-term customer relationships and an in-depth
understanding of its customers' needs and purchasing patterns. Richey
Electronics serves a broad range of customers in a wide variety of industries,
including the telecommunications, computer, medical, transportation and
aerospace industries. In 1996, Richey Electronics distributed electronic
components to more than 16,000 customers nationwide, none of which represented
more than 1.5% of net sales of the Company.

    The Company's sales representatives are trained to identify their
customers' electronic component requirements and to actively market the
Company's entire product line to satisfy these needs. During the design process,
sales representatives meet with the customers' engineers and designers to
discuss their component needs and any design or procurement problems. The sales
representatives suggest components that meet performance criteria,


                                          3
<PAGE>

are cost effective and focus on specific problems. Through this approach,
components carried by the Company are often incorporated into final product
specifications.

    The Company had approximately 325 sales representatives as of December 31,
1996.  Sales representatives are compensated primarily by commission based on
the gross profits obtained on their sales. The Company now has sales offices in
21 of the 31 major metropolitan distribution markets in the United States, which
accounted for 80% of the total distribution market in 1995 according to the
December 2, 1996 edition of ELECTRONIC NEWS.  The Company's market positions are
particularly strong in the northeastern and western United States.

    The Company's local sales efforts are supported by central marketing
groups, located in Garden Grove, California and in Boston, Massachusetts, which
are responsible for identifying new suppliers and developing supplier relations,
coordinating national advertising, negotiating supplier agreements and promoting
new and existing product lines within the Company.

OPERATIONS

    DISTRIBUTION.  The principal focus of the Company's distribution business
is to provide OEM customers with rapid and reliable deliveries of electronic
components and a wide variety of related value-added assembly services. The
Company utilizes a computerized system of inventory control to assist in
marketing its products and to coordinate purchases from manufacturers. Each
sales office and warehouse, as well as management, are linked through the
Company's computer system, providing detailed on-line information regarding the
price and availability of the Company's entire stock of inventory, as well as
on-line access to the inventories of several of the Company's major suppliers.
The Company also offers its customers a number of operational services,
including just-in-time delivery and electrical data interchange programs.

    After product price and availability are established, the Company's system
automatically places an order for shipment, or allocates inventory to the
assembly operations, if so required. The system then instructs warehouse
personnel to pull products for shipment and, via its locator system, informs
them as to the location of the inventory. In order to optimize use of available
warehouse space, the Company uses a random-access, multi-bin system whereby
inventory is stored in the first available space.

    If the order is scheduled for delivery over an extended period of time or
requires inventory purchases to fulfill all or part of the customer's
requirements, the system will inform the product management team, via a buy
action report, that action must be taken. The product manager makes the
appropriate buying decision which is forwarded, in most cases, by electronic
purchase order to component manufacturers.

    Approximately 51% of the Company's inventory is located in Los Angeles, 23%
in Boston and 16% in Santa Clara, California.  The Company constantly reviews
inventories in an effort to maximize inventory turnover and customer service.
The Company believes its turnover ratio (4.4x for 1996) compares favorably with
those achieved by competitors for similar interconnect, electromechanical and
passive component inventories.

    VALUE-ADDED ASSEMBLY SERVICES.  The Company offers a wide variety of value-
added assembly services,  including component assemblies, cable and harness
assemblies, battery packs, heat shrinkable tubing and other related
electromechanical subassemblies.  After a customer's assembly order is taken,
the inventory requirements are automatically routed, via the computer system, to
the warehouse and assembly facilities.  The system tracks the order through the
entire assembly process, including final inspection and shipment to the
customer.  The Company conducts stringent quality control tests in-line during
assembly, and also conducts physical, mechanical and electrical tests at the
conclusion of the assembly process.  A Company-wide emphasis on quality is
evidenced by the certification of its Garden Grove and Los Angeles facilities to
the ISO 9002 standard.  The Company has met the certification requirements of
the International Standards Organization for ISO 9002 certification by operating
its Garden Grove and Los Angeles facilities in accordance with established,
written procedures.


                                          4


<PAGE>

COMPONENT MANUFACTURERS

    Management believes that the Company has one of the strongest product
offerings, or line cards, in the markets it serves.  The Company has
non-exclusive franchise (distribution) agreements with more than 100 component
manufacturers, of which more than 80 have franchised the Company nationally by
agreeing to supply its distribution activities in all of its present and future
locations.  The Company now represents nine of the ten leading North American
connector manufacturers and has national franchises from eight of these
manufacturers.  The Company is the largest electronic components distributor for
many major national manufacturers, including Deutsch, 3M, Raychem and Samtec.

    For the year ended December 31, 1996, the Company's top five suppliers
accounted for approximately 43% of net sales.  The Company's largest supplier is
Raychem, which accounted for approximately 15% of the Company's net sales in
1996.

    The Company generally purchases products from manufacturers pursuant to
franchise agreements. Being a local authorized distributor is a valuable
marketing tool for the Company because customers receive warranty benefits and
support from the component manufacturer when they purchase products from Richey
Electronics. As an authorized distributor, the Company provides customers a
benefit from the marketing and engineering support available from the Company's
manufacturers, who assist the Company in closing sales and attracting new
customers.

    Most of the Company's franchise agreements are cancelable by either party,
typically upon 30 to 60 days' notice. These agreements generally provide for
price protection, stock rotation privileges and the right to return certain
inventory if the agreement is canceled. Price protection is usually in the form
of a credit to the distributor at the time of sale by the distributor for
inventory for which the manufacturer has reduced its prices. Stock rotation
privileges typically allow the Company to exchange inventory in an amount up to
5% of a prior period's purchases. Upon termination of a franchise agreement, the
right of return generally requires the manufacturer to repurchase the Company's
inventory at the Company's adjusted purchase price. If the Company terminates
the franchise agreement, there is usually a 10% to 15% restocking charge. The
Company believes that the provisions of these franchise agreements should
generally reduce the Company's exposure to significant inventory losses,
although there can be no assurance that the Company will not experience
significant inventory losses as a result of such potential terminations or
otherwise.

COMPETITION

    The electronics distribution industry is highly competitive, primarily with
respect to price and product availability. The Company believes that breadth of
product line, level of technical expertise and quality of service are also
particularly important to small- and medium-sized OEMs. The Company competes
with large national distributors, as well as regional and specialty
distributors, many of whom distribute the same or competitive products. Many of
the Company's competitors have significantly greater assets, greater financial
and personnel resources and larger investments in technology and infrastructure
than the Company.

    In 1996, total North American sales in the electronic components 
distribution industry (including semiconductors and computer related 
peripherals) were approximately $21 billion, of which the top 25 distributors 
had sales of approximately $17.5 billion. The Company ranked in 1996 as the 
nineteenth largest distributor of electronic components in the United States, 
based on information presented in the December 2, 1996 edition of ELECTRONIC 
NEWS.  According to information presented in the April 25, 1996 edition of 
PURCHASING MAGAZINE, giving pro forma effect to the acquisition of Deanco, 
the Company in its market niche of interconnect, electromechanical and 
passive components ranked in 1995 as the third largest distributor of 
interconnect devices in the United States and as the sixth largest 
distributor of electromechanical/passive components in the United States.

                                          5


<PAGE>

EMPLOYEES

    The Company had approximately 1,050 employees as of December 31, 1996.
Approximately 125 of the Company's employees are corporate personnel involved in
product management, finance, quality control or senior management.  Another 100
employees work in the Company's Los Angeles, Boston and branch warehouses; 325
persons are employed in branch sales and marketing efforts and 500 persons are
employed on a full-time or on-call basis in value-added assembly services.
There are no collective bargaining contracts covering any of the Company's
employees. The Company believes its relationship with its employees is
satisfactory.

BACKLOG

    The Company believes that order backlog (confirmed orders from customers
for shipment within the next 12 months) generally averages two to three months'
sales in the electronics distribution industry.  Order backlog at December 31,
1996 was $53.8 million, up from $53.0 million at December 31, 1995 (including
Deanco's contribution of $21.5 million to backlog as of December 31, 1995).
Order backlog is not necessarily indicative of future sales for any particular
period.  Orders constituting the Company's backlog are subject to delivery
rescheduling, price negotiations and cancellation at the option of the buyer
without significant penalty.

ENVIRONMENTAL PROTECTION

    The nature of the Company's operations do not present any significant risks
to the environment.  Therefore, no material capital expenditures were or are
expected to be required for environmental protection.


ITEM 2.  PROPERTIES

    The Company leases all facilities used in its business. The following table
summarizes the principal properties occupied by the Company:

                                                                EXPIRATION DATE
                  LOCATION                 SQUARE FOOTAGE          OF LEASE
              ----------------           ------------------     ---------------
 ADMINISTRATIVE AND SALES OFFICE:
  Garden Grove, California . . . . . .          27,500                2001
 WAREHOUSING, ASSEMBLY AND SALES:
  Boston, Massachusetts. . . . . . . .          60,000                2004
  Dallas, Texas. . . . . . . . . . . .          15,300                2001
  Gaithersburg, Maryland . . . . . . .          13,000           1999-2001
  Los Angeles, California. . . . . . .          55,000                2000
  Portland, Oregon . . . . . . . . . .          30,000                2001
  Santa Clara, California  . . . . . .          42,200                2002

    The Company also leases sales offices in Arizona, California, Colorado,
Connecticut, Florida, Georgia, Illinois, Kansas, Maryland, Minnesota, Missouri,
New Jersey, New York and Washington which range in size from 600 to 8,000 square
feet.

    The Company believes its facilities are suitable for their uses and are, in
general, adequate for the Company's current needs. The Company believes that
lease extensions or replacement space may be obtained for all of its leased
facilities upon the expiration of the current lease terms, in most cases at
rates which are not materially higher than those currently in effect.

ITEM 3.  LEGAL PROCEEDINGS

    There are no material legal proceedings pending against the Company.


                                          6

<PAGE>

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    Not Applicable.


                                       PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY
         AND RELATED STOCKHOLDER MATTERS

    The Company's Common Stock is being traded on Nasdaq under the symbol
"RCHY."

    The following table sets forth, for the periods indicated, the high and low
sales prices of the Company's Common Stock as reported by Nasdaq.

                                                        STOCK PRICE
                                                     HIGH           LOW
                                                   --------       -------
 CALENDAR YEAR 1995:
    First quarter. . . . . . . . . . . . . .        $ 7 3/4        $ 6
    Second quarter . . . . . . . . . . . . .          7 1/2          5 1/2
    Third quarter. . . . . . . . . . . . . .          9              6
    Fourth quarter . . . . . . . . . . . . .         13 3/4          7 1/2

 CALENDAR YEAR 1996: . . . . . . . . . . . .
    First quarter. . . . . . . . . . . . . .        $13 1/4        $ 9 1/2
    Second quarter . . . . . . . . . . . . .         16             10 3/8
    Third quarter. . . . . . . . . . . . . .         13 1/4          7 1/4
    Fourth quarter . . . . . . . . . . . . .         12              8 1/4

 CALENDAR YEAR 1997:
    First quarter (through March 20, 1997) .        $14 1/8        $10 3/8

    On March 20, 1997, there were approximately 1,429 holders of record of
the Company's Common Stock.

DIVIDEND POLICY

    The Company has never declared or paid cash dividends on its Common Stock.
The Company intends to retain earnings for working capital to support growth, to
reduce outstanding indebtedness and for general corporate purposes. In addition,
the Company's revolving line of credit contains provisions that prohibit the
Company from paying cash dividends on its Common Stock. Accordingly, the Company
does not expect to pay any dividends on its Common Stock in the foreseeable
future. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Note 4 of Notes to Financial Statements.

SALE OF NOTES

    On February 26, 1996 and March 22, 1996, the Company sold to Jefferies & 
Company, Inc. and Cruttenden Roth Incorporated (the "Initial Purchasers") 
$55,755,000 aggregate principal amount of 7% Convertible Subordinated Notes 
due 2006. The Notes were sold to the Initial Purchasers in a private 
placement pursuant to the exemption from registration provided by Section 
4(2) of the Securities Act of 1933, as amended (the "Act"). In connection 
with the purchase of the Notes, each of the Initial Purchasers represented to 
the Company that it is an accredited investor as defined in Regulation D 
under the Act and agreed to comply with other applicable requirements 
necessary to make such exemption available. The Notes were sold to the Initial 
Purchasers for cash at a purchase price of 96.5% of the principal amount 
thereof. The Notes are convertible into shares of the Company's Common Stock 
at a conversion price of $14.125 per share (subject to adjustment in certain 
events). The Company maintains an effective shelf registration statement with 
the Commission to register resales of the Notes and the Common Stock issuable 
upon conversion.


                                          7


<PAGE>

                               SELECTED FINANCIAL DATA

    The following table summarizes certain selected financial data of the
Company and should be read in conjunction with and is qualified by "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Company's Financial Statements, Notes to Financial Statements and other
financial information included herein. All of the financial information is
derived from financial statements that have been audited by McGladrey & Pullen,
LLP, independent auditors.

<TABLE>
<CAPTION>
 


                                                                               YEARS ENDED (1)
                                              -----------------------------------------------------------------------
                                              JANUARY 1,    DECEMBER 31,   DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
                                                1993           1993          1994            1995           1996
                                              ----------    ------------   ------------   ------------   ------------
 <S>                                           <C>           <C>             <C>           <C>            <C>
                                                            (IN THOUSANDS, EXCEPT PER SHARE AND OTHER DATA)
 OPERATIONS STATEMENT DATA:
  Net sales. . . . . . . . . . . . . .         $31,387        $64,995        $90,266       $117,057       $226,215
  Cost of goods sold . . . . . . . . .          23,105         48,741         68,176         89,080        168,664
                                                -------        -------       --------       --------       --------

  Gross profit . . . . . . . . . . . .           8,282         16,254         22,090         27,977         57,551
  Selling, warehouse
     general and admini-
     strative and amortization . . . .           7,144         13,889         17,318         20,874         41,070
  Acquisition-related
    restructuring costs (2). . . . . .              --             --             --          1,450          -
                                                -------        -------       --------       --------       --------

  Operating income . . . . . . . . . .           1,138          2,365          4,772          5,653         16,481
  Interest expense . . . . . . . . . .             388          1,198          1,606            867          5,569
  Income tax expense (3) . . . . . . .             308            460          1,273          1,918          4,376
                                                -------        -------       --------       --------       --------

  Net income . . . . . . . . . . . . .         $   442        $   707       $  1,893       $  2,868       $  6,536
                                                -------        -------       --------       --------       --------
                                                -------        -------       --------       --------       --------

 Earnings per common share (4)
     Primary . . . . . . . . . . . . .         $  0.16        $  0.14       $   0.32       $   0.36       $   0.72
                                                -------        -------       --------       --------       --------
                                                -------        -------       --------       --------       --------
     Fully Diluted . . . . . . . . . .            0.16           0.14           0.32           0.36       $   0.70
                                                -------        -------       --------       --------       --------
                                                -------        -------       --------       --------       --------

  Weighted average number of shares
     outstanding (4)
     Primary . . . . . . . . . . . . .           2,774          5,085          5,889          8,036          9,060
     Fully Diluted . . . . . . . . . .           2,774          5,085          5,889          8,036         12,376

 OTHER FINANCIAL DATA:
  EBITDA (5) . . . . . . . . . . . . .        $  1,283       $  3,362       $  5,537         $6,565(6)     $19,581
  EBITDA margin (5). . . . . . . . . .             4.1%           5.2%           6.1%           5.6%(6)        8.7%
  Depreciation and amortization. . . .             145            997            765            912          3,100
  Inventory turnover ratio (7) . . . .             3.7x           4.4x           4.9x           5.0x           4.4x
  Days sales outstanding in accounts
     receivable (7). . . . . . . . . .              41             43             42             42             44

</TABLE>
<TABLE>
<CAPTION>

                                              JANUARY 1,    DECEMBER 31,   DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
                                                1993           1993          1994            1995(8)        1996
                                              ----------    ------------   ------------   ------------   ------------
 <S>                                           <C>           <C>             <C>           <C>            <C>
 BALANCE SHEET DATA:
  Working capital. . . . . . . . . . .          $3,014       $  6,888       $  5,317      $  34,076        $43,033
  Total assets . . . . . . . . . . . .           9,669         30,918         35,013        118,941        124,761
  Short-term debt. . . . . . . . . . .           3,181          6,995         10,443            835          4,012
  Long-term debt . . . . . . . . . . .              --          8,151          3,594         61,652         65,205
  Stockholders' equity . . . . . . . .           3,333          6,898          8,785         27,392         33,953

</TABLE>
 

                                          8


<PAGE>

Footnotes to Selected Financial Data

(1) In the period from 1993 through 1996, the following transactions were
    completed.  On April 6, 1993, RicheyImpact Electronics, Inc.
    ("RicheyImpact") merged with Brajdas Corporation, a California corporation
    ("Brajdas"), with Brajdas as the surviving legal entity (the
    "Richey-Brajdas Merger").  Brajdas subsequently changed its name to Richey
    Electronics, Inc. and reincorporated in Delaware.  The Richey-Brajdas
    Merger was recorded as a reverse purchase acquisition with RicheyImpact as
    the accounting acquirer.  Thereafter, Richey Electronics acquired the
    businesses of the following companies on the following dates:  the In-Stock
    products division of Anchor Group, Inc. ("In-Stock") on April 4, 1994,
    Inland Empire Interconnects ("IEI") on August 16, 1995, Deanco, Inc.
    ("Deanco") on December 20, 1995, MS Electronics on March 19, 1996 and
    Summit Distributors on December 5, 1996.  See Note 2 of Notes to Financial
    Statements for pro forma information with respect to acquisitions.  Unless
    otherwise indicated, the information in the above table of Selected
    Financial Data excludes the results of operations of Brajdas prior to the
    Richey-Brajdas Merger and excludes the results of operations of each such
    business acquired in the period from 1994 through 1996 prior to the date on
    which it was acquired.

(2) Consists of restructuring costs associated with the consolidation of the
    operations of Deanco into the Company, including the Company's closure of
    certain of its facilities and other costs associated with the
    consolidation.

(3) The Company has net operating loss carryforwards which reduce its cash tax
    payments.  See Note 8 of Notes to Financial Statements.

(4) The Richey-Brajdas Merger was accounted for as a reverse purchase
    acquisition with RicheyImpact being the accounting acquirer. Per share data
    for all periods from January 1, 1992 through April 6, 1993, the date of the
    Richey-Brajdas Merger, are based upon the weighted average number of shares
    of Brajdas indirectly acquired by the former stockholders of RicheyImpact.

(5) EBITDA consists of earnings before interest, income taxes, depreciation and
    amortization. The Company has included EBITDA data (which are not a measure
    of financial performance under generally accepted accounting principles)
    because it understands such data are used by certain investors. EBITDA
    margin represents EBITDA as a percentage of net sales. Because of the
    significant amortization of intangible assets and non-cash income tax
    expense incurred as a result of the Company's NOLs, the Company believes
    that EBITDA may be a meaningful measure of its financial performance. See
    "Management's Discussion and Analysis of Financial Condition and Results of
    Operations -- Deferred Tax Assets."

(6) Excluding the restructuring reserve of approximately $1.4 million, which is
    an operating expense, EBITDA would have been approximately $8.0 million and
    EBITDA margin would have been 6.8% for the year ended December 31, 1995.

(7) Inventory turnover ratio and days sales outstanding in accounts receivable
    calculations are based upon Richey Electronics' annualized sales and cost
    of sales for the fourth quarter and accounts receivable and inventory
    balances at year-end.  The calculation for the year ended December 31, 1995
    excludes the effect of the acquisition of Deanco.

(8) Includes Deanco as the acquisition of Deanco was completed on December 20,
    1995.


                                          9


<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

GENERAL

    Richey Electronics is a leading specialty distributor of interconnect,
electromechanical  and passive electronic components and a provider of related
value-added assembly services to more than 16,000 customers nationwide. The
Company distributes a broad line of connectors, switches, wire, cable and heat
shrinkable tubing and other interconnect, electromechanical and passive
electronic components used in the assembly and manufacturing of electronic
equipment. Richey Electronics also provides a wide variety of value-added
assembly services, which typically generate higher gross margins than
traditional component distribution. These value-added assembly services consist
of (i) component assembly, which is the assembly of components to manufacturer
specifications and (ii) contract assembly, which is the assembly of cable
assemblies, battery packs and mechanical assemblies to customer specifications.
The Company's customers are primarily small- and medium-sized OEMs. The Company
intends to capitalize on a trend toward outsourcing by increasing sales of
value-added assembly services. These sales increased from $21.2 million, or
23.5% of sales, in 1994 to $33.0 million, or 29.0% of sales, in 1995 and to
$66.9 million, or 29.6% of sales, in 1996. Pro forma for the acquisition of
Deanco, 1995 sales of value-added assembly services were $51.5 million.

     In the period from 1994 through 1996, the Company continued to grow
through strategic acquisitions of businesses with operations similar to those of
the Company.  On April 4, 1994, the Company completed the acquisition of the
assets and business of In-Stock for $1.9 million in cash, funded by its
revolving line of credit.  On August 16, 1995, the Company completed the
acquisition of the assets and business of IEI for $1.2 million in cash, funded
by its revolving line of credit.  On December 20, 1995, the Company acquired
Deanco, through the acquisition of the stock of Deanco's parent, Electrical
Distribution Acquisition Company ("EDAC"), for consideration comprised of an
aggregate stock purchase price of approximately $34.1 million in cash, the
redemption of EDAC stockholder notes of approximately $6.6 million and the
assumption of Deanco debt of approximately $19.3 million.  The Company funded
the purchase consideration for the acquisition of Deanco by its revolving line
of credit and a term loan from its senior lender.  On March 16, 1996, the
Company completed the acquisition of certain assets and the business of MS
Electronics for the purchase price of approximately $2.5 million in cash, funded
by its revolving line of credit, and the assumption of MS Electronics' debt of
approximately $500,000.  On December 5, 1996, the Company acquired the
inventory, accounts receivable and fixed and intangible assets of Summit
Distributors, including the right to use its name, in a private sale from its
commercial lender in Buffalo, New York.  The Company did not assume any
liabilities of Summit Distributors in the transaction.  The purchase price and
related transaction costs for the Summit Distributors acquisition were $1.1
million and were paid in cash, funded by the Company's revolving line of credit.
All of the acquisitions in the period from 1994 through 1996 were accounted for
as purchase business combinations with the operations of the acquired business
included subsequent to the acquisition date.  See Note 2 of Notes to Financial
Statements for pro forma information with respect to acquisitions.

    The Company will seek to complete additional strategic acquisitions in
connection with the ongoing consolidation occurring in the electronics
distribution industry.


                                          10


<PAGE>

RESULTS OF OPERATIONS

    The following table sets forth certain items in the statements of
operations as a percentage of net sales for the periods shown.

                                                 YEARS ENDED DECEMBER 31,
                                             ---------------------------------
                                              1994         1995         1996
                                             -------      -------      -------

  Net sales  . . . . . . . . . . . . .        100.0%       100.0%       100.0%
  Cost of goods sold . . . . . . . . .         75.5         76.1         74.6
                                               -----        -----        -----

  Gross profit . . . . . . . . . . . .         24.5         23.9         25.4
  Selling, warehouse, general and
    administrative . . . . . . . . . .         18.6         17.4         17.5
  Amortization of intangibles. . . . .           .6           .4           .6
  Acquisition-related restructuring
    costs. . . . . . . . . . . . . . .           --          1.2          --
                                               -----        -----        -----

  Operating income . . . . . . . . . .          5.3          4.9          7.3
  Interest expense . . . . . . . . . .          1.8          0.7          2.5
                                               -----        -----        -----

 Income before income taxes. . . . . .          3.5          4.1          4.8
  Income tax expense . . . . . . . . .          1.4          1.6          1.9
                                               -----        -----        -----

  Net income . . . . . . . . . . . . .          2.1%         2.5%         2.9%
                                               -----        -----        -----
                                               -----        -----        -----


YEAR ENDED DECEMBER 31, 1996 AS COMPARED WITH YEAR ENDED DECEMBER 31, 1995

    Net sales rose to $226.2 million in 1996, an increase of $109.1 million, or
93.2%, over 1995 net sales of $117.1 million which included approximately $3.5
million of post-acquisition Deanco sales.  Net sales of electronic components
rose to $159.3 million in 1996 from $80.6 million in 1995 (excluding Deanco
sales), an increase of 97.6%.  This increase in component sales is primarily the
result of the acquisition of Deanco.  Net sales of value-added assembly services
rose to $66.9 million in 1996 from $33.0 million in 1995 (excluding Deanco
sales), an increase of 102.7%.  This increase for value-added services is
primarily the result of the Deanco acquisition and increased demand for these
services.  Pro forma for the acquisition of Deanco, net sales for 1995 would
have been $217.0 million, compared with net sales of $226.2 million for 1996.
See Note 2 of Notes to Financial Statements.

    Gross profit was $57.6 million in 1996 compared with gross profit of $28.0
million in 1995 (including approximately $800,000 of gross profit from Deanco's
operations after it was acquired by the Company).  Gross profit as a percentage
of net sales was 25.4% for 1996 as compared to 23.9% for 1995.  This 1.5%
increase in gross profit percentage was due to (i) improved value-added gross
profit margins, (ii) growth in value-added assembly services as a percentage of
total sales to approximately 30% in 1996 from approximately 29% in 1995, (iii)
an increased percentage of component orders to be shipped in under 30 days which
typically have higher margins than orders with longer shipping schedules and
(iv) improved electronic component margins attributed to certain higher margin
product lines acquired with Deanco.

    Operating expenses in 1996 were $41.1 million compared to $22.3 million in
1995 (including a $1.45 million restructuring charge in the fourth quarter of
1995 associated with the acquisition of Deanco), an increase of 84.3%.
Exclusive of such restructuring charge, operating expenses increased 97% from
1995 to 1996 primarily due to acquisitions.  Operating expenses as a percentage
of net sales were 18.1% for 1996 compared with 19.0% for 1995 after giving
effect to such restructuring charge and 17.8% exclusive of such restructuring
charge.  Exclusive of such restructuring charge, operating expenses as a
percentage of net sales increased 0.3% from 1995 to 1996, of which approximately
0.2% is attributable to the amortization of intangibles associated with the
acquisition of Deanco.  The 1996 increase in expenses as a percentage of sales
is also due to the fact that Deanco's expenses as a percentage of sales were
historically significantly higher than those of the Company and during the first
part of 1996 the Company realized only a portion of the expected cost savings
from the integration of Deanco into the Company.  The operational integration of
Deanco and MS Electronics was completed in the third quarter of 1996 and
contributed


                                          11


<PAGE>

to an approximately $2.4 million reduction in operating expenses for the third
and fourth quarters of 1996 from the first and second quarters of 1996.

    Interest expense was $5.6 million for 1996 compared with $867,000 for 1995.
The increase in interest expense was primarily due to increased borrowings to
finance acquisitions.

    The Company's provision for federal and state income tax expense increased
to $4.4 million for 1996 compared with $1.9 million for 1995.  This increase was
proportional to the increase in pre-tax earnings. As of December 31, 1996, the
Company had approximately $13.5 million in federal net operating loss
carryforwards available to reduce future cash tax payments.  For the period
ended December 31, 1996, cash tax payments were reduced approximately $1.7
million for the utilization of these NOLs. See "Deferred Tax Assets" and Note 8
of Notes to Financial Statements.

YEAR ENDED DECEMBER 31, 1995 AS COMPARED WITH YEAR ENDED DECEMBER 31, 1994

    Net sales were $117.1 million in 1995, an increase of $26.8 million, or
OP29.7%, from $90.3 million in 1994. Excluding sales of approximately $3.5
million from acquired Deanco operations after December 19, 1995, net sales
increased 25.8% in 1995. Excluding Deanco, net sales of electronic components
increased to $80.6 million in 1995 from $69.1 million in 1994, an increase of
16.6%, and net sales of value-added assembly services increased to $33.0 million
in 1995 from $21.2 million in 1994, an increase of 55.7%. Component sales
increased in 1995 due to (i) the general strength of the market for electronic
products, such as computers, telecommunications and aerospace equipment, and
(ii) the addition of new franchised lines to the Company's product offering
together with geographic expansion of existing franchises. Rapid growth in net
sales of value-added assembly services resulted from the continuing trend of
OEMs to outsource the assembly of their products as well as management's
decision to accept larger contract assembly orders from larger customers than
it had in the past. On a pro forma basis, assuming the acquisition of Deanco
had occurred as of January 1, 1994, net sales would have been $193.5 million and
$217.0 million for 1994 and 1995, respectively.

    The Company believes that order backlog (confirmed orders from customers 
for shipment within the next 12 months) generally averages two to three 
months' sales in the electronics distribution industry. Order backlog at 
December 31, 1996 was $53.8 million, up from $53.0 million at December 31, 
1995 (including Deanco's contribution of $21.5 million to backlog as of 
December 31, 1995).

    Gross profit was $28.0 million in 1995, an increase of $5.9 million, or
26.7%, from $22.1 million in 1994. Excluding gross profit of approximately
$800,000 from acquired Deanco operations after December 19, 1995, gross profit
increased 23.0% in 1995. Overall, the Company's gross margin declined to 23.9%
in 1995 from 24.5% in 1994. The Company's component distribution gross margins
remained approximately the same in 1995 as compared to 1994. Value-added
assembly gross margins declined in 1995 compared to 1994 due to (i) an increase
in the number of larger orders from larger customers which typically provide
lower gross margins than the Company previously experienced, (ii) the
acquisition of IEI which had historically lower gross margins than the Company
and (iii) inefficiencies related to the closing of IEI's facility and the move
and integration of IEI into one of the Company's existing facilities.

    Operating expenses increased from $17.3 million in 1994 to $22.3 million in
1995 (including a $1.45 million restructuring charge in the fourth quarter of
1995 to cover the costs of closing certain of Deanco's facilities and
consolidating the operations of Deanco into the Company), an increase of 29%.
Exclusive of such restructuring charge, operating expenses increased 20.5%,
primarily due to acquisitions.  Operating expenses as a percentage of net sales
were 19.2% for 1994 compared with 19.0% for 1995 after giving effect to such
restructuring charge and 17.8% exclusive of such restructuring charge.
Exclusive of such restructuring charge, operating expenses as a percentage of
net sales declined 1.3% from 1994 to 1995 as a direct result of the Company's
strategy to increase its operating leverage by spreading its fixed costs over a
larger sales base.

    Interest expense declined to $867,000 in 1995 from $1.6 million in 1994.
The decrease in interest expense was due to a substantial reduction in the
Company's borrowings resulting from the use of the $15.7 million of net proceeds
from its 1995 secondary offering of 3,165,000 shares of Common Stock to retire
its subordinated debt and to pay down its revolving line of credit.

    The Company's provision for federal and state income tax expense increased
to $1.9 million in 1995 from $1.3 million in 1994, proportional to the increase
in pre-tax earnings. For the period ended December 31, 1995, cash tax payments
were reduced approximately


                                          12


<PAGE>
$1.7 million for the utilization of state and federal NOLs. See "Deferred Tax
Assets" and Note 8 of Notes to Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

    In December 1995 and January 1996, the Company funded the purchase
consideration for the acquisition of Deanco, using advances under its $45
million revolving line of credit facility (the "Revolving Line of Credit") and a
$30 million term loan (the "Term Loan"), each provided by First Interstate Bank
of  California ("FICAL") pursuant to a loan agreement (the "Loan Agreement")
entered into with the Company in connection with the Deanco acquisition.  The
Revolving Line of Credit is now maintained with Wells Fargo Bank, N.A., as
successor to FICAL under the Loan Agreement.  The Company also used the
Revolving Line of Credit to fund the March 1996 purchase of MS Electronics and
the December 1996 purchase of Summit Distributors.

    In the first quarter of 1996, the Company issued $55,755,000 of 7%
Convertible Subordinated Notes due 2006 (the "Notes") in a private placement.
The Notes are convertible into 3,947,000 shares of the Company's Common Stock at
a conversion price of $14.125 per share (subject to adjustment).  The Company
maintains an effective shelf registration with the Commission to register
resales of the Notes and the Common Stock issuable upon conversion.  The net
proceeds from the Company's sale of the Notes were approximately $53.8 million
and were used to repay the Term Loan and to pay down the Revolving Line of
Credit.  See Note 4 of Notes to Financial Statements.

    The Loan Agreement governing the Revolving Line of Credit limits the
Company's ability to create or incur liens on assets, to make distributions or
investments, to enter into any mergers or make additional acquisitions or
dispositions of assets and to enter into transactions with affiliates. In
addition, the Company must comply with various financial and other covenants
established by the bank.  The Loan Agreement also provides the bank with the
right to terminate the commitment on 30 days' notice if there is a change in
control of the Company (generally, the acquisition of more than 50% of the
Company's capital stock).

    As of December 31, 1996, the Company had outstanding borrowings under the
Revolving Line of Credit of approximately $10.5 million and additional borrowing
capacity of approximately $28 million.  The Company believes that available
borrowings under the Revolving Line of Credit and cash generated by operations
will be adequate to meet its anticipated funding commitments for the remainder
of 1997.

    Net cash provided by operating activities was $4.2 million for 1996 as
compared with $236,000 for 1995 and $4.0 million for 1994.  The 1996 increase
over 1995 is primarily a result of an increase in net income and non-cash
expenses.  1996 earnings before interest, income taxes, depreciation and
amortization (EBITDA) were approximately $19.6 million compared with
approximately $6.6 million for 1995.

    Net cash used in investing activities increased to $9.0 million in 1996
from $3.3 million in 1995 and $2.9 million in 1994. All of the investing
activities were funded by borrowings under revolving line of credit facilities
and net cash provided by operating activities.  In 1996, the Company invested
$1.3 million in improvements and equipment, primarily for leasehold improvements
and value-added machinery and equipment.  An additional $7.7 million was used to
pay for acquisition and restructuring costs primarily associated with the
Deanco, MS Electronics and Summit Distributors acquisitions.  In 1995, the
Company invested $1.3 million in improvements and equipment, primarily for
leasehold improvements at its principal value-added assembly facility in Los
Angeles and its corporate headquarters in Garden Grove.  An additional $1.2
million was used for the IEI acquisition.  During 1994, the Company spent
$400,000 on improvements and equipment to enhance its value-added assembly
capabilities, $1.8 million for the In-Stock acquisition and $500,000 in costs
associated with the Richey-Brajdas Merger.  The Company anticipates incurring
capital expenditures of approximately $1.3 million in 1997, all of which will be
financed with net cash from operating activities and borrowings under its
Revolving Line of Credit. The Company's actual capital expenditures may vary
significantly from its current expectations, based on a number of factors,
including, but not limited to, additional acquisitions, if any.

    Inventory turnover for the year ended December 31, 1996, was 4.4x compared
to 5.0x for 1995 (excluding the effect of the acquisition of Deanco in December
1995).  This decrease is the result of management's decisions


                                          13


<PAGE>

to strengthen the Company's line card by adding new product lines that require
minimum initial stocking levels and to make inventory turnover rates on product
lines acquired with Deanco consistent with the Company's goals, as Deanco
historically had a higher inventory turnover rate.

    Days sales outstanding in accounts receivable increased to 44 days for 1996
from 42 days for 1995 as a result of the Deanco acquisition.

DEFERRED TAX ASSETS

    As of December 31, 1996, the Company had approximately $13.5 million in net
operating loss carryforwards, which expire between 2005 and 2008. The NOLs
resulted from Brajdas losses prior to the Richey-Brajdas Merger.

    Section 382 of the Internal Revenue Code of 1986, as amended and related
regulations impose certain limitations on a corporation's ability to use NOLs if
more than a 50% change in ownership occurs.  The Company's issuance of
additional Common Stock in 1995, together with an earlier acquisition,
constitutes more than a 50% change in ownership.  As a result, the usage of NOLs
is restricted to approximately $4.9 million on an annual basis.

     The Company has been consistently profitable since December 28, 1990 and
generated taxable income before NOL carryforwards of approximately $6.9 million
in 1996.  Based on its current level of profitability, management believes that
the Company will be able to fully utilize the NOLs prior to their expiration.
However, management has continued to maintain a valuation allowance due to the
inherent uncertainties in forecasting future taxable income.  Management
believes that it is "more likely than not" that the Company will be able to
generate the approximately $14 million of future taxable income necessary to
realize the recorded amount of the net deferred tax asset prior to expiration of
the NOLs. The amount of deferred tax asset considered realizable, however, would
be reduced in the near term if estimates of future taxable income during the
carryforward period are reduced.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    The Financial Statements required by this Item 8 are listed in Item 14(a)
and are submitted at the end of this Form 10-K.


                                          14


<PAGE>

SELECTED QUARTERLY FINANCIAL DATA

    The following table sets forth certain statements of operations data for
the periods indicated. The quarterly financial information provided excludes the
financial results of In-Stock, IEI, Deanco, MS Electronics and Summit
Distributors prior to the date of the respective acquisition. This information
has been derived from unaudited financial statements which, in the opinion of
management, include all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of such information. These
operating results are not necessarily indicative of results for any future
period.

<TABLE>
<CAPTION>
 

                                                  FIRST              SECOND               THIRD              FOURTH
                                                 QUARTER             QUARTER             QUARTER             QUARTER
                                                -----------         -----------         -----------         -----------
 <S>                                             <C>                 <C>                 <C>                 <C>
 1996
  Net sales. . . . . . . . . . . . . .          $58,384,000         $58,212,000         $53,713,000         $55,906,000
  Gross profit . . . . . . . . . . . .           14,313,000          14,806,000          14,116,000          14,316,000
  Net income . . . . . . . . . . . . .            1,142,000           1,735,000           1,754,000           1,905,000
  Earnings per common share
     Primary . . . . . . . . . . . . .                 0.13                0.19                0.19                0.21
     Fully Diluted . . . . . . . . . .                 0.13                0.18                0.18                0.20
  Shipping Days. . . . . . . . . . . .                   64                  64                  62                  64

 1995
  Net sales. . . . . . . . . . . . . .          $26,596,000         $28,305,000         $28,803,000         $33,353,000
  Gross profit . . . . . . . . . . . .            6,513,000           6,660,000           6,931,000           7,873,000
  Net income . . . . . . . . . . . . .              680,000             909,000           1,070,000             209,000
  Earnings per common share
     Primary . . . . . . . . . . . . .                 0.12                0.11                0.12                0.02
     Fully Diluted . . . . . . . . . .                 0.12                0.11                0.12                0.02
  Shipping Days. . . . . . . . . . . .                   64                  64                  62                  62

 1994
  Net sales. . . . . . . . . . . . . .          $20,247,000         $23,105,000         $22,838,000         $24,076,000
  Gross profit . . . . . . . . . . . .            4,855,000           5,562,000           5,793,000           5,880,000
  Net income . . . . . . . . . . . . .              355,000             532,000             471,000             535,000
  Earnings per common share
     Primary . . . . . . . . . . . . .                 0.06                0.09                0.08                0.09
     Fully Diluted . . . . . . . . . .                 0.06                0.09                0.08                0.09
  Shipping Days. . . . . . . . . . . .                   65                  64                  63                  62


</TABLE>
 

---------------
    The unaudited quarterly results of operations indicate that net sales rose
from $480,000 per shipping day in the fourth quarter of 1995 (excluding Deanco)
to $912,000, $910,000, $866,000 and $874,000 per shipping day in the four
consecutive quarters of 1996, respectively.  The calendar for 1997 contains 62,
64, 63 and 64 shipping days for the first through fourth quarters, respectively.
Quarterly operating results may fluctuate significantly from quarter to quarter
in the future.


                                          15


<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL ACCOUNTING
         AND FINANCIAL DISCLOSURE

Not applicable.


                                       PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    The information required by this item regarding directors and executive
officers of the Company is set forth in the Company's definitive Proxy Statement
(the "1997 Proxy Statement") to be filed with the Commission relating to its
annual meeting of stockholders to be held on May 1, 1997, under the headings
"Nominees for Election as Directors," "Other Executive Officers of the Company"
and "Section 16(a) Beneficial Ownership Reporting Compliance," and is
incorporated herein by reference.


ITEM 11. EXECUTIVE COMPENSATION


    The information required by this item regarding compensation of the
Company's directors and executive officers set forth in the 1997 Proxy Statement
under the headings "Board Meetings and Director Compensation" and "Executive
Compensation" is incorporated herein by reference.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
         AND MANAGEMENT

    The information required by this item regarding beneficial ownership of the
Common Stock by certain beneficial owners and by management of the Company set
forth in the 1997 Proxy Statement under the heading "Security Ownership of
Certain Beneficial Owners and Management" is incorporated herein by reference.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    The information required by this item regarding certain relationships and
related transactions with management of the Company set forth in the 1997 Proxy
Statement under the headings "Compensation Committee Interlocks and Insider
Participation" and "Certain Relationships and Related Transactions" is
incorporated herein by reference.

                                       PART IV


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

    (a)  Documents filed as part of this report:

         1.  Financial Statements

              Independent Auditor's Report

              Balance Sheets at December 31, 1995 and 1996

              Statements of Income for the years ended December 31, 1994, 1995
              and 1996

              Statements of Stockholders' Equity for the years ended December
              31, 1994, 1995 and 1996


                                          16


<PAGE>

              Statements of Cash Flows for the years ended December 31, 1994,
              1995 and 1996

              Notes to Financial Statements


         2.  Financial Statement Schedules

         Not Applicable.

         3.  Exhibits

         2.1  Stock Purchase Agreement, dated November 15, 1995, among Richey
              Electronics, Inc., Deanco, Inc., Electrical Distribution
              Acquisition Company and all of the stockholders of Electrical
              Distribution Acquisition Company. *4* (2.1)

         2.2  First Amendment to Stock Purchase Agreement and Instrument of
              Joinder dated December 20, 1995 among Richey Electronics, Inc.,
              Deanco, Inc., Electrical Distribution Acquisition Company and all
              of the stockholders of Electrical Distribution Acquisition
              Company. *4* (2.2)

         2.3  Sales Tax Indemnification Agreement dated December 20, 1995 among
              Richey Electronics, Inc. and the stockholders of Electrical
              Distribution Acquisition Company identified therein. *4* (2.3)

         3.1  Restated Certificate of Incorporation of Richey Electronics, Inc.
              *5* (3.1)

         3.2  Bylaws of Richey Electronics, Inc. *5* (3.2)

         4.1  Indenture between Richey Electronics, Inc. and First Trust of
              California, National Association, dated as of February 15, 1996.
              *10* (4.1)

         4.2  Registration Rights Agreement among Richey Electronics, Inc.,
              Jefferies & Company, Inc. and Cruttenden Roth Incorporated, dated
              as of February 26, 1996.  *12* (4.2)

        10.1  Indemnification Agreement among Barclay and Company, Inc.,
              Brajdas Corporation, Donald I. Zimmerman and certain former
              shareholders of RicheyImpact Electronics, Inc. identified therein
              dated as of April 5, 1993. *2* (E)

        10.2  Letter re Amendment to Indemnification Agreement by Barclay and
              Company, Inc. and Donald I. Zimmerman, and agreed to by BRJS
              Investment Holding Corp., Brajdas Corporation and the other
              persons and entities identified therein dated April 23, 1993. *1*
              (10.3)

        10.3  Registration Rights Agreement between Brajdas Corporation and
              BRJS Investment Holding Corp. dated April 2, 1993. *2* (10.4)

        10.4  Employment Agreement between William C. Cacciatore and Brajdas
              Corporation dated as of April 1, 1993. *1* (10.18)

        10.5  Addendum to Employment Agreement (William C. Cacciatore) dated as
              of February 21, 1995. *8* (10.37)

        10.6  Second Addendum to Employment Agreement (William C. Cacciatore)
              dated as of May 17, 1995. *10* (10.31)


                                          17


<PAGE>

        10.7  Employment Agreement between C. Don Alverson and Brajdas
              Corporation dated as of April 1, 1993. *1* (10.17)

        10.8  Addendum to Employment Agreement (C. Don Alverson) dated as of
              February 21, 1995. *8* (10.38)

        10.9  Second Addendum to Employment Agreement (C. Don Alverson) dated
              as of May 17, 1995. *10* (10.32)

       10.10  Employment Agreement between Richard N. Berger and Brajdas
              Corporation dated as of April 1, 1993. *1* (10.20)

       10.11  Addendum to Employment Agreement (Richard N. Berger) dated as of
              February 21, 1995. *8* (10.39)

       10.12  Employment Agreement between Norbert W. St. John and Brajdas
              Corporation dated as of April 1, 1993. *1* (10.19)

       10.13  Addendum to Employment Agreement (Norbert W. St. John) dated as
              of February 21, 1995. *8* (10.40)

       10.14  Second Addendum to Employment Agreement (Norbert W. St. John)
              dated as of May 17, 1995. *10* (10.33)

       10.15  Employment Agreement between William Class and Richey
              Electronics, Inc. dated as of January 1, 1996.  *11* (10.1)

       10.16  Employment Agreement between Charles W. Mann and Richey
              Electronics, Inc. dated as of April 1, 1995.  *12* (10.35)

       10.17  Service and Management Agreement dated December 18, 1990 by and
              among RicheyImpact Electronics, Inc., Palisades Associates, Inc.
              and Saunders Capital Group, Inc. *3* (10.2)

       10.18  Agreement to Assume and Amend the Service and Management
              Agreement among Brajdas Corporation, Palisades Associates, Inc.
              and Saunders Capital Group, Inc. dated as of April 6, 1993. *3*
              (10.3)

       10.19  Modification Agreement among the Company, Palisades Associates,
              Inc. and Saunders Capital Group, Inc. dated as of January 2,
              1995. *8* (10.26)

       10.20  Modification Agreement by and between Richey Electronics, Inc.
              and Palisades Associates, Inc. dated as of February 21, 1995. *8*
              (10.41)

       10.21  1993 Stock Appreciation Rights Plan. *6* (A)

       10.22  1992 Stock Option Plan. *8* (10.35)

       10.23  Form of Incentive Stock Option Agreement. *8* (10.36)

       10.24  Lease between Principal Mutual Life Insurance Company and Richey
              Electronics, Inc. for lease of premises at 7441 Lincoln Way,
              Garden Grove, California. *8* (10.32)

       10.25  Lease between M&M Enterprises, a California General Partnership
              and Richey Electronics, Inc. for lease of premises at 10871 La
              Tuna Canyon Road, Sun Valley, California. *8* (10.33)


                                          18


<PAGE>

       10.26  Lease between Hownat Trust and Deanco, Inc. for lease of premises
              at 87 Concord Street, North Reading, Massachusetts, Boston
              Massachusetts. *10* (10.21)

       10.27  Lease between Murray Center Venture and Deanco ACA Manufacturing,
              Inc. for lease of premises at Building 1, Murray Business Center,
              3601 SW Murray Blvd., Beaverton, Oregon 97201. *10* (10.25)

       10.28  Lease Agreement between Fujita California Partners III and
              Deanco, Inc., Acacia Division, for premises at 3230 Scott
              Boulevard, Santa Clara, California.

       10.29  Loan Agreement dated as of December 20, 1995 among Richey
              Electronics, Inc., the banks named therein and First Interstate
              Bank of California, as Agent.  *4* (10.1)

       10.30  First Amendment to the Loan Agreement dated as of February 26,
              1996 among Richey Electronics, Inc., the banks named therein and
              First Interstate Bank of California, as Agent. *10* (10.30)

        11.1  Statement regarding computation of per share earnings.

        21.1  Subsidiaries of Richey Electronics, Inc.

        23.1  Consent of McGladrey & Pullen, LLP

        23.2  Consent of McGladrey & Pullen, LLP

        27.1  Financial Data Schedule

  --------------------
    *1*  Incorporated by reference to the designated exhibit of the Annual
         Report on Form 10-K for Brajdas Corporation for the fiscal year ended
         February 28, 1993, filed May 28, 1993.

    *2*  Incorporated by reference to the designated exhibit of the Statement
         on Schedule 13D filed on behalf of BRJS Investment Holding Corp., C.
         Don Alverson, William C. Cacciatore, Greg A. Rosenbaum and Norbert W.
         St. John with the Commission on April 20, 1993.

    *3*  Incorporated by reference to the designated exhibit of the Transition
         Report on Form 10-Q for Brajdas Corporation for the period from
         January 1, 1993 through July 2, 1993, filed August 4, 1993.

    *4*  Incorporated by reference to the designated exhibit of Form 8-K for
         Richey Electronics, Inc. dated December 20, 1995, filed January 3,
         1996.

    *5*  Incorporated by reference to the designated exhibit of the
         Registration Statement on Form S-1, filed January 7, 1994,
         Registration No. 33-73916.

    *6*  Incorporated by reference to the designated exhibit of the definitive
         proxy statement for the 1993 Annual Meeting of Stockholders, filed
         July 13, 1993.

    *7*  Incorporated by reference to the designated exhibit of the Form 8-K
         for Brajdas Corporation dated July 7, 1993, filed July 13, 1993.

    *8*  Incorporated by reference to the designated exhibit of the
         Registration Statement on Form S-2, filed February 23, 1995,
         Registration Statement No. 33-89690.

    *9*  Incorporated by reference to the designated exhibit of the Quarterly
         report on Form 10-Q for Richey Electronics, Inc. for the period ending
         March 31, 1995, filed May 15, 1995.


                                          19


<PAGE>

    *10* Incorporated by reference to the designated exhibit of the Annual
         Report on Form 10-K for the Company for the fiscal year ended December
         31, 1995, filed April 1, 1996.

    *11* Incorporated by reference to the designated exhibit of the Quarterly
         report on Form 10-Q for Richey Electronics, Inc. for the period ending
         June 28, 1996, filed August 12, 1996.

    *12* Incorporated by reference to the designated exhibit of the
         Registration Statement on Form S-2, filed April 26, 1996, Registration
         No. 333-02983.


    Exhibits 10.4 - 10.23 are management contracts or compensatory plans or
arrangements required to be filed as exhibits pursuant to Item 14(c) of Form
10-K.

    (b)  Reports on Form 8-K

         No reports on Form 8-K were filed in the fourth quarter of 1996.


                                          20


<PAGE>

                                      SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) 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, in the City of Garden
Grove, State of California, on March 21, 1997.


                             RICHEY ELECTRONICS, INC.


                             By  /s/ Richard N. Berger
                                ------------------------------------------
                                  Richard N. Berger
                                  Vice President, Chief Financial
                                  Officer and Secretary


    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signature                         Title                         Date
---------                         -----                         ----

/s/ William C. Cacciatore         Chairman of the Board,        March 21, 1997
------------------------------    President, Chief Executive
William C. Cacciatore             Officer (Principal
                                  Executive Officer)

/s/ C. Don Alverson               Director                      March 21, 1997
------------------------------
C. Don Alverson

/s/ Richard N. Berger             Vice President, Chief         March 21, 1997
------------------------------    Financial Officer and
Richard N. Berger                 Secretary (Principal
                                  Financial and Accounting
                                  Officer)

/s/ Greg A. Rosenbaum             Director                      March 21, 1997
------------------------------
Greg A. Rosenbaum

/s/ Norbert W. St. John            Director                     March 21, 1997
------------------------------
Norbert W. St. John


                                          21


<PAGE>

                             INDEPENDENT AUDITOR'S REPORT




To the Board of Directors
Richey Electronics, Inc.
Garden Grove, California

We have audited the accompanying balance sheets of Richey Electronics, Inc. as
of December 31, 1995 and 1996, and the related statements of income,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Richey Electronics, Inc. as of
December 31, 1995 and 1996 and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1996, in conformity
with generally accepted accounting principles.

                                  McGLADREY & PULLEN, LLP



Pasadena, California
February 7, 1997


                                          22


<PAGE>

                               RICHEY ELECTRONICS, INC.

                                    BALANCE SHEETS

                              DECEMBER 31, 1995 AND 1996

                                                   1995              1996
                                                ------------      ------------
 ASSETS
 CURRENT ASSETS
  Cash . . . . . . . . . . . . . . . . . . .   $    572,000      $     30,000
  Trade receivables. . . . . . . . . . . . .     25,622,000        27,111,000
  Inventories. . . . . . . . . . . . . . . .     31,450,000        37,631,000
  Deferred income taxes. . . . . . . . . . .      3,948,000         2,629,000
  Other current assets . . . . . . . . . . .      1,481,000         1,235,000
                                                ------------      ------------
     TOTAL CURRENT ASSETS. . . . . . . . . .     63,073,000        68,636,000
                                                ------------      ------------

 IMPROVEMENTS AND EQUIPMENT, NET . . . . . .      3,469,000         3,668,000
                                                ------------      ------------

 OTHER ASSETS AND INTANGIBLES
  Deferred income taxes. . . . . . . . . . .      4,979,000         2,218,000
  Deferred debt costs. . . . . . . . . . . .        500,000         2,533,000
  Other. . . . . . . . . . . . . . . . . . .        661,000           473,000
  Goodwill . . . . . . . . . . . . . . . . .     46,259,000        47,233,000
                                                ------------      ------------
                                                 52,399,000        52,457,000
                                                ------------      ------------

                                               $118,941,000      $124,761,000
                                                ------------      ------------
                                                ------------      ------------

 LIABILITIES AND STOCKHOLDERS' EQUITY
 CURRENT LIABILITIES
  Current maturities of long-term debt . . .   $    835,000      $  4,012,000
  Accounts payable . . . . . . . . . . . . .     18,250,000        16,551,000
  Accrued expenses . . . . . . . . . . . . .      6,088,000         4,502,000
  Accrued restructuring costs. . . . . . . .      3,824,000           538,000
                                                ------------      ------------

     TOTAL CURRENT LIABILITIES . . . . . . .     28,997,000        25,603,000
                                                ------------      ------------

 ACCRUED RESTRUCTURING COSTS . . . . . . . .        900,000            --
                                                ------------      ------------

 LONG-TERM DEBT
  Subordinated notes payable . . . . . . . .      2,982,000         2,000,000
  Other long-term debt . . . . . . . . . . .     58,670,000         7,450,000
  Convertible subordinated notes payable . .             --        55,755,000
                                                ------------      ------------
                                                 61,652,000        65,205,000
                                                ------------      ------------

 STOCKHOLDERS' EQUITY
  Preferred stock, $.001 par value,
     authorized 10,000 shares, issued none. .           --             --
  Common stock, $.001 par value,
     authorized 30,000,000 shares. . . . . .          9,000             9,000
  Additional paid-in capital . . . . . . . .     20,976,000        21,001,000
  Retained earnings. . . . . . . . . . . . .      6,407,000        12,943,000
                                                ------------      ------------
                                                 27,392,000        33,953,000
                                                ------------      ------------
                                               $118,941,000      $124,761,000
                                                ------------      ------------
                                                ------------      ------------


                          See Notes to Financial Statements.


                                          23


<PAGE>

                               RICHEY ELECTRONICS, INC.

                                 STATEMENTS OF INCOME
                  THREE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996

<TABLE>
<CAPTION>
 

                                                        1994                1995                1996
                                                     -----------        ------------        ------------
<S>                                                  <C>                <C>                 <C>
Net sales. . . . . . . . . . . . . . . . . .         $90,266,000        $117,057,000        $226,215,000
Cost of goods sold . . . . . . . . . . . . .          68,176,000          89,080,000         168,664,000
                                                      -----------        ------------        ------------

  Gross profit . . . . . . . . . . . . . . .          22,090,000          27,977,000          57,551,000
                                                      -----------        ------------        ------------

Operating expenses:
  Selling, warehouse, general and
     administrative. . . . . . . . . . . . .          16,750,000          20,415,000          39,622,000
  Amortization of intangibles. . . . . . . .             568,000             459,000           1,448,000
  Restructuring costs. . . . . . . . . . . .               --              1,450,000               --
                                                      -----------        ------------        ------------
                                                      17,318,000          22,324,000          41,070,000
                                                      -----------        ------------        ------------

        OPERATING INCOME . . . . . . . . . .           4,772,000           5,653,000          16,481,000

Interest expense . . . . . . . . . . . . . .           1,606,000             867,000           5,569,000
                                                      -----------        ------------        ------------

  Income before income taxes . . . . . . . .           3,166,000           4,786,000          10,912,000

Federal and state income taxes . . . . . . .           1,273,000           1,918,000           4,376,000
                                                      -----------        ------------        ------------

        NET INCOME . . . . . . . . . . . . .         $ 1,893,000         $ 2,868,000         $ 6,536,000
                                                      -----------        ------------        ------------
                                                      -----------        ------------        ------------

Earnings per common share:
  Primary. . . . . . . . . . . . . . . . . .         $      0.32         $     0. 36         $      0.72
                                                      -----------        ------------        ------------
                                                      -----------        ------------        ------------

  Fully diluted. . . . . . . . . . . . . . .                0.32                0.36                0.70
                                                      -----------        ------------        ------------
                                                      -----------        ------------        ------------

Weighted average number of shares outstanding:
  Primary. . . . . . . . . . . . . . . . . .           5,889,000           8,036,000           9,060,000
                                                      -----------        ------------        ------------
                                                      -----------        ------------        ------------

  Fully diluted. . . . . . . . . . . . . . .           5,889,000           8,036,000          12,376,000
                                                      -----------        ------------        ------------
                                                      -----------        ------------        ------------

</TABLE>
 

                          See Notes to Financial Statements.


                                          24


<PAGE>

                               RICHEY ELECTRONICS, INC.

                          STATEMENTS OF STOCKHOLDERS' EQUITY
                  THREE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996

<TABLE>
<CAPTION>
 

                                                      COMMON STOCK
                                  ---------------------------------------------------
                                                                           ADDITIONAL
                                    SHARES                PAR               PAID-IN           RETAINED
                                  OUTSTANDING             VALUE             CAPITAL           EARNINGS               TOTAL
                                  -----------           --------        -------------       ------------        ------------
 <S>                               <C>                  <C>             <C>                 <C>                 <C>
 BALANCE, DECEMBER 31, 1993        5,889,000             $ 6,000        $  5,246,000        $  1,646,000        $  6,898,000
 Reverse stock split
   adjustments                        --                    --             (6,000)                 --                 (6,000)
 Net income                           --                    --                --               1,893,000           1,893,000
                                  ----------             -------        ------------        ------------        ------------


 BALANCE, DECEMBER 31, 1994        5,889,000               6,000           5,240,000           3,539,000           8,785,000

 Issuance of common stock in
   public offering, net of
   offering expenses               3,165,000               3,000          15,736,000              --              15,739,000
 Net income                           --                    --               --                2,868,000           2,868,000
                                  ----------             -------        ------------        ------------        ------------
 BALANCE, DECEMBER 31, 1995        9,054,000               9,000          20,976,000           6,407,000          27,392,000
 Stock options exercised
   and other                           6,000                --                25,000               --                 25,000
 Net income                           --                    --               --                6,536,000           6,536,000
                                  ----------             -------        ------------        ------------        ------------

 BALANCE, DECEMBER 31, 1996        9,060,000             $ 9,000        $ 21,001,000        $ 12,943,000        $ 33,953,000
                                  ----------             -------        ------------        ------------        ------------
                                  ----------             -------        ------------        ------------        ------------


</TABLE>
 

                          See Notes to Financial Statements.


                                        25
<PAGE>

                               RICHEY ELECTRONICS, INC.

                               STATEMENTS OF CASH FLOWS
                  THREE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996

<TABLE>
<CAPTION>
 

                                                                  1994                1995                1996
                                                             -------------       -------------       -------------
 <S>                                                         <C>                 <C>                 <C>
 CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                 $   1,893,000       $   2,868,000       $   6,536,000
  Adjustments to reconcile net income to net
     cash provided by operating activities:
     Depreciation and amortization                                 765,000             912,000           3,100,000
     Deferred taxes                                              1,157,000           1,065,000           4,080,000
     Change in operating assets and liabilities,
        net of effect of business combinations:
         (Increase) decrease in:
           Trade receivables                                    (1,107,000)         (2,448,000)            592,000
           Inventories                                          (1,518,000)         (2,727,000)         (4,329,000)
           Other current assets                                     14,000            (260,000)            284,000
        Increase (decrease) in:
           Accounts payable and accrued expenses                 2,820,000            (624,000)         (4,573,000)
           Accrued restructuring costs                              --               1,450,000          (1,450,000)
                                                             -------------       -------------       -------------

        NET CASH PROVIDED BY OPERATING ACTIVITIES                4,024,000             236,000           4,240,000
                                                             -------------       -------------       -------------

 CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of improvements and equipment                          (401,000)         (1,316,000)         (1,310,000)
  Payment of acquisition and restructuring costs                (2,512,000)         (2,025,000)         (7,706,000)
                                                             -------------       -------------       -------------

        NET CASH (USED IN) INVESTING ACTIVITIES                 (2,913,000)         (3,341,000)         (9,016,000)
                                                             -------------       -------------       -------------

 CASH FLOWS FROM FINANCING ACTIVITIES
  Net advances (repayments) on revolving
     line of credit                                              1,848,000          (8,843,000)             --
  Borrowings (repayments) under long-term
     revolving line-of-credit arrangement                           --               1,974,000          (7,911,000)
  Term loan borrowings                                              --                  --              30,000,000
  Payments on long-term debt                                    (2,957,000)         (5,202,000)        (71,114,000)
  Proceeds from issuance of common stock, net                       --              15,739,000              25,000
  Proceeds from issuance of convertible subordinated debt           --                  --              55,755,000
  Transaction costs associated with refinancing activities          --                  --              (2,521,000)
                                                             -------------       -------------       -------------

        NET CASH PROVIDED BY (USED IN)
           FINANCING ACTIVITIES                                 (1,109,000)          3,668,000           4,234,000
                                                             -------------       -------------       -------------

        INCREASE (DECREASE) IN CASH                                  2,000             563,000            (542,000)
 Cash
  Beginning                                                          7,000               9,000             572,000
                                                             -------------       -------------       -------------
  Ending                                                     $       9,000       $     572,000       $      30,000
                                                             -------------       -------------       -------------
                                                             -------------       -------------       -------------

</TABLE>

 

                          See Notes to Financial Statements.


                                          26
<PAGE>

                               RICHEY ELECTRONICS, INC.

                         STATEMENTS OF CASH FLOWS, CONTINUED
                  THREE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996


<TABLE>
<CAPTION>
 

                                                                  1994                1995                1996
                                                             -------------       -------------       -------------
 <S>                                                          <C>                 <C>                 <C>
 Supplemental Disclosures of Cash Flow Information
  Cash payments for:
     Interest                                                $   1,675,000       $   1,230,000       $   3,961,000
                                                             -------------       -------------       -------------
                                                             -------------       -------------       -------------

     Income taxes                                            $      46,000       $   1,249,000       $     437,000
                                                             -------------       -------------       -------------
                                                             -------------       -------------       -------------

Assets acquired, liabilities assumed and
  securities issued in business combinations:
  Working capital                                           $    1,464,000       $  15,362,000       $   1,980,000
  Leasehold improvements and equipment                             103,000           1,646,000             101,000
  Other assets                                                       --                861,000               --
  Goodwill                                                         274,000          47,287,000           2,272,000
  Restructuring and transaction costs                                --             (3,427,000)              --
  Subordinated notes payable                                         --             (2,982,000)              --
  Other liabilities assumed                                          --            (23,434,000)              --
  Stock payment notes                                                --            (34,106,000)              --
                                                             -------------       -------------       -------------
                                                             -------------       -------------       -------------


        Net cash paid                                        $   1,841,000       $   1,207,000       $  4,353,0000
                                                             -------------       -------------       -------------
                                                             -------------       -------------       -------------


</TABLE>
 

                          See Notes to Financial Statements.


                                          27
<PAGE>

                               RICHEY ELECTRONICS, INC.

                            NOTES TO FINANCIAL STATEMENTS


NOTE 1.  NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

    Richey Electronics, Inc. (the Company) is a specialty distributor of
electronic components and a provider of value-added assembly services.  The
Company distributes a broad line of connectors, switches, wire, cable and heat
shrinkable tubing, and other interconnect, electromechanical and passive
electronic components used in assembly and manufacture of electronic equipment.
Richey has distribution rights from major worldwide suppliers, none of which
individually accounted for sales greater than 16% in 1996.  Richey's corporate
headquarters are based in California and it has markets in 17 states.

A SUMMARY OF THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES FOLLOWS:

YEAR END

    The Company reports its annual operating results based upon a calendar year
end (December 31) and its quarterly results using the Friday nearest the end of
each quarter.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue and
expenses during the reporting period.  Actual results could differ from those
estimates and could materially impact the reported amount of assets and
liabilities and future operating results.

CONCENTRATION OF CREDIT RISK

    The Company distributes electronic components to small- and medium-sized
manufacturers in a wide variety of industries including telecommunications,
computer, medical, transportation and aerospace.  Credit is extended based on an
evaluation of the customer's financial condition and collateral is typically not
required.  Credit losses are provided for in the financial statements through a
charge to operations.  For the year ended December 31, 1996, sales to no
individual customer represented more than 1.5% of net sales.  Credit losses have
been consistently within management's expectations and were not material in any
year presented.  A valuation allowance for known and anticipated credit losses
is maintained but is not material.

INVENTORIES

    Inventories consist of electronic components held for sale and are valued
at the lower of cost (first-in, first-out method) or market.  The Company
periodically reviews the age and turnover of its inventory to determine whether
any inventory has become obsolete or has declined in value and incurs a charge
to operations for known and anticipated inventory obsolescence.  The Company has
not incurred any material charges to operations for inventory obsolescence.

IMPROVEMENTS AND EQUIPMENT

    Improvements and equipment are stated at cost, less accumulated
depreciation and amortization.  Equipment is depreciated using the straight-line
method over estimated service lives ranging from three to seven years.
Improvements are amortized over the life of the lease or the economic life of
the asset, whichever is shorter.

GOODWILL

    The Company is amortizing goodwill on a straight-line method over lives
ranging from 15 to 40 years, principally 40 years.

    Financial Accounting Standards Board (FASB) Statement No. 121, ACCOUNTING
FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED
OF became effective for the year ended December 31, 1996.  Statement No. 121
establishes accounting standards for the impairment of long-lived assets,
certain identifiable


                                          28
<PAGE>
                            NOTES TO FINANCIAL STATEMENTS


NOTE 1.  NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES, (CONTINUED)

intangibles and goodwill related to those assets to be held and used and for
long-lived assets and certain identifiable intangibles to be disposed of.  No
adjustments were required for Statement No. 121.

    The Company also periodically reviews the value of its goodwill not related
to specific long-lived assets to determine if an impairment has occurred.  The
Company does not believe that an impairment of its goodwill has occurred based
on an evaluation of operating income, cash flows and business prospects.

DISTRIBUTION AGREEMENTS AND CUSTOMER LISTS

    Distribution agreements and customer lists acquired pursuant to a previous
acquisition have been amortized using the straight-line method over their
respective estimated economic lives and these intangibles were fully amortized.

INCOME TAXES

    Deferred taxes are provided on a liability method whereby deferred tax
liabilities are recognized for taxable temporary differences and deferred tax
assets are recognized for deductible temporary differences and operating loss
and tax credit carryforwards.  Temporary differences are the differences between
the reported amounts of assets and liabilities and their tax bases.  Deferred
tax assets are reduced by a valuation allowance when it cannot be demonstrated
that the deferred tax assets are more likely than not to be realized.  Deferred
tax assets and liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment.

EARNINGS PER COMMON SHARE

    Earnings per common share are computed using the weighted average number of
shares of common stock outstanding.  The weighted average number of shares used
for computing fully diluted earnings per share assumes that the 7% Convertible
Subordinated Notes due 2006 (the Notes) which were sold by the Company in the
first quarter of 1996 through a private offering are converted at $14.125 per
share on the date they were issued.  The Notes are not common stock equivalents
and, therefore, are not considered in determining the primary weighted average
number of shares.  Net income used in computing fully diluted earnings per share
is increased for the interest expense, net of tax, associated with the Notes.

FAIR VALUE OF FINANCIAL INSTRUMENTS

    The Company's financial instruments consist primarily of cash, accounts
receivable and payable, and debt instruments.  The carrying value of financial
instruments, other than the debt instruments, is representative of their fair
value due to short-term maturity.  The carrying value of the Company's revolving
line of credit and subordinated debt is considered to approximate their fair
value because the interest rate of these instruments is consistent with current
rates offered to the Company.  The fair value of the 7% Convertible Subordinated
Notes is $58,933,000 based upon quoted market prices.

ACCOUNTING FOR STOCK-BASED COMPENSATION

    During 1996 the Company adopted FASB Statement No. 123, ACCOUNTING FOR
STOCK-BASED COMPENSATION, which establishes financial accounting and reporting
standards for stock-based compensation plans.  The statement suggests
stock-based compensation transactions with employees be accounted for at fair
value.  Transactions after December 15, 1995 with nonemployees must be accounted
for based on the fair value of the consideration received or the fair value of
the equity instruments issued, whichever is more reliably measurable.  An
enterprise may continue to follow the requirements of Accounting Principles
Board (APB) Opinion No. 25 for employees, which does not require compensation to
be recorded if the consideration to be received is at least equal to the market
value of the shares at the measurement date.  If an enterprise elects to follow
APB Opinion No. 25, it must disclose the pro forma effects on net income as if
compensation were measured in accordance with the suggestions of Statement No.
123.  The Company follows APB Opinion No. 25.


                                          29
<PAGE>

                            NOTES TO FINANCIAL STATEMENTS


NOTE 2.  BUSINESS COMBINATIONS

    In the period from 1994 to 1996, the Company completed several business
combinations.  All of these acquisitions were accounted for as purchase business
combinations with the operations of the acquired business included subsequent to
the acquisition date.  Each of the acquired businesses had operations similar to
the Company's.  These acquisitions are described as follows:

IN-STOCK ACQUISITION

    On April 4, 1994, the Company completed the purchase of the assets and
business of the In-Stock Products division of Anchor Group, Inc. (In-Stock),
located in Boston, Massachusetts.

INLAND EMPIRE INTERCONNECTS ACQUISITION

    On August 16, 1995, the Company completed the purchase of the assets and
business of Inland Empire Interconnects (IEI), an Ontario, California molded
cable assembly company.

EDAC AND SUBSIDIARY (DEANCO ACQUISITION)

    On December 20, 1995, the Company completed the purchase of all the issued
and outstanding capital stock of Electrical Distribution Acquisition Company
(EDAC).  EDAC, a holding company, and its wholly owned subsidiary, Deanco, Inc.
(Deanco), were acquired for $34,106,000 of stock payment notes, the assumption
of $5,962,000 of existing EDAC stockholder notes and the assumption of all other
debt of Deanco.  These notes were paid on January 2, 1996.  The Company merged
EDAC into the Company in January 1996 and merged Deanco into the Company in
October 1996.

    In connection with the Deanco Acquisition, the Company closed certain of
its own facilities and incurred other costs associated with the consolidation of
the operations of Deanco into the Company.  During 1995 the Company recognized a
restructuring charge of $1,450,000.  All of these costs were paid by December
31, 1996.  No adjustments were made to the original estimates of this
restructuring accrual.

    Also in conjunction with the Deanco Acquisition, the Company accrued
restructuring costs of $3,100,000 at December 31, 1995 related to the
consolidation of Deanco's operations into the Company.  Those costs related to
the operations of Deanco were recorded as a purchase accounting adjustment,
resulting in an increase in goodwill.  At December 31, 1995, current accrued
restructuring costs of $3,824,000 and long-term restructuring costs of $900,000
consisted of the unpaid portion of $1,450,000 and $3,100,000 restructuring
charge and other restructuring items related to past acquisitions.  At December
31, 1996 the remaining accrued restructuring costs of $538,000 consist of
approximately $140,000 for severance, $165,000 for lease and facility costs for
Deanco facilities to be closed and other items of $232,000.  During 1996 certain
adjustments were made to the preliminary estimates recorded at December 31,
1995.  These purchase accounting adjustments related to a reduction in costs for
redundant facility consolidations of $900,000 due to the Company's decision to
retain Deanco's Santa Clara facility and close Richey's San Jose facility.  This
reduction was offset by an increase in product line termination costs from
$300,000 to $665,000, an increase in severance costs for Deanco employees of
$148,000 and an increase in other costs directly attributable to the
acquisition.  The Company expects the remaining accrued restructuring costs of
$538,000 to be paid within the next 12 months.

MS ELECTRONICS

    On March 19, 1996, the Company completed the acquisition of the assets and
business of MS Electronics, Inc. (MS Electronics).  The purchase price and
related transaction costs, including the assumption of MS Electronics' debt of
$525,000, were approximately $3,111,000 and were paid in cash.  The allocation
of the purchase price is as follows:  $2,231,000 to estimated fair value of
tangible assets acquired, $1,288,000 to liabilities assumed and $2,168,000 to
goodwill.

SUMMIT DISTRIBUTORS

    On December 5, 1996, the Company completed the acquisition of the assets
and business of Summit Distributors, Inc.  The purchase price and related
transactions costs were $1,138,000 and were paid in cash.  The preliminary
allocation of the purchase price was $1,095,000 to current assets and $43,000 to
fixed assets.



                                          30
<PAGE>
                            NOTES TO FINANCIAL STATEMENTS


NOTE 2.  BUSINESS COMBINATIONS, (CONTINUED)

PRO FORMA RESULTS (UNAUDITED)

    The following pro forma results assume the 1995 Deanco acquisition occurred
as of the beginning of 1995.  The 1996 Summit Distributors and MS Electronics
acquisitions and the 1995 IEI acquisition are not included in the pro forma
financial information because those acquisitions would not have materially
changed reported sales or net income.  The unaudited pro forma results have been
prepared utilizing the historical financial statements of the Company and Deanco
before extraordinary items.  The unaudited pro forma results give effect to
certain adjustments, including amortization of acquired intangibles and
goodwill, elimination of duplicate facilities and redundant salaries, interest
expense and related tax effects.

                                                    Year Ended
                                                 December 31, 1995
                                                    (Unaudited)
                                                 -----------------
 Net Sales . . . . . . . . . . . . . . . . .       $ 216,983,000
 Net Income. . . . . . . . . . . . . . . . .           4,377,000
 Earnings per share. . . . . . . . . . . . .                0.54


    The pro forma financial information does not purport to be indicative of
the results of operations that would have occurred had the transactions actually
taken place at the beginning of the period presented.

NOTE 3.  IMPROVEMENTS AND EQUIPMENT

    Improvements and equipment at December 31 consist of the following:

                                                   1995           1996
                                                 ----------     ----------
 Improvements. . . . . . . . . . . . . . . .     $2,084,000     $1,738,000
 Furniture, fixtures and equipment . . . . .      2,597,000      4,998,000
                                                 ----------     ----------
                                                  4,681,000      6,736,000
 Less accumulated depreciation and amortization   1,212,000      3,068,000
                                                 ----------     ----------
                                                 $3,469,000     $3,668,000
                                                 ----------     ----------
                                                 ----------     ----------

NOTE 4.  BORROWING ARRANGEMENTS

REVOLVING LINE OF CREDIT

    The Company has a bank revolving line of credit of $45,000,000, which
expires December 31, 1999.  The revolving line of credit allows advances of up
to 85% of eligible receivables and 50% of eligible inventory, as defined.  The
revolving line of credit has several interest rate pricing features available
and at December 31, 1996, $8,000,000 bears interest at the Eurodollar rate plus
2.25% (total of 7% at December 31, 1996) and $2,450,000 bears interest at 1%
above the bank's prime rate (total of 9.25% at December 31, 1996).  The Company
is required to pay the lender a quarterly unused line fee equal to 3/8%,
quarterly, of the difference between the maximum commitments and the daily
average outstanding borrowings for the prior quarter.  The credit agreement
contains various restrictive covenants which require the Company to meet certain
financial conditions, including maintaining a minimum level of stockholders'
equity, minimum profitability, fixed charge coverage and cash flow leverage
ratios.  In addition, the Company is restricted from the payment of cash
dividends.  At December 31, 1996, $10,450,000 was outstanding under the
Company's revolving line of credit.  The Company intends to maintain


                                          31
<PAGE>
                            NOTES TO FINANCIAL STATEMENTS


NOTE 4.  BORROWING ARRANGEMENTS, (CONTINUED)


borrowings of at least $7,450,000 during 1997; therefore, $3,000,000 of the
balance is classified as a current liability.

    The following is a summary of borrowings under revolving lines of credit:
<TABLE>
<CAPTION>
 

                                                                  1994                 1995                1996
                                                               -----------         -----------         -----------
 <S>                                                            <C>                 <C>                 <C>
 Weighted average interest rate in effect
    at year end. . . . . . . . . . . . . . . . . . . .               10.0%                8.2%                7.5%
 Available borrowings at year end. . . . . . . . . . .         $ 5,452,000         $18,261,000         $28,195,000
 Maximum outstanding borrowings during
    the year . . . . . . . . . . . . . . . . . . . . .          12,610,000          18,361,000          31,106,000
 Weighted average interest rate for the
    borrowings outstanding during the year . . . . . .                8.9%                9.3%                7.7%

</TABLE>
 

    The Company's revolving line of credit provides that up to $3,000,000 of
the available line can be used for letters of credit.  None were outstanding at
year end.

7% CONVERTIBLE SUBORDINATED NOTES OFFERING

    In 1996 the Company issued $55,755,000 of 7% Convertible Subordinated Notes
(the Notes) due 2006.  The Notes are convertible into 3,947,000 shares of the
Company's common stock at a conversion price of $14.125 per share (subject to
certain adjustments) at the holder's option at any time after 60 days following
the issuance and prior to maturity.  The payment of principal and interest on
these notes is subordinated to all senior debt consisting of $10,450,000
outstanding at December 31, 1996 under the Company's revolving line of credit.
The Company maintains an effective shelf registration statement with the
Securities and Exchange Commission to register resales of the Notes and the
common stock issuable upon conversion.

    The Notes may not be redeemed by the Company prior to March 4, 1999.
Thereafter the Notes may be redeemed at the option of the Company at a
redemption price of 103.5% of outstanding principal in 1999 decreasing by 0.5%
each year until March 1, 2006.

    In addition, under certain circumstances, the holders of these Notes have
the option to require the Company to repurchase the Notes.  These designated
events include a more than 50% change in control.


                                          32
<PAGE>
                            NOTES TO FINANCIAL STATEMENTS


NOTE 4.  BORROWING ARRANGEMENTS, (CONTINUED)


LONG-TERM DEBT

Long-term debt at December 31, as follows:

<TABLE>
<CAPTION>
 

                                                                                      1995                1996
                                                                                  ------------        ------------
 <S>                                                                              <C>                 <C>
 Revolving line of credit                                                         $ 18,361,000        $ 10,450,000
 Convertible subordinated notes payable, interest at 7.0%
    due March 1 and September 1 annually, principal due September 1, 2006.                  --          55,755,000
 Stock payment notes for Deanco Acquisition, paid
    January 2, 1996.                                                                34,106,000               --
 Subordinated promissory notes payable to former EDAC
    management and stockholders, paid January 2, 1996.                               5,962,000               --
 Subordinated promissory notes payable to former stock-
    holders of Deanco, unsecured, due in annual installments
    of $1,000,000 beginning in 1997 with a final payment of $953,000 on
    September 30, 1999, interest payable annually at 8%.                             2,982,000           2,953,000
 Unsecured subordinated note payable to a corporation,
    paid January 1, 1996.                                                              700,000               --
 Other                                                                                 376,000              59,000
                                                                                  ------------        ------------
 Less current maturities                                                            62,487,000          69,217,000
                                                                                       835,000           4,012,000
                                                                                  ------------        ------------
                                                                                  $ 61,652,000        $ 65,205,000
                                                                                  ------------        ------------
                                                                                  ------------        ------------

</TABLE>
 

Aggregate maturities of long-term debt as of December 31, 1996, are as follows:

 1997. . . . . . . . . . . . . . . . . . . .    $ 4,012,000
 1998. . . . . . . . . . . . . . . . . . . .      1,000,000
 1999. . . . . . . . . . . . . . . . . . . .      8,450,000
 2006. . . . . . . . . . . . . . . . . . . .     55,755,000
                                                 -----------
                                                $69,217,000
                                                 -----------
                                                 -----------



                                          33
<PAGE>
                            NOTES TO FINANCIAL STATEMENTS


NOTE 5.  ACCRUED EXPENSES

    Accrued expenses at December 31 consist of the following:

                                                    1995              1996
                                                  ----------        ----------

 Compensation. . . . . . . . . . . . .           $3,193,000        $2,790,000
 Interest. . . . . . . . . . . . . . .            1,040,000         1,464,000
 Other . . . . . . . . . . . . . . . .            1,855,000           248,000
                                                  ----------        ----------
                                                 $6,088,000        $4,502,000
                                                  ----------        ----------
                                                  ----------        ----------


NOTE 6.  COMMITMENTS AND CONTINGENCIES

OPERATING LEASES

     The Company leases office and warehouse space under operating lease
agreements with various terms and conditions with rent escalations typically
based on the Consumer Price Index.

     Future minimum lease payments under these leases, exclusive of lease
payments on duplicate facilities which have been accrued, are as follows:

 1997. . . . . . . . . . . . . . . . . . . .                $1,965,000
 1998. . . . . . . . . . . . . . . . . . . .                 1,923,000
 1999. . . . . . . . . . . . . . . . . . . .                 1,760,000
 2000. . . . . . . . . . . . . . . . . . . .                 1,004,000
 Thereafter. . . . . . . . . . . . . . . . .                 1,796,000
                                                            ----------
                                                            $8,448,000
                                                            ----------
                                                            ----------


    Total rent expense under operating leases, including rent for facilities
leased on a month-to-month basis, was $678,000, $903,000 and $2,016,000 for
1994, 1995 and 1996, respectively.

CONTINGENT LIABILITIES

    There are no material legal proceedings pending or, to the knowledge of
management, threatened against the Company.

NOTE 7.  SERVICE AND MANAGEMENT AGREEMENT

    The Company is party to a Service and Management Agreement dated
December 18, 1990, as amended and modified, with a director.  The Service and
Management Agreement terminates on December 31, 1997; however, the term is
automatically extended for additional two-year consecutive periods unless
earlier terminated.  Management fees payable under this and prior agreements
were approximately $244,000 in 1994, $234,000 in 1995 and $175,000 in 1996,
including a $64,000 termination payment in 1995 to a former party to this
agreement.


                                          34
<PAGE>
                            NOTES TO FINANCIAL STATEMENTS


NOTE 8.  INCOME TAXES

    Components of income tax expense are as follows:
<TABLE>
<CAPTION>
                                                                 1994               1995           1996
                                                               ----------         ----------     ----------
 <S>                                                           <C>                 <C>           <C>
Currently paid or payable:
    Federal. . . . . . . . . . . . . . . . . . . . . . . . .    $   60,000        $  745,000      $  697,000
    State. . . . . . . . . . . . . . . . . . . . . . . . . .        56,000           108,000         426,000
    Deferred . . . . . . . . . . . . . . . . . . . . . . . .     1,157,000         1,065,000       3,253,000
                                                                ----------        ----------      ----------
                                                                $1,273,000        $1,918,000      $4,376,000
                                                                ----------        ----------      ----------
                                                                ----------        ----------      ----------
</TABLE>

    The following table presents a reconciliation from the amount of income tax
determined by applying the U.S. federal income tax rate to pretax income for
those adjustments representing more than 5% of pretax income:

<TABLE>
<CAPTION>

                                                                     1994        1995      1996
                                                                     ----        ----      ----
 <S>                                                                <C>         <C>       <C>
 Computed "expected" statutory rate                                   35%         35%       35%
 Increase (decrease) in rate resulting from:
      State income taxes, net of federal tax benefit                   5           5         5
                                                                      --          --        --
                                                                      40%         40%       40%
                                                                      --          --        --
                                                                      --          --        --
</TABLE>

    Net deferred taxes at December 31 consist of the following:

<TABLE>
<CAPTION>
 

                                                                  1995                1996
                                                               -----------         -----------
 <S>                                                           <C>                 <C>
 Deferred tax liabilities, other . . . . . . . . . . .         $   314,000         $   210,000
                                                               -----------         -----------

 Deferred tax assets:
   Net operating loss carryforwards (NOLs) . . . . . .           7,096,000           4,720,000
   Costs capitalized to inventory for tax purposes . .             919,000             716,000
   Accrued expenses not deductible until paid. . . . .           2,462,000             410,000
   Other . . . . . . . . . . . . . . . . . . . . . . .             890,000             968,000
                                                               -----------         -----------
                                                                11,367,000           6,814,000
   Less valuation allowance. . . . . . . . . . . . . .          (2,126,000)         (1,757,000)
                                                               -----------         -----------
                                                                 9,241,000           5,057,000
                                                               -----------         -----------
      Net. . . . . . . . . . . . . . . . . . . . . . .         $ 8,927,000         $ 4,847,000
                                                               -----------         -----------
                                                               -----------         -----------


</TABLE>
 

           Net deferred tax assets described above have been included in the
accompanying balance sheets as follows:

                                              1995                1996
                                           -----------         -----------
 Current assets. . . . . . . . . .         $ 3,948,000         $ 2,629,000
 Noncurrent assets . . . . . . . .           4,979,000           2,218,000
                                            -----------         -----------
                                           $ 8,927,000         $ 4,847,000
                                            -----------         -----------
                                            -----------         -----------

                                          35
<PAGE>
                            NOTES TO FINANCIAL STATEMENTS


NOTE 8.  INCOME TAXES, (CONTINUED)

    As of December 31, 1996, the Company had acquired net operating loss
carryforwards which have the following expiration dates:

 Expiration Date                                            FEDERAL
 ---------------                                           -----------
 2005. . . . . . . . . . . . . . . . . . . .               $   454,000
 2006. . . . . . . . . . . . . . . . . . . .                 9,673,000
 2007. . . . . . . . . . . . . . . . . . . .                 2,588,000
 2008. . . . . . . . . . . . . . . . . . . .                   771,000
                                                           -----------
                                                           $13,486,000
                                                           -----------
                                                           -----------

    Section 382 of the Internal Revenue Code of 1986 imposes certain
limitations on a corporation's ability to use net operating loss carryforwards
if more than a 50% ownership change occurs.  The Company's issuance of
additional common stock in 1995, together with an earlier acquisition,
constitutes a more than 50% ownership change.  As a result, the usage of the
NOLs are restricted to approximately $4,900,000 on an annual basis.

    The Company has been consistently profitable and generated taxable income
before NOL carryforwards of approximately $6.9 million in 1996.  Based on its
current level of profitability, management believes that the Company will be
able to fully utilize the NOLs prior to their expiration.  However, management
has continued to maintain a valuation allowance due to the inherent
uncertainties in forecasting future taxable income.  Management believes that it
is "more likely than not" that the Company will be able to generate the
approximately $14 million of future taxable income necessary to realize the
recorded amount of the net deferred tax asset prior to the expiration of the
NOLs.  The amount of deferred tax asset considered realizable, however, would be
reduced in the near term if estimates of future taxable income during the
carryforward period are reduced.

NOTE 9.  EMPLOYEE BENEFIT PLANS

STOCK APPRECIATION RIGHTS PLAN

    On July 7, 1993, the Company adopted a Stock Appreciation Rights Plan.
Each stock appreciation right (SAR) provides the recipient with the right to
receive a cash payment equal to the excess, if any, of the fair market value of
a share of the Company's common stock on the date the SAR is exercised over the
fair market value on the date the SAR was granted, or such other value as
determined by the Compensation Committee.  The maximum number of rights that may
be awarded under the plan may not exceed approximately 589,000.  To date, no
rights have been granted under this plan.

STOCK OPTION PLAN

    The Company has a stock option plan adopted in 1992.  The options granted
generally vest at a rate of 25% per year over a four-year period and expire ten
years from the date of grant.  The exercise price of the options is equal to the
quoted market price at the date of grant.


                                          36


<PAGE>
                            NOTES TO FINANCIAL STATEMENTS


NOTE 9.  EMPLOYEE BENEFIT PLANS, (CONTINUED)
<TABLE>
<CAPTION>
 

                                                              Weighted                      Weighted                       Weighted
                                                               Average                       Average                        Average
                                                              Exercise                      Exercise                       Exercise
                                                 1994          Price           1995           Price          1996            Price
                                               --------        --------       -------        --------       -------         --------
<S>                                            <C>             <C>           <C>             <C>           <C>              <C>
Outstanding at beginning of year . . .              --                       226,737          $6.00        493,071          $6.34
   Granted . . . . . . . . . . . . . .         226,737          $6.00        266,334           6.63        135,300           9.80
   Terminated and canceled . . . . . .              --                            --                       (7,363)           6.00
   Exercised . . . . . . . . . . . . .              --                            --                       (8,360)           6.07
                                               --------                      --------                     --------

Outstanding at end of year . . . . . .         226,737          $6.00        493,071          $6.34        612,648          $7.11
                                               --------                      --------                      --------
                                               --------                      --------                      --------

Options exercisable, end of year . . .           --                           45,642          $6.00        186,591          $6.67

Available for grant, end of year . . .         362,197                        95,863                       284,424

Weighted average fair value of
  options granted during the year. . .           --                            $4.35                         $7.07

</TABLE>
 

    The following table summarizes information about stock options outstanding
at December 31, 1996:


         Options outstanding
-------------------------------------------------
  Number         Remaining                              Options
Outstanding    Contractual Life   Exercise Price      Exercisable
-----------    ----------------    --------------      -----------
 212,014           7                   $ 6              106,005
 265,334           8                     7               65,586
 110,300           9                    10               15,000
  25,000           9                    11                --
 -------                                                --------

 612,648           8                                    186,591
 -------                                                --------
 -------                                                --------

    The Company applies APB Opinion 25 and related Interpretations in
accounting for its plans.  Accordingly, no compensation cost has been
recognized.  Had compensation cost for the Company's stock option plan been
determined based on the fair value at the grant dates for awards under this plan
consistent with the method of FASB Statement No. 123, the Company's net income
and earnings per share would have been reduced to the pro forma amounts
indicated below:

                                                 1995           1996
                                            ------------    ------------

 Net income                  As reported    $  2,868,000    $  6,536,000
                             Pro forma         2,707,000       6,242,000

 Primary earnings per share  As reported            0.36            0.72
                             Pro forma              0.34            0.69

 Fully diluted earnings
   per share                 As reported            0.36            0.70
                             Pro forma              0.34            0.67

    The pro forma compensation cost was recognized for the fair value of the
stock options granted, which was estimated using the Black-Scholes model with
the following assumptions:  expected volatility of 42% and 53% in


                                          37
<PAGE>
                            NOTES TO FINANCIAL STATEMENTS


NOTE 9.  EMPLOYEE BENEFIT PLANS, (CONTINUED)

1995 and 1996, respectively, and risk-free interest rate of 6.75% for 1995 and
6.5% for 1996, the options would be exercised at the end of the exercise period
and no dividends.

401(K) SAVINGS PLAN

    The Company has a defined contribution 401(k) savings plan covering
substantially all its employees.  The plan provides the Company with an option
to match any participants' contributions; however no such contributions were
made by the Company during 1994, 1995 or 1996.

NOTE 10.  QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
 

                                                  First              Second               Third              Fourth
                                                 Quarter             Quarter             Quarter             Quarter
                                              -------------       -------------       -------------       -------------
 <S>                                           <C>                 <C>                 <C>                 <C>
 1996
  Net sales. . . . . . . . . . . . . .        $  58,384,000       $  58,212,000       $  53,713,000       $  55,906,000
  Gross profit . . . . . . . . . . . .           14,313,000          14,806,000          14,116,000          14,316,000
  Net income . . . . . . . . . . . . .            1,142,000           1,735,000           1,754,000           1,905,000
  Primary earnings per
  common share . . . . . . . . . . . .                 0.13                0.19                0.19                0.21
  Fully diluted earnings per
  common share . . . . . . . . . . . .                 0.13                0.18                0.18                0.20

 1995
  Net sales. . . . . . . . . . . . . .           26,596,000          28,305,000          28,803,000          33,353,000
  Gross profit . . . . . . . . . . . .            6,513,000           6,660,000           6,931,000           7,873,000
  Net income . . . . . . . . . . . . .              680,000             909,000           1,070,000             209,000
  Primary earnings per
  common share . . . . . . . . . . . .                 0.12                0.11                0.12                0.02
  Fully diluted earnings per
  common share . . . . . . . . . . . .                 0.12                0.11                0.12                0.02

 1994
  Net sales. . . . . . . . . . . . . .           20,247,000          23,105,000          22,838,000          24,076,000
  Gross profit . . . . . . . . . . . .            4,855,000           5,562,000           5,793,000           5,880,000
  Net income . . . . . . . . . . . . .              355,000             532,000             471,000             535,000
  Primary earnings per
  common share . . . . . . . . . . . .                 0.06                0.09                0.08                0.09
  Fully diluted earnings per
  common share . . . . . . . . . . . .                 0.06                0.09                0.08                0.09


</TABLE>
 

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<PAGE>

                               Richey Electronics, Inc.
                              Annual Report on Form 10-K
                         For the Year Ended December 31, 1996

                                    Exhibit Index

Exhibit
Number
-------
2.1      Stock Purchase Agreement, dated November 15, 1995, among Richey
         Electronics, Inc., Deanco, Inc., Electrical Distribution Acquisition
         Company and all of the stockholders of Electrical Distribution
         Acquisition Company. *4* (2.1)

2.2      First Amendment to Stock Purchase Agreement and Instrument of Joinder
         dated December 20, 1995 among Richey Electronics, Inc., Deanco, Inc.,
         Electrical Distribution Acquisition Company and all of the
         stockholders of Electrical Distribution Acquisition Company. *4* (2.2)

2.3      Sales Tax Indemnification Agreement dated December 20, 1995 among
         Richey Electronics, Inc. and the stockholders of Electrical
         Distribution Acquisition Company identified therein. *4* (2.3)

3.1      Restated Certificate of Incorporation of Richey Electronics, Inc. *5*
         (3.1)

3.2      Bylaws of Richey Electronics, Inc. *5* (3.2)

4.1      Indenture between Richey Electronics, Inc. and First Trust of
         California, National Association, dated as of February 15, 1996.  *10*
         (4.1)

4.2      Registration Rights Agreement among Richey Electronics, Inc.,
         Jefferies & Company, Inc. and Cruttenden Roth Incorporated, dated as
         of February 26, 1996.  *12* (4.2)

10.1     Indemnification Agreement among Barclay and Company, Inc., Brajdas
         Corporation, Donald I. Zimmerman and certain former shareholders of
         RicheyImpact Electronics, Inc. identified therein dated as of April 5,
         1993. *2* (E)

10.2     Letter re Amendment to Indemnification Agreement by Barclay and
         Company, Inc. and Donald I. Zimmerman, and agreed to by BRJS
         Investment Holding Corp., Brajdas Corporation and the other persons
         and entities identified therein dated April 23, 1993. *1* (10.3)

10.3     Registration Rights Agreement between Brajdas Corporation and BRJS
         Investment Holding Corp. dated April 2, 1993. *2* (10.4)

10.4     Employment Agreement between William C. Cacciatore and Brajdas
         Corporation dated as of April 1, 1993. *1* (10.18)

10.5     Addendum to Employment Agreement (William C. Cacciatore) dated as of
         February 21, 1995. *8* (10.37)

10.6     Second Addendum to Employment Agreement (William C. Cacciatore) dated
         as of May 17, 1995. *10* (10.31)

10.7     Employment Agreement between C. Don Alverson and Brajdas Corporation
         dated as of April 1, 1993. *1* (10.17)

10.8     Addendum to Employment Agreement (C. Don Alverson) dated as of
         February 21, 1995. *8* (10.38)

10.9     Second Addendum to Employment Agreement (C. Don Alverson) dated as of
         May 17, 1995. *10* (10.32)


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<PAGE>

10.10    Employment Agreement between Richard N. Berger and Brajdas Corporation
         dated as of April 1, 1993. *1* (10.20)

10.11    Addendum to Employment Agreement (Richard N. Berger) dated as of
         February 21, 1995. *8* (10.39)

10.12    Employment Agreement between Norbert W. St. John and Brajdas
         Corporation dated as of April 1, 1993. *1* (10.19)

10.13    Addendum to Employment Agreement (Norbert W. St. John) dated as of
         February 21, 1995. *8* (10.40)

10.14    Second Addendum to Employment Agreement (Norbert W. St. John) dated as
         of May 17, 1995. *10* (10.33)

10.15    Employment Agreement between William Class and Richey Electronics,
         Inc. dated as of January 1, 1996.  *11* (10.1)

10.16    Employment Agreement between Charles W. Mann and Richey Electronics,
         Inc. dated as of April 1, 1995.  *12* (10.35)

10.17    Service and Management Agreement dated December 18, 1990 by and among
         RicheyImpact Electronics, Inc., Palisades Associates, Inc. and
         Saunders Capital Group, Inc. *3* (10.2)

10.18    Agreement to Assume and Amend the Service and Management Agreement
         among Brajdas Corporation, Palisades Associates, Inc. and Saunders
         Capital Group, Inc. dated as of April 6, 1993. *3* (10.3)

10.19    Modification Agreement among the Company, Palisades Associates, Inc.
         and Saunders Capital Group, Inc. dated as of January 2, 1995. *8*
         (10.26)

10.20    Modification Agreement by and between Richey Electronics, Inc. and
         Palisades Associates, Inc. dated as of February 21, 1995. *8* (10.41)

10.21    1993 Stock Appreciation Rights Plan. *6* (A)

10.22    1992 Stock Option Plan. *8* (10.35)

10.23    Form of Incentive Stock Option Agreement. *8* (10.36)

10.24    Lease between Principal Mutual Life Insurance Company and Richey
         Electronics, Inc. for lease of premises at 7441 Lincoln Way, Garden
         Grove, California. *8* (10.32)

10.25    Lease between M&M Enterprises, a California General Partnership and
         Richey Electronics, Inc. for lease of premises at 10871 La Tuna Canyon
         Road, Sun Valley, California. *8* (10.33)

10.26    Lease between Hownat Trust and Deanco, Inc. for lease of premises at
         87 Concord Street, North Reading, Massachusetts, Boston Massachusetts.
         *10* (10.21)

10.27    Lease between Murray Center Venture and Deanco ACA Manufacturing, Inc.
         for lease of premises at Building 1, Murray Business Center, 3601 SW
         Murray Blvd., Beaverton, Oregon 97201.  *10* (10.25)

10.28    Lease Agreement between Fujita California Partners III and Deanco,
         Inc., Acacia Division, for premises at 3230 Scott Boulevard, Santa
         Clara, California.

10.29    Loan Agreement dated as of December 20, 1995 among Richey Electronics,
         Inc., the banks named therein and First Interstate Bank of California,
         as Agent.  *4* (10.1)

10.30    First Amendment to the Loan Agreement dated as of February 26, 1996
         among Richey Electronics, Inc., the banks named therein and First
         Interstate Bank of California, as Agent. *10* (10.30)


                                          40


<PAGE>

11.1     Statement regarding computation of per share earnings.

21.1     Subsidiaries of Richey Electronics, Inc.

23.1     Consent of McGladrey & Pullen, LLP

23.2     Consent of McGladrey & Pullen, LLP

27.1     Financial Data Schedule

---------------

*1*      Incorporated by reference to the designated exhibit of the Annual
         Report on Form 10-K for Brajdas Corporation for the fiscal year ended
         February 28, 1993, filed May 28, 1993.

*2*      Incorporated by reference to the designated exhibit of the Statement
         on Schedule 13D filed on behalf of BRJS Investment Holding Corp., C.
         Don Alverson, William C. Cacciatore, Greg A. Rosenbaum and Norbert W.
         St. John with the Commission on April 20, 1993.

*3*      Incorporated by reference to the designated exhibit of the Transition
         Report on Form 10-Q for Brajdas Corporation for the period from
         January 1, 1993 through July 2, 1993, filed August 4, 1993.

*4*      Incorporated by reference to the designated exhibit of Form 8-K for
         Richey Electronics, Inc. dated December 20, 1995, filed January 3,
         1996.

*5*      Incorporated by reference to the designated exhibit of the
         Registration Statement on Form S-1, filed January 7, 1994,
         Registration No. 33-73916.

*6*      Incorporated by reference to the designated exhibit of the definitive
         proxy statement for the 1993 Annual Meeting of Stockholders, filed
         July 13, 1993.

*7*      Incorporated by reference to the designated exhibit of the Form 8-K
         for Brajdas Corporation dated July 7, 1993, filed July 13, 1993.

*8*      Incorporated by reference to the designated exhibit of the
         Registration Statement on Form S-2, filed February 23, 1995,
         Registration Statement No. 33-89690.

*9*      Incorporated by reference to the designated exhibit of the Quarterly
         report on Form 10-Q for Richey Electronics, Inc. for the period ending
         March 31, 1995, filed May 15, 1995.

*10*     Incorporated by reference to the designated exhibit of the Annual
         Report on Form 10-K for the Company for the fiscal year ended December
         31, 1995, filed April 1, 1996.

*11*     Incorporated by reference to the designated exhibit of the Quarterly
         report on Form 10-Q for Richey Electronics, Inc. for the period ending
         June 28, 1996, filed August 12, 1996.

*12*     Incorporated by reference to the designated exhibit of the
         Registration Statement on Form S-2, filed April 26, 1996, Registration
         No. 333-02983.


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