<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  ANNUAL REPORT
                                  ON FORM 10-K

       Pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

        For the fiscal year ended                   Commission file number
            February 28, 2002                              1-8798
-----------------------------------------   ------------------------------------

                          Nu Horizons Electronics Corp.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                Delaware                                 11-2621097
-----------------------------------------   ------------------------------------
    (State of other jurisdiction of                   (I.R.S. Employer
     incorporation or organization                   Identification No.)

  70 Maxess Road, Melville, New York                        11747
--------------------------------------------------------------------------------
(Address of principal executive offices)                  (Zip Code)

                                 (631) 396-5000
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

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

                                      None
--------------------------------------------------------------------------------
                                (Title of class)

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

                                                 Name of each exchange on
           Title of each class                       which registered

 Common Stock Par Value $.0066 Per Share       NASDAQ National Market System
-----------------------------------------   ------------------------------------

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

                                (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 1-K or any amendment to this
Form 10K [X]

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of May 1, 2001.

     Common Stock - Par Value $.0066                    16,609,005
-----------------------------------------   ------------------------------------
                  Class                             Outstanding Shares

  Aggregate Market Value of Non-Affiliate Stock at May 1, 2002 - approximately
                                  $157,287,277
--------------------------------------------------------------------------------

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
PART I:
<S>                                                                                     <C>
          ITEM 1.  Business                                                             Pages  3 - 6

          ITEM 2.  Properties                                                           Pages  7

          ITEM 3.  Legal Proceedings                                                    Page   7

          ITEM 4.  Submission of Matters to a Vote of Security Holders                  Page   7

PART II:

          ITEM 5.  Market for the Registrant's Common Equity and Related Stockholder
                   Matters                                                              Page   8

          ITEM 6.  Selected Financial Data                                              Page   9

          ITEM 7.  Management's Discussion and Analysis of Financial Condition and
                   Results of Operations                                                Pages  10 - 14

          ITEM 7A  Market and Other Business Risks                                      Page   14

          ITEM 8.  Financial Statements and Supplementary Data                          Pages  F1 - F19

          ITEM 9.  Changes in and Disagreements with Accountants on Accounting and
                   Financial Disclosures                                                Page   15

PART III:

         ITEM 10.  Directors and Executive Officers of the Company                      Pages  15 - 16

         ITEM 11.  Executive Compensation                                               Pages  17 - 25

         ITEM 12.  Security Ownership of Certain Beneficial Owners and Management       Page   26

         ITEM 13.  Certain Relationships and Related Transactions                       Page   26

PART IV:

         ITEM 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K     Pages  27 - 34

Signatures                                                                              Page   30

Exhibit Index
</TABLE>

                                                                          Page 2

<PAGE>

PART I.

ITEM 1.   BUSINESS

          GENERAL:

          Except for historical information contained herein, the matters set
          forth herein are forward-looking statements that involve certain risks
          and uncertainties that could cause actual results to differ from those
          in the forward-looking statements. Potential risks and uncertainties
          include such factors as the level of business and consumer spending
          for electronic products, the amount of sales of the Company's
          products, the competitive environment within the electronics industry,
          the ability of the Company to continue to expand its operations, the
          level of costs incurred in connection with the Company's expansion
          efforts, the economic conditions in the semiconductor industry and the
          financial strength of the Company's customers and suppliers. Investors
          are also directed to consider other risks and uncertainties discussed
          in documents filed by the Company with the Securities and Exchange
          Commission.

               Nu Horizons Electronics Corp. (the "Company") and its wholly
          owned subsidiaries, NIC Components Corp. ("NIC"), Titan Logistics
          Corp. ("Titan"), Nu Horizons Eurotech Ltd. ("NUE"), and its majority
          owned subsidiaries NIC Components Asia PTE. LTD. ("NIA"), NIC Eurotech
          Ltd. ("NIE") and Nu Horizons Asia PTE. LTD. ("NUA") are engaged in the
          distribution of high technology active and passive electronic
          components. Nu Horizons International Corp. ("International"), another
          wholly owned subsidiary, is an export distributor of electronic
          components.

               NUV Inc. ("NUV" or "Nu Visions"), is currently an inactive wholly
          owned subsidiary of the Company, and was a contract assembler of
          circuit boards and related electromechanical devices for various
          original equipment manufacturers, or OEMs, until the sale of its
          assets on August 23, 2001.

               All references herein to the Company shall, unless the context
          otherwise requires, be deemed to refer to the Company and its
          subsidiaries.

               Active components distributed by the Company, principally to OEMs
          in the United States, include mainly commercial semiconductor products
          such as memory chips, microprocessors, digital and linear circuits,
          microwave, RF and fiber-optic components, transistors and diodes.
          Passive components distributed by NIC, principally to OEMs and other
          distributors nationally, consist of a high technology line of chip and
          leaded components including capacitors, resistors and related
          networks.

               The active and passive components distributed by the Company are
          utilized by the electronics industry and other industries in the
          manufacture of sophisticated electronic products including: industrial
          instrumentation, computers and peripheral equipment, consumer
          electronics, telephone and telecommunications equipment, satellite
          communications equipment, cellular communications equipment, medical
          equipment, automotive electronics, and audio and video electronic
          equipment.

               Manufacturers of electronic components augment their marketing
          programs through the use of independent distributors and contract
          assemblers such as the Company, upon which the Company believes they
          rely to a considerable extent to market their products. Distributors
          and assemblers, such as the Company, offer their customers the
          convenience of diverse inventories and rapid delivery, design and
          technical assistance, and the availability of product in smaller
          quantities than generally available from manufacturers. Generally,
          companies engaged in the distribution of active and passive electronic
          components, such as the Company, are required to maintain a relatively
          significant investment in inventories and accounts receivable. To meet
          these requirements, the Company, and other companies in the industry,
          typically depend on internally generated funds as well as external
          borrowings.

                                                                          Page 3

<PAGE>

ITEM 1.   BUSINESS (Continued):

               Management's policy is to manage, maintain and control the bulk
          of its inventories from its principal headquarters and stocking
          facility in Melville, Long Island, New York and stocking facility in
          San Jose, California. As additional franchise line opportunities
          become available to the Company, the need for branch level inventories
          may be necessary and desirable in order to better serve the specific
          needs of local markets.

          Semiconductor Products (Active Components):

               The Company is a distributor of a broad range of semiconductor
          products to commercial and military OEM's, principally in the United
          States. The Company is a franchised distributor of active components
          for approximately thirty product lines. Significant franchised product
          lines include Allegro, Elantec, Exar, Hitachi Semiconductor,
          Integrated Circuit Systems, Intersil Corporation, Marvel, Pericom, ST
          Microelectronics, Sun Microsystems, TDK Semiconductor, Vitesse
          Semiconductor and Xilinx among others.

               The Company's franchise agreements authorize it to sell all or
          part of the product line of a manufacturer on a non-exclusive basis.
          Under these agreements, each manufacturer will generally grant credits
          for any subsequent price reduction by such manufacturer and inventory
          return privileges whereby the Company can return to each such
          manufacturer for credit or exchange a percentage ranging from 5% to
          20% of the inventory purchased from said manufacturer during a
          semi-annual period. The franchise agreements generally may be
          cancelled by either party upon written notice. The Company
          anticipates, in the future, entering into additional franchise
          agreements and increasing its inventory levels in accordance with
          business demands.

          Passive Components and Relationship with Nippon:

               NIC has been the exclusive outlet in North America for Nippon
          Industries Co. Ltd.'s (Japan) ("Nippon") brand of passive components
          with a license for the use of the Nippon brand. The Company has a
          License Agreement with Nippon dated as of September 1, 2000 under
          which the Company has been granted an exclusive license to use the
          Nippon brand in the United States, Mexico, Central and South America
          and the Caribbean. The License Agreement has an initial term of ten
          years and automatically renews for successive one year periods unless
          the Company or Nippon terminates the License Agreement 90 days prior
          to the end of the initial or any renewal term.

               Due to certain market situations, NIC, with Nippon's assent, has
          also established several manufacturing associations with U.S. and
          Taiwan based manufacturers to supply NIC with a portion of its product
          requirements under the NIC brand. NIC intends to continue to give
          Nippon priority, however, in acquiring Nippon's products whenever
          Nippon's technology and pricing are commensurate market requirements.

          Sales and Marketing:

               Management's strategy for long-term success has been to focus the
          Company's sales and marketing efforts towards the following industry
          segments, both domestically and abroad: industrial, telecom/datacom,
          medical instrumentation, microwave and RF, fiber-optic, consumer
          electronics, security and protection devices, office equipment,
          computers and computer peripherals, factory automation and robotics.
          In order to help achieve these goals, the Company may enter into new
          franchise agreements for a broad base of commodity semiconductor
          products including those used in the key niche industries referred to
          above.

               As of February 28, 2002, the Company had approximately 15,000
          customers. All sales are made through customers' purchase orders.
          Semiconductors are sold primarily via telephone by the Company's
          in-house staff of approximately 80 salespersons, and by a field sales
          force of approximately 100 salespersons. The Company maintains branch
          sales facilities located as follows:

                                                                          Page 4

<PAGE>

ITEM 1.   BUSINESS (Continued):

          Sales and Marketing (continued):

          EAST COAST
          ----------

          Massachusetts - Boston
          New York - Melville (Long Island) and Rochester
          New Jersey - Mt. Laurel (Philadelphia) and Pine Brook
          Ohio - Cleveland
          Maryland - Columbia
          North Carolina - Raleigh
          Georgia - Atlanta
          Alabama - Huntsville
          Florida - Ft. Lauderdale, Orlando and Tampa

          MIDWEST                         WEST COAST
          -------                         ----------

          Arizona - Phoenix               California - Irvine, Los Angeles,
          Colorado - Denver                  Sacramento, San Diego and San Jose
          Illinois - Chicago              Oregon - Portland
          Minnesota - Minneapolis         Washington - Redmond
          Texas - Austin and Dallas

          CANADA                    ASIA                    EUROPE
          ------                    ----                    ------

          Montreal                  Singapore               Buckingham, England
          Ottowa
          Toronto

               NIC's passive components are marketed through the services of a
          national network of approximately 20 independent sales representative
          organizations, employing over 200 salespersons, as well as through
          NIC's in-house sales and engineering personnel. The independent
          representative organizations do not represent competing product lines
          but sell other related products. Commissions to such organizations
          generally range from 2 to 3% of all sales in a representative's
          exclusive territory.

               NIC has developed a national network of approximately 75 regional
          distributor locations, which market passive components on a
          non-exclusive basis. Approximately 35 of the regional distributors
          have entered into agreements with NIC whereby they are required to
          purchase from NIC a prescribed initial inventory. These distributors
          are protected by NIC against price reductions and are granted certain
          inventory return and other privileges. Due to the efforts of NIC and
          its distributors, NIC's passive components have been tested and
          "designed in" as a prime source of qualified product by over 7,000
          OEMs in the United States.

               No single customer accounted for more than 3% of the Company's
          consolidated sales for the year ended February 28, 2002. The Company's
          sales practice is to require payment within thirty days of delivery.

          Source of Supply:

               The Company inventories an extensive stock of active and passive
          components, however, if the Company's customers order products for
          which the Company does not maintain inventory, the Company's marketing
          strategy is to obtain such products from its franchise manufacturers,
          or, if a product is unobtainable, to identify and recommend
          satisfactory interchangeable alternative components. For this purpose,
          the Company devotes considerable efforts to familiarizing itself with
          component product movement throughout the industry, as well as to
          constant monitoring of its own inventories.

                                                                          Page 5

<PAGE>

ITEM 1.   BUSINESS (Continued):

          Source of Supply (continued):

               As of February 28, 2002, there were three manufacturers that
          represented more than 10% of the Company's inventory on a consolidated
          basis. Those suppliers accounted for approximately $45,577,000 of
          total inventory. Electronic components distributed by the Company
          generally are presently readily available; however, from time to time
          the electronics industry has experienced a shortage or surplus of
          certain electronic products.

               For the year ended February 28, 2002, the Company purchased
          inventory from two suppliers that was in excess of 10% of the
          Company's total purchases. Purchases from these suppliers were
          approximately $34,906,000 and $40,457,000 for the fiscal year.

          Competition and Regulation:

               The Company competes with many companies that distribute
          semiconductor and passive electronic components and, to a lesser
          extent, companies that manufacture such products and sell them
          directly to OEMs and other distributors. Many of these companies have
          substantially greater assets and possess greater financial and
          personnel resources than those of the Company. In addition, certain of
          these companies possess independent franchise agreements to carry
          semiconductor product lines which the Company does not carry, but
          which it may desire to have. Competition is based primarily upon
          inventory availability, quality of service, knowledge of product and
          price. The Company believes that the distribution of passive
          electronic components under its own label is a competitive advantage.

               The Company's competitive ability to price its imported active
          and passive components could be adversely affected by increases in
          tariffs, duties, changes in the United States' trade treaties with
          Japan, Taiwan or other foreign countries, transportation strikes and
          the adoption of Federal laws containing import restrictions. In
          addition, the cost of the Company's imports could be subject to
          governmental controls and international currency fluctuations. Because
          imports are paid for with U.S. dollars, the decline in value of United
          States currency as against foreign currencies would cause increases in
          the dollar prices of the Company's imports from Japan and other
          foreign countries. Although the Company has not experienced any
          material adverse effect to date in its ability to compete or maintain
          its profit margins as a result of any of the foregoing factors, no
          assurance can be given that such factors will not have a material
          adverse effect in the future.

          Backlog:

               The Company defines backlog as orders, believed to be firm,
          received from customers and scheduled for shipment, no later than 60
          days for active components and no later than 90 days for passive
          components from the date of the order. As of May 1, 2002, the
          Company's backlog was approximately $36,685,000 as compared to a
          backlog of approximately $46,973,000 at May 1, 2001.

          Employees:

               As of February 28, 2002, the Company employed approximately 471
          persons: 12 in management, 327 in sales and sales support, 24 in
          product and purchasing, 26 in finance, accounting and human resources,
          19 in MIS, 25 in operations and 38 in quality control, shipping,
          receiving and warehousing. The Company believes that its employee
          relations are satisfactory.

                                                                          Page 6

<PAGE>

ITEM 2.   PROPERTIES

               In December 1996, the Company leased an approximately 80,000
          square foot facility in Melville, Long Island, New York to serve as
          its executive offices and main distribution center. The lease term is
          from December 17, 1996, to December 16, 2008 at an annual base rental
          of $601,290 and provides for a 4% annual escalation in each of the
          last ten years of the term.

               On May 1, 1996, the Company leased approximately 25,000 square
          feet of warehouse and office space for its San Jose, California
          operation. This facility serves as the Company's West Coast regional
          sales and distribution headquarters. The lease term is from May 1,
          2001 to April 30, 2006 at an annual base rental of $540,000.

               On August 1, 2000, the Company leased approximately 10,000 square
          feet of office space in Melville, Long Island, New York to serve as
          the executive offices of it's NIC Components subsidiary. The lease
          term is from April 1, 2001 to December 31, 2008 at an annual base
          rental of $285,700 and provides for a 4% annual escalation in each
          subsequent year of the lease.

               The Company also leases space for thirty-two (32) branch sales
          offices, which range in size from 1,000 square feet to 9,300 square
          feet, with lease terms that expire between July 2002 and June 2008.
          Annual base rentals range from $21,600 to $199,400 with aggregate base
          rentals approximating $1,530,000. The Company believes it can obtain
          extensions of the leases scheduled to expire in fiscal 2003 on
          substantially similar terms to those currently in effect.

ITEM 3.   LEGAL PROCEEDINGS:

               No material legal proceeding is pending to which the Company is a
          party or to which any of its property is or may be subject.

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

               No matters were submitted during the fourth quarter of the fiscal
          year ended February 28, 2002 to a vote of security holders through the
          solicitation of proxies or otherwise.

                                                                          Page 7

<PAGE>

PART II.

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

        a)   The Company's common stock is traded on the NASDAQ National Market
             System under the symbol "NUHC". The following table sets forth, for
             the periods indicated, the high and low closing prices for the
             Company's common stock as adjusted for a 3-for-2 stock split
             declared on September 11, 2000, as reported by the NASDAQ National
             Market System.

             FISCAL YEAR 2001:                             HIGH       LOW
                                                           ----       ---

                First Quarter                            $16.50    $ 9.25
                Second Quarter                            22.68     10.67
                Third Quarter                             21.25      7.88
                Fourth Quarter                            13.37      6.56

             FISCAL YEAR 2002:

                First Quarter                            $12.51    $ 8.98
                Second Quarter                            11.23      8.39
                Third Quarter                              9.22      7.75
                Fourth Quarter                            10.92      8.50

             FISCAL YEAR 2003:
                   First Quarter (Through May 1, 2002)   $10.00    $ 8.35

        b)   As of May 1, 2002, the Company's common stock was owned by
             approximately 400 holders of record and 9,500 beneficial holders.

        c)   The Company has never paid a cash dividend on its common stock. The
             Company's current revolving credit line agreement permits dividends
             of up to 25% of the Company's consolidated net income.

                                                                          Page 8

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA:

<TABLE>
<CAPTION>
                       FOR THE            FOR THE            FOR THE            FOR THE           FOR THE
                      YEAR ENDED         YEAR ENDED        YEAR ENDED         YEAR ENDED         YEAR ENDED
                       FEBRUARY           FEBRUARY          FEBRUARY           FEBRUARY           FEBRUARY
                       28, 2002           28, 2001          29, 2000           28, 1999           28, 1998
                       --------           --------          --------           --------           --------

INCOME STATEMENT
  DATA:
<S>                   <C>                <C>                <C>               <C>              <C>
Continuing
Operations
Net sales               $281,912,508      $634,009,953       $364,069,562      $243,514,672    $221,217,251
Gross profit on
  sales                   60,222,426       139,502,597         76,456,311        53,016,248      48,028,412
Gross profit
 percentage                 21.4%            22.0%               21.0%             21.8%           21.7%
Net income (loss)
  before provision
  for income taxes
  and minority
  interests               (2,797,157)       58,515,268         20,694,140         7,668,406       8,088,372
Net income (loss)         (2,762,566)       33,561,085         11,903,786         4,608,127       4,743,948

Net income (loss)
from discontinued
operations                 4,982,242         1,791,000           (205,000)          (63,296)        554,043

Total net income        $  2,219,676      $ 35,352,085       $ 11,698,786      $  4,544,831    $  5,297,991

Earnings per common
share:

Basic                   $   .13           $   2.18           $   .87           $   .35         $    .41

Diluted                 $   .13           $   1.99           $   .67           $   .29         $    .35
</TABLE>

<TABLE>
<CAPTION>
                         FEBRUARY         FEBRUARY           FEBRUARY           FEBRUARY         FEBRUARY
                         28, 2002         28, 2001           29, 2000           28, 1999         28, 1998
                         --------         --------           --------           --------         --------

BALANCE SHEET
  DATA:
<S>                     <C>               <C>               <C>                 <C>            <C>
Working capital         $120,790,159      $201,732,737       $106,903,383       $71,343,379    $ 77,046,418
Total assets             151,318,461       247,830,999        136,625,266        94,340,725      95,580,832
Long-term debt             2,731,598        85,181,496         38,307,319        22,377,852      32,790,395
Shareholders'
  equity                 126,473,177       124,361,211         75,461,183        56,337,068      51,542,045
</TABLE>

                                                                          Page 9

<PAGE>

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

        Introduction:

        Nu Horizons Electronics Corp. and its wholly owned subsidiaries, NIC
        Components Corp. ("NIC"), Nu Horizons Eurotech Limited ("NUE"), Titan
        Logistics Corp. ("TITAN") and Nu Horizons International Electronics
        Corp. ("International") and its majority owned subsidiaries NIC
        Components Asia PTE. LTD. ("NIA"), NIC Eurotech Limited ("NIE") and Nu
        Horizons Asia PTE. LTD. ("NUA") are engaged in the distribution of high
        technology active and passive electronic components to a wide variety of
        original equipment manufacturers ("OEMs") of electronic products. Active
        components distributed by the Company include semiconductor products
        such as memory chips, microprocessors, digital and linear circuits,
        microwave, RF and fiber-optic components, transistors and diodes.
        Passive components distributed by NIC, principally to OEMs and other
        distributors nationally, consist of a high technology line of chip and
        leaded components, including capacitors, resistors and related networks.

        All references in this report to "the Company," "we," "our" and "us" are
        to Nu Horizons Electronics Corp. and its subsidiaries.

        As of August 23, 2001 the Company sold the assets of Nu Visions
        Manufacturing Inc. ("Nu Visions"), a wholly owned subsidiary of the
        Company, which was a contract assembler of circuit boards and related
        electromechanical devices for various OEM's.

        The financial information presented herein includes: (i) Balance sheets
        as of February 28, 2002, and February 28, 2001; (ii) Statements of
        income for the twelve month periods ended February 28, 2002, February
        28, 2001 and February 29, 2000; (iii) Statements of cash flows for the
        twelve month periods ended February 28, 2002, February 28, 2001 and
        February 29, 2000; and (iv) Consolidated changes in shareholders' equity
        for the twelve month periods ended February 28, 2002, February 28, 2001
        and February 29, 2000.

        Critical Accounting Policies and Estimates
        ------------------------------------------

        The Company's financial statements have been prepared in accordance with
        accounting principles generally accepted in the United States of
        America. The preparation of these financial statements requires the
        Company to make significant estimates and judgments that affect the
        reported amounts of assets, liabilities, revenues and expenses and
        related disclosure of contingent assets and liabilities. The Company
        evaluates its estimates, including those related to bad debts,
        inventories, intangible assets, income taxes and contingencies and
        litigation, on an ongoing basis. The Company bases its estimates on
        historical experience and on various other assumptions that are believed
        to be reasonable under the circumstances, the results of which form the
        basis for making judgments about the carrying values of assets and
        liabilities that are not readily apparent from other sources. Actual
        results may differ from these estimates under different assumptions or
        conditions.

        The Company believes the following critical accounting policies, among
        others, involve the more significant judgments and estimates used in the
        preparation of its consolidated financial statements:

        - The Company recognizes revenue in accordance with SEC Staff Accounting
        Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB
        101"). Under SAB 101, revenue is recognized when the title and risk of
        loss have passed to the customer, there is persuasive evidence of an
        arrangement, delivery has occurred or services have been rendered, the
        sales price is determinable and collectibility is reasonably assured.
        The Company recognizes revenues at time of shipment of its products and
        sales are recorded net of discounts and returns.

        - The Company maintains allowances for doubtful accounts for estimated
        bad debts. If the financial condition of the Company's customers were to
        deteriorate, resulting in an impairment of their inability to make
        payments, additional allowances might be required.

        - Inventories are recorded at the lower of cost or market. Write-downs
        of inventories to market value are based upon product franchise
        agreements governing price protection, stock rotation and obsolescence,
        as

                                                                         Page 10

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (Continued):

        well as assumptions about future demand and market conditions. If
        assumptions about future demand/or actual market conditions are less
        favorable than those projected by management, additional write-downs of
        inventories could be required.

        Fiscal Year 2002 versus 2001
        ----------------------------

        Results of Continuing Operations:
        ---------------------------------

        Net sales for the year ended February 28, 2002 aggregated $281,913,000
        as compared to $634,010,000 for the year ended February 28, 2001, a
        decrease of $352,097,000 or approximately 56%. Management attributes
        this decrease in sales for the period to the core semiconductor and
        passive component distribution business, which experienced substantially
        decreased demand. Toward the latter part of the fourth quarter of our
        prior fiscal year, we and the market place overall began to experience a
        significant decline in demand for electronic components. This reduced
        demand has continued throughout fiscal 2002. Management believes and
        expects that the current slowdown has stabilized but will extend at
        least through the first half of fiscal 2003. As a result, we expect
        revenues to continue to range from flat to a moderate upside potential
        through the first three quarters of fiscal 2003.

        Gross profit margin as a percentage of net sales was 21.4% for the year
        ended February 28, 2002 as compared to 22.0% for the year ended February
        28, 2001. It should also be noted that the gross profit margin for the
        fourth quarter of the current year was 20.1%. This continuing decrease
        in gross margin reflects decreasing prices due to increased competitive
        pressures resulting from the industry wide decline in demand coupled
        with an oversupply of product in the marketplace. As a result management
        believes that there could be some continued margin pressure in the first
        half of fiscal 2003, with a return to relative margin stability in the
        second half of fiscal 2003, however, no assurances can be given in this
        regard.

        Operating expenses decreased by $15,747,000 to $60,378,000 for the year
        ended February 28, 2002 from $76,125,000 for the year ended February 28,
        2001, a decrease of approximately 21%. The dollar decrease in operating
        expenses was due to decreases in the following expense categories:
        approximately $11,290,000 or approximately 72% of the decrease was for
        personnel related costs - commissions, salaries, travel and fringe
        benefits. The remaining decrease of approximately $4,457,000 or
        approximately 28% of the total is a result of decreases in various other
        general and administrative expenses. Operating expenses as a percentage
        of sales, however, increased to 21.4% of sales as compared to 12.0% for
        the prior year. The sharp reduction in sales has resulted in higher
        operating expenses as a percentage of sales and a loss of the economies
        of scale the Company enjoyed in its prior fiscal year. Management has
        decided to endure this higher rate of operating expenses in order to be
        prepared for what we believe will be an inevitable rebound for the
        industry, although no assurances can be given as to the timing or size
        of any rebound.

        Interest expense decreased by $3,345,000 from $4,862,000 for the year
        ended February 28, 2001 to $1,517,000 for the year ended February 28,
        2002. This decrease was primarily due to the lower average levels of
        bank debt during the year resulting from the decrease in the Company's
        inventory and accounts receivable levels required to support reduced
        sales activity, repayment of indebtedness with the proceeds of the sale
        of the Nu Visions Manufacturing (NUV) subsidiary and substantially lower
        interest rates overall.

                                                                         Page 11

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (Continued):

        Net loss from continuing operations for the year ended February 28, 2002
        was $2,763,000 or $ .17 per basic and$.16 per diluted share, as compared
        to income of $33,561,000 or $2.07 per basic share and $1.89 per diluted
        share, for the year ended February 28, 2001. Management attributes
        $1,638,000 of the loss for fiscal 2002 to reduced sales volumes,
        resulting in a greater decrease in gross profit margin dollars than in
        operating expenses. The remaining loss of $1,125,000, is attributable to
        a one-time charge for the impairment of the value of goodwill, which had
        previously been amortized over a fifteen-year period.

        Discontinued Operations:
        ------------------------

        On August 23, 2001, the Company completed the sale of the assets of its
        contract-manufacturing subsidiary, Nu Visions. The selling price was
        paid with a $2,000,000 Subordinated Note and $29,563,000 in cash.

        Net income from the discontinued operation for the year ended February
        28, 2002 was $799,000 or $.05 per basic and diluted share as compared to
        $1,791,000 or $.11 per basic share and $.10 per diluted share the year
        before. The net gain on the sale of the subsidiary resulted in an after
        tax profit of $4,184,000 or $.25 per basic share and $.24 per diluted
        share for the current year. This resulted in total net income from the
        discontinued operation for the year ended February 28, 2002 of
        $4,982,000 or $.30 per basic share and $.29 per diluted share as
        compared to $1,791,000 or $.11 per basic share and $.10 per diluted in
        the prior year.

        Combined Net Income:
        --------------------

        Net income from both continuing and discontinued operations combined for
        the year ended February 28, 2002 was $2,220,000 or $.13 per diluted
        share as compared to $35,352,000 or $1.99 per diluted share the year
        before.

        Fiscal Year 2001 versus 2000
        ----------------------------

        Results of Continuing Operations:
        ---------------------------------

        Net sales for the year ended February 28, 2001 aggregated $634,010,000
        as compared to $364,070,000 for the year ended February 29, 2000, an
        increase of approximately 74%. Management attributes this increase in
        sales for the period to the core semiconductor and passive component
        distribution business, which experienced substantially increased demand.
        Management believes that the ability to generate greater market
        penetration to a larger account base coupled with an increased focus on
        fewer product lines, contributed to the substantial increase in sales
        performance. Toward the latter part of the fourth quarter of fiscal 2001
        we and the market place overall began to experience a significant
        decline in demand for electronic components.

        Gross profit margin as a percentage of net sales was 22.0% for the year
        ended February 28, 2001 as compared to 21.0% for the year ended February
        29, 2000. This increase in gross margin percentage compared to the prior
        period resulted from tightened inventory availability at the supplier
        level coupled with continued strong customer demand through the third
        quarter.

        Operating expenses increased by $22,497,000 to $76,125,000 for the year
        ended February 28, 2001 from $53,628,000 for the year ended February 29,
        2000, an increase of approximately 42%. The dollar increase in operating
        expenses was due to increases in the following expense categories:
        Approximately $15,073,000 or approximately 67% of the increases were for
        personnel related costs - commissions, salaries, travel and fringe
        benefits. The remaining increase of approximately $7,424,000 or
        approximately 33% of the total increment is a result of increases in
        various other operating expenses including, but not limited to, freight
        out, rent, telephone, computer expenses and various general and
        administrative expenses. While operating expenses, expressed in dollars,
        for fiscal 2001 increased approximately 42% over fiscal 2000, those same
        expenses, as a percentage of sales dollars, decreased from 14.7% for the
        prior year to

                                                                         Page 12

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (Continued):

        12.0% for the fiscal 2001 year. Management was encouraged by the fact
        that sales volume increased at a greater rate than operating expenses,
        which it believed provided the economies of scale that were required to
        produce an enhanced bottom line performance.

        Interest expense increased by $2,727,000 from $2,135,000 for the year
        ended February 29, 2000 to $4,862,000 for the year ended February 28,
        2001. This increase was primarily due to the higher average levels of
        bank debt during the year resulting from an increase in the Company's
        inventories and accounts receivable levels needed to support increased
        sales activity coupled with higher interest rates overall.

                                 INTEREST COSTS
                                 FOR THE FISCAL
                                   YEAR ENDED

                                                   February        February
                                                   28, 2001        29, 2000
                                                 ------------------------------

                        Revolving Bank Credit    $4,862,000       $1,575,000
                        Sub. Convert. Notes               0          560,000
                                                 ------------------------------
                        Total Interest Expense   $4,862,000       $2,135,000
                                                 =============================

        Discontinued Operations:
        -----------------------

        On August 23, 2001, the Company completed the sale of the assets of its
        contract-manufacturing subsidiary, Nu Visions. The selling price was
        paid with a $2,000,000 Subordinated Note and $29,563,000 in cash.

        Net income from discontinued operations was $1,791,000 or $.11 per
        diluted share, for the year ended February 28, 2001. For the year ended
        February 29, 2000, there was a net loss from discontinued operations of
        $205,000, or $.01 per basic and diluted share.

        Combined Net Income:
        --------------------

        Net income for the year ended February 28, 2001 (from both continuing
        and discontinued operations) was $35,352,000 or $1.99 per share diluted,
        as compared to $11,699,000 or $.67 per share diluted, for the year ended
        February 29, 2000. Management attributes the increase in earnings to
        increased sales volume net of higher operating expenses for the year
        ended in 2001 as compared to 2000.

        Liquidity and Capital Resources:
        --------------------------------

        Fiscal Year 2002 versus 2001
        ----------------------------

        The Company ended its 2002 fiscal year with working capital and cash
        aggregating approximately $120,790,000 and $2,690,000, respectively, as
        compared to approximately $201,732,000 and $558,000 respectively, at
        February 28, 2001. The Company's current ratio at February 28, 2002, was
        6.8:1 as compared to 6.4:1 at February 28, 2001. The Company believes
        that its financial position at February 28, 2002, will enable it to take
        advantage of any new opportunities that may arise.

        On October 18, 2000, the Company entered into a new unsecured revolving
        line of credit with six banks, which currently provides for maximum
        borrowings of $120,000,000 at either (i) the lead bank's prime rate or
        (ii) LIBOR plus 87.5 to 147.5 basis points depending on the ratio of the
        Company's debt to its earnings before interest, taxes, depreciation and
        amortization, at the option of the Company through October 18, 2004.
        Borrowings under this line of credit decreased from $85,000,000 at
        February 28, 2001 to $2,500,000 at February 28, 2002. The primary reason
        for the decrease was lower borrowings needed due to reductions in
        inventories and receivables as a result of the significant decline in
        sales and repayment of amounts outstanding under the line of credit from
        the proceeds of the sale of the Nu Visions Manufacturing subsidiary. The
        Company does not expect a fluctuation in interest rates to have a
        material effect on its financial results.

                                                                         Page 13

<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (Continued):

         The Company has contacted the lead bank under its loan agreement to
         discuss an amendment to the current loan agreement to address the
         Company's reduced need for credit and to amend certain of the financial
         covenants contained therein. The Company is currently in full
         compliance with all of the covenants contained in its loan agreement.
         However, the Company believes that there is a risk that, due to the
         overall decline in sales in the electronic components market, without
         an amendment to the loan agreement, commencing in August 2002, the
         Company may violate the covenant related to EBITDA (Earnings Before
         Interest, Taxes, Depreciation and Amortization). The lead bank has
         advised the Company that all of the lenders under the Company's loan
         agreement are willing to enter into an amendment to the loan agreement
         that would enable the Company to remain in compliance with all
         covenants, as revised, for the foreseeable future. There can be no
         assurances that the Company and its lenders will actually enter into
         such an agreement.

         The Company anticipates that its resources provided by its cash flow
         from operations and its bank lines of credit, as amended, will be
         sufficient to meet its financing requirements for at least the next
         twelve-month period.

         Inflationary Impact:
         --------------------

         Since the inception of operations, inflation has not significantly
         affected the operating results of the Company. However, inflation and
         changing interest rates have had a significant effect on the economy in
         general and therefore could affect the operating results of the Company
         in the future.

         Forward Looking Statement Disclaimer:
         -------------------------------------

         Except for historical information contained herein, the matters set
         forth above may be forward-looking statements that involve certain
         risks and uncertainties that could cause actual results to differ from
         those in the forward-looking statements. Potential risks and
         uncertainties include such factors as the level of business and
         consumer spending for electronic products, the amounts of sales of the
         Company's products, the competitive environment within the electronic
         industry, the ability of the Company to continue to expand its
         operations and the level of costs incurred in connection therewith,
         economic conditions in the semiconductor industry and the financial
         strength of the Company's customers and suppliers. Investors are also
         directed to consider other risks and uncertainties discussed in
         documents filed by the Company with the Securities and Exchange
         Commission.

ITEM 7A. MARKET AND OTHER BUSINESS RISKS:

         The Company's credit facility bears interest based on interest rates
         tied to the prime or LIBOR rate, either of which may fluctuate over
         time based on economic conditions. As a result, the Company is subject
         to market risk for changes in interest rates and could be subjected to
         increased or decreased interest payments if market rates fluctuate. If
         market rates increase, the impact could have a material adverse effect
         on the Company's financial results.

         The Company has several foreign subsidiaries and acquires certain
         inventory from foreign suppliers and as such, faces risk due to adverse
         movements in foreign currency exchange rates. These risks could have a
         material impact on the Company's financial results in future periods.

         The electronic component industry is cyclical which can cause
         significant fluctuations in sales, gross margins and profits, from year
         to year. For example, during calendar 2001, the industry experienced a
         severe decline in the demand for electronic components, which caused
         sales to decrease by 56%. The prior year reflected a 74% increase in
         net sales. It is difficult to predict the timing of the changing cycles
         in the electronic component industry.

                                                                         Page 14

<PAGE>

ITEM 8.      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          Independent Auditors' Report

To The Board of Directors and Shareholders
Nu Horizons Electronics Corp.
Melville, New York

         We have audited the accompanying consolidated balance sheets of Nu
Horizons Electronics Corp. and subsidiaries as of February 28, 2002 and February
28, 2001, and the consolidated statements of income, changes in shareholders'
equity and cash flows for the three years in the period ended February 28, 2002.
Our audits also included the financial statement schedule listed in the index at
Item 14(a). These consolidated financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

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

         In our opinion, the consolidated financial statements, referred to
above, present fairly in all material respects, the financial position of Nu
Horizons Electronics Corp. and subsidiaries at February 28, 2002 and February
28, 2001, and the results of their operations and their cash flows for each of
the three years in the period ended February 28, 2002 in conformity with
accounting principles generally accepted in the United States of America.


                                                    /s/ LAZAR LEVINE & FELIX LLP
                                                    ----------------------------
                                                        LAZAR LEVINE & FELIX LLP



New York, New York
May 3, 2002

                                                                        Page F-1

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------

<TABLE>
<CAPTION>
                                        -ASSETS-
                                         ------

                                                                            February        February
CURRENT ASSETS:                                                             28, 2002        28, 2001
                                                                          ----------------------------
<S>                                                                       <C>             <C>
    Cash                                                                  $  2,689,978    $    558,176
    Accounts receivable - net of allowance for doubtful accounts
      of $4,445,901 and $5,590,675 for 2002 and 2001, respectively          40,018,469      87,250,544
    Inventories                                                             95,076,198     119,005,965
    Prepaid expenses and other current assets                                3,726,568       7,717,332
    Net assets of discontinued subsidiary                                           --      24,397,341
                                                                          ----------------------------
TOTAL CURRENT ASSETS                                                       141,511,213     238,929,358

PROPERTY, PLANT AND EQUIPMENT - NET                                          6,145,476       6,018,619

OTHER ASSETS:
    Costs in excess of net assets acquired - net of amortization                    --       1,281,560
    Subordinated note receivable                                             2,000,000              --
    Other assets                                                             1,661,772       1,601,462
                                                                          ----------------------------

                                                                          $151,318,461    $247,830,999
                                                                          ============================

                        -LIABILITIES AND SHAREHOLDERS' EQUITY-
                         ------------------------------------

CURRENT LIABILITIES:
    Accounts payable                                                      $ 13,637,730    $ 29,418,411
    Accrued expenses                                                         7,083,324       7,778,210
                                                                          ----------------------------
TOTAL CURRENT LIABILITIES                                                   20,721,054      37,196,621
                                                                          ----------------------------

LONG-TERM LIABILITIES:
    Deferred income taxes                                                      231,598         181,496
    Revolving credit line                                                    2,500,000      85,000,000
                                                                          ----------------------------
TOTAL LONG-TERM LIABILITIES                                                  2,731,598      85,181,496
                                                                          ----------------------------

MINORITY INTERESTS                                                           1,392,632       1,091,671
                                                                          ----------------------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
    Preferred stock, $1 par value, 1,000,000 shares authorized; none
      issued or outstanding                                                         --              --
    Common stock, $.0066 par value, 20,000,000 shares authorized;
      16,609,005 and 16,501,840 shares issued and outstanding for 2002
      and 2001, respectively                                                   109,619         108,912
    Additional paid-in capital                                              42,600,827      41,798,615
    Retained earnings                                                       84,010,397      81,790,721
    Other accumulated comprehensive income (loss)                             (247,666)        821,807
                                                                          ----------------------------
                                                                           126,473,177     124,520,055
    Less: loan to ESOP                                                              --         158,844
                                                                          ----------------------------
TOTAL SHAREHOLDERS' EQUITY                                                 126,473,177     124,361,211
                                                                          ----------------------------

                                                                          $151,318,461    $247,830,999
                                                                          ============================
</TABLE>

                 See notes to consolidated financial statements

                                                                        Page F-2

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
                        CONSOLIDATED STATEMENTS OF INCOME
                        ---------------------------------

<TABLE>
<CAPTION>
                                                                          FOR THE YEAR ENDED
                                                              --------------------------------------------
                                                                FEBRUARY        FEBRUARY        FEBRUARY
                                                                28, 2002        28, 2001        29, 2000
                                                              ------------    ------------    ------------
<S>                                                           <C>             <C>             <C>
NET SALES                                                     $281,912,508    $634,009,953    $364,069,562
                                                              ------------    ------------    ------------

COSTS AND EXPENSES:
    Cost of sales                                              221,690,082     494,507,356     287,613,251
    Operating expenses                                          60,377,685      76,125,482      53,627,525
    Impairment of goodwill                                       1,124,636              --              --
    Interest expense                                             1,517,262       4,861,847       2,134,646
                                                              ------------    ------------    ------------
                                                               284,709,665     575,494,685     343,375,422
                                                              ------------    ------------    ------------

INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES
     AND MINORITY INTERESTS                                     (2,797,157)     58,515,268      20,694,140

    Provision (credit) for income taxes                           (503,742)     24,110,598       8,647,909
                                                              ------------    ------------    ------------

INCOME (LOSS) BEFORE MINORITY INTERESTS                         (2,293,415)     34,404,670      12,046,231

    Minority interest in earnings of subsidiary                    469,151         843,585         142,445
                                                              ------------    ------------    ------------

INCOME (LOSS) FROM CONTINUING OPERATIONS                        (2,762,566)     33,561,085      11,903,786
                                                              ------------    ------------    ------------

DISCONTINUED OPERATIONS:
   Income (loss) from operations of contract manufacturing
       subsidiary disposed of - net of income taxes                798,735       1,791,000        (205,000)
   Gain on sale of contract manufacturing subsidiary - net
       of income taxes                                           4,183,507              --              --
                                                              ------------    ------------    ------------
                                                                 4,982,242       1,791,000        (205,000)
                                                              ------------    ------------    ------------

NET INCOME                                                    $  2,219,676    $ 35,352,085    $ 11,698,786
                                                              ============    ============    ============

NET INCOME (LOSS) PER COMMON SHARE - BASIC:
    Continuing operations                                     $       (.17)   $       2.07    $        .88
    Discontinued operations                                            .30             .11            (.01)
                                                              ------------    ------------    ------------
                                                              $        .13    $       2.18    $        .87
                                                              ============    ============    ============

NET INCOME (LOSS) PER COMMON SHARE-
DILUTED:
    Continuing operations                                     $       (.16)   $       1.89    $        .68
    Discontinued operations                                            .29             .10            (.01)
                                                              ------------    ------------    ------------
                                                              $        .13    $       1.99    $        .67
                                                              ============    ============    ============

WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
    Basic                                                       16,574,911      16,213,084      13,511,545
    Diluted                                                     17,430,332      17,746,075      17,547,789
</TABLE>

                 See notes to consolidated financial statements

                                                                        Page F-3

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
           ----------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                      ACCUMULATED
                                                          ADDITIONAL                     OTHER                         TOTAL
                                                COMMON     PAID-IN       RETAINED    COMPREHENSIVE     LOAN TO      SHAREHOLDERS'
                                     SHARES     STOCK      CAPITAL       EARNINGS       INCOME           ESOP          EQUITY
                                   ----------  --------  ------------  ------------  -------------   ------------   -------------
<S>                                <C>         <C>       <C>           <C>           <C>             <C>              <C>
Balance at February 28, 1999        8,753,076  $ 57,770  $ 19,042,230  $ 38,076,840  $           -   $   (839,772)  $  56,337,068

Stock dividend distributed            437,638     2,888     3,334,102    (3,336,990)             -              -               -
Exercise of stock options               4,388        29        25,844             -              -              -          25,873
Conversion of subordinated
  convertible notes                   823,550     5,435     7,053,565             -              -              -       7,059,000
Repayment from ESOP                         -         -             -             -              -        340,456         340,456
Net income                                  -         -             -    11,698,786              -              -      11,698,786
                                   ----------  --------  ------------  ------------  -------------   ------------   -------------
Balance at February 29, 2000       10,018,652    66,122    29,455,741    46,438,636              -       (499,316)     75,461,183

Three-for-two stock split           5,437,364    35,887       (35,887)            -              -              -               -
Exercise of stock options           1,045,824     6,903     7,310,016             -              -              -       7,316,919
Income tax benefit from stock
   options exercised                        -         -     5,068,745             -              -              -       5,068,745
Repayment from ESOP                         -         -             -             -              -        340,472         340,472
Foreign currency translation                -         -             -             -        821,807              -         821,807
Net income                                  -         -             -    35,352,085              -              -      35,352,085
                                   ----------  --------  ------------  ------------  -------------   ------------   -------------
Balance at February 28, 2001       16,501,840   108,912    41,798,615    81,790,721        821,807       (158,844)    124,361,211

Exercise of stock options             107,165       707       490,616             -              -              -         491,323
Income tax benefit from stock
    options exercised                       -         -       311,596             -              -              -         311,596
Repayment from ESOP                         -         -             -             -              -        158,844         158,844
Foreign currency translation                -         -             -             -     (1,069,473)             -      (1,069,473)
Net income                                  -         -             -     2,219,676              -              -       2,219,676
                                   ----------  --------  ------------  ------------  -------------   ------------   -------------

Balance at February 28, 2002       16,609,005  $109,619  $ 42,600,827  $ 84,010,397  $    (247,666)  $          -   $ 126,473,177
                                   ==========  ========  ============  ============  =============   ============   =============
</TABLE>

                 See notes to consolidated financial statements

                                                                        Page F-4

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------

<TABLE>
<CAPTION>
                                                                                FOR THE YEAR ENDED
                                                             ---------------------------------------------------------
                                                                FEBRUARY             FEBRUARY             FEBRUARY
                                                                28, 2002             28, 2001             29, 2000
                                                             ---------------     -----------------     ---------------
<S>                                                          <C>                 <C>                   <C>
INCREASE (DECREASE) IN CASH AND
      CASH EQUIVALENTS:

Cash flows from operating activities:
    Cash received from customers                             $  358,499,244         $ 637,588,990       $ 355,352,590
    Cash paid to suppliers and employees                       (275,441,710)         (659,196,422)       (368,622,165)
    Interest paid                                                (1,517,262)           (5,559,847)         (2,837,646)
    Income taxes paid                                            (2,987,904)          (29,847,868)         (4,134,402)
                                                             ---------------     -----------------     ---------------
Net cash provided (used) by operating activities                 78,552,368           (57,015,147)        (20,241,623)
                                                             ---------------     -----------------     ---------------

Cash flows from investing activities:
    Capital expenditures                                         (1,393,184)           (4,330,953)         (1,691,765)
    Proceeds from sale of subsidiary                             29,563,000                     -                   -
    Net assets of subsidiary sold                               (18,217,706)                    -                   -
    Expenses related to sale of subsidiary                       (3,606,122)                    -                   -
                                                             ---------------     -----------------     ---------------
Net cash provided (used) by investing activities                  6,345,988            (4,330,953)         (1,691,765)
                                                             ---------------     -----------------     ---------------

Cash flows from financing activities:
    Borrowings under revolving credit line                       81,300,000           210,775,000          95,785,000
    Repayments under revolving credit line                     (163,800,000)         (163,575,000)        (72,885,000)
    Proceeds from exercise of stock options                         802,919            12,385,664              25,873
                                                             ---------------     -----------------     ---------------
Net cash provided (used) by financing activities                (81,697,081)           59,585,664          22,925,873
                                                             ---------------     -----------------     ---------------

Effect of exchange rate changes                                  (1,069,473)              821,807                   -
                                                             ---------------     -----------------     ---------------

Net increase (decrease) in cash and cash equivalents              2,131,802              (938,629)            992,485

Cash and cash equivalents, beginning of year                        558,176             1,496,805             504,320
                                                             ---------------     -----------------     ---------------

Cash and cash equivalents, end of year                       $    2,689,978         $     558,176       $   1,496,805
                                                             ===============     =================     ===============
</TABLE>

                 See notes to consolidated financial statements

                                                                        Page F-5

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                -------------------------------------------------

<TABLE>
<CAPTION>
                                                                           FOR THE YEAR ENDED
                                                         --------------------------------------------------------
                                                           FEBRUARY            FEBRUARY             FEBRUARY
                                                           28, 2002            28, 2001             29, 2000
                                                         --------------     ----------------     ----------------
<S>                                                      <C>                <C>                  <C>
RECONCILIATION OF NET INCOME TO NET
CASH FROM OPERATING ACTIVITIES

NET INCOME                                                 $  2,219,676        $  35,352,085       $   11,698,786

Adjustments:
         Gain on sale of subsidiary                          (4,183,507)                   -                    -
         Depreciation and amortization                        1,416,235            2,007,864            1,660,345
         Impairment of goodwill                               1,124,636                    -                    -
         Contribution to ESOP (compensation)                    158,844              340,472              340,456
         Bad debt provision                                      86,982            2,793,468            1,097,338
Changes in assets and liabilities:
         Decrease (increase) in accounts receivable          54,850,081          (33,039,963)         (23,885,972)
         Decrease (increase) in inventories                  40,047,471          (65,579,273)         (24,430,502)
         Decrease (increase) in prepaid expenses
          and other current assets                            4,230,329           (5,907,296)             537,537
         (Increase) in other assets                          (2,045,742)            (404,463)             (72,746)
         (Decrease) increase in accounts payable
          and accrued expenses                              (19,703,700)          10,528,757            8,852,022
         Increase (decrease) in income taxes                     50,102           (3,949,071)           3,711,715
         Increase in minority interest                          300,961              842,273              249,398
                                                         --------------     ----------------     ----------------

Net cash provided (used) by operating activities           $ 78,552,368        $ (57,015,147)      $  (20,241,623)
                                                         ==============     ================     ================
</TABLE>

                 See notes to consolidated financial statements

                                                                        Page F-6

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                       THREE YEARS ENDED FEBRUARY 28, 2002
                       -----------------------------------

1.        ORGANIZATION:

          Nu Horizons Electronics Corp. and its subsidiaries, (both wholly and
          majority owned) are wholesale and export distributors of semiconductor
          and passive electronic components throughout the United States, Asia
          and Europe.

2.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

      a.  Principles of Consolidation:

          The consolidated financial statements include the accounts of Nu
          Horizons Electronics Corp. (the "Company"), and its wholly-owned
          subsidiaries, NIC Components Corp. ("NIC"), Nu Horizons International
          Corp. ("International"), Nu Horizons Eurotech ("NUE"), and Titan
          Logistics Corp. ("Titan") and its majority owned subsidiaries, NIC
          Eurotech Limited ("NIE"), Nu Horizons Asia PTE. LTD. ("NUA") and NIC
          Components Asia PTE. LTD ("NIA"). All material intercompany balances
          and transactions have been eliminated. See also Note 3.

      b.  Use of Estimates:

          In preparing financial statements, in accordance with accounting
          principles generally accepted in the United States of America,
          management makes certain estimates and assumptions, where applicable,
          that affect the reported amounts of assets, liabilities and
          disclosures of contingent assets and liabilities at the date of the
          financial statements, as well as reported amounts of revenues and
          expenses during the reporting period. While actual results could
          differ from those estimates, management does not expect such
          variances, if any, to have a material effect on the financial
          statements.

      c.  Concentration of Credit Risk/Fair Value:

          Financial instruments that potentially subject the Company to
          concentrations of credit risk consist principally of cash and accounts
          receivable.

          The Company maintains, at times, deposits in federally insured
          financial institutions in excess of federally insured limits.
          Management attempts to monitor the soundness of the financial
          institution and believes the Company's risk is negligible.
          Concentrations with regard to accounts receivable are limited due to
          the Company's large customer base.

          The carrying amounts of cash, accounts receivable, accounts payable
          and accrued expenses approximate fair value due to the short-term
          nature of these items. The carrying amount of long-term debt also
          approximates fair value since the interest rates on these instruments
          approximate market interest rates.

      d.  Cash and Cash Equivalents:

          For purposes of the statements of cash flows, the Company considers
          all highly liquid investments purchased with a remaining maturity of
          three months or less to be cash equivalents.

                                                                        Page F-7

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                       THREE YEARS ENDED FEBRUARY 28, 2002
                       -----------------------------------

2.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

      e.  Inventories:

          Inventories, which consist primarily of goods held for resale, are
          stated at the lower of cost (first-in, first-out method) or market.

      f.  Depreciation:

          Depreciation is provided using the straight-line method as follows:

                 Office equipment                  5 years
                 Furniture and fixtures            5 - 12 years
                 Computer equipment                5 years

          Leasehold improvements are amortized over the term of the lease.
          Maintenance and repairs are charged to operations and major
          improvements are capitalized. Upon retirement, sale or other
          disposition, the associated cost and accumulated depreciation are
          eliminated from the accounts and any resulting gain or loss is
          included in operations.

      g.  Goodwill:

          Costs in excess of net assets acquired are amortized on a
          straight-line basis over fifteen years. As of the end of fiscal 2002
          and 2001, accumulated amortization of goodwill aggregated $1,229,238
          and $1,072,314, respectively.

          The Company periodically reviews the valuation and amortization of
          goodwill to determine possible impairment by comparing the carrying
          value to the undiscounted future cash flows of the related assets, in
          accordance with Statement of Financial Accounting Standards (SFAS) No.
          121, "Accounting for the Impairment of Long-lived Assets and for
          Long-lived Assets to be Disposed of." As a result of this review, the
          Company identified certain conditions as indicators of asset
          impairment and accordingly, recognized full impairment of the
          remaining goodwill, recording a one-time charge of $1,124,636, as of
          February 28, 2002.

      h.  Income Taxes:

          The Company has elected to file a consolidated federal income tax
          return with its domestic subsidiaries. The Company utilizes SFAS 109
          "Accounting for Income Taxes", which requires use of the asset and
          liability approach of providing for income taxes. Deferred income
          taxes are provided for on the timing differences for certain items
          which are treated differently for tax and financial reporting
          purposes. These items include depreciation of fixed assets, inventory
          capitalization valuations and the recognition of bad debt expense.

          International has elected under Section 995 of the Internal Revenue
          Code to be taxed as an "Interest Charge Disc". Based upon these rules,
          income taxes are paid when International distributes its income to the
          parent company. Until distributions are made, the parent company pays
          interest only on the deferred tax liabilities. International's untaxed
          income at February 28, 2002 approximates $2,500,000.

                                                                        Page F-8

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                       THREE YEARS ENDED FEBRUARY 28, 2002
                       -----------------------------------

2.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

      i.  Revenue Recognition/Shipping and Handling Costs:

          Revenue is recognized when products are shipped to customers in
          accordance with SEC Staff Accounting Bulletin No. 101, ("Revenue
          Recognition in Financial Statements"). Amounts related to shipping and
          handling that are billed to customers as part of sales transactions
          are reflected as a reduction of operating expenses and aggregated
          $130,328, $279,181 and $203,819 for the fiscal years ended 2002, 2001
          and 2000, respectively. Shipping and handling costs incurred by the
          Company, are included in costs of sales and aggregated $1,042,052,
          $2,454,242, and $1,313,014 for the fiscal years ended 2002, 2001 and
          2000, respectively.

      j.  Advertising and Promotion Costs:

          Advertising and promotion costs, which are included in general and
          administrative expenses, are expensed as incurred. For the fiscal
          years ended 2002, 2001 and 2000, such costs aggregated $424,490,
          $1,295,465 and $662,646 respectively.

      k.  Earnings Per Common Share:

          Basic and diluted earnings per share have been computed in accordance
          SFAS No. 128. The number of average shares for each period has been
          adjusted to reflect the 3-for-2 stock split in October, 2000.

       l. Stock-Based Compensation:

          The Company applies the intrinsic value-based method of accounting
          prescribed by Accounting Principles Board (APB) Opinion No. 25,
          "Accounting for Stock Issued to Employees," and related
          interpretations, in accounting for employee stock options. As such,
          compensation expense would be recorded on the date of grant only if
          the current market price of the underlying stock exceeded the exercise
          price. Compensation expense related to stock options granted to
          non-employees is accounted for under SFAS No. 123 "Accounting for
          Stock Based Compensation", whereby compensation expense is recognized
          over the vesting period based on the fair value of the options on the
          date of grant.

          In March 2000, the Financial Accounting Standards Board issued FASB
          Interpretation No. 44, "Accounting for Certain Transactions Involving
          Stock Compensation" (FIN 44). FIN 44 provides guidance for issues
          arising in applying APB Opinion No. 25. FIN 44 applies specifically to
          new awards, exchanges of awards in a business combination,
          modification to outstanding awards, and changes in grantee status that
          occur on or after July 1, 2000, except for the provisions related to
          repricings and the definition of an employee which apply to awards
          issued after December 15, 1998. Application of FIN 44 did not have a
          material effect on the Company's financial reporting.

                                                                        Page F-9

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                       THREE YEARS ENDED FEBRUARY 28, 2002
                       -----------------------------------

2.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

      m.  Foreign Currency Translation/Other Comprehensive Income:

          Assets and liabilities of the Company's foreign subsidiaries are
          translated at current exchange rates, while income and expenses are
          translated at average rates for the period. Translation gains and
          losses are reported as a component of accumulated other comprehensive
          income on the statement of shareholders' equity in accordance with
          SFAS No. 130. "Reporting Comprehensive Income".

      n.  Reclassifications:

          Certain prior years information has been reclassified to conform to
          the current year's reporting presentation.

      o.  New Accounting Pronouncements:

          In June 2001, the Financial Accounting Standards Board ("FASB") issued
          Statement of Financial Accounting Standards ("SFAS") No. 141,
          "Business Combinations", effective for fiscal years beginning after
          December 15, 2001. Under SFAS 141, the pooling of interests method of
          accounting is no longer allowed for business combinations. The Company
          does not believe that the effect of the adoption of this statement
          will have a material impact on its financial statements.

          In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other
          Intangible Assets." On March 1, 2002, the company adopted this
          statement, which among other things, eliminates the amortization of
          goodwill and requires annual tests for determining impairment of
          goodwill. The company had previously written off all of its remaining
          goodwill and as such, the adoption of this statement will not have an
          impact on its financial statements. Management of the Company has
          determined that prior year pro forma information regarding
          amortization of goodwill is not material to these financial
          statements.

          In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
          Retirement Obligations," which addresses the financial accounting and
          reporting for obligations associated with the retirement of tangible
          long-lived assets and the related asset retirement costs. SFAS No. 143
          requires that the fair value of a liability for an asset retirement
          obligation be recorded in the period incurred and the related asset
          retirement costs be capitalized. The Company is required to adopt this
          statement in the first quarter of fiscal 2003 and has not yet
          completed its evaluation of the effect, if any, on its consolidated
          financial position and results of operations.

          In August 2001, the FASB issued SFAS No. 144, "Accounting for the
          Impairment or Disposal of Long-Lived Assets." SFAS No. 144 addresses
          the financial accounting and reporting for the impairment or disposal
          of long-lived assets, including business segments accounted for as
          discontinued operations. The Company is required to adopt this
          statement in the first quarter of fiscal 2003 and has not yet
          completed its analysis to determine the effect, if any, on its
          consolidated financial position and results of operations.

                                                                       Page F-10

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                       THREE YEARS ENDED FEBRUARY 28, 2002
                       -----------------------------------

3.       SALE OF SUBSIDIARY:

         On August 23, 2001, the Company completed the sale of the assets of its
         contract-manufacturing subsidiary, Nu Visions Manufacturing, Inc. ("Nu
         Visions"). The selling price of $31,563,000 consisted of $2,000,000 in
         a subordinated note (see below) and $29,563,000 in cash.

         Operating results of Nu Visions were as follows:

<TABLE>
<CAPTION>
                                                          2002                 2001                2000
                                                    ------------------    ---------------     ----------------
         <S>                                             <C>                <C>                  <C>
         Net sales                                        $21,736,655        $36,620,000          $15,169,000
         Income (loss) before income taxes                  1,331,226          3,036,000             (325,000)
         Income tax provision (benefit)                       798,735          1,791,000             (205,000)
</TABLE>

         Pursuant to the sale of this subsidiary, the Company received a
         $2,000,000 Junior Subordinated Note, dated August 23, 2001 and issued
         by the buyer as part of the purchase price. The note has a maturity
         date of May 14, 2007 and is subordinate in right of payment to all
         existing and future indebtedness of the issuer. The note bears interest
         from the issue date, on the principal amount, to, and including the
         maturity date, at a rate of 8% per annum. Interest shall be payable on
         the maturity date and shall compound quarterly as of each anniversary
         of the issue date. Prepayment of the note and interest accrued is
         permitted if and when certain conditions in the subordination agreement
         have been met.

4.       PROPERTY, PLANT AND EQUIPMENT:

         Property, plant and equipment which is reflected at cost, consists of
         the following:

<TABLE>
<CAPTION>
                                                                      2002                 2001
                                                                  ------------         ------------
             <S>                                                   <C>                  <C>
             Furniture, fixtures and equipment                     $ 7,755,003          $ 7,200,192
             Computer equipment                                      5,405,976            4,709,830
             Leasehold improvements                                  1,254,364            1,126,667
                                                                  ------------         ------------
                                                                    14,415,343           13,036,689
             Less: accumulated depreciation and amortization         8,269,867            7,018,070
                                                                  ------------         ------------
                                                                   $ 6,145,476          $ 6,018,619
                                                                  ============         ============
</TABLE>

         Depreciation expense for the years ended February 28, 2002, February
         28, 2001 and February 29, 2000 aggregated $1,259,248, $1,131,169,and
         $1,050,635 respectively.

5.       OTHER ASSETS:

         Other assets consists of the following:

<TABLE>
<CAPTION>
                                                                      2002                 2001
                                                                  ------------         ------------
             <S>                                                    <C>                  <C>
             Net cash surrender value - life insurance              $1,218,691           $1,155,155
             Other                                                     443,081              446,307
                                                                  ------------         ------------
                                                                    $1,661,772           $1,601,462
                                                                  ============         ============
</TABLE>

                                                                       Page F-11

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                       THREE YEARS ENDED FEBRUARY 28, 2002
                       -----------------------------------

6.       REVOLVING CREDIT LINE:

         On October 18, 2000, the Company entered into a new unsecured revolving
         line of credit with six banks, which currently provides for maximum
         borrowings of $120,000,000 at either (i) the lead bank's prime rate or
         (ii) LIBOR plus 87.5 to 147.5 basis points depending on the ratio of
         the Company's debt to its earnings before interest, taxes, depreciation
         and amortization, at the option of the Company, through October 18,
         2004. Direct borrowings under the line of credit were $2,500,000 and
         $85,000,000 at February 28, 2002 and 2001, respectively. As of the end
         of the fiscal years, the Company had met all of the required covenants.

7.       CAPITAL STOCK AND STOCK OPTIONS:

         On September 13, 2000, the Company's Board of Directors declared a
         three-for -two stock split of the Company's common stock, to be
         distributed on October 23, 2000, to all holders of record at the close
         of business on October 2, 2000. As a result of the stock split,
         5,437,364 shares were distributed. All shares and per share data for
         all periods presented have been restated to reflect this stock split.

         On September 23, 1999, the Board of Directors approved a 5% stock
         dividend payable on November 4, 1999 to shareholders of record on
         November 19, 1999. As a result of the stock dividend, 437,638 shares
         were distributed, common stock was increased by $2,888, additional paid
         in capital was increased by $ 3,334,102 and retained earnings was
         decreased by $3,336,990.

         Stock options granted to date under the Company's 1994 Stock Option
         Plan generally expire five years after date of grant and become
         exercisable in four equal annual installments, respectively, commencing
         one year from date of grant. Stock options granted to date under each
         of the Company's 1998 and 2000 Stock Option Plans generally expire ten
         years after the date of grant and become exercisable in two equal
         annual installments commencing one year from date of grant. To date, no
         options have been granted under the Company's 2000 Key Employee Stock
         Option Plan. Stock options granted under the Company's Outside Director
         Stock Option Plan and 2000 Outside Directors' Stock Option Plan expire
         ten years after the date of grant and become exercisable in three equal
         annual installments on the date of grant and the succeeding two
         anniversaries thereof.

                                                                       Page F-12

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                       THREE YEARS ENDED FEBRUARY 28, 2002
                       -----------------------------------

7.       CAPITAL STOCK AND STOCK OPTIONS (Continued):

         A summary of options granted and related information for the three
         years ended February 28, 2002 is as follows:

<TABLE>
<CAPTION>
     -----------------------------------------------------------------------------------------------------
                                                                                         Weighted Average
                                                                        Options          Exercise Price
                                                                        -------          --------------
     <S>                                                                 <C>           <C>
     Outstanding, February 28, 1999                                        1,734,450     $ 8.20
              Stock dividend (5%)                                             98,698          -
              Granted                                                        833,950       6.27
              Exercised                                                       (4,388)      5.90
              Cancelled                                                     (595,500)      7.69
                                                                        ------------
     Outstanding, February 29, 2000                                        2,067,210       3.02

     Weighted average fair value of options granted during the year                      $ 3.20
                                                                                         ======

              Stock split (3-for-2)                                          762,063     $    -
              Granted                                                        479,750      14.62
              Exercised                                                   (1,045,824)      7.00
              Cancelled                                                      (14,420)      4.70
                                                                        ------------
     Outstanding February 28, 2001                                         2,248,779       5.88

     Weighted average fair value of options granted during the year                      $ 8.15
                                                                                         ======

              Granted                                                         99,000     $10.00
              Exercised                                                     (103,304)      4.77
              Cancelled                                                      (43,763)      8.46
                                                                        ------------
     Outstanding February 28, 2002                                         2,200,712       6.07
                                                                        ============

     Weighted average fair value of options granted during the year                      $ 9.99
                                                                                         ======

     Options exercisable at the end of each fiscal year:
              February 29, 2000                                            1,328,770     $ 5.07
              February 28, 2001                                              996,890       4.35
              February 28, 2002                                            1,818,621       5.04
</TABLE>

         Exercise prices for options outstanding as of February 28, 2002 ranged
         from $2.93 to $18.33. The weighted-average remaining contractual life
         of these options is approximately 5 years. Outstanding options at
         February 28, 2002 are held by approximately 70 individuals.

                                                                       Page F-13

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                       THREE YEARS ENDED FEBRUARY 28, 2002
                       -----------------------------------

7.       CAPITAL STOCK AND  STOCK OPTIONS (Continued):

         The Company applies APB 25 and related Interpretations in accounting
         for the Option Plans. Accordingly, no compensation cost has been
         recognized for its Option Plans. Had compensation cost for the Option
         Plans been determined using the fair value based method, as defined in
         SFAS 123, the Company's net earnings and earnings per share, would have
         been adjusted to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                  2002                   2001                   2000
                                           -------------------    -------------------    -------------------
         <S>                                      <C>                   <C>                    <C>
         Net earnings:
                  As reported                     $2,219,676            $35,352,085            $11,698,786
                  Pro forma                        1,230,375             34,344,329             11,004,402
         Basic earnings per share:
                  As reported                     $      .13            $      2.18            $      0.87
                  Pro forma                       $      .07            $      2.12            $      0.81
         Diluted earnings per share:
                  As reported                     $      .13            $      1.99            $      0.67
                  Pro forma                       $      .07            $      1.94            $      0.63
</TABLE>

         The fair value of each option grant was estimated on the date of the
         grant using the Black-Scholes option-pricing model with the following
         weighted average assumptions for the fiscal years ended 2002, 2001 and
         2000, respectively: expected volatility of 38.9%, 49.8%, and 51.7%,
         respectively; risk free interest rate of 4.9%, 5.5%, and 5.9%,
         respectively; and expected lives of 1 to 10 years.

         The effects of applying SFAS 123 in the above pro forma disclosures are
         not indicative of future amounts, as they are likely to be affected by
         the number of grants awarded since additional awards are generally
         expected to be made at varying amounts.

8.       MINORITY INTERESTS IN SUBSIDIARY:

         Minority interests represents the liability related to the 30% minority
         interest in NIC Components Asia PTE. LTD., the 20% minority interest in
         NIC Eurotech Limited and the 10% minority interest in Nu Horizons Asia
         PTE. LTD.

9.       INCOME TAXES:

         The provision for income taxes from continuing operations is comprised
         of the following:

<TABLE>
<CAPTION>
                                                    2002                   2001                  2000
                                              ----------------       -----------------     -----------------
         <S>                                       <C>                   <C>                    <C>
         Current:
                  Federal                            $(256,833)            $17,127,570            $6,733,018
                  State and local                      (60,907)              4,194,653             1,826,424
                  Foreign                              267,956               1,022,644                     -
         Deferred:
                  Federal                             (341,362)              1,390,836                69,889
                  State                               (112,596)                374,895                18,578
                                              ----------------       -----------------     -----------------
                                                     $(503,742)            $24,110,598            $8,647,909
                                              ================       =================     =================
</TABLE>

                                                                       Page F-14

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                       THREE YEARS ENDED FEBRUARY 28, 2002
                       -----------------------------------

9.       INCOME TAXES (Continued):

         The tax benefits associated with the disqualifying disposition of stock
         acquired with incentive stock options reduced taxes currently payable
         as shown above by $311,596 for 2002 and $5,068,745 for 2001. Such
         benefits are credited to additional paid-in capital.

         The components of the net deferred income tax liability, pursuant to
         SFAS 109, are as follows:

<TABLE>
<CAPTION>
                                                                      2002                   2001
                                                                 ---------------       ----------------
         <S>                                                       <C>                    <C>
         Deferred tax assets:
                  Accounts receivable                               $  1,552,706           $  2,139,409
                  Inventory                                               94,482                289,416
                  Goodwill                                               139,812                      -
                                                                 ---------------       ----------------
                  Total deferred tax assets                            1,787,000              2,428,825
                                                                 ---------------       ----------------

         Deferred tax liabilities:
                  Fixed assets                                        (1,248,636)            (1,680,000)
                  Income of Interest Charge DISC                        (769,962)              (930,321)
                                                                 ---------------       ----------------
                  Total deferred tax liabilities                      (2,018,598)            (2,610,321)
                                                                 ---------------       ----------------

         Net deferred tax liabilities                               $   (231,598)          $   (181,496)
                                                                 ===============       ================
</TABLE>

         The following is a reconciliation of the maximum statutory federal tax
         rate to the Company's effective tax rate:

<TABLE>
<CAPTION>
                                                  2002                   2001                   2000
                                           -------------------    -------------------    -------------------
<S>                                             <C>                    <C>                    <C>
         Statutory rate                         (34.0)%                34.0%                  34.0%
         State and local taxes                   (7.8)                  8.6                    8.9
         Foreign and other                       23.8                  (1.4)                  (1.1)
                                                -----                  ----                   ----

         Effective tax rate                     (18.0)%                41.2%                  41.8%
                                                =====                  ====                   ====
</TABLE>

10.      EMPLOYEE BENEFIT PLANS:

         On January 13, 1987, the Company's Board of Directors approved the
         adoption of an employee stock ownership plan (ESOP). The ESOP covers
         all eligible employees and contributions are determined by the Board of
         Directors. The ESOP purchases shares of the Company's common stock
         using loan proceeds. As the loan is repaid, a pro rata amount of common
         stock is released for allocation to eligible employees. The Company
         makes cash contributions to the ESOP to meet its obligations.
         Contributions to the ESOP for the three years ended February 28, 2002
         aggregated $158,844 for 2002, $340,472 for 2001 and $340,456 for 2000.
         At February 28, 2002 the ESOP owned 550,789 shares of the Company's
         common stock at an average price of approximately $1.71 per share.

                                                                       Page F-15

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                       THREE YEARS ENDED FEBRUARY 28, 2002
                       -----------------------------------

10.      EMPLOYEE BENEFIT PLANS (Continued):

         On October 28, 1999, the Company, on behalf of the ESOP, entered into
         an additional credit agreement with a bank, which provides for a
         $3,000,000 revolving line of credit at the bank's prime rate until
         October 28, 2003. Direct borrowings under this line of credit are
         payable in forty-eight equal monthly installments commencing with the
         fiscal period subsequent to such borrowings. At February 28, 2002 there
         were no direct borrowings outstanding under the ESOP line of credit.

         In January 1991, the Company also established a 401-K profit sharing
         plan to cover all eligible employees. The Company's contributions to
         the plan are discretionary, but may not exceed 1% of compensation.
         Contributions to the plan for the three years ended February 28, 2002
         were $145,947, $117,968 and $115,401, respectively.

11.      COMMITMENTS AND CONTINGENCIES:

         Leases:

         On September 13, 1996, the Company signed employment contracts (the
         "Contracts"), as amended, with three of its senior executives for a
         continually renewing five-year term. The Contracts specified a base
         salary of $226,545 for each officer, which shall be increased each year
         by the change in the consumer price index, and also entitle two of the
         three officers to an annual bonus equal to 3.33% and the third officer
         to 2.33% (9% in the aggregate) of the Company's consolidated earnings
         before income taxes. Benefits are also payable upon the occurrence of
         either a change in control of the Company, as defined, or the
         termination of the officer's employment, as defined. The Contracts also
         provide for certain payments of the executives' salaries, performance
         bonuses and other benefits in event of death or disability of the
         officer for the balance of the period covered by the agreement.

         In December 1996, the Company leased an approximately 80,000 square
         foot facility in Melville, Long Island, New York to serve as its
         executive offices and main distribution center. In mid- 1997, the
         Company moved its executive offices and distribution operation to the
         facility. The lease term is from December 17, 1996 to December 16, 2008
         at an annual base rental of $601,290 and provides for a 4% annual
         escalation in each of the last ten years of the term. The Company also
         leases certain other office, warehouse and other properties which
         leases include various escalation clauses, renewal options, and other
         provisions. Aggregate minimum rental commitments under noncancelable
         operating leases are as follows:

                          Fiscal 2003                $3,145,665
                          Fiscal 2004                 2,863,775
                          Fiscal 2005                 2,633,861
                          Fiscal 2006                 2,173,577
                          Fiscal 2007                 1,179,215
                          Thereafter                  1,914,015

         Rent expense was $2,956,569, $2,464,878, and $2,175,834 for each of the
         three years in the period ending February 28, 2002.

         Litigation:

         At times the company is involved in various lawsuits incidental to its
         business. At February 28, 2002, management does not believe that any
         matter is material to its financial statements.

                                                                       Page F-16

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                       THREE YEARS ENDED FEBRUARY 28, 2002
                       -----------------------------------

12.      MAJOR SUPPLIERS:

         For the year ended February 28, 2002, the Company purchased inventory
         from two suppliers that was in excess of 10% of the Company's total
         purchases. Purchases from these suppliers were approximately
         $34,906,000 and $40,457,000 for the fiscal year.

         For the year ended February 28, 2001, the Company purchased inventory
         from two suppliers that was in excess of 10% of the Company's total
         purchases. Purchases from these suppliers were approximately
         $86,997,000 and $86,317,000 for the fiscal year.

         For the year ended February 29, 2000 the Company purchased inventory
         from two suppliers that was in excess of 10% of the Company's total
         purchases. Purchases from these suppliers were approximately
         $49,816,000 and $57,230,000 for the fiscal year.

13.      BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION:

         Since the sale of the Company's contract manufacturing subsidiary,
         management believes that the Company is once again operating in a
         single business segment, distribution of electronic components, in
         accordance with the rules of SFAF No. 131 ("Disclosure About Segments
         of an Enterprise and Related Information").

         Inasmuch as the Company's business is primarily conducted in the United
         States, operations are also carried out overseas through our foreign
         subsidiaries in different geographic areas.

         Revenues, by geographic area, for the fiscal years are as follows:

<TABLE>
<CAPTION>
                                                  2002                   2001                   2000
                                           -------------------    -------------------    -------------------
         <S>                                    <C>                    <C>                    <C>
         Americas                                $248,668,150           $584,751,399           $345,831,844
         Europe                                    16,640,422             31,227,496             14,655,234
         Asia/Pacific                              16,603,936             18,031,058              3,582,484
                                           -------------------    -------------------    -------------------
                                                 $281,912,508           $634,009,953           $364,069,562
                                           -------------------    -------------------    -------------------
</TABLE>

         Total assets, by geographic area, at the end of the fiscal years are as
         follows:

<TABLE>
<CAPTION>
                                                  2002                   2001                   2000
                                           -------------------    -------------------    -------------------
         <S>                                    <C>                    <C>                    <C>
         Americas                                $132,283,894           $223,830,846           $121,409,125
         Europe                                     9,897,388             13,909,529             10,887,524
         Asia/Pacific                               9,137,179             10,090,624              4,328,617
                                           -------------------    -------------------    -------------------
                                                 $151,318,461           $247,830,999           $136,625,266
                                           -------------------    -------------------    -------------------
</TABLE>

                                                                       Page F-17

<PAGE>

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                       THREE YEARS ENDED FEBRUARY 28, 2002
                       -----------------------------------

14.      SELECTED QUARTERLY FINANCIAL DATA (Unaudited):

<TABLE>
<CAPTION>
                                                      THREE MONTH PERIOD ENDED
                                    -----------------------------------------------------------

                                      FEBRUARY        NOVEMBER         AUGUST          MAY
                                      28, 2002        30, 2001        31, 2001       31, 2001
                                    ------------    ------------    ------------   ------------
<S>                                 <C>             <C>             <C>            <C>
Continuing Operations
Net sales                           $ 64,002,942    $ 58,217,629    $ 69,947,370   $ 89,744,567
                                    ------------    ------------    ------------   ------------
Cost of sales                         51,135,344      46,007,268      53,895,457     70,652,013
Operating expenses                    14,048,358      14,288,424      14,798,207     17,242,696
Impairment of goodwill                 1,124,636              --              --             --
Interest expense                         179,773         191,685         190,980        954,824
                                    ------------    ------------    ------------   ------------
Net income (loss) - continuing
operations                            (2,259,132)     (1,382,191)        436,641        442,116

Discontinued Operations
Net income                                    --              --         256,800        541,935
Gain on sale                                  --       1,606,275       2,577,232             --
                                    ------------    ------------    ------------   ------------

Net income (loss)                   $ (2,259,132)   $    224,084    $  3,270,673   $    984,051
                                    ============    ============    ============   ============
Basic (Loss) Earnings per Share     $       (.13)   $        .01    $        .20   $        .06
                                    ============    ============    ============   ============
Weighted average number of common
and common equivalent shares
outstanding                           16,609,005      16,580,927      16,562,583     16,547,130
                                    ============    ============    ============   ============

<CAPTION>
                                                      THREE MONTH PERIOD ENDED
                                    -----------------------------------------------------------

                                      FEBRUARY        NOVEMBER         AUGUST           MAY
                                      28, 2001        30, 2000        31, 2000       31, 2000
                                    ------------    ------------    ------------   ------------
<S>                                 <C>             <C>             <C>            <C>
Continuing Operations
Net sales                           $141,911,707    $180,994,992    $170,080,695   $141,022,559
                                    ------------    ------------    ------------   ------------
Cost of sales                        109,618,800     141,657,347     133,234,715    109,996,494
Operating expenses                    19,681,234      18,960,869      18,858,865     18,624,514
Interest expense                       1,930,108       1,358,902         870,409        702,428
                                    ------------    ------------    ------------   ------------
Net income - continuing
operations                             6,075,755      10,830,055       9,361,810      7,293,465

Discontinued Operations
Net income                               768,949         215,844         674,865        131,342
                                    ------------    ------------    ------------   ------------

Net income                          $  6,844,704    $ 11,045,899    $ 10,036,675   $  7,424,807
                                    ============    ============    ============   ============
Basic Earnings per Share            $        .41    $        .67    $        .63   $        .48
                                    ============    ============    ============   ============
Weighted average number of common
and common equivalent shares
outstanding                           16,501,860      16,479,565      15,924,308     15,568,881
                                    ============    ============    ============   ============
</TABLE>

                                                                       Page F-18

<PAGE>

REPORT OF MANAGEMENT

The management of Nu Horizons Electronics Corp. is responsible for the
preparation of the consolidated financial statements in accordance with
accounting principles generally accepted in the United States of America and for
the integrity and objectivity of all the financial data included in this annual
report. In preparing the financial statements, management makes informed
judgments and estimates as to the expected effects of events and transactions
currently being reported.

To meet this responsibility, the Company maintains a system of internal
accounting controls to provide reasonable assurance that assets are safeguarded,
and that transactions are properly executed and recorded. The system includes
policies and procedures, and reviews by officers of the Company.

The Board of Directors, through its Audit Committee, is responsible for
determining that management fulfills its responsibility with respect to the
Company's financial statements and the system of internal accounting controls.

The Audit Committee is composed solely of outside directors. The Committee meets
periodically and, when appropriate, separately with representatives of the
independent accountants and officers of the Company to monitor the activities of
each.

Lazar Levine & Felix LLP, the independent accountants, have been selected by the
Board of Directors to examine the Company's financial statements. Their report
appears herein.

BY:  /s/ PAUL DURANDO                    BY:  /s/ ARTHUR NADATA
    ---------------------------              -----------------------
            Paul Durando                          Arthur Nadata
    Vice President, Finance and                   President and
             Treasurer                       Chief Executive Officer

                                                                       Page F-19

<PAGE>

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

         The Company had no disagreements on accounting or financial disclosure
         matters with its accountants, nor did it change accountants, during the
         three-year period ending February 28, 2002.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY:

<TABLE>
<CAPTION>
                  NAME                  AGE     POSITION
                  ----                  ---     --------
               <S>                     <C>      <C>
               Irving Lubman             63      Chief Operating Officer and Chairman of the Board

               Arthur Nadata             56      President, Chief Executive Officer and Director

               Richard S. Schuster       53      Vice-President, Secretary and Director

               Paul Durando              58      Vice President - Finance, Treasurer and Director

               Harvey R. Blau            66      Director

               Herbert M. Gardner        67      Director

               Dominic A. Polimeni       55      Director

               David Siegel              76      Director
</TABLE>

                  The Company's Certificate of Incorporation provides for a
         Board of Directors consisting of not less than three nor more than
         eleven directors, classified into three classes as nearly equal in
         number as possible, whose terms of office expire in successive years.
         The following table sets forth the directors of the Company.

<TABLE>

               <S>                          <C>                     <C>
                      Class I                   Class II                   Class III
                (To Serve Until the        (To Serve Until the        (To Serve Until the
                 Annual Meeting of          Annual Meeting of          Annual Meeting of
               Stockholders in 2003)      Stockholders in 2004)      Stockholders in 2002)
               ---------------------      ---------------------      ---------------------
                    Paul Durando               Harvey Blau               Irving Lubman
               Herbert Gardner (1)(2)   Dominic A. Polimeni (1)(2)       Arthur Nadata
                 David Siegel(1)(2)        Richard S. Schuster
</TABLE>

         (1)   Member of Compensation Committee
         (2)   Member of Audit Committee

               All officers serve at the discretion of the Board. There are no
         family relationships among the directors and officers.

               Irving Lubman has been our Chairman of the Board since October
         1982 and Chief Operating Officer since September 1996. Mr. Lubman was
         our Chief Executive Officer from October 1982 to September 1996. Mr.
         Lubman has been actively involved in electronic components'
         distribution since 1957, when he joined Milgray Electronics Corp.,
         holding the position of sales manager until 1968. From 1968 through
         October 1982, when he joined the Company, Mr. Lubman was corporate vice
         president of Diplomat Electronics Corp., also a distributor of
         electronic components.

               Arthur Nadata has been our President and a Director since October
         1982 and Chief Executive Officer since September 1996. Mr. Nadata was
         also the Treasurer of the Company from October 1982 to September 1996.
         Prior to joining the Company in October 1982, Mr. Nadata worked for
         eighteen years for Diplomat Electronics Corp. in various operational
         and sales positions of increasing responsibility, eventually becoming
         corporate vice president of sales and marketing.

                                                                         Page 15

<PAGE>

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY (Continued):

               Richard S. Schuster has been our Vice President, Secretary and a
         Director since October 1982. For the seven years prior to joining the
         Company in November 1982, Mr. Schuster served as manager of Capar
         Components Corp., an importer and distributor of passive components,
         and a wholly owned subsidiary of Diplomat Electronics Corp. For the six
         years prior to 1975, Mr. Schuster was employed by International
         Components Corp., responsible for production, engineering and sales of
         imported semiconductor and passive components.

               Paul Durando has been our Vice President, Finance since joining
         the Company in March 1991, Treasurer since September 1996 and has been
         a Director since September 1994. Prior to joining the Company in March
         1991, Mr. Durando served for six years as Executive Vice President of
         Sigma Quality Foods, Inc. From 1977 to 1984, he was Vice President,
         Operations of the Wechsler Coffee Corp. Mr. Durando was also associated
         with Deloitte Haskins & Sells for seven years.

               Harvey R. Blau has been a Director of the Company since May 1984.
         Mr. Blau has been a practicing attorney in the State of New York since
         1961, and is a member of the law firm of Blau, Kramer, Wactlar &
         Lieberman, P.C., Jericho, New York, counsel to the Company for more
         than five years. For more than the past five years, Mr. Blau has been
         Chairman of the Board of Griffon Corporation, a diversified industrial
         company that produces garage doors, specialty plastic films and
         electronic information and communications systems, and Aeroflex
         Incorporated, a company that designs, develops and manufactures
         microelectronics, integrated circuit, interconnect and testing
         solutions. Until April 1, 2002, Mr. Blau was a Director of Reckson
         Associates, landlord for the Company's executive offices and
         distribution center in Melville, Long Island, New York.

               Herbert M. Gardner has been a Director of the Company since May
         1984. For more than the past five years, Mr. Gardner has been Senior
         Vice President of Janney Montgomery Scott LLC, investment bankers. Mr.
         Gardner is Chairman of the Board of Supreme Industries Inc. and a
         director of iDine Rewards Network, Inc., TGC Industries Inc., Hirsch
         International Corp., Co-Active Marketing Group, Inc. Rumson-Fair Haven
         Bank and Trust Company and Chase Packaging Corp.

               Dominic A. Polimeni has been a Director of the Company since
         September 1997. Mr. Polimeni has over 26 years experience in the
         distribution and Inventory Logistics Management ("ILM") businesses and
         has been responsible for evaluating and negotiating over 50
         acquisitions of distribution and ILM businesses. He has been a Director
         of Questron Technology, Inc. a publicly held company based in Boca
         Raton, Florida, since March 1995, and Chairman and Chief Executive
         Officer of Questron since February 1996. Questron sold its business and
         assets to the General Electric Company, through a Chapter 11 Section
         363 sale under the U.S. Bankruptcy Code, in May 2002. Mr. Polimeni has
         also been a Managing Director of Gulfstream Financial Group, Inc., a
         privately held financial consulting and investment-banking firm since
         August 1990. Prior to that he held the position of Chief Financial
         Officer of Arrow Electronics, Inc. (over $10.0 billion in sales in
         2001) from 1986 to 1990. He also held several other positions,
         including general management positions, with Arrow over an eight-year
         period. Mr. Polimeni began his career as a certified public accountant
         in the New York office of Arthur Young & Company.

               David Siegel has been a Director of the Company since June 2000.
         For more than the past five years Mr. Siegel has been a Vice President
         and director of Great American Electronics, a distribution company,
         which he founded. Mr. Siegel is also a director of Micronetics Corp.
         and Surge Components Corp. Mr. Siegel previously served on our Board of
         Directors from September 1991 to October 1996.

                                                                         Page 16

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION:

         The following table sets forth the compensation paid by the Company to
         its Chief Executive Officer and each of the three other executive
         officers for the years ended February 28, 2002, February 28, 2001 and
         February 29, 2000.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                       Long Term
                              Annual Compensation (1)                 Compensation
                              ----------------------                  ------------
                                                                Securities
         Name of Principal   Fiscal                             Underlying   All other (3)
           and Position       Year       Salary       Bonus    Options (2)   Compensation
         ----------------     ----       ------       -----    -----------   ------------
         <S>                 <C>      <C>         <C>          <C>           <C>
         Irving Lubman        2002    $ 263,040   $  120,981             0       $ 41,313
         COO, Chairman        2001      258,700    1,560,860        82,500         39,500
         of the Board         2000      251,210      520,087       336,498         21,552

         Arthur Nadata        2002    $ 263,040   $  172,702             0       $ 39,605
         President and        2001      258,700    2,229,791       112,500         39,047
         CEO                  2000      251,210      742,983       375,875         20,514

         Richard Schuster     2002    $ 263,040   $  172,702             0       $ 36,154
         Vice President       2001      258,700    2,229,791        97,500         34,432
         and Secretary and    2000      251,210      742,983       336,498         18,330
         President, NIC
         Components
         Corp.

         Paul Durando         2002    $ 180,000   $   12,953             0       $ 1,800
         Vice President,      2001      180,000      187,400        15,000         1,550
         Finance and          2000      155,000       80,724        35,438         1,500
         Treasurer
</TABLE>

                     SUMMARY COMPENSATION TABLE - Footnotes

         (1) No other annual compensation is shown because the amounts of
             perquisites and other non-cash benefits provided by the Company do
             not exceed the lesser of $50,000 or 10% of the total annual base
             salary and bonus disclosed in this table for the respective
             officer.

         (2) Number of shares have been adjusted to reflect the Company's 3-for
             -2 stock split in October 2000.

         (3) The amounts disclosed in this column include the Company's
             contributions on behalf of the named executive officer to the
             Company's 401(k)-retirement plan in amounts equal to a maximum of
             1% of the executive officer's annual salary and, for Messrs.
             Lubman, Nadata and Schuster contributions to life insurance
             policies where the Company is not the beneficiary, and the cost to
             the Company of the non-business use of Company automobiles used by
             executive officers.

                                                                         Page 17

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION (Continued):

         Employment Contracts

         On September 13, 1996, the Company signed employment contracts (the
         "Contracts"), as amended, with three of its senior executives for a
         continually renewing five-year term. The Contracts specify a base
         salary of $226,545 for each officer in 1997, which shall be increased
         each year by the change in the consumer price index, and also entitle
         two of the three officers to an annual bonus equal to 3.33%, and the
         third officer to 2.33% (9% in the aggregate) of the Company's
         consolidated earnings before income taxes. Benefits are also payable
         upon the occurrence of either a change in control of the Company, as
         defined, or the termination of the officer's employment, as defined. In
         the event the employee terminates his employment within six months
         after a change in control of the Company, he will receive a lump sum
         payment equal to three-quarters of the remaining compensation under his
         employment agreement. Each Contract also provides for certain payments
         of the executive salary, performance bonuses and other benefits in the
         event of death or disability of the officer for the balance of the
         period covered by the agreement.

         No stock options were granted to the officers named in the Summary
         Compensation Table during the fiscal year ended February 28, 2001.

         The following table sets forth certain information as to each exercise
         of stock options during the fiscal year ended February 28, 2002 by the
         persons named in the Summary Compensation Table and the fiscal year end
         value of unexercised options:

             AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR-END
                               OPTIONS/SAR VALUES

<TABLE>
<CAPTION>
                                                                                         Value of
                                                                        Number of       Unexercised
                                                                       Unexercised      In-the-Money
                                                                       Options/SARs     Options/SARs
                                                                       at FY End         at FY End
                                                                      -------------    -------------

                                 Shares Acquired                        Exercisable/     Exercisable/
                                   on Exercise   Value Realized (1)   Unexercisable    Unexercisable
                                 --------------- ------------------   --------------   -------------
             <S>                 <C>             <C>                  <C>              <C>
             Irving Lubman                   0         $      0            388,956     $ 1,662,894
                                                                            41,250               0

             Arthur Nadata                   0         $      0            553,959       2,393,558
                                                                            56,250               0

             Richard Schuster                0         $      0            466,708       2,003,616
                                                                            48,750               0

             Paul Durando                5,905         $ 28,757             25,218          87,350
                                                                             7,500               0
</TABLE>

         (1) Market value less exercise price, before payment of applicable
             federal or state taxes.

                                                                         Page 18

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION (Continued):

         Directors who are not employees of the Company receive an annual fee of
         $3,000 for Board Membership and $500 for each Board of Directors or
         Committee meeting attended. There were four meetings of the Board of
         Directors and no meetings of the Compensation Committee during the
         fiscal year ended February 28, 2002. One director attended or
         participated in all of the meetings of the Board of Directors, two
         directors attended three meetings and one director attended two
         meetings.

         For the fiscal year ended February 28, 2002, there were four meetings
         of the Audit Committee. The Company's Audit Committee is involved in
         discussions with the Company's independent public accountants with
         respect to the scope and results of the Company's year-end audit, the
         Company's internal accounting controls and the professional services
         furnished by the independent auditors to the Company. During fiscal
         2002, the Company had no standing Nominating Committee or any committee
         performing similar functions.

Compensation Committee Interlocks and Insider Participation

         The Company's Compensation Committee consisted during fiscal 2002 of
         Messrs. Gardner (Chairman), Polimeni, Blau and Siegel. Mr. Gardner is
         Senior Vice President of Janney Montgomery Scott, Inc., investment
         bankers, which acted as placement agent in connection with the
         Company's $15 million private placement of convertible subordinated
         notes in August 1994. Mr. Blau is a partner in the law firm of Blau,
         Kramer, Wactlar & Lieberman, P.C. The Company has utilized, and
         anticipates that it will continue to utilize, the services of Blau,
         Kramer, Wactlar & Lieberman, P.C. as its general counsel. Mr. Blau
         resigned as a member of the Compensation Committee in May 2002.

         In accordance with rules promulgated by the Securities and Exchange
         Commission, the information included under the captions "Compensation
         Committee Report on Executive Compensation" and "Company Stock
         Performance" will not be deemed to be filed or to be proxy soliciting
         material or incorporated by reference in any prior or future filings by
         the Company under the Securities Act of 1933 or the Securities Exchange
         Act of 1934.

Compensation Committee Report on Executive Compensation

         The Compensation Committee of the Board of Directors generally
         determines the compensation of the Company's executive officers. Each
         member of the Compensation Committee is a Director who is not an
         employee of the Company or any of its affiliates. The following report
         with respect to certain compensation paid or awarded to the Company's
         executive officers during fiscal 2002 is furnished by the Compensation
         Committee.

General Policies

         The Company's compensation programs are intended to enable the Company
         to attract, motivate, reward and retain management talent required to
         achieve aggressive corporate objectives in a rapidly changing industry,
         and thereby increase stockholder value. It is the Company's policy to
         provide incentives to its senior management to achieve both short-term
         and long-term objectives and to reward exceptional performance and
         contributions to the development of the Company's business. To attain
         these objectives, the Company's executive compensation program includes
         a competitive base salary, coupled with, with respect to certain
         executives, a substantial cash bonus which is "at risk" based on the
         Company's earnings.

         Many of the Company's employees, including its executive officers, also
         are eligible to be granted stock options periodically in order to more
         directly align their interests with the long-term financial interest of
         the Company's stockholders.

                                                                         Page 19

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION (Continued):

  Relationship of Compensation to Performance

         The Compensation Committee annually establishes, subject to any
         applicable employment agreements, the salaries that will be paid to the
         Company's executive officers during the coming year. In setting
         salaries the Board of Directors takes into account several factors,
         including competitive compensation data, the extent to which an
         individual may participate in the stock option plan maintained by the
         Company and its affiliates, and qualitative factors bearing on an
         individual's experience, responsibilities, management and leadership
         abilities, and job performance.

         The Compensation Committee of the Board of Directors under the Plans
         grants stock options to key employees, including the Company's
         executive officers. Among the Company's executive officers, the number
         of shares subject to options granted to each individual generally
         depends upon his or her base salary and the level of that officer's
         management responsibility. During fiscal 2002, no options were granted
         to the Company's executive officer.

         During fiscal 2002, bonuses were paid to three executive officers, as
         set forth in the Summary Compensation Table, pursuant to the terms of
         their employment agreements with the Company and on a discretionary
         basis to Paul Durando, the Company's Vice President, Finance and
         Director. This latter bonus was determined to be appropriate by the
         Compensation Committee in light of Mr. Durando's contributions to the
         Company's performance, his base salary level and the level of his
         management responsibilities.

  Compensation of Chief Executive Officer

         The Company has entered into an employment agreement with Arthur
         Nadata, the Company's President and Chief Executive Officer, pursuant
         to which Mr. Nadata receives a base salary of $226,545, adjusted for
         CPI index increases, and an incentive bonus equal to three and
         thirty-three one-hundredths percent (3.33%) of the Company's
         consolidated pre-tax earnings. In this way, Mr. Nadata's cash
         compensation is tied directly to the Company's profitability.

                                                      The Compensation Committee

                                                      Herbert Gardner
                                                      Dominic Polimeni
                                                      David Siegel

  Compliance with Section 16(a) of the Securities Exchange Act

         Section 16(a) of the Exchange Act requires the Company's executive
         officers, directors and persons who own more than ten percent of a
         registered class of the Company's equity securities ("Reporting
         Persons") to file report of ownership and changes in ownership on Forms
         3, 4 and 5 with the Securities and Exchange Commission (the "SEC") and
         the National Association of Securities Dealers (the "NASD"). These
         Reporting Persons are required by SEC regulation to furnish the Company
         with copies of all Forms 3, 4 and 5 they file with the SEC and NASD.

  Compliance with Section 16(a) of the Securities Exchange Act (continued)

         Based solely on the Company's review of the copies of the forms it has
         received, the Company believes that all Reporting Persons complied on a
         timely basis with all filing requirements applicable to them with
         respect to transactions during fiscal year 2002.

                                                                         Page 20

<PAGE>

ITEM 11.   EXECUTIVE COMPENSATION (Continued):

                         COMPANY STOCK PERFORMANCE GRAPH

         The following Performance Graph compares the Company's cumulative total
         stockholder return on its Common Stock for a five-year period (February
         28, 1997 to February 28, 2002) with the cumulative total return of the
         NASDAQ Market Index (which includes the Company) and a peer group of
         companies selected by the Company for purposes of the comparison.
         Dividend reinvestment has been assumed and, with respect to companies
         in the Peer Group, the returns of each such company have been weighted
         to reflect relative stock market capitalization.

                     COMPARE 5 -YEAR CUMULATIVE TOTAL RETURN
                      AMONG NU-HORIZONS ELECTRONICS CORP.,
                    NASDAQ MARKET INDEX AND PEER GROUP INDEX

<TABLE>
<CAPTION>
    Measurement Period           Nu Horizons             NASDAQ
   (Fiscal Year Covered)      Electronics Corp.       Market Index           Peer Group
------------------------------------------------------------------------------------------------
<S>                           <C>                     <C>                    <C>
        FYB 3/01/97                $100.00               $100.00               $100.00
        FYE 2/28/98                  68.24                136.00                109.81
        FYE 2/28/99                  47.30                175.74                 56.95
        FYE 2/29/00                 193.76                341.39                109.57
        FYE 2/28/01                 174.51                159.78                 91.16
        FYE 2/28/02                 148.80                130.47                 91.32
</TABLE>

                     ASSUMES $100 INVESTED ON MARCH 1, 1997
                           ASSUMES DIVIDEND REINVESTED
                      FISCAL YEAR ENDING FEBRUARY 28, 2002

         Peer group includes All American Semiconductor, Arrow Electronics Inc.,
         Avnet Inc., Bell Microproducts Inc., Jaco Electronics Inc., Pioneer
         Standard Electronics and Reptron Electronics Inc.

         1994 Stock Option Plan:

         In September 1994, the Company's stockholders approved the 1994 Stock
         Option Plan (the "1994 Plan"), as amended in September 1996, under
         which key employees and officers of the Company, its subsidiaries and
         affiliates may be granted options to purchase an aggregate of 1,732,500
         shares of the Company's Common Stock, as adjusted for a 5% stock
         dividend and a three for two stock split. The

                                                                         Page 21

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION (Continued):

     Compensation Committee, consisting of at least two members of the Board of
     Directors, administers the 1994 Plan. The Compensation Committee, subject
     to provisions in the 1994 Plan, has the authority to designate, in its
     discretion, which persons are to be granted options, the number of shares
     subject to each option, and the period of each option. Each recipient must
     be an employee of the Company at the time of grant and throughout the
     period ending on the day three months before the date of exercise. Under
     the terms of the 1994 Plan, the exercise price of the shares subject to
     each option granted will be not less than 85% nor more than 100% of the
     fair market value at the date of grant or 110% of such fair market value
     for options granted to any employee to or director who owns stock
     possessing more than ten percent (10%) of the total combined voting power
     of all classes of stock of the Company. Adjustments will be made to the
     purchase price in the event of stock dividends, corporate reorganizations,
     or similar events. Options are currently outstanding for 537,743 shares and
     no options are currently available for grant.

     The Compensation Committee of the Board of Directors has the responsibility
     and authority to administer and interpret the provisions of the 1994 Plan.
     The Compensation Committee shall appropriately adjust the number of shares
     for which awards may be granted pursuant to the 1994 Plan in the event of
     reorganization, recapitalization, stock split, reverse stock split, stock
     dividend, exchange or combination of shares, merger, consolidation, rights
     offering or any change in capitalization. The Board may, from time to time,
     amend, suspend or terminate any or all of the provisions of the 1994 Plan,
     provided that, without the participant's approval, no change may be made
     which would prevent an ISO granted under the 1994 Plan from qualifying as
     an ISO under Section 422A of the Internal Revenue Code of 1986, as amended
     (the "Code") or results in a modification of the ISO under Section 425(h)
     of the Code or otherwise alter or impair any right theretofore granted to
     any participant; and further provided that, without the consent and
     approval of the holders of a majority of the outstanding shares of Common
     Stock of the Company present at that meeting at which a quorum exists,
     neither the Board nor the Committee may make any amendment which (i)
     changes the class of persons eligible for options; (ii) increases (except
     as provided under Section 1.6 of the 1994 Plan) the total number of shares
     or other securities reserved for issuance under the 1994 Plan; (iii)
     decreases the minimum option prices stated in Section 2.2 of the 1994 Plan
     (other than to change the manner of determining Fair Market Value to
     conform to any then applicable provision of the Code or any regulation
     thereunder); (iv) extends the expiration date of the 1994 Plan, or the
     limit on the maximum term of options; or (v) withdraws the administration
     of the 1994 Plan from a committee consisting of two or more members, each
     of whom is a Disinterested Person. With the consent of the participant
     affected thereby, the Committee may amend or modify any outstanding option
     in any manner not inconsistent with the terms of the 1994 Plan.

     1998 Stock Option Plan:

      In May 1998, the Board of Directors adopted the Nu Horizons Electronics
     Corp. 1998 Stock Option Plan (the "1998 Option Plan"), as amended, under
     which any director, officer, employee or consultant of the Company, a
     subsidiary or an affiliate may be granted options to purchase an aggregate
     1,653,750 shares of the Company's Common Stock, as adjusted for a 5%
     dividend and a 3-for-2 stock split. The 1998 Option Plan may be
     administered by the Board of Directors of the Company or by a committee
     consisting of two or more non-employee Directors, as defined by Rule 16b
     under the Securities Exchange Act of 1934. The Compensation Committee
     administers the 1998 Option Plan. Subject to the terms of the 1998 Option
     Plan, the Board of Directors or the Committee may determine and designate
     those directors, officers, employees and consultants who are to be granted
     stock options under the 1998 Option Plan and the number of shares to be
     subject to such options and the term of the options to be granted, which
     term may not exceed ten years. The Board of Directors of the Committee
     also, subject to the express provisions of the 1998 Option Plan, has the
     authority to interpret the 1998 Option Plan and to prescribe, amend and
     rescind the rules and regulations relating to the 1998 Option Plan. Only
     non-qualified stock options may be granted under the terms of the 1998
     Option Plan. The exercise price of the options granted under the 1998
     Option Plan would not be less than such fair market value at the date of
     grant. The option price, as well as the number of shares subject to such
     option, shall be appropriately adjusted by the Committee in the event of
     stock splits, stock dividends, recapitalizations, and certain other events
     involving a change in the Company's capital. During fiscal 2002, no options
     were granted under the 1998 Option Plan. Options are currently outstanding
     for 1,308,219 shares and 32,409 options are currently available for grant.

                                                                         Page 22

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION (Continued):

         2000 Stock Option Plan:

         In July 2000, the Board of Directors adopted the Nu Horizons
         Electronics Corp. 2000 Stock Option Plan, under which any of the
         Company's employees or consultants, or those of its subsidiaries or
         affiliates, may be granted options to purchase an aggregate 300,000
         shares of Common Stock, as adjusted for a 3-for-2 stock split. The
         Company's executive officers and directors are not eligible to
         participate in the 2000 Option Plan. The 2000 Option Plan may be
         administered by the Board of Directors or a committee consisting of two
         or more Non-Employee Directors, as defined by Rule 16b of the
         Securities Exchange Act of 1934. The Compensation Committee administers
         the 2000 Option Plan. Subject to the terms of the 2000 Option Plan, the
         Board of Directors or the Committee may determine and designate those
         employees and consultants who are to be granted stock options under the
         2000 Option Plan, the number of shares to be subject to such options
         and the term of the options to be granted, which term may not exceed
         ten years. The Board of Directors or the Committee also, subject to the
         express provisions of the 2000 Option Plan, has the authority to
         interpret the 2000 Option Plan and to prescribe, amend and rescind the
         rules and regulations relating to the 2000 Option Plan. Only
         non-qualified stock options may be granted under the terms of the 2000
         Option Plan. The exercise price for the options granted under the 2000
         Option Plan will not be less than fair market value at the date of
         grant. The option price, as well as the number of shares subject to
         such option, shall be appropriately adjusted by the Committee in the
         event of stock splits, stock dividends, recapitalizations and certain
         other events involving a change in the Company's capital. During fiscal
         2002, 39,000 options were granted under the plan with exercise prices
         of $7.31, $7.53 and $8.68 and 144,750 options remain available for
         grant.

         2000 Key Employee Stock Option Plan:

         In November 2000, the Company's stockholders approved the 2000 Key
         Employee Stock Option Plan (the "2000 Key Employee Plan") under which
         key employees and officers of the Company, its subsidiaries and
         affiliates may be granted options to purchase an aggregate of 600,000
         shares of the Company's Common Stock, as adjusted for a three for two
         stock split. The 2000 Key Employee Plan may be administered by the
         Board of Directors or a committee, consisting of two or more members of
         the Board of Directors who are Non-Employee Directors, as defined by
         Rule 16b of the Securities Exchange Act of 1934. Our Compensation
         Committee administers the 2000 Key Employee Plan. Subject to the terms
         of the 2000 Key Employee Plan, the Board of Directors or the Committee
         may determine and designate those employees and consultants who are to
         be granted stock options under the 2000 Key Employee Plan and the
         number of shares to be subject to such options and the term of the
         options to be granted, which term may not exceed ten years. The Board
         of Directors or the Committee shall also, subject to the express
         provisions of the 2000 Key Employee Plan, have the authority to
         interpret the 2000 Key Employee Plan and to prescribe, amend and
         rescind the rules and regulations relating to the 2000 Key Employee
         Plan. Only non-qualified stock options may be granted under the terms
         of the 2000 Key Employee Plan. The exercise price for the options
         granted under the 2000 Key Employee Plan will not be less than fair
         market value at the date of grant. The Committee in the event of stock
         splits, stock dividends, recapitalizations and certain other events
         involving a change in our capital shall, appropriately adjust the
         option price, as well as the number of shares subject to such option.
         During fiscal 2002, no options were granted under the plan and 600,000
         options remain available for grant.

         Outside Director Stock Option Plan:

         In September 1994, the Company's stockholders approved the Outside
         Directors Stock Option Plan (the "Director Plan") which covers 236,250
         shares of the Company's Common Stock, as adjusted for a 5% stock
         dividend and a 3-for-2 stock split. The primary purposes of the
         Director Plan are to attract and retain well-qualified persons for
         service as directors of the Company and to provide such outside
         directors with the opportunity to increase their proprietary interest
         in the Company's continued success and further align their interests
         with the interests of the stockholders of the Company through the grant
         of options to purchase shares of the Company's Common Stock. At
         February 28, 2002, there are 79,500 director options outstanding and no
         options remain available for grant.

         All directors of the Company who are not employees of the Company were
         eligible to participate in the Director Plan.

                                                                         Page 23

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION (Continued):

         The Compensation Committee of the Board of Directors has the
         responsibility and authority to administer and interpret the provisions
         of the Director Plan. The Compensation Committee shall appropriately
         adjust the number of shares for which awards may be granted pursuant to
         the Director Plan in the event of reorganization, recapitalization,
         stock split, reverse stock split, stock dividend, exchange or
         combination of shares, merger, consolidation, rights offering, or any
         change in capitalization.

         Under the Director Plan each non-employee Director then serving, on
         June 1 of each year from 1994 through 1999, received options to
         purchase 10,000 shares of Common Stock (as adjusted for stock splits
         and stock dividends) at a price equal to the closing price of the
         Common Stock on a national securities exchange upon which the Company's
         stock is listed or the average of the mean between the last reported
         "bid" and "asked prices if the Common Stock is not so listed for the
         five business days immediately preceding the date of grant. Options
         awarded to each outside director vested in three equal installments
         over a period of two years, subject to forfeiture under certain
         conditions and shall be exercisable by the outside director upon
         vesting.

         2000 Outside Directors' Stock Option Plan:

         In November 2000, the Company's stockholders approved the 2000 Outside
         Directors' Stock Option Plan (the "2000 Director Plan") which covers
         210,000 shares of the Company's Common Stock, as adjusted for a 3-for-2
         stock split. The primary purposes of the 2000 Director Plan are to
         attract and retain highly skilled individuals as directors of the
         Company, to provide additional incentive to such outside directors to
         serve as directors and to encourage their continued service on the
         Board of Directors. At February 28, 2002, there are 120,000 director
         options outstanding and 90,000 options remain available for grant.

         All directors of the Company who are not employees of the Company, of
         which there are four, are eligible to participate in the Director Plan.

         The Board of Directors has the responsibility and authority to
         administer and interpret the provisions of the 2000 Director Plan. The
         Board of Directors of the Company may at any time amend, suspend or
         discontinue the 2000 Director Plan but no such action shall adversely
         affect any outstanding option without the consent of the optionee that
         holds such option. In the event of reorganization, recapitalization,
         stock split, reverse stock split, stock dividend, exchange or
         combination of shares, merger, consolidation, rights offering, or any
         change in capitalization of the Company, the number of shares covered
         by each outstanding option, the number of shares authorized under the
         2000 Director Plan as well as the exercise price of each outstanding
         option shall be appropriately adjusted

            Under the Director Plan, on November 9, 2000 each non-employee
         Director then serving received options to purchase 15,000 shares of
         Common Stock at a price of $14.62 per share (the price of shares of
         Common Stock on November 9, 2000) and on the June 1 of each subsequent
         year each non-employee director then serving will be granted options to
         purchase 15,000 shares of Common Stock at a price equal to the closing
         price of the Common Stock on a national securities exchange upon which
         the Company's stock is listed or the average of the mean between the
         last reported "bid" and "asked prices if the Common Stock is not so
         listed for the five business days immediately preceding the date of
         grant. Options awarded to each outside director vest in three equal
         installments over a period of two years, subject to forfeiture under
         certain conditions and shall be exercisable by the outside director
         upon vesting.

         Summary of Fiscal 2002 Stock Option Grants:

            During fiscal 2002, pursuant to the 2000 Director Plan, the Company
         granted options to purchase 15,000 shares to each of Messrs. Blau,
         Gardner, Polimeni and Siegel at a price of $11.40 per share.

                                                                         Page 24

<PAGE>

ITEM 11.   EXECUTIVE COMPENSATION (Continued):

           Employee Stock Ownership Plan:

                In January 1987, the Company adopted an Employee Stock Ownership
           Plan ("ESOP" or "Plan") that covers substantially all of the
           Company's employees. The ESOP is managed by three Trustees, Messrs.
           Lubman, Nadata and Schuster (the "Trustees"), who vote the securities
           held by the Plan (other than securities of the Company which have
           been allocated to employees' accounts).

                The annual contributions to the Plan are to be in such amounts
           as the Board of Directors in its sole discretion shall determine.
           Each employee who participates in the Plan has a separate account and
           the annual contribution by the Company to an employee's account is
           not permitted to exceed the lesser of $30,000 (or such other limit as
           may be the maximum permissible pursuant to the provisions of Section
           415 of the Internal Revenue Code and Regulations issued thereunder)
           or 25% of such employee's annual compensation, as defined under the
           Plan. No contributions are required of, nor shall any be accepted
           from, any employee.

                All contributions to the Plan are invested in the Company's
           securities (except for temporary investments), the Trustees having
           the right to purchase the Company's securities on behalf of
           employees. The Trustees are considered the stockholder for the
           purpose of exercising all owners' and stockholders' rights, with
           respect to the Company's securities held in the Plan, except for
           voting rights, which inure to the benefit of each employee who can
           vote all shares held in his account, even if said shares are not
           vested. Vesting is based upon an employee's years of service, with
           employees generally becoming fully vested after six years.

                Benefits are payable to employees at retirement or upon death,
           disability or termination of employment, with payments commencing no
           later than sixty days following the last day of the Plan year in
           which such event occurred. Subject to the right of the employee to
           demand payment in the form of the Company's Common Stock, all
           benefits are payable in cash or in Common Stock, at the discretion of
           the Trustees.

                The Trustees are empowered to borrow funds for the purpose of
           purchasing the Company's securities. The securities so purchased are
           required to be held in an acquisition indebtedness account, to be
           released and made available for reallocation as principal is repaid.
           In October 1999, the Company, on behalf of the ESOP, entered into a
           revolving credit agreement with its bank, which provides for a
           $3,000,000 revolving line of credit at the bank's prime rate until
           October 2004. Direct borrowings under this line of credit are payable
           in forty-eight equal monthly installments commencing with the fiscal
           period subsequent to such borrowings. At February 28, 2002, there
           were no amounts outstanding under this line of credit. At February
           28, 2002, the ESOP owned 550,789 shares at an average price of
           approximately $1.71 per share.

           401(k) Savings Plan

                The Company sponsors a retirement plan intended to be qualified
           under Section 401(k) of the Internal Revenue Code. All non-union
           employees over age 21 who have been employed by the Company for at
           least six months are eligible to participate in the plan. Employees
           may contribute to the plan on a tax-deferred basis up to 15% of their
           total annual salary, but in no event more than the maximum permitted
           by the Code ($10,500 in calendar 2001). Company contributions are
           discretionary. Effective with the plan year ended February 28, 2002,
           the Company has elected to make matching contributions at the rate of
           $ .25 per dollar contributed by each employee up to a maximum of 1%
           of an employee's salary vesting at the cumulative rate of 20% per
           year of service starting one year after commencement of service and,
           accordingly, after five years of any employee's service with Company,
           matching contributions by the Company are fully vested. As of
           February 28, 2002 approximately 250 employees had elected to
           participate in the plan. For the fiscal year ended February 28, 2002,
           the Company contributed approximately $145,947 to the plan, of which
           $7,893 was a matching contribution of $2,631 for each of Mr. Lubman,
           Mr. Nadata, Mr. Schuster and $1,800 for Mr. Durando.

                                                                         Page 25

<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:

               The following table sets forth, as of May 1, 2002, certain
          information with regard to the record and beneficial ownership of the
          Company's Common Stock by (i) all persons known to the Company to be
          beneficial owners of more than 5% of the company's outstanding Common
          Stock, based solely on filings with the Commission; (ii) each
          Director, (iii) the Company's Chief Executive Officer and the three
          other most highly compensated executive officers of the Company; and
          (iv) all executive officers and Directors as a group.

<TABLE>
<CAPTION>
                                NAME                               SHARES         PERCENT
          ------------------------------------------------    ----------------  -----------
          <S>                                                 <C>               <C>
          Paul Durando                                           35,125 (1)(2         *
          Herbert M. Gardner                                    135,711 (3)(4)        *
          Harvey R. Blau                                         20,642 (3)           *
          Dominic Polimeni                                       20,000 (3)           *
          David Siegel                                           36,804 (3)           *
          Irving Lubman                                         464,098 (5)(6)      2.7%
          Arthur Nadata                                         964,262 (5)(6)      5.6%
          Richard S. Schuster                                   925,663 (5)(6)      5.4%
          Merrill Lynch Investment Managers                   1,785,860 (7)        10.8%
          Dimensional Fund Advisors                             917,255 (8)         5.5%
          FMR Corp.                                           1,654,700 (9)        10.0%
          All officers and directors as a group (8 persons)   2,602,305            14.7%
</TABLE>

     NOTES:
     ------
     (*)  Less than 1% of the Company's outstanding stock.
     (1)  Includes options exercisable within 60 days for 25,218 shares of
          Common Stock under the Company's 1998 Stock Option Plan and the 1994
          Stock Option Plan.
     (2)  Includes 9,907 shares of fully vested Common Stock owned through the
          Employee's Stock Ownership Plan, which include voting power.
     (3)  Includes options exercisable within 60 days for 99,500 shares of
          common stock for Mr. Gardner, 20,000 for Mr. Blau, 20,000 shares for
          Mr. Polimeni and 20,000 shares for Mr. Siegel under the Company's
          Outside Director Stock Option Plan.
     (4)  Includes 4,330 shares owned by Mr. Gardner's spouse, as to which he
          disclaims beneficial ownership, 5,775 shares held in the Gardner
          Family Foundation, of which he is President, 13,623 shares owned by
          Mr. Gardner's qualified plan and 5,587 shares held by his IRA.
     (5)  Includes options exercisable within 60 days for 388,956 shares of
          common stock for Mr. Lubman, 466,708 for Mr. Schuster and 553,959
          Nadata under the Company's 1998 Stock shares for Mr. Option Plan and
          the 1994 Stock Option Plan.
     (6)  Includes 25,471 shares of fully vested common stock owned through the
          Employees Stock Ownership Plan, which include voting power. These
          officers are also Trustees of the Plan.
     (7)  World Fin. Ctr., North Tower, 250 Vessey St., N.Y., N.Y. 10381
     (8)  1299 Ocean Ave, 11/th/ Fl., Santa Monica, CA 90401
     (9)  82 Devonshire Street, Boston, MA 02109

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:

               Harvey R. Blau, a Director of the Company, is a member of Blau,
          Kramer, Wactlar & Lieberman, P.C., general counsel to the Company. For
          the fiscal year ended February 28, 2002, the Company paid $291,638 in
          legal fees to Blau, Kramer, Wactlar & Lieberman, P.C.

               For the fiscal year ended February 28, 2002, the Company received
          an aggregate $282,174 in respect of various electronic components sold
          to Procomponents, Inc. and PCI Manufacturing, two corporations in
          which Mitchell Lubman, Mr. Lubman's brother, is an officer and owns
          greater than ten percent equity interest.

               For the fiscal year ended February 28, 2002, the Company received
          an aggregate $465,404 in respect of various electronic components sold
          to Brevan Electronics, a corporation in which Stuart Schuster, Mr.
          Schuster's brother, is an officer and owns a greater than ten percent
          equity interest.

                                                                         Page 26

<PAGE>

PART IV.

ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTON FORM 8K:

  (a) (1) The following consolidated financial statements of the registrant and
          its subsidiaries are filed as a part of this report:

<TABLE>
<CAPTION>
                                                                                      Page
                                                                                      ----
          <S>                                                                         <C>
          Independent Auditors' Report                                                 F-1

          Consolidated Balance Sheets as of February 28, 2002 and February 28, 2001    F-2

          Consolidated Statements of Income for the three years in the period ended
          February 28, 2002                                                            F-3

          Consolidated Statements of Changes in Shareholders' Equity for the three
          years in the period ended February 28, 2002                                  F-4

          Consolidated Statements of Cash Flows for the three years in the period
          ended February 28, 2002                                                      F-5

          Notes to Consolidated Financial Statements                                   F-7

          Schedule II - Valuation and Qualifying Accounts and Reserves                  35
</TABLE>

  (a) (3) See exhibits required - Item (c) below

  (b)     No reports were filed by the Company on Form 8-K during the last
          quarter of the fiscal year.

  (c)     Exhibits


         EXHIBIT
         NUMBER                          DESCRIPTION
        ------------------------------------------------------------------------

          3.1    Certificate of Incorporation, as amended(Incorporated by
                 Reference to Exhibit 3.1 to the Company's Quarterly Report on
                 Form 10-Q for the Quarter ended November 30, 2000).

          3.2    By-laws, as amended (Incorporated by Reference to Exhibit 3.2
                 to the Company's Annual Report on Form 10-K for the year ended
                 February 29, 1988)

          4.1    Specimen Common Stock Certificate (Incorporated by Reference as
                 Exhibit 4.1 to the Company's Registration Statement on Form
                 S-1, Registration No. 2-89176).

          10.1   Agreement between the Company and Trustees relating to the
                 Company's Employee Stock Ownership Plan (Incorporated by
                 Reference to Exhibit 10.5 to the Company's Annual Report on
                 Form 10-K for the year ended February 28, 1987).

                                                                         Page 27

<PAGE>

ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTSON FORM 8K

  (c)     Exhibits (continued):

         EXHIBIT
         NUMBER                          DESCRIPTION
        ------------------------------------------------------------------------

          10.2   Note Agreement dated August 15, 1994 between the Company and
                 Massachusetts Mutual Life Insurance Company (Incorporated by
                 Reference to Exhibit 10.1 to the Company's Quarterly Report on
                 Form 10-Q for the quarter ended August 31, 1994).

          10.3   1994 Stock Option Plan (Incorporated by Reference to Exhibit
                 10.3 to the Company's Quarterly Report on Form 10-Q for the
                 quarter ended August 31, 1994).

          10.4   Outside Director Stock Option Plan (Incorporated by Reference
                 to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q
                 for the quarter ended August 31, 1994).

          10.5   Agreement dated September 22, 1995 between the Company and Paul
                 Durando (Incorporated by Reference to Exhibit 10.13 to the
                 Company's Quarterly Report on Form 10-Q for the quarter ended
                 August 31, 1995).

          10.6   Employment and Change of Control Agreements dated September 13,
                 1996, between and Company and Irving Lubman. (Incorporated by
                 Reference to Exhibit 10.15 to the Company's Quarterly Report on
                 Form 10Q for the quarter ended August 31, 1996).

          10.7   Employment and Change of Control Agreements dated September 13,
                 1996, between and Company and Arthur Nadata. (Incorporated by
                 Reference to Exhibit 10.16 to the Company's Quarterly Report on
                 Form 10Q for the quarter ended August 31, 1996).

          10.8   Employment and Change of Control Agreements dated September 13,
                 1996, between and Company and Richard Schuster. (Incorporated
                 by Reference to Exhibit 10.17 to the Company's Quarterly Report
                 on Form 10Q for the quarter ended August 31, 1996).

          10.9   Indemnity Agreements Dated May 23, 1997 between the Company and
                 Messrs. Blau, Durando, Gardner, Lubman, Nadata and Schuster
                 (incorporated by reference to Exhibit 10.19 to Form 10-Q for
                 the quarter ended May 31, 1997)

          10.10  Revolving Credit Agreement dated October 18,2000 between the
                 Company and six banks: Mellon Bank, N.A., European American
                 Bank, HSBC Bank USA, Fleet Bank, The Chase Manhattan Bank and
                 The Bank of New York (Incorporated by reference to Exhibit
                 10.13 to form 10Q for the quarter ended November 30,2000).

          10.11  1998 Stock Option Plan, as amended (Incorporated by reference
                 to Exhibit 4.1 to the Company's Registration Statement on Form
                 S-8, No.333-82805).

          10.12  2000 Stock Option Plan (Incorporated by reference to Exhibit
                 4.1 to the Company's Registration Statement on Form S-8,
                 No.333-51188).

          10.13  2000 Key Employee Stock Option Plan (Incorporated by reference
                 to Exhibit 4.1 to the Company's Registration Statement on Form
                 S-8 No. 333-51192).

          10.14  2000 Outside Directors' Stock Option Plan (Incorporated by
                 reference to Exhibit 4.1 to the Company's Registration
                 Statement on Form S-8 No.333-51190).

                                                                         Page 28

<PAGE>

ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTSON FORM 8K

   (d)    Exhibits (continued):

          EXHIBIT
          NUMBER                           DESCRIPTION
         -----------------------------------------------------------------------

          11.    Computation of Per Share Earnings

          22.    The following is a list of the Company's subsidiaries:


                                                              State or
                                                             Country of
                                    Name                    Incorporation
                  --------------------------------------   ---------------

                  NIC Components Corp.                     New York
                  NIC Eurotech Limited                     United Kingdom
                  Nu Horizons International Corp.          New York
                  NUV, Inc.                                Massachusetts
                  Nu Horizons/Merit Electronics Corp.      Delaware
                  Nu Horizons Eurotech Limited             United Kingdom
                  Titan Logistics Corp.                    New York
                  NIC Components Asia PTE.LTD.             Singapore
                  Nu Horizons Asia PTE.LTD.                Singapore

          23.    Accountants' Consent

          99.    Additional Exhibit

                                                                         Page 29

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                         NU HORIZONS ELECTRONICS CORP.
                                                 (Registrant)

                                    By:  /s/ ARTHUR NADATA
                                        ----------------------------------------
                                         Arthur Nadata,
                                         President (Principal Operating Officer)

                                    By:  /s/ PAUL DURANDO
                                        ----------------------------------------
                                         Paul Durando
                                         Vice President, Finance
                                         (Principal Financial and
                                         Accounting Officer)

Pursuant to the requirements of the Securities 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 date indicated:

           SIGNATURE                       CAPACITY                   DATE
           ---------                       --------                   ----

By:  /s/ IRVING LUBMAN               Chairman of The Board,       May  23, 2002
     ---------------------------    Chief Operating Officer
         Irving Lubman

By:  /s/ ARTHUR NADATA             President, Chief Executive     May  23, 2002
     ---------------------------      Officer and Director
         Arthur Nadata

By:  /s/ RICHARD SCHUSTER          Vice President, Secretary      May  23, 2002
     ---------------------------          and Director
         Richard Schuster

By:  /s/ PAUL DURANDO               Vice President, Finance,      May  23, 2002
     ---------------------------     Treasurer and Director
         Paul Durando

By:  ___________________________            Director
         Harvey R. Blau

By:  /s/ HERBERT M. GARDNER                 Director              May  23, 2002
     ---------------------------
         Herbert M. Gardner

By:  /s/ DOMINIC A. POLIMENI                Director              May 23, 2002
     ---------------------------
         Dominic A. Polimeni

By:  /s/ DAVID SIEGEL                       Director              May 23, 2002
     ---------------------------
         David Siegel

                                                                         Page 30

<PAGE>

               Accountant's Consent
               --------------------

          We consent to the incorporation by reference in Registration Statement
          numbers 333-79561, 333-82805, 33-88952, 33-88958, 333-51188, 333-51190
          and 333-51192 on Form S-8 of our opinion dated May 3, 2002 on the
          consolidated financial statements of Nu Horizons Electronics Corp. and
          subsidiaries included in the Corporation's annual report on Form 10-K
          for the fiscal year ended February 28, 2002.



                                                /s/ LAZAR LEVINE & FELIX LLP
                                                --------------------------------
                                                LAZAR LEVINE & FELIX LLP
                                                Certified Public Accountants

          New York, New York
          May 21, 2002

                                                                         Page 31

<PAGE>

          99.     Additional Exhibit:
                  ------------------

            The following undertakings are incorporated by reference into the
          Company's Registration Statements on Form S-8 (Registration Nos.
          33-88952, 33-88958, 333-79561, 333-82805, 333-51188, 333-51190 and
          333-51192).

            (a) The undersigned registrant hereby undertakes:

                (1) To file, during any period in which offers or sales are
                being made, a post-effective amendment to the registration
                statement:

                    (i)   To include any prospectus required by section 10(a)
                    (3) of the Securities Act of 1933;

                    (ii)  To reflect in the prospectus any facts or events
                    arising after the effective date of the registration
                    statement (or the most recent post-effective amendment
                    thereof) which, individually or in the aggregate, represent
                    a fundamental change in the information set forth in the
                    registration statement;

                    (iii) To include any material information with respect to
                    the plan of distribution not previously disclosed in the
                    registration statement or any material change to such
                    information in the registration statement;

                    Provided, however, that paragraphs (a) (1) (i) and (a) (1)
                    (ii) do not apply if the registration statement is on Form
                    S-3 or Form S-8, and the information required to be included
                    in a post-effective amendment by those paragraphs is
                    contained in periodic reports filed by the registrant
                    pursuant to section 13 periodic reports filed by the
                    registrant pursuant to section 13 or section 15(d) of the
                    Securities Exchange Act of 1934 that are incorporated by
                    reference in the registration statement.

                (2) That, for the purpose of determining any liability under the
                Securities Act of 1933, each such post-effective amendment shall
                be deemed to be a new registration statement relating to the
                securities offered therein, and the offering of such securities
                at that time shall be deemed to be the initial bona fide
                offering thereof.

                (3) To remove from registration by means of a post-effective
                amendment any of the securities being registered, which remain,
                unsold at the termination of the offering.

            (b) The undersigned registrant hereby undertakes that, for purposes
            of determining any liability under the Securities Act of 1933, each
            filing of the registrant's annual report pursuant to section 13(a)
            or section 15(d) of the Securities Exchange Act of 1934 (and, where
            applicable, each filing of an employee benefit plan's annual report
            pursuant to section 15(d) of the Securities Exchange Act of 1934)
            that is incorporated by reference in the registration statement
            shall be deemed to be a new registration statement relating to the
            securities offered therein, and the offering of such securities at
            that time shall be deemed to be the initial bona fide offering
            thereof.

                                                                         Page 32

<PAGE>

          99.    Additional Exhibit (Continued):
                 ------------------

          (f) (1) The undersigned registrant hereby undertakes to deliver or
          cause to be delivered with the prospectus to each employee to whom the
          prospectus is sent or given a copy of the registrant's annual report
          to stockholders for its last fiscal year, unless such employee
          otherwise has received a copy of such report, in which case the
          registrant shall state in the prospectus that it will promptly
          furnish, without charge, a copy of such report on written request of
          the employee. If the last fiscal year of the registrant has ended with
          120 days prior to the use of the prospectus, the annual report for the
          fiscal year will be furnished to each such employee.

              (2) The undersigned registrant hereby undertakes to transmit or
              cause to be transmitted to all employees participating in the plan
              who do not otherwise receive such material as stockholders of the
              registrant, at the time and in the matter such material is sent to
              its stockholders, copies of all reports, proxy statements and
              other communications distributed to its stockholders generally.

              (3) Where interests in a plan are registered herewith, the
              undersigned registrant and plan hereby undertake to transmit or
              cause to be transmitted promptly, without charge, to any
              participant annual report of the plan filed pursuant to section
              15(d) of the Securities Exchange Act of 1934 (Form 11-K). If such
              report is filed separately on Form 11-K, such form shall be
              delivered upon written request. If such report is filed as a part
              of the registrant's annual report to stockholders delivered
              pursuant to paragraph (1) or (2) of this undertaking, additional
              delivery shall not be required.

              (4) If the registrant is a foreign private issuer, eligible to use
              Form 20-F, then the registrant shall undertake to deliver or cause
              to be delivered with the prospectus to each employee to whom the
              prospectus is sent or given, a copy of the registrant's latest
              filing on Form 20-F in lieu of the annual report to stockholders.

                  (i) Insofar as indemnification for liabilities arising under
                  the Securities Act of 1933, may be permitted to directors,
                  officers and controlling persons of the registrant pursuant to
                  the foregoing provisions, or otherwise, the registrant has
                  been advised that in the opinion of the Securities and
                  Exchange Commission such indemnification is against public
                  policy as expressed in the Act and is, therefore,
                  unenforceable. In the event that a claim for indemnification
                  against such liabilities (other than the payment by the
                  registrant of expenses incurred or paid by a director, officer
                  or controlling person of the registrant in the successful
                  defense of any action, suit or proceeding) is asserted by such
                  director, officer or controlling person in connection with the
                  securities being registered, the registrant will, unless in
                  the opinion of its counsel the matter has been settled by
                  controlling precedent, submit to a court of appropriate
                  jurisdiction the question whether such indemnification by it
                  is against public policy as expressed in the act and will be
                  governed by the final adjudication of such issue.

                                                                         Page 33

<PAGE>

SCHEDULE II

                 NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                 ----------------------------------------------

                      SCHEDULE II--VALUATION AND QUALIFYING
                              ACCOUNTS AND RESERVES

                       Three Years Ended February 28, 2002

<TABLE>
<CAPTION>
                            Balance at      Additions
                            Beginning    charged to costs                    Balance at end
       Description          of period      and expenses     Deductions (A)      of period
       -----------          ---------      ------------     --------------      ---------
<S>                         <C>          <C>                <C>              <C>
Valuation account
 deducted in the
 balance sheet from
 the asset to which
 it applies:
  Allowance for
  doubtful accounts-
  accounts receivable

          2002             $5,590,675      $          0       $ 1,144,774      $4,445,901
                           ==========      ============       ===========      ==========

          2001             $3,447,072      $  2,452,602       $   308,999      $5,590,675
                           ==========      ============       ===========      ==========

          2000             $2,630,984      $  1,097,337       $   281,249      $3,447,072
                           ==========      ============       ===========      ==========
</TABLE>

(A) Accounts written off.

                                                                         Page 34

<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                          ____________________________

                                  EXHIBIT INDEX

                                       to

                                    FORM 10-K

                   FOR THE FISCAL YEAR ENDED FEBRUARY 28, 2002

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

                          ____________________________

                          NU HORIZONS ELECTONICS CORP.

             (Exact Name of Registrant as Specified in Its Charter)


  EXHIBIT
  NUMBER                                  DESCRIPTION
  -----------------------------------------------------------------------------

  11                  Computation of Per Share Earnings