<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                 ANNUAL REPORT
                                  ON FORM 10K


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

        For the fiscal year ended                  Commission file number
            February 29, 2000                              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, 1999.

    Common Stock - Par Value $.0066                        10,018,652
---------------------------------------     ------------------------------------
                Class                                 Outstanding Shares

               Aggregate Market Value of Non-Affiliate Stock at
                   May 1, 2000 - approximately $195,364,000
--------------------------------------------------------------------------------
<PAGE>

                NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
PART I:
<S>                                                                                   <C>
     ITEM 1.     Business                                                             Pages    3 - 7

     ITEM 2.     Properties                                                           Pages    7 - 8

     ITEM 3.     Legal Proceedings                                                    Page         8

     ITEM 4.     Submission of Matters to a Vote of Security Holders                  Page         8

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 - 13

     ITEM 8.     Financial Statements and Supplementary Data                          Pages F1 - F17

     ITEM 9.     Changes in and Disagreements with Accountants on Accounting and
                 Financial Disclosures                                                Page        14

PART III:

    ITEM 10.     Directors and Executive Officers of the Company                      Pages  14 - 15

    ITEM 11.     Executive Compensation                                               Pages  16 - 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 - 33

Signatures                                                                            Page        34

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"), Nu Horizons Asia PTE.
          LTD.("NUA"), NIC Eurotech Ltd. ("NIE") and its majority owned
          subsidiary NIC Components Asia PTE. LTD.("NIA") 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. Nu Visions Manufacturing, Inc. ("NUV" or "Nu Visions")
          located in Springfield, Massachusetts, another wholly-owned subsidiary
          of the Company, is a contract assembler of circuit boards and related
          electromechanical devices for various Original Equipment Manufacturers
          or OEMs. 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
          original equipment manufacturers (OEMs) in the United States, include
          mainly commercial semiconductor products such as memory chips,
          microprocessors, digital and linear circuits, microwave, RF and
          fiberoptic 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.

            Management's policy is to manage, maintain and control all
          inventories from its principal headquarters and stocking facility on
          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.

                                                                          Page 3
<PAGE>

ITEM 1. BUSINESS (Continued):

        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, Basis Communications, Cirrus Logic, Elantec, Exar,
        Hyundai, Maxim Integrated Products, Pericom, ST Microelectronics, Sun
        Microsystems, TDK 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 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) brand of passive components and does not
        anticipate any change in this relationship. While the Company does not
        have a written agreement with Nippon in this regard, it believes that a
        formal written agreement is not material to its ongoing business
        relationship with Nippon.

          Due to certain market situations, NIC, with Nippon's assent, has also
        established several manufacturing associations with U.S. and Taiwan
        based companies. NIC intends to continue to give Nippon priority,
        however, in acquiring its products whenever the technology and pricing
        are commensurate with the North American market's requirements.

        Contract Assembly:

          As discussed above, the Company's core business is the distribution of
        active components to OEM's and passive components to OEM's and
        distributors nationally in the United States.

          Those components are then placed on printed circuit boards by the
        OEM's themselves or are contracted for placement to outside contract
        assembly companies (domestically or offshore). The Company believes that
        outside contract assembly is becoming more prevalent nationally,
        especially among small to midsize OEM's.

          With a view towards maximizing the Company's current customer base as
        well as offering new customers additional services, the Company decided
        that contract circuit board assembly was a natural extension to its
        business since 80% of the components found on most printed circuit
        boards can be provided through the Company's active and NIC's passive
        products.

                                                                          Page 4
<PAGE>

ITEM 1. BUSINESS (Continued):

        Contract Assembly (continued):

        Nu Visions provides both surface mount and through-hole circuit board
        assembly services to the aforementioned OEMs. In order to expand and
        enhance this segment of the business, the Company has acquired
        approximately $3,000,000 of automated circuit board assembly equipment
        and in fiscal 1999 expanded the size of Nu Vision's facility to 45,000
        square feet in anticipation of continued growth.

        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, fiberoptic, 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 29, 2000, 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 100 salespersons, and by a field sales
        force of approximately 120 salespersons. The Company maintains branch
        sales facilities located as follows:

        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
        -------

        Arizona - Phoenix
        Illinois - Chicago
        Minnesota - Minneapolis
        Texas - Austin and Dallas

        WEST COAST
        ----------

        California - Irvine, Los Angeles, Sacramento, San Diego and San Jose
        Oregon - Portland
        Washington - Redmond

          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 are generally equal
        to 5% of all sales in a representative's exclusive territory.

                                                                          Page 5
<PAGE>

ITEM 1. BUSINESS (Continued):

        Sales and Marketing (continued):

          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.

          Nu Visions' contract manufacturing facilities are marketed through the
        services of several East Coast independent sales representatives, as
        well as the Company's field sales force.

          No single customer accounted for more than 2% of the Company's
        consolidated sales for the year ended February 29, 2000. 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.

          As of February 29, 2000, there were three manufacturers that
        represented more than 10% of the Company's inventory on a consolidated
        basis. Those suppliers accounted for approximately 46% of total
        inventory. Electronic components distributed by the Company generally
        are presently readily available; however, from time to time the
        electronics industry has experienced shortages or surplus of certain
        electronic products.

          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.

        Competition and Regulation:

          The Company competes with many companies that distribute semiconductor
        and passive electronic components and, to a lesser extent, companies
        which 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.

                                                                          Page 6
<PAGE>

ITEM 1. BUSINESS (Continued):

        Competition and Regulation (continued):

          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 of 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, 2000, the Company's backlog was
        approximately $89,655,000 as compared to a backlog of approximately
        $24,000,000 at May 1, 1999.

        Employees:

          As of February 29, 2000, the Company employed approximately 546
        persons: 12 in management, 260 in sales and sales support, 34 in product
        and purchasing, 19 in accounting and finance, 13 in MIS, 31 in
        operations, 117 in manufacturing, and 60 in quality control, shipping,
        receiving and warehousing. The Company believes that its employee
        relations are satisfactory.

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.

          The Company leases approximately 45,000 square feet of manufacturing
        and office space in Springfield, Massachusetts for its Nu Visions
        subsidiary. The lease term is from June 15, 1998 to June 15, 2008 at an
        annual base rental of $244,260, subject to annual consumer price index
        increases not to exceed 2% annually.

                                                                          Page 7
<PAGE>

ITEM 2.  PROPERTIES (Continued):

         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, 1996 to April 30,
      2001 at an annual base rental of $225,000.

         The Company also leases space for twenty three (23) branch sales
      offices which range in size from 1,000 square feet to 5,000 square feet,
      with lease terms that expire between July 2000 and January 2004. Annual
      base rentals range from $15,600 to $100,800 with aggregate base rentals
      approximating $825,000.

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 29, 2000 to a vote of security holders through the
      solicitation of proxies or otherwise.

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 reported by the NASDAQ National Market System.

<TABLE>
<CAPTION>
         FISCAL YEAR 1999:                                         HIGH           LOW
                                                                   ----           ----
         <S>                                                      <C>            <C>
               First Quarter                                      $ 7.09         $ 6.00
               Second Quarter                                       6.62           4.00
               Third Quarter                                        6.87           3.50
               Fourth Quarter                                       6.50           4.25

         FISCAL YEAR 2000:

               First Quarter                                      $ 5.95         $ 3.75
               Second Quarter                                       8.33           5.30
               Third Quarter                                        9.50           6.55
               Fourth Quarter                                      17.50           8.75

         FISCAL YEAR 2001:
               First Quarter (Through May 1, 2000)                $24.75         $14.00
</TABLE>


      b) As of May 1, 2000, the Company's common stock was owned by
         approximately 400 holders of record and 5600 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
                                29, 2000            28, 1999              28, 1998            28, 1997           29, 1996
                                --------            --------              --------            --------           --------
<S>                           <C>                 <C>                   <C>                 <C>                <C>
INCOME STATEMENT
  DATA:
Net Sales                     $379,238,562        $253,872,325          $233,325,408        $216,612,707       $202,803,184
Gross profit on sales           79,240,311          55,036,322            50,794,325          48,488,124         48,201,148
Gross profit percentage               20.9%               21.7%                 21.8%               22.4%              23.8%
Income before provision for
   income taxes and minority
   interests                    20,370,140           7,624,158             8,947,537          11,921,256         15,799,592
Net income                      11,698,786           4,544,831             5,297,991           7,073,560          9,396,301
Earnings per
 common share:
Basic                         $       1.30        $        .52          $        .61        $        .81       $       1.19

Diluted                       $       1.03        $        .43          $        .52        $        .69       $        .97
</TABLE>

<TABLE>
<CAPTION>
                                FEBRUARY        FEBRUARY         FEBRUARY        FEBRUARY       FEBRUARY
                                28, 2000        28, 1999         28, 1998        29, 1997       28, 1996
                                --------        --------         --------        --------       --------
<S>                             <C>             <C>              <C>             <C>            <C>
BALANCE SHEET
  DATA:

Working capital               $104,048,711      $68,849,897      $75,217,607     $51,941,472    $57,954,434
Total assets                   147,537,145       99,758,895       99,641,428      74,783,314     75,459,586
Long-term debt                  38,307,319       22,377,852       32,790,395      15,523,483     27,094,030
Shareholders'
  equity                        75,461,183       56,337,068       51,542,045      46,950,735     37,617,703
</TABLE>

                                                                          Page 9
<PAGE>

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

         Introduction:

         Nu Horizons Electronics Corp. (the "Company") and its wholly-owned
         subsidiaries, NIC Components Corp. ("NIC"), Nu Horizons Eurotech
         Limited ("NUE"), Nu Horizons Asia PTE.LTD. ("NUA"), NIC Eurotech
         Limited ("NIE"), Titan Logistics Corp. ("TITAN") and Nu Horizons
         International Electronics Corp. ("International") and its majority
         owned subsidiary NIC Components Asia PTE.LTD. ("NIA") 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
         fiberoptic 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.

         Nu Visions Manufacturing, Inc. ("NUV" or "Nu Visions") located in
         Springfield, Massachusetts, another wholly-owned subsidiary of the
         Company, is a contract assembler of circuit boards, harnesses and
         related electromechanical devices for various OEMs.

         The financial information presented herein includes: (i) Balance sheets
         as of February 29, 2000, and February 28, 1999; (ii) Statements of
         income for the twelve month periods ended February 29, 2000, February
         28, 1999 and February 28, 1998; (iii) Statements of cash flows for the
         twelve month periods ended February 29, 2000, February 28, 1999 and
         February 28, 1998; and (iv) Consolidated changes in shareholders'
         equity for the twelve month periods ended February 29, 2000, February
         28, 1999 and February 28, 1998.

         Results of Operations:

         Fiscal Year 2000 versus 1999

         Net sales for the year ended February 29, 2000 aggregated $379,238,562
         as compared to $253,872,325 for the year ended February 28, 1999, an
         increase of approximately 50%. Management attributes this increase in
         sales for the period entirely to the core semiconductor distribution
         business which experienced substantially increase 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, has contributed to the substantial increase in sales
         performance. While the Company believes it can continue to successfully
         implement this approach, no assurances can be given in this regard.

         Gross profit margin as a percentage of net sales was 20.9% for the year
         ended February 29, 2000 as compared to 21.7% for the year ended
         February 28, 1999. This decrease in gross margin percentage compared to
         the prior period is due to a greater percentage of larger orders from
         larger customers, which require a lower gross margin marketing approach
         on that business, thereby decreasing margins overall. Notwithstanding
         the forgoing, the Company expects margin pressure to stabilize and
         possibly experience a modest increase, due to its belief that the long
         awaited semiconductor industry recovery is well underway, however, no
         assurances can be given in this regard.

         Operating expenses increased by $10,861,919 to $56,032,525 for the year
         ended February 29, 2000 from $45,170,606 for the year ended February
         28, 1999, an increase of approximately 24%. The dollar increase in
         operating expenses was due to increases in the following expense
         categories: Approximately $8,725,000 or approximately 80% of the
         increases were for personnel related costs -commissions, salaries,
         travel and fringe benefits. The remaining increase of approximately
         $2,137,000 or approximately 20% 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 2000 increased approximately 24% over
         the Fiscal 1999 period those same expenses, as a percentage of sales
         dollars, decreased from 17.8% for the prior year to 14.8% for the
         current fiscal year. Management is encouraged by the fact that sales
         volume is increasing at a greater rate than operating expenses, which
         it believes is providing the economies of scale required to produce an
         enhanced bottom line performance. Management believes that this trend
         should continue through the next fiscal year, although no assurances
         can be given in this regard.

                                                                         Page 10
<PAGE>

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

         Fiscal Year 2000 versus 1999 (continued)

         Interest expense increased by $594,481 from $2,243,161 for the year
         ended February 28, 1999 to $2,837,642 for the year ended February 29,
         2000. This increase was primarily due to the higher average levels of
         bank debt during the year resulting from an increase in the Company's
         cash, inventories and accounts receivable levels needed to support
         increased sales activity.

<TABLE>
<CAPTION>
                                                INTEREST COSTS
                                                FOR THE FISCAL
                                                  YEAR ENDED

                                           February        February
                                           29, 2000        28, 1999
                                         -----------------------------
              <S>                        <C>                <C>
              Revolving Bank Credit        $2,277,278     $1,660,794
              Sub. Convert. Notes             560,364        582,367
                                         -----------------------------
              Total Interest Expense       $2,837,642     $2,243,161
                                         =============================
</TABLE>


         Net income for the year ended February 29, 2000 was $11,698,786 or
         $1.03 per share diluted, as compared to $4,544,831 or $.43 per share
         diluted, for the year ended February 28, 1999. Management attributes
         the increase in earnings to increased sales volume net of higher
         operating expenses for the year ended in 2000 as compared to 1999.

         Fiscal Year 1999 versus 1998

         Results of Operations:

         Net sales for the year ended February 28, 1999 aggregated $253,872,325
         as compared to $233,325,408 for the year ended February 29, 1998, an
         increase of 8.8%. Management attributes this increase in sales for the
         period entirely to the core semiconductor distribution business which
         experienced demand but, due to reduced unit pricing as a result of
         excess inventory levels at the semiconductor manufacturing (supplier)
         level resulted in only a moderate increase.

         Gross profit margin as a percentage of net sales was 21.7% for the year
         ended February 28, 1999 as compared to 21.8% for the year ended
         February 28, 1998. Management attributes this relative stability in
         profit margins to substantial inventory oversupplies at the supplier
         level, as mentioned above and resulting reduced unit pricing. No
         assurance can be given that gross profit stabilization will continue in
         future periods.

         Operating expenses increased by $5,037,184 to $45,170,606 for the year
         ended February 28, 1999 from $40,133,422 for the year ended February
         28, 1998, an increase of approximately 12.5%. The dollar increase in
         operating expenses was due to increases in the following expense
         categories: Approximately $3,290,000 or approximately 65% of the
         increases were for personnel related costs -commissions, salaries,
         travel and fringe benefits. The remaining increase of approximately
         $1,747,000 or approximately 35% 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. Toward the latter part of fiscal
         1998 and early in fiscal 1999, the Company decided to pursue and
         continue with a policy of upgrading and enlarging its sales and sales
         support staff as well as physical branch facilities to support
         anticipated future growth in the near as well as more distant future.
         Increased sales levels in the second, third and fourth quarters of
         fiscal 1998 and in fiscal 1999 did not meet expectations. The Company
         continues to believe in this strategy for long-term growth and expects
         market conditions to undergo a correction in the near future although
         no assurances can be given in this regard.

                                                                         Page 11
<PAGE>

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

         Fiscal Year 1999 versus 1998 (Continued)

         Results of Operations (continued):

         Interest expense increased by $519,998 from $1,723,163 for the year
         ended February 28, 1998 to $2,243,161 for the year ended February 28,
         1999. This increase was primarily due to the interest on higher average
         levels of bank debt during the year resulting from an increase in
         average receivables and inventories which were necessary to support
         increased sales.

<TABLE>
<CAPTION>
                                                INTEREST COSTS
                                                FOR THE FISCAL
                                                  YEAR ENDED

                                             February       February
                                             28, 1999       28, 1998
                                         ------------------------------
             <S>                         <C>                <C>
             Revolving Bank Credit          $1,660,794     $1,140,796
             Sub. Convert. Notes               582,367        582,367
                                         ------------------------------
             Total Interest Expense         $2,243,161     $1,723,163
                                         ==============================
</TABLE>

         Net income for the year ended February 28, 1999 was $4,544,831 or $.43
         per share diluted, as compared to $5,297,991 or $.52 per share diluted,
         for the year ended February 28, 1998. The decrease in earnings is
         primarily due to increased operating expenses and the lack of a
         commensurate increase in gross margin on sales.

         Liquidity and Capital Resources:

         Fiscal Year 2000 versus 1999

         The Company ended its 2000 fiscal year with working capital and cash
         aggregating approximately $104,049,000 and $1,497,000, respectively at
         February 29, 2000 as compared to approximately $68,850,000 and $504,000
         respectively, at February 28, 1999. The Company's current ratio at
         February 29, 2000, was 4.1:1. The Company believes that its financial
         position at February 29, 2000, will enable it to take advantage of any
         new opportunities that may arise.

         On October 28, 1999, the Company entered into a new unsecured revolving
         line of credit, which currently provides for maximum borrowings of
         $57,000,000 through October 28, 2003 with three banks at either (I) the
         lead bank's prime rate or (ii) LIBOR plus 57.5 to 112.5 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 28, 2003. At February 29, 2000, $37,800,000 was
         outstanding under this line of credit as compared to $14,900,000 at
         February 28, 1999. The Company does not expect the fluctuation in
         interest rates to have a material effort on its financial results.

         In a private placement completed on August 31, 1994, the Company issued
         $15 million principal amount of Subordinated Convertible Notes, which
         were due in $5,000,000 increments on August 31, 2000, 2001 and 2002.
         The notes were subordinate in right of payment to all existing and
         future senior indebtedness of the Company. The notes bore interest at
         8.25%, payable quarterly on November 15, February 15, May 15 and August
         15. The notes were convertible into shares of common stock at a
         conversion price of $9.00 per share. The cost of issuing these notes
         was $521,565 and was amortized over three years. As of February 29,
         2000, all of the notes had been converted into 1,705,883 shares of
         common stock.

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

                                                                         Page 12
<PAGE>

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

         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.

         Other:

         Except for historical information contained herein, the matters set
         forth above 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.

                                                                         Page 13
<PAGE>

             ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          Independent Auditors' Report

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

     We have audited the accompanying consolidated financial statements of Nu
Horizons Electronics Corp. and subsidiaries as of February 29, 2000 and February
28, 1999, and the consolidated statements of income, changes in shareholders'
equity and cash flows for the three years in the period ended February 29, 2000.
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 generally accepted auditing
standards.  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 29, 2000 and February 28, 1999,
and the results of their operations and their cash flows for each of the three
years in the period ended February 29, 2000 in conformity with generally
accepted accounting principles.


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



New York, New York
May 22, 2000

                                                                        Page F-1
<PAGE>

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

<TABLE>
<CAPTION>

                                                      February       February
                                                      29, 2000       28, 1999
                                                   -------------- --------------
<S>                                                <C>            <C>
                                   -ASSETS-
                                    ------
CURRENT ASSETS:

Cash                                                $  1,496,805  $      504,320
Accounts receivable-net of allowance for
  doubtful accounts of $3,447,072 and
  $2,630,984 for 2000 and 1999, respectively          64,709,037      41,920,403
Inventories                                           69,544,396      45,113,894
Prepaid expenses and other current assets              1,817,718       2,355,255
                                                    ------------      ----------
TOTAL CURRENT ASSETS                                 137,567,956      89,893,872

PROPERTY, PLANT AND EQUIPMENT - NET
(Note 3)                                               7,319,138       7,130,794

OTHER ASSETS
Costs in excess of net assets acquired-net             1,438,484       1,595,408
Other assets (Note 4)                                  1,211,567       1,138,821
                                                    ------------  --------------
                                                    $147,537,145  $   99,758,895
                                                    ============  ==============

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

CURRENT LIABILITIES:
Accounts payable                                    $ 20,558,054  $  14,369,712
Income taxes payable                                   3,623,248              -
Accrued expenses                                       9,337,943      6,674,263
                                                    ------------  -------------
TOTAL CURRENT LIABILITIES                             33,519,245     21,043,975
                                                    ------------  -------------

LONG-TERM LIABILITIES:
Deferred income taxes (Note 9)                           507,319        418,852
Revolving credit line (Notes 5)                       37,800,000     14,900,000
Subordinated convertible notes (Note 7)                        -      7,059,000
                                                    ------------  -------------
TOTAL LONG-TERM LIABILITIES                           38,307,319     22,377,852
                                                    ------------  -------------

MINORITY INTEREST (Note 6)                               249,398              -
                                                    ------------  -------------

COMMITMENTS AND CONTINGENCIES
(Notes 10, 11 and 12)

SHAREHOLDERS' EQUITY (Note 8):
Preferred stock, $1 par value, 1,000,000
    shares authorized; none issued or outstanding              -              -
Common stock, $.0066 par value, 20,000,000
    shares authorized; 10,018,652 and 8,753,076
    shares issued and outstanding for February 29,
    2000 and February 28, 1999, respectively              66,122         57,770
Additional paid-in capital                            29,455,741     19,042,230
Retained earnings                                     46,438,636     38,076,840
                                                    ------------  -------------
                                                      75,960,499     57,176,840
Less:  loan to ESOP (Note 10)                            499,316        839,772
                                                    ------------  -------------
                                                      75,461,183     56,337,068
                                                    ------------  -------------

                                                    $147,537,145  $  99,758,895
                                                    ============  =============
</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
                                                     29, 2000                 28, 1999                 28, 1998
                                               -------------------      ------------------       ------------------
<S>                                            <C>                      <C>                      <C>
NET SALES                                             $379,238,562            $253,872,325             $233,325,408
                                               -------------------      ------------------       ------------------

COSTS AND EXPENSES:

       Cost of sales (Note 12)                         299,998,251             198,836,003              182,531,083
       Operating expenses                               56,032,525              45,170,606               40,133,422
       Interest expense                                  2,837,646               2,243,161                1,723,163
       Interest income                                           -                  (1,603)                  (9,797)
                                               -------------------      ------------------       ------------------
                                                       358,868,422             246,248,167              224,377,871
                                               -------------------      ------------------       ------------------

INCOME BEFORE PROVISION
FOR INCOME TAXES AND MINORITY
INTERESTS                                               20,370,140               7,624,158                8,947,537

       Provision for income taxes (Note 9)               8,528,909               3,079,327                3,649,546
                                               -------------------      ------------------       ------------------

INCOME BEFORE MINORITY INTERESTS                        11,841,231               4,544,831                5,297,991

MINORITY INTEREST IN EARNINGS OF
SUBSIDIARY (Note 6)                                        142,445                       -                        -
                                               -------------------      ------------------       ------------------

NET INCOME                                            $ 11,698,786            $  4,544,831             $  5,297,991
                                               ===================      ==================       ==================

EARNINGS PER SHARE

       Basic                                          $       1.30            $        .52             $        .61
                                               ===================      ==================       ==================

       Diluted                                        $       1.03            $        .43             $        .52
                                               ===================      ==================       ==================
</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>
                                                                ADDITIONAL                                         TOTAL
                                                     COMMON      PAID-IN        RETAINED        LOAN TO        SHAREHOLDERS'
                                        SHARES        STOCK      CAPITAL        EARNINGS          ESOP            EQUITY
                                     -----------   ----------  -----------    -----------      -----------     ------------
<S>                                   <C>           <C>        <C>            <C>             <C>             <C>
Balance at February 28, 1997           8,732,299  $  57,633   $ 18,938,984  $  28,234,018    $   (279,900)    $  46,950,735

Exercise of stock options                 20,777        137        103,246              -               -           103,383
Loan to ESOP                                   -          -              -              -        (950,014)         (950,014)
Repayment from ESOP                            -          -              -              -         139,950           139,950
Net income                                     -          -              -      5,297,991               -         5,297,991
                                     -----------   --------    -----------    -----------      ----------       -----------
Balance at February 28, 1998           8,753,076     57,770     19,042,230     33,532,009      (1,089,964)       51,542,045

Repayment from ESOP                            -          -              -              -         250,192           250,192
Net income                                     -          -              -      4,544,831               -         4,544,831
                                     -----------   --------    -----------    -----------      ----------       -----------
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
                                     ===========   ========     ==========    ===========      ==========       ===========
</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
                                                         29, 2000                  28, 1999                  28, 1998
                                                   -------------------       -------------------       -------------------
<S>                                                <C>                       <C>                       <C>
INCREASE (DECREASE) IN CASH AND
        CASH EQUIVALENTS:

Cash flows from operating activities:
        Cash received from customers                  $ 355,352,590             $ 248,540,451             $ 226,296,024
        Cash paid to suppliers and employees           (368,622,165)             (236,336,921)             (232,653,486)
        Interest received                                         -                     1,602                     9,797
        Interest paid                                    (2,837,646)               (2,243,161)               (1,723,163)
        Income taxes paid                                (4,134,402)               (1,359,716)               (4,511,763)
                                                      -------------             -------------             -------------
               Net cash provided (used) by
                  operating activities                  (20,241,623)                8,602,255               (12,582,591)
                                                      -------------             -------------             -------------

Cash flows from investing activities:
        Capital expenditures                             (1,691,765)               (2,031,604)               (1,176,904)
        Purchase of stock for ESOP                                -                         -                  (950,014)
        Proceeds from sale of building                            -                         -                 1,126,840
                                                      -------------             -------------             -------------
               Net cash (used) by investing
                        activities                       (1,691,765)               (2,031,604)               (1,000,078)
                                                      -------------             -------------             -------------

Cash flows from financing activities:
        Borrowings under revolving credit line           95,785,000                43,950,000                51,650,000
        Repayments under revolving credit line          (72,885,000)              (54,350,000)              (34,350,000)
        Principal payments of long-term debt                      -                         -                  (433,129)
        Proceeds from exercise of employee
          stock options                                      25,873                         -                   103,383
                                                      -------------             -------------             -------------
               Net cash provided by (used in)
                        financing activities             22,925,873              ( 10,400,000)               16,970,254
                                                      -------------             -------------             -------------

Net (decrease) increase in cash and cash
   equivalents                                              992,485                (3,829,349)                3,387,585
Cash and cash equivalents, beginning of year                504,320                 4,333,669                   946,084
                                                      -------------             -------------             -------------

Cash and cash equivalents, end of year                $   1,496,805             $     504,320             $   4,333,669
                                                      =============             =============             =============
</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
                                                          29, 2000                  28, 1999                 28, 1998
                                                    -------------------      --------------------       ------------------
<S>                                                 <C>                      <C>                        <C>
RECONCILIATION OF NET INCOME TO
NET CASH FROM OPERATING
ACTIVITIES:

Net income                                                 $ 11,698,786               $ 4,544,831             $  5,297,991
                                                    -------------------      --------------------       ------------------

Adjustments to reconcile net income to net cash
   provided (used) by operating activities:

        Depreciation and amortization                         1,660,345                 1,417,509                1,488,057
        Bad debts                                             1,097,338                   762,500                  315,000
        Contribution to ESOP (compensation)                     340,456                   250,192                  139,950
        Loss on sale of building                                      -                         -                   60,871
Changes in assets and liabilities:
        (Increase) in accounts receivable                   (23,885,972)               (5,331,874)              (7,029,384)
        (Increase) in inventories                           (24,430,502)               (1,109,004)             (14,240,320)
        (Increase) decrease in prepaid
          expenses and other current assets                     537,537                 2,481,752               (1,933,738)
        (Increase) in other assets                              (72,746)                 (136,095)                 (80,951)
        Increase in accounts payable
                 and accrued expenses                         8,852,022                 5,734,987                3,190,686
        (Decrease) in income taxes                            3,391,863                         -                        -
        Increase Minority Funding                               249,398                         -                        -
        (Decrease) increase in deferred taxes                   319,852                   (12,543)                 209,247
                                                    -------------------      --------------------       ------------------
        Total adjustments                                   (31,940,409)                4,057,424              (17,880,582)
                                                    -------------------      --------------------       ------------------

Net cash provided (used) by operating activities           $(20,241,623)              $ 8,602,255             $(12,582,591)
                                                    ===================      ====================       ==================
</TABLE>

NON-CASH FINANCING ACTIVITIES:

  During the year ended February 29, 2000, the subordinated debt-holder
  (see Note 7) converted $7,059,000 of debt into 823,550 shares of the Company's
  common stock.

                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 29, 2000
                      -----------------------------------

1.  ORGANIZATION:

    Nu Horizons Electronics Corp. and its subsidiaries, are wholesale
    distributors throughout the United States or export distributors of
    electronic components, except for Nu Visions Manufacturing, which is a
    contract assembler of circuit boards and various electromechanical devices.
    During fiscal 2000 the Company incorporated two new subsidiaries in
    Singapore, one of which is currently inactive.

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 Visions Manufacturing,
        Inc. ("NUV"), Nu Horizons International Corp. ("International"), NIC
        Eurotech Limited ("NIE"), Nu Horizons Eurotech ("NUE"), Nu Horizons Asia
        PTE.LTD. ("NUA"), NIC Components Asia PTE.LTD ("NIA") and Titan
        Logistics Corp. ("Titan"). All material intercompany balances and
        transactions have been eliminated.

    b.  Use of Estimates:

        In preparing financial statements, in accordance with generally accepted
        accounting principles, 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.  Inventories:

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

                                                                        Page F-7
<PAGE>

                NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                ----------------------------------------------
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                THREE YEARS ENDED FEBRUARY 29, 2000 (CONTINUED)
                -----------------------------------------------


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

    e.  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.

    f.  Income Taxes:

        The Company has elected to file a consolidated federal income tax return
        with its subsidiaries. The Company utilizes Financial Accounting
        Standards Board Statement No. 109 (SFAS 109) "Accounting for Income
        Taxes". SFAS 109 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, 1999 approximates $3,200,000.

    g.  Goodwill:

        Costs in excess of net assets acquired are being amortized on a
        straight-line basis over fifteen years. As of February 29, 2000 and
        February 28, 1999, accumulated amortization of goodwill aggregated
        $915,390 and $758,466, 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.

    h.  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-8
<PAGE>

                NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                ----------------------------------------------
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                THREE YEARS ENDED FEBRUARY 29, 2000 (CONTINUED)
                -----------------------------------------------

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

    i.  Earnings Per Common Share:

        Basic and diluted earnings per share have been computed in accordance
        with the adoption of SFAS No. 128.

        The following average shares were used for the computation of basic and
        diluted earnings per share:

<TABLE>
<CAPTION>
                              2000                 1999                1998
                          ---------------     ---------------     --------------
        <S>               <C>                 <C>                 <C>
        Basic                9,007,563           8,753,076           8,753,076
        Diluted             11,698,526          11,271,859          10,898,859
</TABLE>

    j.  Reclassifications:

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

    k.  Stock-Based Compensation:

        SFAS No. 123 "Accounting for Stock Based Compensation", effective
        January 1, 1996, requires the Company to either record compensation
        expense or to provide additional disclosures with respect to stock
        awards and stock option grants. The accompanying Notes to Consolidated
        Financial Statements include the disclosures required by SFAS No. 123.
        No compensation expense is recognized pursuant to the Company's stock
        option plans under SFAS No. 123 which is consistent with prior treatment
        under APB No. 25.

    l.  Advertising and Promotion Costs:

        Advertising and promotion costs, which are included in general and
        administrative expenses, are expensed as incurred. For the three years
        ended February 29, 2000, such costs aggregated $662,646, $909,156 and
        $774,000, respectively.

    m.  Comprehensive Income:

        SFAS 130 "Reporting Comprehensive Income" is effective for years
        beginning after December 15, 1997. This statement prescribes standards
        for reporting other comprehensive income and its components. Since the
        Company currently does not have any items of other comprehensive income,
        a statement of comprehensive income is not required.

    n.  Currencies:

        The Company's functional currency for all operations is the U.S. dollar.
        Accordingly, gains and losses arising from translation of foreign
        currency financial statement balances into U.S. dollars are included in
        income. Gains and losses resulting from foreign currency transactions
        are also included in income.

                                                                        Page F-9
<PAGE>

                NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                ----------------------------------------------
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                THREE YEARS ENDED FEBRUARY 29, 2000 (CONTINUED)
                -----------------------------------------------

3.  PROPERTY, PLANT AND EQUIPMENT:

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

<TABLE>
<CAPTION>
                                                                     2000                1999
                                                                 -----------          -----------
          <S>                                                    <C>                  <C>
          Furniture, fixtures and office equipment               $ 8,802,458          $ 7,839,268
          Computer equipment                                       4,088,302            3,499,524
          Assets held under capitalized leases                       919,834              919,834
          Leasehold improvements                                   1,394,161            1,254,364
                                                                 -----------          -----------
                                                                  15,204,755           13,512,990

          Less:  accumulated depreciation and amortization         7,885,617            6,382,196
                                                                 -----------          -----------
                                                                 $ 7,319,138          $ 7,130,794
                                                                 ===========          ===========
</TABLE>

    Depreciation expense including depreciation of capitalized leases for the
    years ended February 29, 2000, February 28, 1999 and February 28, 1998
    aggregated $1,503,421, $1,260,585 and $1,331,133, respectively.

4.  OTHER ASSETS:

    Other assets as of February 29, 2000 and February 28, 1999 consists of the
    following:

<TABLE>
<CAPTION>

                                                                    2000                   1999
                                                              ---------------        ---------------
          <S>                                                 <C>                    <C>
          Net cash surrender value - life insurance               $1,090,004             $1,023,832
          Other                                                      121,563                114,989
                                                              --------------         --------------
                                                                  $1,211,567             $1,138,821
                                                              ==============         ==============
</TABLE>

5.  REVOLVING CREDIT LINE:

    On October 28, 1999, the Company entered into a new unsecured revolving line
    of credit with three banks, which currently provides for maximum borrowings
    of $57,000,000 at either (i) the lead bank's prime rate or (ii) LIBOR plus
    57.5 to 112.5 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 28, 2003. Direct borrowings under
    lines of credit were $37,800,000 and $14,900,000 at February 29, 2000 and
    February 28, 1998, respectively. As of the end of the fiscal year, the
    Company met all of the required covenants.


6.  MINORITY INTEREST IN SUBSIDIARY:

    Represents the liability related to the 30% minority interest in NIC
    Components Asia PTE.LTD which is included in the Company's consolidated
    financial statements.

                                                                       Page F-10
<PAGE>

                NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                ----------------------------------------------
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                THREE YEARS ENDED FEBRUARY 29, 2000 (CONTINUED)
                -----------------------------------------------

7.   SUBORDINATED CONVERTIBLE NOTES:

     In a private placement completed on August 31, 1994, the Company issued $15
     million principal amount of Subordinated Convertible Notes, which are were
     in $5,000,000 increments on August 31, 2000, 2001 and 2002. The notes were
     subordinate in right of payment to all existing and future senior
     indebtedness of the Company. The notes bore interest at 8.25%, payable
     quarterly on November 15, February 15, May 15, and August 15. The notes
     were convertible into shares of common stock at a conversion price of $9.00
     per share. The cost of issuing these notes was $521,565 and was amortized
     over three years.

     As of February 29, 2000, all of the notes had been converted into 1,705,883
     shares of common stock.

8.   CAPITAL STOCK AND STOCK OPTIONS:

     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 Key Employees Stock
     Incentive Plan and the 1994 and 1998 Stock Option Plans generally expire
     five and ten years after date of grant respectively, and become exercisable
     in four and two equal annual installments, respectively, commencing one
     year from date of grant. Stock options granted under the Company's Outside
     Director 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.

     A summary of options granted and related information for the three years
     ended February 29, 2000 is as follows:

<TABLE>
<CAPTION>
                                                                                                Weighted Average
                                                                             Options            Exercise Price
                                                                             -------            --------------
<S>                                                                        <C>                  <C>
     Outstanding, February 28, 1997                                          1,302,227               $ 8.16

          Granted                                                              118,500                 8.30
          Exercised                                                            (20,777)                4.98
          Canceled                                                             (38,500)               10.14
                                                                           -----------
     Outstanding, February 28, 1998                                          1,361,450                 8.20

     Weighted average fair value of options granted during the year                                  $ 3.13
                                                                                                     ======

                   Granted                                                     378,000                 5.87
                   Canceled                                                     (5,000)                5.41
                                                                           -----------
     Outstanding, February 28, 1999                                          1,734,450                 6.81

     Weighted average fair value of options granted during the year                                  $ 3.05
                                                                                                     ======
          Stock Dividend (5%)                                                   98,698                    -
          Granted                                                              833,950                 6.27
          Exercised                                                             (4,388)                5.90
          Canceled                                                            (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
                                                                                                     ======
</TABLE>

                                                                       Page F-11

<PAGE>

                NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                ----------------------------------------------
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                THREE YEARS ENDED FEBRUARY 29, 2000 (CONTINUED)
                -----------------------------------------------

8.   CAPITAL STOCK AND STOCK OPTIONS (continued):


               Options exercisable at the end of each fiscal year:
               February 28, 1998                    673,825       $7.52
               February 28, 1999                    997,950        8.06
               February 29, 2000                    885,847        7.60

     Exercise prices for options outstanding as of February 29, 2000 ranged from
     $4.62 to $14.50. The weighted-average remaining contractual life of these
     options is approximately 5 years. Outstanding options at February 29, 2000
     are held by 53 individuals.

     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:


                                        2000           1999          1998
                                    -----------     ----------    ----------

     Net earnings:
       As reported                  $11,698,786     $4,544,831    $5,297,991
       Pro forma                     11,004,402      4,311,690     4,827,590
     Basic earnings per share:
       As reported                  $      1.30     $      .52    $      .61
       Pro forma                           1.22            .49           .55
     Diluted earnings per share:
       As reported                  $      1.03     $      .43    $      .52
       Pro forma                            .97            .41           .47

     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 2000, 1999 and 1998, respectively: expected
     volatility of 51.7 %, 45.3%, and 45.8%, respectively; risk free interest
     rate of 5.9%, 6.0%, and 6.1% for 2000, 1999 and 1998, respectively; and
     expected lives of 1 to 5 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.

9.   INCOME TAXES:

     The provision for income taxes is comprised of the following:

                                  2000            1999            1998
                               ----------      ----------      ----------

     Current:
       Federal                 $6,639,410      $2,523,535      $3,103,097
       State and Local          1,801,032         680,931         655,559
     Deferred:
       Federal                     69,889         (64,760)        (74,103)
       State                       18,578         (60,379)        (35,007)
                               ----------      ----------      ----------
                               $8,528,909      $3,079,327      $3,649,546
                               ==========      ==========      ==========

                                                                       Page F-12

<PAGE>

                NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                ----------------------------------------------
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                THREE YEARS ENDED FEBRUARY 29, 2000 (CONTINUED)
                -----------------------------------------------

9.   INCOME TAXES (continued):

     The components of the net deferred income tax liability, pursuant to SFAS
     109, as of February 29, 2000 and February 28, 1999 are as follows:

                                                2000               1999
                                                ----               ----
     Deferred Tax Assets:
       Accounts Receivable                  $   684,060        $   672,003
       Inventory                                205,920             98,600
                                            -----------
       Total Deferred Tax Assets                889,980            770,603
                                            -----------        -----------

     Deferred Tax Liabilities
       Fixed Assets                             (34,580)           (68,890)
       Income of Interest Charge DISC        (1,362,719)        (1,120,565)
                                            -----------        -----------
       Total Deferred Tax Liabilities        (1,397,299)        (1,189,455)
                                            -----------        -----------

     Net Deferred Tax Liabilities           $  (507,319)       $  (418,852)
                                            ===========        ===========

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

                                 2000         1999        1998
                                 ----         ----        ----
     Statutory rate              35.0%        35.0%       35.0%
     State and local taxes        8.9          8.1         7.1
     Other                       (1.7)        (2.7)       (1.3)
                                 ----         ----        ----

     Effective tax rate          42.2%        40.4%       40.8%
                                 ====         ====        ====

10.  EMPLOYEE BENEFIT PLANS:

     On January 13, 1987, the Company's Board of Directors approved the
     termination of the Company's pension plan and approved the adoption of an
     employee stock ownership plan (ESOP) to replace the terminated pension
     plan. 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
     29, 2000 aggregated $340,456 for fiscal 2000, $250,197 for 1999 and
     $139,950 for 1998. At February 29, 2000 the ESOP owned 434,155 shares at an
     average price of approximately $3.60 per share.

     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 29, 2000, 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 29, 2000 were $115,401,
     $114,216 and $120,403, respectively.

                                                                       Page F-13

<PAGE>

                NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                ----------------------------------------------
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                THREE YEARS ENDED FEBRUARY 29, 2000 (CONTINUED)
                -----------------------------------------------

11.  COMMITMENTS:

     (a)  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, 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.

     (b)  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 2001        $2,071,000
                         Fiscal 2002         1,635,000
                         Fiscal 2003         1,190,000
                         Fiscal 2004         1,031,000
                         Fiscal 2005           911,000
                         Thereafter          2,002,000

          Rent expense was $2,175,834, $1,837,330, and $1,459,325 for each of
          the prior three years in the period ending February 29, 2000.


12.  MAJOR SUPPLIERS:

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

     For the year ended February 28, 1999, the Company purchased inventory from
     two suppliers that was in excess of 10% of the Company's total purchases.
     Purchases from these suppliers aggregated approximately $45,040,000.

     For the year ended February 28, 1998, the Company purchased inventory from
     one supplier that was in excess of 10% of the Company's total purchases.
     Purchases from this supplier aggregated approximately $18,872,000.

                                                                       Page F-14

<PAGE>

                NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                ----------------------------------------------
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                THREE YEARS ENDED FEBRUARY 29, 2000 (CONTINUED)
                -----------------------------------------------

13.  BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION:

     The Company's operations have been classified into two business segments in
     accordance with SFAS 131 "Disclosure About Segments of on Enterprise and
     Related Information": Electronic component distribution and industrial
     contract manufacturing. The component distribution segment includes the
     resale of active and passive components to various original equipment
     manufacturers and distributors. The industrial contract-manufacturing
     segment consists of a subsidiary which provides electronic circuit board
     and harness assembly services to original equipment manufacturers. This
     segment began operations in September 1991.

     Summarized financial information by business segment for fiscal 2000, 1999
     and 1998 is as follows:


<TABLE>
<S>                                           <C>                     <C>                <C>
                                                        2000               1999              1998
     -------------------------------------------------------------------------------------------------
     Net sales from external customers:

       Electronic Component Distribution            $364,069,937       $243,514,672       $221,217,251
       Industrial Contract Manufacturing              15,168,625         10,357,653         12,108,157
     -------------------------------------------------------------------------------------------------
                                                    $379,238,562       $253,872,325       $233,325,408

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

     Operating income (loss):

       Electronic Component Distribution            $ 22,241,395       $  9,210,235       $  9,430,055
       Industrial Contract Manufacturing                 823,946            655,481          1,230,848
     -------------------------------------------------------------------------------------------------
                                                    $ 23,065,341       $  9,865,716       $ 10,660,903

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

     Total assets:


       Electronic Component Distribution            $136,625,267       $ 94,340,725       $ 95,519,254
       Industrial Contract Manufacturing              10,911,878          5,418,170          4,122,174
     -------------------------------------------------------------------------------------------------
                                                    $147,537,145       $ 99,758,895       $ 99,641,428

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

     Depreciation and amortization:

       Electronic Component Distribution            $  1,183,185       $  1,116,850       $  1,201,732
       Industrial Contract Manufacturing                 477,160            300,659            286,325
     -------------------------------------------------------------------------------------------------
                                                    $  1,660,345       $  1,417,509       $  1,488,057

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

     Capital expenditures (including capital leases):


       Electronic Component Distribution            $  1,059,381       $  1,133,014       $    983,419
       Industrial Contract Manufacturing                 632,384            898,590            193,485
     -------------------------------------------------------------------------------------------------
                                                    $  1,691,765       $  2,031,604       $  1,176,904

     -------------------------------------------------------------------------------------------------
</TABLE>

Geographic:

The Company's operations are primarily conducted in the United States.
Information about the Company's operations in different geographic areas for the
three years in the period ended February 29, 2000, is not considered material to
the financial statements.

                                                                       Page F-15

<PAGE>

                NU HORIZONS ELECTRONICS CORP. AND SUBSIDIARIES
                ----------------------------------------------
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                THREE YEARS ENDED FEBRUARY 29, 2000 (CONTINUED)
                -----------------------------------------------

14.  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED):

<TABLE>
<CAPTION>
                                                               THREE MONTH PERIOD ENDED


<S>                              <C>                    <C>                    <C>                   <C>
                                      FEBRUARY               NOVEMBER               AUGUST                  MAY
                                      29, 2000               30, 1999              31, 1999               31, 1999
                               ------------------     ------------------     -----------------     ------------------

NET SALES                            $115,402,898           $100,822,657           $88,871,395            $74,141,612
                               ------------------     ------------------     -----------------     ------------------

COST OF SALES                          90,004,959             79,918,457            70,907,363             59,167,472
                               ------------------     ------------------     -----------------     ------------------

OPERATING AND
INTEREST EXPENSES                      17,126,372             15,260,691            14,218,696             12,406,857
                               ------------------     ------------------     -----------------     ------------------

PROVISION FOR
INCOME TAXES                            3,685,827              2,267,059             1,535,587              1,040,436
                               ------------------     ------------------     -----------------     ------------------

NET INCOME                           $  4,585,740           $  3,376,450           $ 2,209,749            $ 1,526,847
                               ==================     ==================     =================     ==================

BASIC EARNINGS
PER SHARE                            $        .50           $        .38           $       .25            $       .17
                               ==================     ==================     =================     ==================

WEIGHTED AVERAGE
NUMBER OF COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING

                                        9,007,563              8,899,480             8,753,076              8,753,076
                               ==================     ==================     =================     ==================

                                                               THREE MONTH PERIOD ENDED
                               --------------------------------------------------------------------------------------

                                       FEBRUARY               NOVEMBER               AUGUST                  MAY
                                       28, 1999               30, 1998              31, 1998               31, 1998
                               ------------------     ------------------     -----------------     ------------------

NET SALES                            $ 66,579,269           $ 64,263,220           $62,797,917            $60,231,919
                               ------------------     ------------------     -----------------     ------------------

COST OF SALES                          52,712,341             50,681,732            48,848,889             46,593,041
                               ------------------     ------------------     -----------------     ------------------

OPERATING AND
INTEREST EXPENSES                      12,343,878             11,460,371            11,869,342             11,738,573
                               ------------------     ------------------     -----------------     ------------------

PROVISION FOR
INCOME TAXES                              618,237                833,274               848,862                778,954
                               ------------------     ------------------     -----------------     ------------------

NET INCOME                           $   904, 813           $  1,287,843           $ 1,230,824            $ 1,121,351
                               ==================     ==================     =================     ==================

BASIC EARNINGS
PER SHARE                            $        .10           $        .15           $       .14            $       .13
                               ==================     ==================     =================     ==================

WEIGHTED AVERAGE
NUMBER OF COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING           8,753,076              8,753,076             8,753,076              8,753,076
                               ==================     ==================     =================     ==================
</TABLE>

                                                                       Page F-16

<PAGE>

REPORT OF MANAGEMENT

The management of Nu Horizons Electronics Corp. is responsible for the
preparation of the consolidated financial statements in accordance with
generally accepted accounting principles 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-17

<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 29, 2000.

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY:

<TABLE>
<CAPTION>
         NAME                  AGE                        POSITION
         ----                  ---                        --------
     <S>                       <C>        <C>
     Irving Lubman             61         Chief Operating Officer and Chairman of the Board

     Arthur Nadata             54         President, Chief Executive Officer and Director

     Richard S. Schuster       51         Vice-President, Secretary and Director

     Paul Durando              56         Vice President - Finance, Treasurer and Director

     Harvey R. Blau            64         Director

     Herbert M. Gardner        60         Director

     Dominic A. Polimeni       53         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.

                   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 2000)   Stockholders in 2001)   Stockholders in 2002)
          --------------------    --------------------    ---------------------
             Paul Durando              Harvey Blau (1)         Irving Lubman
          Herbert Gardner (1)      Dominic A. Polimeni (1)     Arthur Nadata
                                     Richard S. Schuster

(1)  Member of Compensation and Audit Committees

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

     Irving Lubman has been Chairman of the Board since October 1982 and Chief
Operating Officer since September 1996. Mr. Lubman was 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 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 14
<PAGE>

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



               Richard S. Schuster has been 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 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. Mr. Blau
          is Chairman of the Board of Griffon Corporation and Aeroflex
          Incorporated and is a Director of Reckson Associates Realty Corp.

               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 and
          Underwriter of the Company's May 1984 public offering. Mr. Gardner is
          Chairman of the Board of Supreme Industries Inc. and a director of
          Transmedia Network, Inc., TGC Industries Inc., Hirsch International
          Corp., Co-Active Marketing Group, Inc. and Rumson-Fair Haven Bank and
          Trust Company.

               Dominic A. Polimeni has been a Director of the Company since
          September 1997. Mr. Polimeni has been a Director of Questron
          Technology, Inc. since March 1995, and Chairman and Chief Executive
          Officer of Questron Technology, Inc. since February 1996. Mr. Polimeni
          has 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. for four (4) years. Mr. Polimeni
          also practiced as a Certified Public Accountant for more than 12 years
          and was a Partner in the New York office of Arthur Young & Company.

                                                                         Page 15
<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 29, 2000, February 28, 1999 and
          February 28, 1998.

<TABLE>
<CAPTION>
                          SUMMARY COMPENSATION TABLE


                                                                    Long Term
                           Annual Compensation (1)                 Compensation
                           -----------------------                 --------------
                                                           Securities
Name of Principal     Fiscal                               Underlying       All other (2)
   and Position        Year      Salary       Bonus        Options         Compensation
-----------------      ----      ------       -----       -----------      -------------
<S>                    <C>      <C>          <C>           <C>             <C>
Irving Lubman          2000     $251,210     $520,087        224,332            $39,500
COO, Chairman          1999      243,893      196,102         75,000             21,552
of the Board           1998      236,789      344,370              -             16,781


Arthur Nadata          2000     $251,210     $742,983        250,583            $39,047
President and          1999      243,893      280,146        100,000             20,514
CEO                    1998      236,789      344,370              -             31,374

Richard Schuster       2000     $251,210     $742,983        224,332            $34,432
Vice President         1999      243,893      280,146         75,000             18,330
and Secretary and      1998      236,789      344,370              -             18,922
President, NIC
Components Corp.

Paul Durando           2000     $155,000     $ 80,724         23,625            $  1550
Vice President,        1999      150,000       31,011         10,000              1,500
Finance and            1998      138,942       25,827         15,000              1,389
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)  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 16
<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.

          The following table sets forth certain information with respect to
          stock options granted to the officers named in the Summary
          Compensation Table during the fiscal year ended February 29, 2000.

                    OPTIONS/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                                                        Potential Realizable Value
                                    % of Total                                         at Assumed Annual Rates of
                   Options       Options Granted    Exercise Price                     Stock Price Appreciation for
                 Granted (1)       to Employees     ($ per share)    Expiration Date       Entire Term (2) (3)
               ----------------  ---------------   ----------------  --------------- ------------------------------
                                                                                               5%               10%
                                                                                               --               ---
<S>            <C>               <C>               <C>               <C>             <C>                    <C>
P. Durando      23,625               2.8%               $5.71              5/25/09          $ 84,814        $  214,988
I. Lubman      119,332              14.3%                5.71              5/25/09           428,402         1,085,921
               105,000              12.6%                6.19              6/28/09           408,450         1,036,350
A. Nadata      145,583              17.5%                5.71              5/25/09           522,643         1,324,805
               105,000              12.6%                6.19              6/28/09           408,450         1,036,350
R. Schuster    119,332              14.3%                5.71              5/25/09           428,402         1,085,921
               105,000              12.6%                6.19              6/28/09           408,450         1,036,350
</TABLE>



              OPTIONS/SAR GRANTS IN LAST FISCAL YEAR - Footnotes

(1)  Options were granted for a term of ten years, subject to earlier
     termination on termination of employment.  Options become exercisable in
     two equal annual installments commencing one year from the date of grant.

(2)  These amounts represent assumed rates of appreciation, which may not
     necessarily be achieved.  The actual gains, if any, are dependent on the
     market value of the Company's stock at a future date as well as the option
     holder's continued employment throughout the vesting period.  Appreciation
     reported is net of exercise price.


(3)  Potential Realizable Value is based on the assumed annual growth rates for
     the ten-year option term.  Annual growth of 5% results in a stock price of
     $9.30 per share and 10% results in a price of $14.81 per share for on the
     shares granted at $5.71.  The same growth rates result in a stock price of
     $10.08 per share and $16.06 per share on the shares granted at $6.19.
     Actual gains, if any, on stock option exercises are dependent on the future
     performance of the stock as well as the option holder's continued
     employment throughout the vesting period.  There can be no assurance that
     the amounts reflected in this table will be achieved.  Appreciation
     reported is net of exercise price.

                                                                         Page 17
<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION (Continued):

          The following table sets forth certain information as to each exercise
          of stock options during the fiscal year ended February 29, 2000 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>

                                                                          Number of       Value 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                   -                      -                    170,625             $1,702,706
                                                                            289,957              3,182,599

Arthur Nadata                   -                      -                    183,750              1,850,100
                                                                            329,333              3,627,942

Richard Schuster                -                      -                    170,625              1,702,706
                                                                            289,957              3,182,599

Paul Durando                    -                      -                     49,875                415,354
                                                                             42,000                446,198
</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 $2,500 for Board Membership and $500 for each Board of Directors or
          Committee meeting attended. There were two meetings of each of the
          Board of Directors and the Compensation Committee during the fiscal
          year ended February 29, 2000. Each director attended or participated
          in all of the meetings of the Board of Directors and the committees
          thereof on which he served.

          For the fiscal year ended February 29, 2000, there was one meeting 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
          2000, 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 2000 of
          Messrs. Gardner (Chairman), Polimeni and Blau. 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.

          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 of the Company's executive officers generally is
          determined by the Compensation Committee of the Board of Directors.
          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 2000 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 which 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.

          Stock options are granted to key employees, including the Company's
          executive officers, by the Compensation Committee of the Board of
          Directors under the Plans. 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 2000, 10,000 options were granted to each outside
          director under the Company's Outside Director Stock Option Plan.
          Options to purchase 238,650 shares were granted to Mr. Nadata, 213,650
          shares were granted to each of Messrs. Lubman and Schuster and 22,500
          shares were granted to Mr. Durando under the Company's 1998 Stock
          Option Plan. 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
                                             Harvey Blau
                                             Dominic Polimeni

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.

                                                                         Page 20
<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION (Continued):

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 2000.

                        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, 1995 to February 29, 2000) 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 CUMLATIVE TOTAL RETURN
                     AMONG NU-HORIZONS ELECTRONICS CORP.,
                   NASDAQ MARKET INDEX AND PEER GROUP INDEX


   Measurement Period        Nu Horizons         NASDAQ
  (Fiscal Year Covered)   Electronics Corp.    Market Index      Peer Group
-------------------------------------------------------------------------------
     FYE 3/01/95           $100.00             $100.00          $100.00
     FYE 2/29/96            208.33              138.08           131.18
     FYE 2/28/97            123.33              165.74           149.84
     FYE 2/28/98             84.17              225.41           160.94
     FYE 2/28/99             58.33              291.27            83.96
     FYE 2/29/00            224.09              565.81           165.83


                    ASSUMES $100 INVESTED ON MARCH 1, 1995
                          ASSUMES DIVIDEND REINVESTED
                     FISCAL YEAR ENDING FEBRUARY 29, 2000

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

                                                                         Page 21
<PAGE>

EXECUTIVE COMPENSATION (Continued):

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 1,155,000 shares of the Company's
Common Stock, as adjusted for a 5% stock dividend. The 1994 Plan is administered
by the Compensation Committee, consisting of at least two members of the Board
of Directors. 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. During
fiscal 2000, 114,500 options were granted under the 1994 Plan with an exercise
price of $6.00. Options are currently outstanding for 843,938 shares and 311,849
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 (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.

                                                                         Page 22
<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION (Continued):

          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 1,102,500 shares of the Company's Common Stock,
          as adjusted for a 5% dividend. The 1998 Option Plan is to be
          administered by the Board of Directors of the Company; provided,
          however, that the Board may, in the exercise of its discretion,
          designate from among its members a Compensation committee or a Stock
          Option Committee (the "Committee") consisting of no fewer than two
          non-employee Directors, as defined by Rule 16b-3 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 shall also, subject to the express provisions of the 1998
          Option Plan, have 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 will 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 2000, 698,450 options
          were granted under the 1998 Option Plan with exercise prices of $6.00,
          $6.50 and $8.375. Options are currently outstanding for 1,076,272
          shares and 26,228 options are currently available for grant. No
          options granted under the 1998 Option Plan have been exercised.

          Outside Director Stock Option Plan:

               In September 1994, the Company's stockholders approved the
          Outside Directors Stock Option Plan (the "Director Plan") which covers
          157,500 shares of the Company's Common Stock as adjusted for a 5%
          stock dividend. 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 29, 2000, there are
          147, 000 director options outstanding.

                                                                         Page 23
<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION (Continued):

          Outside Director Stock Option (continued):

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

             The Board of Directors of the Company may amend the Director Plan
          from time to time in such manner as it may deem advisable. The
          provisions of the Director Plan relating to (i) which directors shall
          be granted options; (ii) the amount of shares subject to options
          granted; (iii) the price at which shares subject to options may be
          purchased; and (iv) the timing of grants of options shall not be
          amended more than once every six (6) months, other than to comport
          with changes in the Code or the Employee Retirement Income Security
          Act of 1974, as amended. No amendment to the Director Plan shall
          adversely affect any outstanding option, however, without the consent
          of the optionee that holds such option.

             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, on June 1, 1994 each non-employee Director
          then serving received options to purchase 10,000 shares of Common
          Stock at a price of $8.25 per share (the price of shares of Common
          Stock on June 1, 1994) and on the June 1 of each subsequent year each
          non-employee director then serving has or will be granted options to
          purchase 10,000 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 2000 Stock Option Grants:

             During fiscal 2000, the Company granted options to purchase 138,650
          shares to Mr. Nadata, 113,650 shares to each of Messrs. Lubman and
          Schuster and 22,500 shares to Mr. Durando at a price of $6.00 per
          share, options to purchase 100,000 shares each to Messrs. Nadata,
          Lubman and Schuster at a price of $6.50 and options to purchase 10,000
          shares to each of Messrs. Blau, Gardner and Polimeni at a price of
          $6.00 per share.

          Employee Stock Ownership Plan:

             In January 1987, the Company adopted an Employee Stock Ownership
          Plan ("ESOP" or "Plan") which 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 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.

                                                                         Page 24
<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION (Continued):

          Employee Stock Ownership Plan (continued):

             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, 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 29, 2000, the ESOP
          owned 434,155 shares at an average price of approximately $3.60 per
          share.

          401(k) Savings Plan

             The Company sponsors a retirement plan intended to be qualified
          under Section 401(k) of the 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 ($10,000
          in calendar 1998). Company contributions are discretionary. Effective
          with the plan year ended February 29, 2000, 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 29, 2000
          approximately 250 employees had elected to participate in the plan.
          For the fiscal year ended February 29, 2000, the Company contributed
          approximately $115,400 to the plan, of which $9,086 was a matching
          contribution of $2,512 for each of Mr. Lubman, Mr. Nadata, Mr.
          Schuster and $1,550 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, 2000, 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 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                                                             62,300 (1) (2)             *
          Herbert M. Gardner                                                       80,791 (3)                 *
          Harvey R. Blau                                                           24,628 (3)                 *
          Dominic Polimeni                                                         18,500 (3)                 *
          Irving Lubman                                                           270,744 (4) (5)            2.4%
          Arthur Nadata                                                           614,213 (4) (5) (6)        5.4%
          Richard S. Schuster                                                     595,036 (4) (5)            5.3%
          Dimensional Fund Advisors                                               602,357 (7)                5.3%
          All officers and directors as a group (7 persons)                     1,668,534                   14.8%
</TABLE>

NOTES:
------
(*)  Less than 1% of the Company's outstanding stock.
(1)  Includes options exercisable within 60 days for 56,438 shares of common
     stock under the Company's 1998 Stock Option Plan and the 1994 Stock Option
     Plan.
(2)  Includes 5,862 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 63,000 shares of common
     stock for Mr. Gardner, 24,200 for Mr. Blau and 3,500 shares for Mr.
     Polimeni under the Company's Outside Director Stock Option Plan.
(4)  Includes options exercisable within 60 days for 222,166 shares of common
     stock for Mr. Lubman, 269,666 for Mr. Schuster and 309,042 shares for Mr.
     Nadata under the Company's 1998 Stock Option Plan and the 1994 Stock Option
     Plan.
(5)  Includes 16,238 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.
(6)  Includes 35,398 shares held by his children as to which Mr. Nadata
     disclaims beneficial ownership.
(7)  1299 Ocean Avenue, Santa Monica, CA 90401


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 29, 2000, the Company paid $113,239 in
          legal fees to Blau, Kramer, Wactlar & Lieberman, P.C.

             For the fiscal year ended February 29, 2000, the Company received
          an aggregate $615,000 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 29, 2000, the Company received
          an aggregate $495,000 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 REPORTS ON FORM 8-K:

(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 29, 2000 and February 28, 1999                         F-2

          Consolidated Statements of Income for the three years in the period ended February 29, 2000       F-3

          Consolidated Statements of Changes in Shareholders' Equity for the three years in the
          period ended February 29, 2000                                                                    F-4

          Consolidated Statements of Cash Flows for the three years in the period ended February 29, 2000   F-5

          Notes to Consolidated Financial Statements                                                        F-7

          Schedule II - Valuation and Qualifying Accounts and Reserves                                       33
</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 Annual Report on
                    Form 10-K for the year ended February 29, 1988)

          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)

          3.3       Certificate of Amendment to Certificate of Incorporation
                    (Incorporated by Reference to Exhibit 3.1 to the Company's
                    Quarterly Report on Form 10-Q for the Quarter ended August
                    31, 1994)

          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).

                                                                         Page 27
<PAGE>

PART IV.

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

     (c)  Exhibits (continued):

          EXHIBIT
          NUMBER                             DESCRIPTION
        ------------------------------------------------------------------------
          10.1      The Registrant's Key Employee Incentive Stock Option Plan,
                    as amended (Incorporated by Reference to the Company's
                    Registration statement on form S-8 Registration No. 33-
                    20661).

          10.2      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).

          10.3      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).

          10.4      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).

          10.5      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).

          10.6      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).

          10.7      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).

          10.8      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).

          10.9      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).

         10.10      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)

         10.11      Revolving Credit Agreement dated October 28,1999 between the
                    Company and three banks: Mellon Bank, N.A., European
                    American Bank, and HSBC Bank USA. (Incorporated by reference
                    to Exhibit 10.14 to form 10Q for the quarter ended November
                    30,1999).

                                                                         Page 28
<PAGE>

PART IV.

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

     (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
                           Name                                    Country of
                                                                 Incorporation
                    --------------------------------------     -----------------
                    NIC Components Corp.                         New York
                    NIC Eurotech Limited                         United Kingdom
                    Nu Horizons International Corp.              New York
                    Nu Visions Manufacturing, 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.       Accountant's Consent

          27.       Financial Data Schedule

          99.       Additional Exhibit

                                                                         Page 29
<PAGE>

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


          We consent to the incorporation by reference in Registration Statement
          numbers 333-79561, 333-82805, 33-88952 and 33-88958 on Form S-8 of our
          opinion dated May 22, 2000 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 29, 2000.



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

          New York, New York
          May 26, 2000

                                                                         Page 30
<PAGE>

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

             The following undertakings are incorporated by reference into the
          Company's Registration Statements on Form S-8 (Registration Nos. 33-
          11032, 22-20661, 33-88952 and 33-88958).

          (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 31
<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 32
<PAGE>

SCHEDULE II

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

                     SCHEDULE II--VALUATION AND QUALIFYING
                             ACCOUNTS AND RESERVES

                      Three Years Ended February 29, 2000

<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

            2000                 $2,630,984               $1,097,338                 $281,250               $3,447,072
                               =============       ==================          ===============         ================

            1999                 $2,362,722               $  762,500                 $494,238               $2,630,984
                              =============       ==================          ===============         ================

            1998                 $2,192,079               $  315,000                 $144,357               $2,362,722
                              =============       ==================          ===============         ================
</TABLE>

(A)  Accounts written off.

                                                                         Page 33
<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
                                         ---------------------------------------
                                         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  26, 2000
    --------------------------
        Irving Lubman                 Chief Operating Officer

By: /s/ ARTHUR NADATA               President, Chief Executive    May  26, 2000
    --------------------------
        Arthur Nadata                 Officer and Director

By: /s/ RICHARD SCHUSTER            Vice President, Secretary     May  26, 2000
    --------------------------
        Richard Schuster              and Director

By: /s/ PAUL DURANDO                Vice President, Finance,      May  26, 2000
    --------------------------
        Paul Durando                  Treasurer and Director

By: /s/ HARVEY R. BLAU                       Director             May  26, 2000
    --------------------------
        Harvey R. Blau

By: /s/ HERBERT M. GARDNER                   Director             May  26, 2000
    --------------------------
        Herbert M. Gardner

By: /s/ DOMINIC A. POLIMENI                  Director             May 26, 2000
    --------------------------
        Dominic A. Polimeni

                                                                         Page 34
<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549


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

                                 EXHIBIT INDEX

                                      to

                                   FORM 10-K

                  FOR THE FISCAL YEAR ENDED FEBRUARY 29, 2000

                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

  27A                 Financial Data Schedule