Question-and-Answer Session
Operator
(Operator Instructions). Your first question will come from Steven Fox – Bank of America.
Steven Fox – Bank of America
I guess first of all just stepping back on some of the comments you made about the component inventories, Roy, I guess I didn’t hear you say that you felt like the channel was clean, but it seems like some of your suppliers are seeming to suggest that. Can you give us your view on inventories in the channel? How you feel about inventories at the customer base relative to expectations for the next couple of quarters of demand?
Raymond Sadowski
So look, I think maybe the best way to talk about that is to just examine what's happening with our own. I think our team reacted admirably in the, sort of on a real time basis in the current quarter and we had a nice decline in inventory and yet, our inventory turns fell noticeably on a sequential basis. Our objective would be to get our inventory turns back to where they were. So that would imply that if sales were stable we'd still have a little bit more inventory to get out in order to get back to our turns, and of course the reality is we're projecting that sales are actually going to be down.
So Steve, if that applies to the other distributors as well, in other words, significant – let’s say they started the cycle with relatively lean inventory. They got hit with demand declines so turns are declining. The objective is to get returns back to where they were. It is unlikely that very many got that done in the current quarter and my expectation is that given that sales are declining further in the March quarter our inventory will be down but I'd be surprised if we get back to our returns objective and we're probably at least two quarters out on getting back to that level.
Steven Fox – Bank of America
And that turns objective will be around six times?
Raymond Sadowski
Yes, right in that ballpark.
Steven Fox – Bank of America
And then?
Raymond Sadowski
Same place we were.
Steven Fox – Bank of America
And then just to make sure I understand on the gross margin side, if the gross margins were holding steady in both business, so you're saying that all of the gross margin decline, which seems a little more than normal for the mix was a result of mix issues on the corporate level?
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