Question-and-Answer Session
Operator
Thank you. The Question-and-Answer session is going to be conducted electronically. (Operator Instruction) Your first question comes from Sandy Harrison – Signal Hill Group LLC.
Sandy Harrison – Signal Hill Group LLC.
Good luck to you Mike and welcome aboard, Ralph. Just a couple of housekeeping items, and I will ask a follow up question. Could, from the inventory perspective that you have talked about last quarter, do you think that is pretty much through and played its role and then along your comment on inventory? How you see sell in versus sell through from your distribution channel?
Arthur Whipple
I think, we look at our inventories closely every quarter, I assume you are talking about the charge that we took this time. And, I think we have done a really good job at keeping the inventories pruned out and being of very high quality. They are really up the same level that read at the beginning of the year and are reasonable given the lead times that we see coming.
The inventories in the distributor channel again were sell-ins, so, there would be inventories that belong to our distributors. We think they are contracting a bit right now based on early information that we are seeing but they were not historically very high levels in at the end of the quarter.
Sandy Harrison – Signal Hill Group LLC.
So, how do you see sell out on the other side of that? Is it similar to sell-in or it has just decreased and you are thinking the sell in to match it.
Arthur Whipple
What we are seeing is, we have checked with our distributors, for example, our United States distributor, the sell out level is running slightly above on October what is was in the third quarter rate. So, we see that the end demand, that is in indication, the end demand is not down as much as we talking about our own revenues, and we checked with major Asian distributors, and they expect in the quarter that their sell-out is going to be higher than their sell-in and they will end up with lower inventories at the end of the quarter.
Sandy Harrison – Signal Hill Group LLC.
And then, secondly, the follow up question, as far as PCI Express whether be Gen 1 or Gen 2, what are you guys seeing as far as catalogs? We got the macro economic issue; we have heard that before earnings season across the Board. But, what should we be looking for, from macro economic signs and Ralph, as a newcomer to the story, in your due diligence and looking out as far as their positioning, what are some of the encouraging things that you heard? And what are the?, just we can watch from macro perspective as far as the PCI Express market.
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