As its 10th anniversary approaches in 1999, independent distributor America II Electronics Inc. is expanding its operations with the acquisition of two buildings at its St. Petersburg, Fla., headquarters.
"I believe 1999 will be the first year that America II breaks the $200 million [revenue] mark," said chief executive Michael Galinski. "We've seen big improvements in the fourth quarter [of 1998]. I think the worst is behind us, and we're going to see a nice [market] increase going forward."
The two new buildings, which were acquired in early December, add 40,000 sq. ft. of space to the distributor's headquarters, for a total of about 140,000 sq. ft. The expansion will allow America II to improve its handling of large volumes of inventory, as well as to increase its sales staff.
The company will dedicate a 25,000-sq.-ft. building to the staging and redistribution of large-volume shipments of semiconductors and passive devices-up to 200 5-cu.-ft. palettes of inventory per shipment.
"There are very few companies, particularly independents, that can handle the very large deals," Galinski said. "Many distributors can take a shipment of three or four palettes, but it's a major space problem trying to get 100 palettes into the plant.
"There are companies out there with millions [of dollars] tied up in inventory, and they're looking for distributors that can handle big deals very quickly and efficiently," he said. "We can now buy it outright, take it on consignment, or even do different types of partnership deals."
The second new building will be used to double the size of America II's sales floor. Over the next two to three years, the company plans to increase its sales staff from its current 125 representatives to more than 250, according to Galinski.
"It's currently a two- to three-year plan, but we think we can do it faster," he said.
And that will depend on whether America II can energize its overall revenue, which has been stagnant over the past few years, during the semiconductor-industry slowdown.
After posting sales of about $175 million in 1996 and $180 million in 1997, America II is looking at another fairly flat year for revenue in 1998. However, Galinski does not view the year as a disappointment.
"This may be strange to say, because I know a lot of distributors are singing the blues, but '98, while I can't say was good or very good, was an important year because we doubled net income," he said. "That was due to a good management team we've put in place at America II, which is allowing us to run a profitable and strong company."
Galinski anticipates that 1999 will be a record year for America II, and the company will help kick it off with a 10th-anniversary party at the ASD Show in Las Vegas on Feb. 20. More than 2,000 customers and suppliers have been invited to the event, which will be held at the MGM Grand Hotel.
"We want to let the customers and suppliers know that they're responsible for what we've achieved over the last 10 years," Galinski said. "They helped make independent distribution into a legitimate and important part of the semiconductor industry."