All American Semiconductor Inc. today is the latest in a string of distributor to report a sales increase but a net income decrease for its first quarter, ended March 31.
All American cited gross margin pressure as a major factor affecting its bottom line. Net income at the Miami-based distributor was $194,000, compared with $518,000 the prior year. Sales of $70.6 million for the period represented an 11% year- over-year increase from $63.5 million for the same period in 1998.
"While we are pleased that we have reached a new quarterly sales record, our first quarter income was impacted by a decline in our gross profit margins," said Bruce Goldberg, president and chief executive of All American.
Although most of the distributors reporting within the past few weeks have seen their profits hammered, their book to bill ratios remain positive. Industry leaders Arrow Electronics and Avnet Inc., while suffering from the effects of soft foreign markets, reported their core North American components business had improved both sequentially and year-over-year.