D&H is reporting Blow Out Earnings

Watch as Harry and Dan Schwab chat about the current and past economy  and what D&H is seeing. 

Video Transcription

Harry Brelsford  0:06 

Hey, Nation Nation, Harry here back with Dan Schwab. We have not had a chat a long time. And Dan, not only good to see it, but I brought a little something special out from about 10 years ago. And we did a bunch of things together. How are you doing?

Dan Schwab  0:20 

I love that. It's great. Great to have you on today and great to speak with you.

Harry Brelsford  0:24 

Yeah, yeah, good to reconnect in. Feels like I was talking to you the last time we had a recession, we got to do better than that. Let's talk in the boom times

Dan Schwab  0:33 

that we're both still around or both still kicking. So there's some silver linings.

Harry Brelsford  0:38 

There we go. Hey, it's the it's the earning season. And you just came out with the fiscal year earning. So first of all, what is your fiscal year date? Is that is that May 1 or what's your guess? It goes May 1 through April 30. Okay, so yeah, you're reporting some blowout growth in earnings. Just to quote here 19% growth surpasses 5 billion in revenue, congratulations. And that's especially meaningful with some of the consolidation going on in the industry, in the SMB disti space, that clearly puts you in number three position. What do they call that in horse racing a show position? on the leaderboard? Yeah, yeah, exactly. couple of points that stood out, aside from the the earnings, and I'll write that up a little bit more in the blog and some of the percentages, but let's talk about the education community because Boy, you talk about disruption with remote learners, including Jenny Hallmark. Over in the radio control room, her daughter has been homebound learning for quite some time. What's going on with your commitment to the education community? And it looks like you have an executive panel or a community engagement group. What's the story? Well,

Dan Schwab  1:55 

basically, when you think about what transpired in this last year, during COVID, there was two parts that drove our growth, there was the work from home and the Learn from home. Work From Home is obvious, you know, you and I and others, we needed to upgrade notebooks, if you only had one monitor at home, and you're used to working with three, you had to get those new monitors. So a rush on that the headsets, the video cams, the mice, keyboard, all those products. The same is true, obviously, with the suit schools, you know, I've got children in school as well. And they had to pivot overnight. Luckily, many businesses were well prepared. And they had employees could work from home every so often they had a mobile workforce. Schools were really were challenged because it was a major inflection for them. So they needed a lot of consultative advice from our ourselves through our vendor partners. So we've done a tremendous amount of training, education has been our strongest vertical for a long time. So when this when the pandemic kicked in, and schools were, you know, were shut down. Our resellers, really an MSP spun into motion. And there was a tremendous demand for devices. And whether it be wireless needs, whether it be the Chromebook needs, whether it be the video cams for the teachers that were still teaching from school or from home. So there was an incredible demand. So we've had a group that we've leaned on for a long time that our educational specialists, and we've we've taken that a step further, that we not just have an advisory committee, but we now have a community that we're really trying to share best practices and help our partners to grow in that space.

Harry Brelsford  3:35 

All right, and then the the new distribution center now the last time we got together, you you were in Harrisburg, but I think it was the old building. So a you moved in B, is this in the new office park, or is this What's going on?

Dan Schwab  3:52 

So you're right about, you know, two years ago or so we moved to a new headquarters. It's It's wonderful. It's 50 acre beautiful campus, it gives us room to grow. We were really busting at the seams. We didn't Are you were? Yeah, our old headquarters. We were there for 65 years. Yeah. So this was a great 20 3040 year decision for us. Our current warehouse is based in Harrisburg, as well, we have four warehouses across the US and Canada. And, you know, logistics, you know, that's, that's a core competency of ours. In this case, it was 208,000 square feet. And it was same thing, it was really reaching capacity. So we broke ground, we're almost done and we hope to move in September October time period, to a new 750,000 square foot facility state of the art, it's almost two and a half times the size. So we're really excited about that opportunity because it it gives us the opportunity to continue to scale and grow and as you mentioned earlier, with dynamics both you know I'd say the IT industry is in a really good spot because it's it's become even more ingrained in all of our lives, both personal and professional, the need for tech now. So I don't see that diminishing. And then with the macro changes, as you alluded to with other distributors and mergers and acquisitions, I think it bodes well for dnh to be able to save these are focused on our customer service and our partners.

Harry Brelsford  5:14 

Yeah. Hey, final thought. And let me set the table. So with the the sad demise of my small business server some years ago, can you believe 2012 was the end of a toughest 10 years? Or you get your money's worth out of it? Yeah, I did. So what I've done is, and what I encourage the SMB nation membership to do is I've been working pretty hard to reinvent myself, I dusted off the old sheep skins and put them up on the wall. And I'm trying to reinvent myself as an industry analyst. And part of that is, is to be on these earnings calls and get, you know, back in the loop. So I have a question for you, one of my clients, one of my clients out of Austin, Texas is in the data center area. And they are not seeing in your press release to talk about yet in imminent infrastructure refresh. And of course, that's going to come someday, but in the data center space, and I'm talking cruise ships and amusement parks names we all know really well, at the enterprise level, we're not seeing the push for an infrastructure refresh right now. Because a they have no revenue, and be all the money went to laptops. So what are you seeing that that I'm just not getting from the enterprise level, you have a pretty bold statement, and you increase your credit line significantly to support the refresh Gulf.

Dan Schwab  6:37 

So right, so this year, we increase credit lines by 225 million per month, and we're adding an additional 300 million per month of downstream credit. The refresh we're speaking to when you think about it all small and midsize businesses across North America. You're right, they spent their money on endpoint devices. Very straightforward, right with the workforce in transition. As they migrate back to the office, they're now have a hybrid model. So it changes the paradigm for them that those employees that went home that took their three monitors home with them, well, now they're going to work from home two or three days a week. That means you have to refresh the three monitors in the office they use, Well, how about if those were desktops at the office, and now they're all going to bring in their notebooks and walking around the building for different meetings and huddle rooms, because they're going to use different collaboration spaces, that's going to drive a revision of the wireless network. And what is the back office look like the servers, you now have a workforce that's disparate that's all over the country, potentially. So it just changes everything, you're going to be investing in UC and collaboration because gap, you may have a meeting with 20 people instead of all 20 being off is 10 in the office and 10 of remotes, you have to have the right setup. So we're seeing this surge in demand for small and midsize businesses, the reevaluating their infrastructure to support this new business model.

Harry Brelsford  7:55 

Yeah, that makes sense. And, and again, I have all people who would be playing at the enterprise level, I'm probably the least qualified person, but I did just want to share some industry insights and I get it down at SMB. A, it's not as heavy left, right, and B can probably even do it a little bit incrementally, you know, this quarter, you get a monitor next quarter, you get a second monitor, and so on. So I'll tell you what, let's do this. Let's make this a regular call quarterly. When you release your earnings, and we'll see on the flip side, enjoy the enjoy the summer. Congratulations.

Dan Schwab  8:32 

It's wonderful love speaking with you. I'm happy to connect anytime. All right, well, and thanks for everyone from the nation. We appreciate that. Thank you. Be well