Holden Lewis: I would point out maybe a couple of things. One, prior to the pandemic that warehousing sector was less than 1% of our sales. And so oftentimes you get asked, like what — can you show that you actually have improved your business coming out of the pandemic? This is an example of a market where we retained business coming out of the pandemic that we gained because of what we were able to do there. And so again, we think it’s — we love having that customer set involved. The other thing I think I would point out, I think I sort of indicated that market was up 60% in December. Christmas doesn’t come every month, presents today doesn’t have the same commercial value. I just wouldn’t expect that kind of order of magnitude from that customer set as we go forward into 2024 that we experienced over the most recent holiday period.
Ken Newman: Just for my follow-up here. Just looking at the seasonal benchmark for this year, just assuming that ’24 follows that seasonal benchmark as a baseline. It does imply quarterly ADS steps up pretty strongly here and call it, the high single digit range in the back half. Just outside of the comps the normal seasonality, I’m just trying to weigh that against maybe the slower Onsites and how that maybe ramps through the year. Is this anything to suggest that sales wouldn’t necessarily follow those trends that we should be kind of aware of?
Holden Lewis: I’m not getting into the business of predicting January, February, and March DSRs. Here’s what I would tell you. Onsites could have an impact. Does it have an impact in January specifically? I really don’t know, right? I’ve always said that there’s a lot of value, a lot of value and sort of understanding how those trends work. But there’s a lot of error variable anytime that you’re talking about 20 days of activity and you’re trying to apply a lot of meaning to it. Onsites, over a multi-month period of time, yes, I think that they may grow a little bit less quickly in the absence of a market improvement because of some of the signings. But I’ll tell you, we’re also seeing a little bit of an uptick in the sales activity in non-Onsite national accounts, and I think that could also pick up.
So there’s just a lot of moving pieces that makes it difficult for me to say with any sort of definitiveness that you should expect us to beat or miss those DSR benchmarks.
Dan Florness: Probably the piece that I’d throw out on that, it relates less to the question per se and more to an example. So we had our Board meeting last couple of days. And one thing I ask of all of our leadership team is, hey, be in one of the week of the Board meeting. You spent some time with your teams, with other folks and be here because we participate in the Board meetings in person. We had one person that wasn’t here because he was sitting at an airport in Nashville, Tennessee, and there was 8 inches of snow. And so he participated remotely and I was sitting with him this morning, and he’s kind of freaked out right now because the winter weather has not been our friend in January. And it’s not been our industry’s friend, it’s not been our customers’ friend.
In fact, I received a picture the other day, it was actually from a supplier in the Memphis area, so a little bit further west from Nashville. And had a picture of their warehouse, their distribution facility and their head of sales sent it over to our traffic manager and said, every truck that was coming and pick up product that they canceled, except for one. And he said there was a blue Fastenal semi that was here 15 minutes ago, I’m sorry it wasn’t in the picture, but it was great to see you guys still run it. And so the weather is hammering the month pretty hard. Well, there’s a lot of months left, we’ll see how we dig out, no pun intended. But our distribution network is working, that’s a beautiful thing and that truck was there to pick up product.
Operator: Next question is coming from Nigel Coe from Wolfe Research.
Nigel Coe: Yes, the weather is not our friend right now, that’s for sure. So just going back to the Onsites and it seems you firmly believe this is more of a cyclical factor. You called out the networking kind of factor there. Is there anything structural here that we need to consider, maybe some of the e-com cannibalization? MSM is talking about their implant offerings as well. I’m just curious if there’s a bit more, I don’t know, pockets of structural headwinds here we need to consider?
Dan Florness: When I think of Onsites, Onsite and e-com don’t even come into play. I could see — because really what the Onsite is about is we’re stepping into their shoes and we’re operating inside their facility on something that they were probably doing themselves before, and didn’t really have the expertise or the tools or the visibility into the supply chain that we have to help operate it more effectively, more efficiently. And then we arm that Onsite with all the tools we have in place, whether it be vending machines or technology embedded bins or areas where we’re scanning, it’s just a much more efficient way to operate. And that’s about logistics as much as it is ordering, because quite frankly, when there on Onsite, anything that’s gone through FMI and FMI is a high percentage of Onsite, anything going through FMI, the customers hasn’t been really ordering it.
And so e-commerce really isn’t the thing there. E-commerce is probably a bigger thing with smaller customers, because oftentimes, smaller customers buy, and sometimes the way you and I do. I buy a lot of stuff online. The other part it can play into is — and we saw this really in 2020, a market change in activity in that when all of a sudden, people started working more remotely, you’re ordering more things electronically than maybe you were before, because we’re delivering product in one of the facilities, they might catch us and order some stuff, they might phone us. And people tend to phone less when they’re at home, they tend to do more things on the computer. At least that’s what we’re seeing.
