Summary
Fastenal Company's 2019 10-K filing reveals a year of solid revenue growth, with net sales increasing by 7.4% to $5.33 billion. This growth was primarily driven by the company's strategic focus on its "growth drivers," including national accounts, industrial vending, and Onsite locations, which saw significant increases in adoption. Despite top-line growth, the company experienced a slight compression in gross profit and operating income margins due to shifts in product and customer mix, as well as increased product costs stemming from inflation and tariffs. The company continues to expand its network of "in-market locations," which saw a 3.4% increase in 2019, with a notable 24.6% rise in active Onsite locations. This strategic placement aims to bring Fastenal closer to its customers. While traditional branch count decreased, the overall network expansion and the adoption of digital solutions and vending technology underscore Fastenal's commitment to adapting its business model to evolving customer needs and market dynamics. The company generated strong operating cash flow, demonstrating its ability to fund operations and investments.
Financial Highlights
52 data points| Revenue | $5.33B |
| Cost of Revenue | $2.82B |
| Gross Profit | $2.52B |
| SG&A Expenses | $1.46B |
| Operating Income | $1.06B |
| Interest Expense | $13.90M |
| Net Income | $790.90M |
| EPS (Basic) | $0.69 |
| EPS (Diluted) | $0.69 |
| Shares Outstanding (Basic) | 1.15B |
| Shares Outstanding (Diluted) | 1.15B |
Key Highlights
- 1Net sales grew by 7.4% to $5.33 billion in 2019, indicating continued demand for industrial and construction supplies.
- 2The company's strategic "growth drivers," particularly national accounts, industrial vending, and Onsite locations, were key contributors to sales growth.
- 3Total in-market locations increased by 3.4% to 3,228, driven by a significant 24.6% increase in active Onsite locations, signaling a shift towards more customer-proximate service models.
- 4Gross profit margin slightly declined to 47.2% in 2019 from 48.3% in 2018, influenced by a less favorable product and customer mix (e.g., a decrease in fastener sales as a percentage of total sales and an increase in national account sales).
- 5Operating income margin also saw a slight decrease, falling to 19.8% in 2019 from 20.1% in 2018, impacted by similar mix shifts and increased operating expenses.
- 6Industrial vending devices in operation grew by 10.8% to nearly 90,000, highlighting the continued adoption and contribution of this technology-enabled sales channel.
- 7Net earnings increased by 5.2% to $790.9 million, and diluted EPS grew to $1.38 from $1.31 in the prior year, demonstrating the company's ability to translate sales growth into profitability, albeit with some margin pressure.