10-KPeriod: FY2021

FASTENAL CO Annual Report, Year Ended Dec 31, 2021

Filed February 7, 2022For Securities:FAST

Summary

Fastenal Company reported a 6.4% increase in net sales for 2021, reaching $6.01 billion. This growth was driven by strong demand from traditional manufacturing and construction customers, coupled with higher pricing. Despite supply chain disruptions, labor shortages, and inflation impacting business operations, the company's gross profit margin improved to 46.2% from 45.5% in the prior year, indicating effective cost management and pricing strategies. Net earnings saw a 7.7% increase to $925.0 million, translating to diluted EPS of $1.60. While growth drivers like Onsite locations and Fastenal Managed Inventory (FMI) device signings showed improvement, they remained below pre-pandemic targets due to customers prioritizing short-term crisis management. The company continues to focus on its 'high-tech, high-touch' strategy, leveraging its extensive in-market location network and digital solutions to enhance customer service and drive future growth.

Financial Highlights

52 data points
Beta

Revenue

$6.01B

46.2% Gross Margin

Net Income

$925.00M

15.4% Net Margin

EPS (Diluted)

$0.80

Total Assets

$4.30B

Cash & Equivalents

$236.20M

Free Cash Flow

$613.50M

Financial Statements
Beta
Revenue$6.01B
Cost of Revenue$3.23B
Gross Profit$2.78B
SG&A Expenses$1.56B
Operating Income$1.22B
Interest Expense$9.70M
Net Income$925.00M
EPS (Basic)$0.81
EPS (Diluted)$0.80
Shares Outstanding (Basic)1.15B
Shares Outstanding (Diluted)1.15B

Key Highlights

  • 1Net sales increased by 6.4% to $6.01 billion in 2021, driven by robust demand in manufacturing and construction sectors and strategic pricing actions.
  • 2Gross profit margin improved to 46.2% in 2021 from 45.5% in 2020, reflecting better product margins and operational leverage.
  • 3Net earnings grew by 7.7% to $925.0 million, with diluted EPS reaching $1.60, up from $1.49 in 2020.
  • 4Despite supply chain challenges and inflation, the company demonstrated resilience by increasing its net sales and profitability.
  • 5Growth drivers such as Onsite locations and FMI devices showed recovery but did not meet pre-pandemic targets, indicating potential for future expansion.
  • 6The company maintains a strong balance sheet with net cash provided by operating activities of $770.1 million in 2021.

Frequently Asked Questions

Fastenal's net sales in 2021 grew by 6.4% primarily due to strong demand from its traditional manufacturing and non-residential construction customers. This was supported by higher unit sales and an increase in pricing, which helped to mitigate inflationary pressures. Growth from key drivers like Onsite locations and FMI devices also contributed positively.

Fastenal improved its gross profit margin to 46.2% in 2021 from 45.5% in 2020. This was achieved through a combination of factors, including improved product margins (particularly in safety products), better overhead absorption due to higher volumes, favorable supplier rebates, and effective pricing strategies to pass on increased product and transportation costs.

While Fastenal saw a recovery in its growth drivers in 2021, with increases in Onsite locations and FMI device installations, these metrics remained below pre-pandemic targets. The company attributes this to customers focusing on short-term crisis management due to supply chain, labor, and inflation challenges, which extended sales cycles for these solutions. Fastenal anticipates continued growth and aims to reach new signing targets in 2022, contingent on market conditions improving.

In 2021, the direct impact of the COVID-19 pandemic on Fastenal's operations was less pronounced than in 2020, with economic normalization driving strong demand from core customers. However, the pandemic's effects were indirectly felt through ongoing supply chain disruptions, labor shortages, and inflation, which created operational challenges. The pandemic also continued to affect the ability to engage customers for growth driver solutions.