FASTENAL CO Quarterly Report for Q1 Ended Mar 31, 2011

Summary

Fastenal Company (FAST) reported strong revenue growth in the first quarter of 2011, with net sales increasing by 23.0% year-over-year to $640.6 million. This growth was primarily driven by higher unit sales, indicating a recovery from the economic downturn experienced in 2009. The company also saw a significant improvement in operating income, which rose to $128.7 million, reflecting better gross profit margins and improved operating expense management. Financially, the company demonstrated robust cash flow generation, with net cash provided by operating activities at $74.3 million. While inventory levels increased to support growing sales, accounts receivable also rose, partly due to the growth in national account and international business. Fastenal also announced a two-for-one stock split and an increase in its dividend payout, signaling confidence in its future performance and commitment to returning value to shareholders.

Key Highlights

• 1Net sales increased by 23.0% to $640.6 million for the three months ended March 31, 2011, compared to $520.8 million in the prior year.
• 2Gross profit increased by 25.3% to $333.4 million, with gross margin improving to 52.0% from 51.1% in the prior year period.
• 3Operating income saw a substantial increase of 42.2%, reaching $128.7 million, driven by higher sales and improved gross margins.
• 4Net earnings grew by 42.0% to $79.5 million, resulting in diluted earnings per share of $0.54, up from $0.38 in the first quarter of 2010.
• 5Net cash provided by operating activities was $74.3 million, demonstrating strong cash generation capabilities.
• 6The company declared a two-for-one stock split and increased its dividend by 25.0%, reflecting confidence in its financial health.
• 7Inventory levels increased by 13.6% year-over-year, reflecting anticipated sales growth and some inflationary pressures.

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