FASTENAL CO Quarterly Report for Q1 Ended Mar 31, 2013

Summary

Fastenal Company reported solid financial results for the first quarter of 2013, demonstrating revenue growth and improved profitability compared to the prior year period. Net sales increased by 4.9% to $806.3 million, driven primarily by higher unit sales. The company also saw an increase in gross profit margin to 52.3% from 51.3% in the same period last year, a trend attributed to improved pricing habits and better freight utilization, despite a slight increase in operating and administrative expenses as a percentage of sales due to slower sales growth. Operating cash flow remained robust, increasing by 21.3% to $160.2 million, reflecting the company's strong cash-generating capabilities. Investments in property and equipment were significant, driven by the expansion of FAST Solutions (industrial vending) and distribution automation. The company maintained a strong balance sheet and continued its commitment to returning capital to shareholders through dividends, although no stock repurchases were made in the quarter.

Key Highlights

• 1Net sales grew 4.9% year-over-year to $806.3 million for the first quarter of 2013.
• 2Gross profit margin improved to 52.3% from 51.3% in the prior year's first quarter.
• 3Net earnings increased to $109.0 million, or $0.37 per diluted share, up from $100.2 million, or $0.34 per diluted share, in Q1 2012.
• 4Operating cash flow surged by 21.3% to $160.2 million.
• 5The company continued to invest in growth initiatives, particularly its FAST Solutions (industrial vending) program and distribution automation, leading to higher capital expenditures.
• 6The FAST Solutions (industrial vending) business continued its strong growth trajectory, with cumulative machines installed reaching 25,447 by the end of Q1 2013.
• 7The company declared a quarterly dividend of $0.20 per share in April 2013.

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