FASTENAL CO Quarterly Report for Q1 Ended Mar 31, 2014

Summary

Fastenal Company reported solid financial results for the first quarter ended March 31, 2014. Net sales increased by 8.7% to $876.5 million compared to the prior year, driven primarily by higher unit sales. Net earnings saw a modest increase to $111.9 million, resulting in diluted earnings per share of $0.38, up from $0.37 in the same period last year. The company continues to invest in its growth initiatives, particularly its FAST Solutions® industrial vending program, which is showing strong adoption and contributing to overall sales growth. The company's balance sheet remains strong with total assets of $2.17 billion. While inventory and accounts receivable increased, reflecting sales growth, operational working capital management appears adequate. Cash flow from operations remained robust, though slightly down year-over-year due to working capital needs. Fastenal also demonstrated a commitment to shareholder returns through its consistent quarterly dividend payments and opportunistic share repurchases.

Key Highlights

• 1Net sales grew by 8.7% to $876.5 million for Q1 2014.
• 2Net earnings increased to $111.9 million, with diluted EPS of $0.38.
• 3FAST Solutions® (industrial vending) continues to be a significant growth driver, with a substantial increase in installed devices and sales to customers utilizing this technology.
• 4The company returned capital to shareholders through consistent quarterly dividends and share repurchases.
• 5Gross profit margin was 51.2%, showing a slight decrease from the previous year's 52.3% but within the company's expected range.
• 6Operating and administrative expenses remained stable as a percentage of sales, indicating good cost control.
• 7The company's credit facility was amended to increase the total commitment, providing continued financial flexibility.

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