FASTENAL CO Quarterly Report for Q1 Ended Mar 31, 2015

Summary

Fastenal Company reported a solid first quarter for 2015, demonstrating continued revenue growth and improved profitability. Net sales increased by 8.8% year-over-year to $953.3 million, driven by higher unit sales. The company's operating income saw a significant increase of 14.0%, reaching $203.8 million, with a corresponding expansion in operating margin to 21.4% from 20.4% in the prior year's quarter. This improvement was fueled by better leverage of operating and administrative expenses against higher sales. Despite a slight decrease in gross profit margin to 50.8% from 51.2%, the company's effective cost management, particularly in operating and administrative expenses, led to enhanced overall profitability. The company also generated strong operating cash flow of $180.1 million, an increase of 25.7% from the prior year, underscoring its efficient working capital management and healthy financial position. Management remains optimistic about continued growth, supported by initiatives like FAST Solutions® industrial vending and a focus on customer service.

Key Highlights

• 1Net sales increased by 8.8% to $953.3 million in Q1 2015 compared to Q1 2014.
• 2Operating income grew by 14.0% to $203.8 million, with operating margin expanding to 21.4%.
• 3Gross profit margin slightly decreased to 50.8% from 51.2%, primarily due to changes in product and customer mix.
• 4Operating and administrative expenses as a percentage of net sales decreased to 29.4% from 30.8%, indicating improved cost control.
• 5Net earnings increased by 14.0% to $127.6 million, resulting in diluted EPS of $0.43, up from $0.38 in the prior year.
• 6Operating cash flow saw a significant increase of 25.7% to $180.1 million.
• 7The company repurchased 2 million shares of its common stock in the quarter.

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