Summary
Fastenal Company reported solid financial results for the six months ended June 30, 2015, with net sales increasing by 6.8% year-over-year to $1.95 billion and net earnings growing by 10.5% to $268 million. The company demonstrated robust operational income growth of 11.4% for the same period, reaching $430 million. Despite a slowdown in certain customer segments, particularly those tied to the oil and gas industry, Fastenal managed its expenses effectively, leading to strong incremental operating income of 40% in the second quarter. The company continued its strategic investments in growth drivers, including personnel and industrial vending solutions (FAST Solutions®), which expanded its installed device count by 15.7% year-over-year. Management highlighted a strategic shift in capital allocation, with increased share buybacks funded by debt, while maintaining dividend payments. The company's balance sheet remains strong, supported by healthy cash flow generation from operations. Fastenal is navigating a challenging economic environment by focusing on customer service and operational efficiency, aiming to maintain market share gains across its diversified product lines, which include fasteners and other industrial and construction supplies.
Financial Highlights
48 data points| Revenue | $997.83M |
| Cost of Revenue | $495.74M |
| Gross Profit | $502.09M |
| SG&A Expenses | $276.64M |
| Operating Income | $225.83M |
| Interest Expense | $797K |
| Net Income | $140.36M |
| EPS (Basic) | $0.12 |
| EPS (Diluted) | $0.12 |
| Shares Outstanding (Basic) | 1.16B |
| Shares Outstanding (Diluted) | 1.17B |
Key Highlights
- 1Net sales for the six months ended June 30, 2015, increased 6.8% to $1.95 billion, compared to $1.83 billion in the prior year period.
- 2Net earnings for the six months increased 10.5% to $267.96 million, or $0.91 per diluted share, up from $242.45 million, or $0.82 per diluted share.
- 3Operating income grew by 11.4% to $429.6 million for the six-month period, reflecting effective expense management.
- 4The company saw a significant increase in store employee count (9.4% year-over-year) and total employee count (7.7% year-over-year) as part of its growth strategy.
- 5FAST Solutions® (industrial vending) machines installed increased by 15.7% to 50,620 units by the end of Q2 2015.
- 6Fastenal repurchased approximately $295 million of its stock in the last twelve months, funded primarily by debt, while continuing to pay quarterly dividends.
- 7Gross profit margin slightly decreased to 50.3% in Q2 2015 from 50.8% in Q2 2014, impacted by changes in product and customer mix, and reduced supplier incentives.