Summary
Fastenal Company's (FAST) third-quarter 2016 report indicates a modest increase in net sales, up 1.8% year-over-year to $1.013 billion for the three months ended September 30, 2016. For the nine-month period, net sales grew 2.3% to $3.014 billion. While sales showed some growth, the company experienced a decline in gross profit margin to 49.3% in the third quarter, down from 50.5% in the prior year, attributed to shifts in product and customer mix favoring lower-margin non-fastener products and larger accounts. Operating and administrative expenses as a percentage of net sales also increased slightly, impacting operating income, which saw a decrease for both the quarter and the nine-month period. The company continues to invest in growth drivers such as industrial vending machines, with an installed device count of 60,400, and its Onsite business. However, headcount reductions in stores and overall have been implemented due to a softer North American industrial economy, particularly impacting manufacturing and construction markets. Despite these headwinds, Fastenal maintained a strong balance sheet and generated solid operating cash flow, demonstrating resilience in its business model.
Financial Highlights
51 data points| Revenue | $1.01B |
| Cost of Revenue | $513.30M |
| Gross Profit | $499.80M |
| SG&A Expenses | $297.10M |
| Operating Income | $202.90M |
| Interest Expense | $1.80M |
| Net Income | $126.90M |
| EPS (Basic) | $0.11 |
| EPS (Diluted) | $0.11 |
| Shares Outstanding (Basic) | 1.16B |
| Shares Outstanding (Diluted) | 1.16B |
Key Highlights
- 1Net sales for Q3 2016 increased by 1.8% to $1.013 billion, and for the nine months ended September 30, 2016, increased by 2.3% to $3.014 billion.
- 2Gross profit margin decreased to 49.3% in Q3 2016 from 50.5% in Q3 2015, primarily due to unfavorable changes in product and customer mix.
- 3Operating income for Q3 2016 declined to $203.0 million from $220.0 million in Q3 2015.
- 4The company's industrial vending installed device count reached 60,400, an increase of 12.8% year-over-year.
- 5Fastenal continued to invest in its Onsite business, with 100 locations operational by September 30, 2016.
- 6Headcount was reduced by 430 in stores and 115 overall year-over-year due to a softer industrial economy.
- 7Total assets grew to $2.73 billion as of September 30, 2016, compared to $2.53 billion as of December 31, 2015.
- 8Long-term debt increased to $432.4 million from $303.0 million year-over-year, partly to fund capital expenditures and stock buybacks.