Summary
Fastenal Company reported a strong first quarter for 2018, demonstrating robust sales growth and improved profitability, driven by its strategic growth initiatives and favorable market conditions. Net sales increased by 13.2% year-over-year, reaching $1.186 billion, supported by higher unit sales and a modest increase in pricing to offset inflation. The company's focus on expanding its Onsite locations and industrial vending devices continues to yield positive results, contributing significantly to top-line growth. Despite a slight decline in gross profit margin to 48.7% from 49.4% in the prior year, primarily due to a shift in product and customer mix and increased transportation costs, operating income as a percentage of net sales remained strong at 19.8%. Net earnings saw a significant increase of 29.9% to $174.3 million, with diluted EPS rising to $0.61 from $0.46. This improvement was bolstered by the positive impact of the Tax Cuts and Jobs Act, which lowered the company's effective tax rate.
Financial Highlights
50 data points| Revenue | $1.19B |
| Cost of Revenue | $608.20M |
| Gross Profit | $577.60M |
| SG&A Expenses | $342.70M |
| Operating Income | $234.50M |
| Interest Expense | $2.70M |
| Net Income | $174.30M |
| EPS (Basic) | $0.15 |
| EPS (Diluted) | $0.15 |
| Shares Outstanding (Basic) | 1.15B |
| Shares Outstanding (Diluted) | 1.15B |
Key Highlights
- 1Net sales increased by 13.2% to $1.186 billion in Q1 2018, driven by higher unit sales and, to a lesser extent, price increases.
- 2Diluted Earnings Per Share (EPS) grew to $0.61, a 32.6% increase from $0.46 in Q1 2017, with approximately $0.10 of this growth attributed to the lower tax rate from the Tax Act.
- 3Gross profit margin slightly decreased to 48.7% from 49.4%, attributed to product/customer mix and higher transportation costs.
- 4Operating income margin was 19.8%, a slight decrease from 20.3%, reflecting the gross margin shift.
- 5The company expanded its Onsite locations by 55.1% to 678 and increased industrial vending devices by 14.2% to 73,561 compared to the prior year.
- 6Net cash provided by operating activities decreased to $159.7 million from $210.4 million in the prior year, primarily due to changes in working capital, specifically higher accounts receivable and inventories.
- 7Capital expenditures increased by 50.8% to $28.9 million, with planned net capital expenditures for 2018 projected at approximately $149.0 million.