Fastenal ends 50th year in business with continued growth

January 18, 2018

Fastenal ended its 50th year in business with continued growth and an increase in dividends for shareholders.

Fourth-quarter sales were up 14.8 percent compared to the end of 2016, hitting $1.09 billion.

The company reported earnings of $ 152.4 million, or $0.53 per share, an increase of 32.8 percent from last year’s fourth-quarter numbers.

Tuesday the company also announced a dividend of $0.37 per share to be paid in cash on Feb. 27.

Dan Florness, Fastenal president, praised the double-figure increase in pretax earnings in a conference call Wednesday, and noted the company’s continued work at increasing profits over the course of the year.

“I can’t think of a better way to celebrate 50 years in business,” Florness said.

The company continued to emphasize its non-fastener areas, including vending and in location sales, which are now two thirds of the company’s business. The number of onsite facilities, where Fastenal operates a distribution point for materials within a different company’s building, were up to 605 locations, a 50.9 percent increase over the end of 2016.

The number of industrial vending machines has also increased by 13.7 percent to 71,421.

Florness noted in his conference call that about 25 percent of the non-fastener business was through the vending machines, and that area of the company was “growing as fast as it’s ever grown.”

“We’ve turned onsite — a regional thing — into a company thing,” Florness said.

The daily sales of fastener products grew 13.4 percent overall — of which 3.9 percent is attributed to the recently acquired Mansco business. The sales of non-fastener products represented 65 percent of sales in the third quarter and grew 16.1 percent on a daily basis.

The number of full-time employees also grew compared to last year, by 7.7 percent.

Florness did critique the expenses in the freight side of the business, and said he was frustrated by “sloppiness” that he claimed prevented the company from reaching the growth predictions he had made last quarter.

The whole year has seen a turnaround from no growth or losses in the past several years.

In the first quarter the company grew by less than 1 percent — but that was Fastenal’s first growth since the second quarter of 2015.

For the first three months of the year Fastenal reported earnings of $134.2 million, or 46 cents per share, up 6.3 percent from last year’s first quarter. Their net sales increased to $1.05 billion, up 6.2 percent.

In the second quarter sales had reached $1.12 billion, up 10.6 percent from the second quarter of 2016 and reported earnings of $148.9 million.

In the third quarter company’s sales were up 11.8 percent compared to the previous and their earnings up 12.7 percent for the same period.

In the third quarter Fastenal also reported a quarterly dividend of $0.32 per share.

At the stock market close Wednesday, Fastenal stock was down $3.24 to $52.20.