Fastenal Company · NASDAQ:FAST
Fastenal — Q2 2023 Earnings Presentation
14 slides from Fastenal's earnings presentation, Jul 13, 2023
Slide 1: Second Quarter
SECOND QUARTER JULY 13, 2023 1
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT All statements made herein that are not historical facts (e.g., future operating results, long-term share gains, and business activity, as well as expectations regarding operations, including gross margin, future inventory levels, pricing, Onsite and weighted FMI device signing
Slide 3: CEO Messages on 2Q23
CEO MESSAGES ON 2Q23 • 2Q23 was challenging, with EPS of $0.52 rising 4.6%. Daily Sales Rate (DSR) Growth Softer manufacturing activity contributed to daily sales 20% 18.4% 18.0% growth decelerating to 5.9%. We did not leverage in the 18% 16.0% period, due both to cyclical factors and our not adjust
Slide 4: 2Q23 Growth Driver Update
2Q23 GROWTH DRIVER UPDATE • Onsites: We had 86 signings in 2Q23. Active sites finished Onsite Signings and Active Locations at 1,728, +15.1% from 2Q22. Daily sales, excluding 160 2,000 1,728 transferred branch sales, grew at a high-teens rate from 140 1,800 1,501 1,600 2Q22. Based on the pace of sig
Slide 5: 2Q23 Business Cadence
2Q23 BUSINESS CADENCE • U.S. Industrial Production rose 0.3% in Apr./May 2023 End Market Daily Sales Rate (DSR) Growth over 2Q22, with heavier manufacturing components 40% declining. U.S. PMI averaged 46.7 in 2Q23, including 30% 46.0 in June; sub-50 readings are consistent with 20% declining manufac
Slide 6: 2Q23 Margin Summary
2Q23 MARGIN SUMMARY Gross Profit Margin • Our 2Q23 operating margin was 21.0%, down from 21.6% 50% in 2Q22. Our incremental operating margin was 11.0%. 46.5% 46.5% • 2Q23 gross margin was 45.5%, down from 46.5% in 2Q22 45.5% primarily due to customer/product mix with our strongest 45% growth coming
Slide 7: 2Q23 Cash Flow Profile
2Q23 CASH FLOW PROFILE Operating Cash Flow • 2Q23 operating cash flow was $302.1, or 101.4% of net (in millions) earnings. The improvement in the current period reflects the absence of last year's supply chain constraints, which has 400 reduced the working capital required to support our 350 101.4%
Slide 8: Appendix: Non-GAAP Financial Measures
APPENDIX Non-GAAP Financial Measures The appendix includes information on our Return on Invested Capital ('ROIC'), which is a non- GAAP financial measure. We define ROIC as net operating profit less income tax expense divided by average invested capital over the trailing 12 months. We believe ROIC i
Slide 9: Return on Invested Capital
RETURN ON INVESTED CAPITAL* Calculation of Return on Invested Capital Reconciliation of ROIC to Return on Assets (ROA) TTM TTM TTM TTM (Amounts in millions) 2Q23 2Q22 (Amounts in millions) 2Q23 2Q22 Operating Income $ 1,500.3 1,360.7 Net Earnings $ 1,123.3 1,031.4 Income Tax Expense (362.5) (319.7)
Slide 10: Sequential Trends
SEQUENTIAL TRENDS* Cum. Cum. Cum. Cum. Chg., Chg., Chg., Chg., Jan. Jan. Jan. Jan. Daily Sales Rate (DSR) to to to to BENCHMARKS Jan.* Feb. Mar. Mar. Apr. May Jun. Jun. Jul. Aug. Sep. Sep. Oct. Oct. Nov. Dec. BENCHMARK** 0.2% 1.5% 3.8% 5.4% (0.5%) 2.7% 2.0% 9.8% (3.1%) 2.9% 3.6% 13.4% (1.9%) 11.2% (
Slide 11: Employee Statistics
EMPLOYEE STATISTICS Absolute Count FTE Count (1) HEADCOUNT Change Change Change Change Change Change STATISTICS Since Since Since Since Since Since 2Q23 1Q23 1Q23 4Q22 4Q22 2Q22 2Q22 2Q23 1Q23 1Q23 4Q22 4Q22 2Q22 2Q22 In-market locations (branches & Onsites) 13,668 13,668 0.0% 13,410 1.9% 13,134 4.1
Slide 12: In-Market Location Statistics
IN-MARKET LOCATION STATISTICS Quarterly 2017 2018 2019 2020 2021 2022 1Q23 2Q23 3Q23 4Q23 Starting Branches 2,503 2,383 2,227 2,114 2,003 1,793 1,683 1,660 Opened Branches 18 11 12 12 10 12 2 3 Closed/ Converted Branches (1) (138) (167) (125) (123) (220) (122) (25) (28) Ending Branches (2) 2,383 2,2
Slide 13: End Market Profile
END MARKET PROFILE End Market Mix - Full Year 2022 Transportation/ Other, 2.6% Warehousing, 4.4% Gov't/Education, 3.9% Reseller, 6.6% Manufacturing, 42.6% Construction, 10.3% Mfg - Heavy Equip., 29.6% MAJOR SEGMENT GROWTH Year- Full (Daily Sales rates) Jan. Feb. Mar. Apr. May June to-Date July Aug.
Slide 14: Where Industry Meets Innovation...
WHERE INDUSTRY MEETS INNOVATION... 14