Fastenal Company · NASDAQ:FAST
Fastenal — Q2 2024 Earnings Presentation
15 slides from Fastenal's earnings presentation, Jul 12, 2024
Slide 1: Second Quarter Investor Teleconference
2024 SECOND QUARTER INVESTOR TELECONFERENCE JULY 12, 2024 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 and operating income margin, future inventory levels, pricing, Onsite and weight
Slide 3: CEO Messages on 2Q24
CEO MESSAGES ON 2Q24 • 2Q24 net sales were +1.8%, with underlying market Daily Sales Rate (DSR) Growth activity remaining challenging. EPS of $0.51 were -2.0% 20% 18.4% 18.0% reflecting the challenge of leveraging our business at low 18% 16.0% single-digit net sales growth and given the cyclical 16%
Slide 4: U.S. Manufacturing PMI
U.S. Manufacturing PMI Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. 2012 ## ## ## ## ## ## ## ## ## ## ## 2013 ## ## ## ## ## ## ## ## ## ## ## ## 2014 ## ## ## ## ## ## ## ## ## ## ## ## 2015 ## ## ## ## ## ## ## ## ## ## 2016 ## ## ## ## ## ## ## ## ## 2017 ## ## ## ## ## ## ## ## ##
Slide 5: 2Q24 Growth Driver Update
2Q24 GROWTH DRIVER UPDATE • Onsites: We had 107 signings in 2Q24. Active sites Onsite Signings and Active Locations finished at 1,934, +11.9% from 2Q23. Daily sales, 180 2,000 1,728 1,934 1,800 excluding transferred branch sales, grew low single- 160 1,501 1,600 digits from 2Q23. Sales from sites op
Slide 6: 2Q24 Business Cadence
2Q24 BUSINESS CADENCE • U.S. PMI averaged 48.8 in 2Q24, which is reflective of End Market Daily Sales Rate (DSR) Growth the soft demand that persists in the short term. U.S. 40% Industrial Production was +0.1% in Apr./May 2024 over 30% 2Q23. Heavier manufacturing series like primary metal (-3.1%) an
Slide 7: 2Q24 Margin Summary
2Q24 MARGIN SUMMARY • 2Q24 operating margin was 20.2%, down from 21.0% in Gross Profit Margin 50% 2Q23. Gross margin performed largely as expected, declining to 45.1% from 45.5% in 2Q23 primarily due to 46.5% product/customer mix and short-term inefficiencies in our 45.5% 45.1% supply chain to suppo
Slide 8: 2Q24 Cash Flow Profile
2Q24 CASH FLOW PROFILE Operating Cash Flow • 2Q24 operating cash flow was $258.0, or 88.1% of net (in millions) income, below 2Q23 (101.4%) but slightly above 400 historical 2Q conversion rates. The shift from rightsizing 350 101.4% inventory a year ago to sustaining it in the present has 300 88.1%
Slide 9: 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 is
Slide 10: Return on Invested Capital
RETURN ON INVESTED CAPITAL* Calculation of Return on Invested Capital (ROIC) Reconciliation of ROIC to Return on Assets (ROA) TTM TTM TTM TTM (Amounts in millions) 2Q24 2Q23 (Amounts in millions) 2Q24 2Q23 Operating Income $ 1,517.7 1,500.3 Net Income $ 1,152.3 1,123.3 Income Tax Expense (363.6) (36
Slide 11: 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** 0.1% 1.6% 3.3% 4.9% (0.7%) 2.5% 1.4% 8.2% (3.2%) 2.7% 3.6% 11.5% (2.1%) 9.2% (3
Slide 12: Employee Statistics
EMPLOYEE STATISTICS Absolute Count FTE Count (1) Change Change Change Change Change Change HEADCOUNT Since Since Since Since Since Since STATISTICS 2Q24 1Q24 1Q24 4Q23 4Q23 2Q23 2Q23 2Q24 1Q24 1Q24 4Q23 4Q23 2Q23 2Q23 (2) Selling personnel 16,774 16,764 0.1% 16,512 1.6% 16,302 2.9% 15,386 15,102 1.9
Slide 13: In-Market Location Statistics
IN-MARKET LOCATION STATISTICS Year-to- Date 2014 (1) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Starting Branches 2,687 2,637 2,622 2,503 2,383 2,227 2,114 2,003 1,793 1,683 1,597 Opened Branches 24 41 40 18 11 12 12 10 12 10 3 Closed/Converted Branches (2) (74) (56) (159) (138) (167) (125) (
Slide 14: End Market Profile
END MARKET PROFILE End Market Mix - Full Year 2023 Transportation/ Other, 2.4% Warehousing, 4.6% Gov't/Education, 3.7% Heavy Manufacturing, 43.1% Reseller, 5.8% Non-Residential Construction, 9.1% All Other Manufacturing, 31.3% MAJOR SEGMENT GROWTH Year- Full (Daily Sales rates) Jan. Feb. Mar. Apr. M
Slide 15: Thank You
THANK YOU 15